[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]



 
              U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST 
                          FOR FISCAL YEAR 2013
=======================================================================



                                HEARING

                               before the

                     COMMITTEE ON VETERANS' AFFAIRS

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                      WEDNESDAY, FEBRUARY 15, 2012

                               __________

                           Serial No. 112-43

                               __________

       Printed for the use of the Committee on Veterans' Affairs




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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

CLIFF STEARNS, Florida               BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado               CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida            SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee              MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana          LINDA T. SANCHEZ, California
BILL FLORES, Texas                   BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
JEFF DENHAM, California              JOE DONNELLY, Indiana
JON RUNYAN, New Jersey               TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan               JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York          RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
MARK E. AMODEI, Nevada
ROBERT L. TURNER, New York

            Helen W. Tolar, Staff Director and Chief Counsel

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________

                           February 15, 2012

                                                                   Page

U.S. Department Of Veterans Affairs Budget Request For Fiscal 
  Year 2013......................................................     1

                           OPENING STATEMENTS

Chairman Jeff Miller.............................................     1
    Prepared Statement of Chairman Miller........................    50
Hon. Bob Filner, Ranking Democratic Member.......................     2
    Prepared Statement of Hon. Filner............................    51
Hon. Silvestre Reyes, prepared statement only....................    51
Hon. Michael Turner, prepared statement only.....................    52

                               WITNESSES

Hon. Eric K. Shinseki, Secretary, U.S. Department of Veterans 
  Affairs........................................................     4
    Prepared Statement of Hon. Shinseki..........................    53
    Accompanied by:

      Hon. Robert A. Petzel, M.D., Under Secretary for Health, 
          Veterans Health Administration
      Hon. Allison A. Hickey, Under Secretary for Benefits, 
          Veterans Benefits Administration
      Hon. Steve L. Muro, Under Secretary for Memorial Affairs, 
          National Cemetery Administration
      Hon. Roger W. Baker, Assistant Secretary for Information 
          and Technology, U.S. Department of Veterans Affairs
      Mr. W. Todd Grams, Executive in Charge for the Office Of 
          Management and Chief Financial Officer, U.S. Department 
          of Veterans Affairs
Mr. Carl Blake, National Legislative Director, Paralyzed Veterans 
  of America.....................................................    35
    Prepared Statement of Mr. Blake..............................    64
Mr. Raymond C. Kelley, Director, National Legislative Service, 
  Veterans of Foreign Wars of the United States..................    37
    Prepared Statement of Mr. Kelley.............................    67
Mr. Jeffrey C. Hall, Assistant National Legislative Director, 
  Disabled American Veterans.....................................    38
    Prepared Statement of Joseph A. Violante.....................    71
Ms. Diane Zumatto, National Legislative Director, AMVETS.........    40
    Prepared Statement of Ms. Zumatto............................    78
Mr. Timothy M. Tetz, Director, National Legislative Commission, 
  The American Legion............................................    41
    Prepared Statement of Mr. Tetz...............................    83

                       STATEMENTS FOR THE RECORD

Association of the United States Army............................    91
Modular Building Institute.......................................    94
Warrior Group, Inc...............................................    96

                   MATERIALS SUBMITTED FOR THE RECORD

Pre-Hearing Questions and Responses from Chairman Jeff Miller to 
  the Department of Veterans Affairs (VA)........................    98
Post-Hearing Questions from Chairman Jeff Miller to the 
  Department of Veterans Affairs (VA)............................   105
Post-Hearing Responses from the Department of Veterans Affairs 
  (VA) to Chairman Jeff Miller...................................   110
Post-Hearing Responses from the Department of Veterans Affairs 
  (VA), submitted by Hon. Bob Filner.............................   136


U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2013

                      Wednesday, February 15, 2012

                     U.S. House of Representatives,
                            Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:31 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[Chairman of the Committee] presiding.
    Present: Representatives Miller, Bilirakis, Roe, Johnson, 
Runyan, Buerkle, Huelskamp, Turner, Filner, Brown, Reyes, 
Michaud, Sanchez, McNerney, Donnelly, Walz, Barrow, and 
Carnahan.

           OPENING STATEMENT OF CHAIRMAN JEFF MILLER

    The Chairman. Good morning, everybody. This hearing will 
come to order. Welcome to this morning's hearing to review the 
administration's fiscal year 2013 budget request for the 
Department of Veterans Affairs. Mr. Secretary, we all 
appreciate you being here this morning and bringing your entire 
team with you as well.
    Although we are still combing through the budget, a process 
that will likely involve further follow up questions after this 
hearing this morning, I think it is safe to say that viewed in 
context of an extraordinarily tight fiscal climate a 4.3 
percent increase in discretionary spending should be termed 
positive. That said, outcomes are what really matter. Mr. 
Secretary, I know you and I both agree with that. Veterans do 
not really care about the numbers as long as their claims are 
being decided quicker, their health care is taken care of in a 
timely fashion, and their aging facilities are upgraded.
    I have got some questions about how this funding request 
relates to the actual resource requirement but I will get to 
those later. I want to use the remainder of my time to talk 
about the issue of sequester and the Veterans Administration.
    Mr. Secretary, let me begin by saying that I agree with you 
and the President that sequestration is not desirable whether 
it is applied to DoD, VA, or any other Federal agency. Again, I 
think we can all agree on that. But I also agree that specific 
guidance as to how sequestration will be carried out and its 
impact at the operational level is something that will likely 
be determined a bit farther down the road, but not too much 
further down that road. For example, will there be layoffs? 
Will maintenance needs be postponed or deferred? Will facility 
activations be delayed? Those are details that I am curious 
whether VA has already looked at, and they probably should have 
been looked at, but I can understand if we are not quite at 
that point yet.
    And finally we are in agreement that there is an ambiguity 
in the law with respect to VA that requires a clarifying legal 
decision that only the Office of Management and Budget can 
make. That is where my agreement with the administration and 
its series of nonresponses to me and other Committee Members 
ends.
    For months I have been trying to get clarity about what we, 
as a Committee, and veterans, as our constituency, deserve to 
have resolved. Namely, because of a conflict in the law is VA 
even part of the picture should a sequester order occur? Do we 
have cause to be concerned? There is no such ambiguity with 
respect to the Department of Defense. There is no ambiguity 
with respect to most other non-defense programs. All know that 
those agencies are definitely in play. But because the 
administration has not clarified the matter, no one can say or 
will say if VA is completely exempt or not.
    Now I have received legal opinions from lawyers from both 
the Congressional Research Service and the Government 
Accountability Office saying that in their judgment VA appears 
to be completely exempt. They provided these opinions to me in 
a matter of days, proving that the legal issue at hand is not 
really that complicated. But their judgments, mine, and that of 
others in Congress carry no weight presently. Only OMB can 
resolve this completely. And after multiple requests from this 
Committee, a secretive legal opinion from VA lawyers delivered 
to OMB several months ago, and obvious concern expressed by 
veteran organizations alike, the question still lingers.
    The obvious question is, why does it still linger? Why not 
resolve the issue now? The ambiguity will remain in law even if 
Congress and the President agree on finding $1.2 trillion in 
cuts to avoid a sequester next January. This is an issue that 
needs clarifying once and for all. Mr. Secretary, I know that 
you are not the hold up. And I do not direct this comment at 
you. But I believe that we are seeing here a cynical attempt to 
keep veterans twisting in the wind to create more pressure to 
act to avoid a sequester.
    I say to the President there is enough pressure to act 
already without threatening America's veterans. One way or 
another, a decision has got to be made. And I am not going to 
hold my breath any longer waiting for OMB to make their 
decision. I have introduced legislation to clarify the law as 
it stands now. I ask my colleagues to join me in support. The 
Protect VA Healthcare Act of 2012 would simply amend the law to 
conform to what Congress intended when it voted on the Budget 
Control Act.
    We need to get this issue resolved. If the President will 
not lead on this issue then we will. With that said, I yield to 
my good friend and Ranking Member Mr. Filner for his opening 
statement.

    [The prepared statement of Chairman Miller appears in the 
Appendix]

               OPENING STATEMENT OF BOB FILNER, 

                   RANKING DEMOCRATIC MEMBER

    Mr. Filner. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary and your staff for being here. I also thank those who 
will be on the second panel, the independent budget panel. All 
of you have worked so hard on that budget and that gives us 
some points of reference. It holds the VA accountable and 
allows us to look at this in a comprehensive fashion. So we 
thank the independent budget panel for their presentations.
    I disagree with you on one thing, Mr. Chairman, when you 
said the administration is somehow cynically holding veterans 
hostage, or something like that. The proof is in the pudding. 
I'm sorry, Mr. Secretary, you are not the pudding. But the 
proof is right here. That is at a time when everything is being 
cut back, I just cannot imagine the internal bureaucratic 
budget struggles that you had to go through to get this budget. 
But here we are with everything being threatened, and our 
veterans are moving forward. Not only in this budget but in the 
advance appropriations budget.
    So to say we are leaving veterans twisting in the wind is 
just not true. You are here to say, as you have in the budget, 
that we are moving forward. Yes, we have problems. I mean, we 
know it, you know it, we go back and forth on how best to 
resolve them whether it is the backlog, or mental health care, 
or homelessness. But there is no twisting in the wind here. We 
recognize the problems. We acknowledge them and we are moving 
forward on them. And this budget shows that you are moving 
forward.
    It does not go as far as the independent budget goes. But 
in this context of incredible cutbacks, Mr. Secretary, I think 
you have done a great job here to keep the veterans of this 
country moving forward. Thank you.

    [The prepared statement of Hon. Filner appears in the 
Appendix]

    The Chairman. And now I would like to welcome the first 
panel that will be speaking with us today. We have got the 
Honorable Eric Shinseki, Secretary of the U.S. Department of 
Veterans Affairs. And he is accompanied, and I will just read 
their name, and Mr. Secretary, I do not know if you are going 
to further introduce them in your opening statement or not. But 
Dr. Robert Petzel, Under Secretary for Health; Honorable 
Allison Hickey, Under Secretary for Benefits; Honorable Steven 
Muro, Under Secretary for Memorial Affairs; Honorable Roger 
Baker, Assistant Secretary for IT; and finally W. Todd Grams, 
the Executive in Charge for the Office of Management and Chief 
Financial Officer. Mr. Secretary, your complete written 
statement as usual will be entered in the record and you are 
recognized for five minutes.

   STATEMENT OF HONORABLE ERIC K. SHINSEKI, SECRETARY, U.S. 
   DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY ROBERT A. 
   PETZEL, M.D., UNDER SECRETARY FOR HEALTH, VETERANS HEALTH 
ADMINISTRATION; GENERAL ALLISON A. HICKEY, UNDER SECRETARY FOR 
BENEFITS, VETERANS BENEFITS ADMINISTRATION; MR. STEVE L. MURO, 
    UNDER SECRETARY FOR MEMORIAL AFFAIRS, NATIONAL CEMETERY 
 ADMINISTRATION; HONORABLE ROGER W. BAKER, ASSISTANT SECRETARY 
  FOR INFORMATION AND TECHNOLOGY, U.S. DEPARTMENT OF VETERANS 
AFFAIRS; MR. W. TODD GRAMS, EXECUTIVE IN CHARGE FOR THE OFFICE 
 OF MANAGEMENT AND CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF 
                        VETERANS AFFAIRS

               STATEMENT OF HON. ERIC K. SHINSEKI

    Secretary Shinseki. Thank you, Chairman Miller, Ranking 
Member Filner, distinguished Members of the Committee. Thank 
you for this opportunity to present the President's 2013 budget 
and 2014 advance appropriations requests for the Department of 
Veterans Affairs.
    This Committee has a long history of strong support for our 
Nation's veterans. I have certainly witnessed that over the 
past three budgets which I have been present for. The President 
has demonstrated his respect and his sense of obligation for 
our 22 million veterans by sending the Congress yet again 
another strong budget request for Veterans Affairs. I thank the 
Members for your unwavering support, and I seek your support, 
continued support, on this budget request.
    I would also like to acknowledge the representatives from 
our veterans service organizations who are present this 
morning. Their insights are always helpful as VA develops 
resources and strives to constantly improve our programs. Mr. 
Chairman, thank you for introducing the Members of the panel 
here. I would just point out that to my left is Roger Baker, 
Assistant Secretary for Information Technology. Then Mr. Todd 
Grams to my immediate left. Dr. Petzel to my immediate right. 
General Hickey to his right, and then the Honorable Steve Muro. 
And thank you for allowing my written statement to be submitted 
for the record.
    This hearing occurs at an important moment in our Nation's 
history. I am old enough to have experienced our return from 
Vietnam and to have witnessed the end of the Cold War. We are 
again in another period of transition. Our troops have returned 
home from Iraq. Their numbers in Afghanistan are likely to 
decline over time. Our history also suggests that VA's 
requirements from these two operations will continue to grow 
long after the last combatant leaves Afghanistan, perhaps 
another decade or more. We must provide access to quality care, 
timely benefits and services, and job opportunities for all 
generations of veterans. They have all earned it.
    In the next five years it is estimated that more than a 
million veterans are expected to leave military service, a 
generation that has come to rely on VA at unprecedented levels. 
Through September, 2011 of the approximately 1.4 million 
veterans who deployed to and returned from Operations Enduring 
Freedom and Iraqi Freedom, 67 percent have used some VA benefit 
or service, a far higher percentage than those from previous 
wars. The 2013 budget request would allow VA to fulfill the 
requirements of our mission: health care for 8.8 million 
enrolled veterans; compensation and pension benefits for nearly 
4.2 million veterans, about 10 percent of whom are 100 percent 
disabled; life insurance covering 7.1 million active duty 
servicemembers and enrolled veterans at a 95 percent customer 
satisfaction rating; educational assistance for over 1 million 
veterans and family members on over 6,500 campuses; home 
mortgages that guarantee over 1.5 million servicemember and 
veteran loans with the Nation's lowest foreclosure rate; burial 
honors for nearly 120,000 heroes and eligible family members in 
our 131 national cemeteries, befitting their service to our 
Nation.
    The 2013 budget request continues the momentum of our three 
priorities: increasing access to care, benefits, and services; 
eliminating the claims backlog; and ending veterans 
homelessness, through effective, efficient, and accountable use 
of the resources you and the Congress provide.
    Access encompasses VA's facilities, programs and 
technology. This 2013 budget request allows VA to continue 
improving access by opening new or improved facilities closer 
to where veterans live and by providing telehealth including in 
veterans' homes; by fundamentally transforming veterans' access 
to VA benefits through a new electronic tool called the 
Veterans Relationship Management System; by collaborating with 
the Department of Defense to turn the current Transition 
Assistance Program, TAP, into an outcomes-based training and 
education program that fully prepares departing servicemembers 
for the next phase of their lives; and by establishing a 
national cemetery presence in eight rural areas and better 
serving rural and women veterans.
    We know that more than a million veterans will leave the 
military over the next five years. Potentially all will enroll 
in VA and over 600,000 of them will likely seek care and 
benefits and services from VA in the out years. From what we 
know, fiscal year 2013 will be the first year in which our 
claims production, that is the number of claims going out the 
door, will exceed our incoming claims. For that reason the 
paperless initiative we have been building over the past two 
years is critical to reversing years of backlog growth and we 
must not falter here. We must not hesitate. There is no turning 
back. We must protect stability in IT funding. It is critical 
to solving this issue we have been wrestling with.
    From January, 2010 to January, 2011 alone, the estimated 
number of homeless veterans declined by 12 percent, from 76,300 
to 67,500 on any given night. This downward trend must 
continue. Much remains to be done to end veterans homelessness 
in 2015. We are now developing a dynamic homeless veterans 
registry which contains over 400,000 names of current and 
formerly homeless veterans, allowing us to better see, track, 
and understand the causes of veterans homelessness. In the 
years ahead, this information will help us to more effectively 
prevent it, not just for veterans, but perhaps for other 
communities as well. We look to develop more visibility of the 
``at-risk'' veteran population in order to prevent veterans 
from falling into homelessness, and this budget supports that 
plan.
    We are committed to the responsible use of the resources 
you provide through the 2013 budget and 2014 advance 
appropriations request that you will consider.
    Again, thank you Mr. Chairman for this opportunity to 
appear before this Committee, and to all the Members as well. 
Thank you for your continued, unwavering support. We look 
forward to your questions.

    [The prepared statement of Hon. Shinseki appears in the 
Appendix]

    The Chairman. Thank you very much, Mr. Secretary, again for 
your testimony. And I and the Ranking Member again want to say 
thank you for the diligent work that you and your team has done 
in a very austere time in bringing additional funds to our 
veteran population.
    I would like to go back if I could, the budget states that 
as a result of reassessments to resource requirements for 
health care services, long term care, and other programs, the 
estimates for these programs are now substantially lower than 
what was included in last year's budget submission, which was 
the basis for the Congress providing funds to the VA. In fact 
the revised estimate suggests that Congress provided nearly $3 
billion more than the administration needed in fiscal year 
2012, and roughly $2 billion more than was needed in the 2013 
advance appropriation. So my question, I guess I have got two 
questions. One is when did VA conduct the reassessment and 
communicate its findings to Congress? And number two, it is a 
significant amount of funds. I think we would all be interested 
in knowing exactly how this money was reinvested.
    Secretary Shinseki. A fair question, Mr. Chairman. Let me 
just offer that the budgeting process is a series of estimates 
that get refined over time until we submit the final budget. 
They are based on actuarial projections to create that 
estimate. Sometimes the advance appropriation request 
incorporates data that gets refined as we get closer to 
submitting the actual budget itself, as we are doing here in 
2013.
    Most current estimates of utilization intensity, 
unemployment, inflation, long term care, and CHAMPVA 
requirements are things that influence that budget estimate, 
that modeling process. How much change occurred? About $1.9 
billion to about $2 billion. Those dollars have been reinvested 
in homelessness, activations, new models of care, expanded 
access, caregivers, and improved mental health. As to the 
process, the timing by which we would provide this notification 
to the Congress, this would be the appropriate time. It is in 
the submission of the budget that we acknowledge we had an 
adjustment to the model and we have reinvested the money in 
this fashion. And so this would ordinarily be the appropriate 
time for that notification.
    The Chairman. And your number is more at the $2 billion 
range?
    Secretary Shinseki. I say $2 billion. I think the number is 
like $1.995 billion. So $2 billion, I think, is a fair round 
off.
    The Chairman. In the current budget submission it has $1 
billion for a Veterans Job Corps. We all are keenly aware of 
the high number of unemployed veterans in our country today and 
not a single Member of this Committee nor this Congress should 
be in any way satisfied with that number. And we have tried to 
do things in this Committee to help bring those numbers down. 
My concern is that there is no detail in the budget submission. 
You know, where did the number $1 billion come from? You know, 
it was chosen to be provided in your entitlement accounts to be 
dispensed I think over a five-year period. And so I think we 
would all benefit from a conversation, Mr. Secretary, as to who 
it is going to be focused on, what area of the veteran 
population? How is it going to work? And what will happen to 
these jobs once the funds run out?
    Secretary Shinseki. Mr. Chairman, the proposal for the 
Veterans Job Corps, the $1 billion piece of that is a program 
that we are seeking congressional authorization on. We are 
putting together the details of that, which we would provide to 
you, and you would have a chance to review.
    I would say that the intent here is to put up to 20,000 
back to work over the next five years on projects that will 
restore and protect our public lands. Projects would be in 
national parks, forests, on rivers, trails, wildlife refuges, 
national monuments, and other public lands. Veterans could work 
on park maintenance projects, patrolling public lands, 
rehabilitating natural and recreational areas, and in 
administrative, technical, and law enforcement related 
activities.
    The Veterans Job Corps program is a project that is going 
to be coordinated with other departments and we are sort of an 
oversight of the distribution of funds. There are others who 
will be participating. I am told, and I am confident that VA 
resources will not be diverted to fund this $1 billion, that it 
will come from elsewhere. I do not know exactly where at the 
moment, but Mr. Chairman I will share that with you as soon as 
we have final details.
    The Chairman. Thank you. Mr. Filner?
    Mr. Filner. Thank you, Mr. Secretary. And I just want to 
focus on a couple of areas that I have been involved with over 
the years. One is the claims backlog. In your budget 
presentation you title it eliminate the claims backlog. I do 
not see any real estimate, or projection, or anything of when 
you think you are going to do that. But I still think that in 
the short run at least to get this turned around your notion 
of, I think you used the word brute force a few years ago if I 
recall that----
    Secretary Shinseki. Probably a poor choice of words----
    Mr. Filner. Well no, it was okay, it was good. It gives me 
something to shoot at, very nice. So. I do not think it is 
going to work. I just think all of this stuff you have is good 
stuff, but it is too big. And you know, as you point out there 
are all kinds of factors making it bigger. I still think you 
have to take some radical steps in the short run. Whether it is 
to grant all of the Agent Orange claims that have been 
submitted or have been there for more than, I do not know, X 
number of years. Or as I suggested at other times, all claims 
that have the medical information and have been submitted with 
the help of a veterans service officer you accept subject to 
audit. Unless you take some real radical step to eliminate a 
million of them, or 500,000 of them, you are never going to get 
there. It is just going to always be there. You do not want 
that as your legacy, I do not think. Nor do we.
    You are going to have to take some really strong step in 
terms of accepting stuff that has been in the pipeline a long 
time. Again, that has adequate, by whatever definition, 
documentation and professional support. Plus, this incredible 
situation of Agent Orange. Where, as you know, not only have 
those claims increased but we are talking about, as you well 
know, your comrades for 30 or more years that have been 
wrestling with this. Let us give the Vietnam vets some peace. 
Let us give them a real welcome home. Let us grant those Agent 
Orange claims. Get those, whatever it is, if it is 100,000 or 
200,000 of our backlog, just get them off the books.
    I do not know if you want to comment on that, but I still 
think you are never going to get there with, you know, all this 
is good stuff. I mean, we have talked about it on many 
occasions. But it is not going to fundamentally, or at least in 
the short run, change it around so you can get to a base level 
of zero, or wherever you want to be, and move forward from 
there.
    Secretary Shinseki. Mr. Filner, I will call on Secretary 
Hickey for the final details. We have pretty much worked 
through the increase in Agent Orange claims. I think we are 
well down on the number and I will rely on her statistics here.
    I would say, you and I have discussed the IRS-like model 
several times. We have looked at it and we continue to look at 
it. We continue to look for aspects of it that we can use. So 
it is not an either, or, as in it is either the IRS model or 
not. We have seen goodness in it and we have taken pieces of 
it. What concerns us about the IRS model is that it shifts the 
burden for submitting a complete, accurate claim to the 
veteran. It is shifted entirely to the veteran. Unlike today 
where the VA has a duty to assist, and that is what we do.
    We have taken pieces of the model. Online claims submission 
using a Turbo Tax-like form. We are moving towards a paperless 
IT claims technology, which is the foundation for IRS. We are 
on the verge of achieving that this summer. We have created 
segmented lanes where claims are categorized as easy, moderate, 
or difficult and they get processed much more efficiently that 
way.
    So we have looked at the IRS model and taken what is good 
from it. I think we are on the verge of revolutionizing the way 
we process claims. We ought to go through with fielding this 
automation tool, that we have been building for two years and 
get the results from it.
    Mr. Filner. Okay. I do not think you will revolutionize it. 
I think you may evolutionize it. But it is going to take longer 
than you and I are alive.
    By the way, to use as a reason that this shifts the burden 
to the veterans is a beside the real point. I would drop that 
as one of your opposition points. Because we are not saying 
that. You are saying, ``Oh, the poor veteran has this stuff and 
our bureaucracy wants to help.'' Come on, the problem is the 
bureaucracy, not the veteran. And to say, ``Oh, now we are 
shifting it more.'' We are not. We are saying we accept the 
claim that you have, assuming it was done with, again, 
professional help. And our duty to assist is to accept it 
subject to audit. I think it is a little bit disingenuous to 
say that, ``Oh, the poor veteran now, my plan shifts all the 
burden to him.'' It does not. It does nothing of the sort. It 
puts all the burden on the bureaucracy to say, ``Yeah, we are 
going to accept that,'' rather than go through a year, or two 
years, or five years of putting the veteran under such 
incredible tension from bureaucratic kinds of demands that it 
is, I mean it is probably worse than the original claim.
    Just one last point, if I may Mr. Chairman, I will be very 
brief. As you know I have, and you have it in your testimony, 
about women's veterans that I do not think you had time to do 
in your oral testimony. And I applaud you on that. The House 
passed a bill that I had put forward a year or two ago called a 
Women Veterans' Bill of Rights. It got through the House. It 
got stuck in the Senate. I would just ask that you look at that 
and you can do stuff administratively. You could post something 
in each of our, you know, centers and clinics. We have a long 
way to go on this.
    But women veterans need to feel that this institution is 
evolving to meet their needs. And a statement at the front door 
of their rights I think would be very helpful. So I would just 
ask you to look at that. We did not do it legislatively, but I 
think you could do some stuff administratively.
    Secretary Shinseki. Thank you, Mr. Filner. I will look at 
that. Just as a point of information, I think in this budget 
you will see that between 2012 and 2013 women veterans' issues 
were increased in funding by 17 percent. If you go back to 
2009, when you and I began discussions like this, between 2009 
and this 2013 budget, women's issues funding has gone up 124 
percent. If you include 2014, which is the advance 
appropriation out there, it would be 158 percent. So I want to 
assure you that this is not something that----
    Mr. Filner. Right. I don't question the commitment or the 
budget situation. You know, the average woman veteran who comes 
to a VA center does not know all of those statistics, nor do 
the men inside who may be catcalling, nor does the doctor who 
will not see the woman because she has brought her kids that 
she cannot get babysitting to. So it is a question of what is 
going on at that front door, and how they perceive themselves, 
and how the male veterans perceive them, and how the VA 
perceives them. I do not question your budget stuff. I want a 
more public and a cultural almost saying, ``We are going to 
change this. And here is what you should expect. And here is 
what all of us are going to work toward.'' Thank you, Mr. 
Chairman.
    The Chairman. Thank you. Colonel Johnson?
    Mr. Johnson. Thank you, Mr. Chairman. And Mr. Secretary and 
your team, thank you for being here this morning. My questions 
are brief and I'll try to get through them quickly. Mr. 
Secretary, how can the VA pursue effective procurement when you 
still do not have an integrated financial system with which to 
control the VA's spending? I mean, if you do not have a system 
to track the VA's spending how can you account for what is 
being spent?
    Secretary Shinseki. Thank you, Congressman Johnson. I am 
going to call on a couple of folks here to talk about 
acquisition from their perspective. When we arrived three years 
ago acquisition was being done in multiple places. We have 
moved to centralizing acquisition now. The first step has been 
an integrated model with the first step to integrate all of 
VHA's activities in one account so there is visibility. Then 
the decision will come here, once that is done and we are 
running smoothly, about whether we go to the next step to 
totally centralize acquisition in VA. That is a decision to be 
made at the appropriate time.
    Other evidence of what we have done in the area of 
centralizing our acquisition efforts relates to the 
centralization of IT, which we did quite a significant move in 
a very short period of time. It took us a couple of years to 
grow through that and because of that lesson we are taking a 
more deliberate move in centralization of acquisition. But we 
will get there.
    Let me ask Dr. Petzel to talk about acquisition 
centralization in VHA and then perhaps Mr. Baker to talk about 
IT.
    Mr. Johnson. Okay, I appreciate that. If you could keep 
your answers short I appreciate that too, because I have got 
several others and limited time. But that is okay.
    Secretary Shinseki. Well we can provide it for the record, 
if you wish.
    Mr. Johnson. Okay. Go ahead, I will give you just a minute 
or so.
    Dr. Petzel. VHA, thank you Congressman Johnson, VHA spends 
a large proportion of the money that VA has for acquisition. We 
have centralized our acquisition activities within VHA, ensured 
that everybody is certified and educated about their 
responsibilities. I think most importantly we have developed 
strategic purchasing groups to ensure that we are getting the 
best price and that we have standardized the purchase of all of 
the medical equipment that we have got. Artificial hips, 
surgical gloves, suture material, all of the supplies, we want 
to have a best price and we want to ensure that unless there is 
a real good reason why not, that people are purchasing from 
them.
    Mr. Johnson. And I certainly commend that. My concern is 
you are talking process. I am talking about an integrated 
financial system with visibility from front to back. That is 
what I see that is missing. And I will get to Mr. Baker in just 
a second.
    In the President's budget request he asks for $1 billion 
for Veterans Jobs Corp. We have yet to see specific details 
about the Jobs Corp or how these funds would be spent. How can 
you expect Congress to support and fund a program with which we 
have so little to no information?
    Secretary Shinseki. Mr. Johnson, as I indicated earlier, 
that plan is being finalized, it is being brought together. It 
is a multi-department coordination effort over which VA has 
oversight and as soon as we have that we will provide details.
    Mr. Johnson. Do you have any idea when that is going to be, 
Mr. Secretary?
    Secretary Shinseki. I will give you a better answer when I 
submit it for the record.
    Mr. Johnson. Okay.
    Secretary Shinseki. We are still in the process of bringing 
that plan together.
    Mr. Johnson. Okay. Mr. Baker, as you well know you and I 
started our very first dialogue over a year ago talking about 
an integrated systems architecture, a roadmap that shows where 
you are and where you are going. And we are here a year later, 
I still have not seen that. How can you justify a 6.9 percent 
increase in IT spending when you do not know what you have got, 
and you do not know where you are going?
    Mr. Baker. Thank you, Congressman. I think two points on 
that one and I will make them relatively quickly. About 80 
percent of my budget is spent in the hospitals and in the 
benefits offices providing direct support to the people who 
serve veterans. And so as we look at that we have had 
substantial growth in employees and in the cost of that 
infrastructure. That is the main driver of the increase----
    Mr. Johnson. All the more reason, absolutely. I agree with 
you. But all the more reason why an integrated architecture is 
so vitally important. Because in any IT environment, as you and 
I well know, 75 percent of the life cycle costs is in O&M, 
supporting and managing those systems to do that kind of thing. 
The better you do at managing that architecture, integrating 
the systems, and finding cost efficiencies the lower that O&M 
cost is. That is exactly--you are making my case for why I am 
asking for a systems architecture.
    Mr. Baker. And as you are aware, Congressman, I think we 
have made improvements since the May hearing. Most importantly 
to us, we now have a chief architect who gets it. He came up 
and met with your staff, we have delivered three CDs, and 
actually I understand you may take some time to go through 
those.
    Mr. Johnson. I just got those last night. So I have not 
gone through them yet but I can assure you that I will.
    Mr. Baker. We appreciate the input. I think you will find 
it is better than it was last May. It is not where either of us 
would like it to be. But we are making progress on that. I in 
no way disagree with you. As we talked last May, in a swamp 
full of alligators we might choose different paths through 
that. But we are working on architecture and we appreciate your 
input.
    Mr. Johnson. Okay. Mr. Chairman, I yield back.
    The Chairman. Thank you very much. Ms. Brown?
    Ms. Brown. Thank you, Mr. Chairman. Mr. Secretary, first of 
all let me thank you for your service. This Committee has 
always been very bipartisan and we have always worked very 
closely to provide benefits to the veterans. And I probably 
have been on this Committee longer than any other Member except 
the Ranking Member, and we really came on at the same time. His 
name just came before mine. So I have been on this Committee 
for over 20 years. I do not know how they did that. Maybe we 
was elected minutes apart, or something.
    Anyway, the point I am trying to make is I think it is 
sometime important to have some institutional memory, and I 
have it for this Committee. And I do know that I have 
participated in conferences after conferences over the years, 
and I want to thank, you know, a lot of times people ask, 
``Well, what have we done for the veterans?'' Before 2009 we 
did not have forwarding budget. We didn't have, you know, 
everybody wants more. But for the first time we had stability 
when we had this President, President Barack Obama. And the 
budget that we put forth. And I know most people in this room 
may not remember that, but I have been in every conference and 
I know how all of us talked the talk, but was not prepared to 
walk the walk. And so when we have these little fights up here 
I am confident that the veterans are not going to participate 
with some of the things that have been proposed. So I am very 
grateful. And I do know that you have a very difficult job.
    Let me, you know, when we sit here and we know that we are 
stepping down as far as the military is concerned, and so a lot 
more veterans will be coming back to the community, clearly the 
Job Corps, working with the communities, working with the 
mayors, I met with my Mayor last week. We have an unemployment 
rate of close to 30 percent with the veterans. So we need to do 
all we can. Because lack of employment leads to suicides, the 
mental health services. So you have a very tough job. And I am 
happy to be able to work with you in the forwarding budget 
process.
    I want to know, do you have all of the tools you need 
necessary? Because I have been working with the different 
hospitals around the country. And I want to make sure that they 
can get all of the equipment, that you have all of what you 
need. I understand the forwarding budget, we have it. But do we 
have it to make sure that the hospitals and the different 
facilities get the equipment that they need?
    Secretary Shinseki. Thank you, Congresswoman Brown. This 
budget is adequate to meet our requirements for veterans in 
2013. The 2014 advance appropriations gives us that first 
strong step in submitting an even stronger budget for year 
2014.
    This budget is a 10.5 percent increase over the last budget 
at a time when other departments are being tasked mightily. The 
President has been very supportive of veterans. That 10.5 
percent increase is split between mandatory, mandatory is 
actually a 16.2 percent increase and discretionary, about 4.5 
percent. Each of those pieces of our budget is strong enough to 
support our requirements. This budget helps us meet our 
obligations to veterans.
    Ms. Brown. On the homeless can you give us a, I mean, that 
is, you know, you have done a yeoman's job. We have been 
talking about it for a long time. One-third still of the people 
that are on the street are veterans that have not been able to 
get the assistance that they need. What are you doing, the 
department, to, I mean, to increase what you are doing?
    Secretary Shinseki. Congresswoman, I am going to call on 
Dr. Petzel in just a second, because in the execution of our 
homeless programs, I have pinned the rose on VHA because it is 
our largest administration. VHA goes to all of the communities: 
with 152 hospitals; 800 community-based outpatient clinics; and 
300 vet centers. They are out there and they touch our 
communities in ways no other administration does. Our success 
over the last three years has been to establish a partnership 
from our national headquarters level all the way down through 
VHA's medical facilities, and out into those communities so 
that the organizers in those communities, the Catholic 
Charities, the Volunteers of America, the Salvation Army, 
Swords to Plowshares, all of those great folks that, as I have 
said for years now, are creative geniuses when it comes to 
dealing with the homeless because they have done so much with 
so little for so many years. We are putting resources out of 
VA, through VHA, the health care system, and reaching out to 
those community organizers.
    Ms. Brown. Are we partnering with them?
    Secretary Shinseki. I am sorry?
    Ms. Brown. Are we partnering----
    Secretary Shinseki. We are absolutely partnering with them. 
Every local medical center director and CBOC director is in 
dialogue with those individuals. We tried not to take a cookie 
cutter approach to this so that we could adjust that 
arrangement by community, and fit into what the community 
needed.
    Ms. Brown. Thank you. And I hope we have another round 
because I want to talk some more about Job Corps. Because maybe 
some of the Members have some bright ideas about what we can do 
to assist with the veterans unemployment. Because that is a 
crucial problem throughout the country. Unemployment is 
extremely high but veterans unemployment is unacceptable. And 
Job Corps is one way that we could partner with the 
communities. But you know, I am sure we have some geniuses who 
can help work with the VA to help come up with some proposals 
as to what we could do to help. Thank you. I yield back the 
balance of my time.
    The Chairman. Thank you very much, Ms. Brown. With your 
fine last statement you got Mr. Filner's, something about 
exceptional genius. You got his attention. Dr. Roe?
    Mr. Roe. I thank you Mr. Chairman. And to General Shinseki, 
again thank you for your service, not only to the military, but 
to the Veterans' Affairs Committee and to the Veterans 
Administration. I am going to carry on with what Congresswoman 
Brown was talking about homelessness. That has become a real 
passion of mine. And one of the problems we found out when you 
peel the onion back and get down to the weeds, the VA seems to 
be a little slow in moving. Not the VA, but the local people 
need more vouchers. It is a catch-22 because the VA is so 
paternalistic that they will not turf out the case workers so 
that we can have maybe a caseworker that is not a VA employee. 
This creates a problem because when you hit the maximum number 
of people that one caseworker can take care of the vouchers 
stop. In my district, we have a need for a number of more 
vouchers. We can put a lot more people in homes, and every 
night you do not do that somebody is outside. Is there a way 
that we can speed up the hiring of the caseworkers, or turf 
that out so we can get these veterans off? We've got the 
vouchers. We've got the need. We've got the houses. We just are 
not able to get the veterans in there because of this little 
snafu.
    Secretary Shinseki. Congressman, this is a good point. You 
know that the vouchers go through HUD----
    Mr. Roe. I do know that.
    Secretary Shinseki. --they go through the public housing 
authorities. What we had not been doing, and I think you are 
referring back here to some recent history, HUD decides where 
those vouchers go. We recommend, but the final call is made by 
HUD. We found that that decision is made, say in May, and then 
we are now running to go hire case managers in those locations. 
What we have worked out with HUD is when we give our 
recommendation it is a pretty educated guess on where the 
issues are. We would appreciate it if HUD would give those 
locations the strongest consideration. If HUD will do that, 
then we can use the six or seven months while they are doing 
their final analysis, to go ahead and start hiring case 
managers. That is the model that we are now moving to.
    Mr. Roe. Okay. Well let me just walk you down to where I am 
with it. We have got a great relationship with the regional HUD 
office in Knoxville, Tennessee. We have talked to them. We know 
the people on a first name basis because we are trying to 
shorten that. Also, there is still a bottle neck on the case 
workers at the local Mountain Home. So I hope that will work 
because it is leaving veterans outside when we could get them 
inside.
    Secretary Shinseki. Right.
    Mr. Roe. We have the shelters.
    Secretary Shinseki. I will go look at that specific case. 
It had come up elsewhere and we thought this was the fix. We 
have been able to hire case managers in advance of the 
allocation of the HUD vouchers.
    Mr. Roe. And if we do not do that, is there a way that the 
VA can be flexible enough to allow other--we will bring you 
some ideas because I do not want to----
    Secretary Shinseki. We will be happy to work with you on 
that.
    Mr. Roe. Ms. Brown is right. The second thing I want to 
talk about briefly and then we will move on is the mental 
health issue. When you have a situation where more veterans are 
dying of suicide than combat then we have a huge problem in 
this country. And one of the things I hear from local veterans 
about at home is, that they were with individual therapy with a 
psychiatrist or with a specialist in mental health, and now 
they are in larger groups. That does not seem for some of them 
to work as well. Is that just a manpower issue? I know Mr. 
Michaud has talked about this, I have heard him and Mr. Walz 
both talk about this on numerous occasions. It is being brought 
up to me a lot of places I go that these needs probably are not 
being met as well in a large group setting. Are there resources 
in this budget to help alleviate that?
    Secretary Shinseki. Just very quickly, Congressman, there 
is a 5 percent increase between 2012 and 2013 in the budget. 
But if you look at where we started in 2009 to the 2013 budget 
the increase is 39 percent. If you look out to 2014, the 
increase in resources is 45 percent, and that is the firepower 
for us to go out and hire people.
    Mr. Roe. Okay. But it is not getting chewed up by the 
bureaucracy, though? And it is getting down to the veteran? Are 
we just getting bigger up here at the VA, but not actually 
getting the resources down to a veteran where he or she can 
talk to a person and not in a group setting?
    Secretary Shinseki. I am going to call on Dr. Petzel to 
give you the numbers here. But it is not being captured in 
the----
    Mr. Roe. Thank you.
    Dr. Petzel. Thank you, Mr. Secretary. Congressman Roe, the 
money is being distributed down into the field. As the 
Secretary mentioned we have poured a tremendous amount of 
resources over the last three years into mental health 
professionals and now stand at a point where we have 20,500 
clinical professionals, psychiatrists, psychologists, 
psychiatric social workers, etcetera.
    The question is, I think, is that sufficient? This is what 
you are asking. And the sufficiency of that depends on three 
things. One, do we have enough people out there? Have we given 
enough resources to hire enough people? Two, are those people 
being hired? That is, are we filling vacancies as rapidly as we 
can? And three, are we getting the kind of appropriate 
productivity out of those people?
    We have some of the same questions that you have. And to 
that end, we are site visiting every single one of our 152 
medical centers with a mental health team to evaluate the 
staffing, the access that veterans have, and to assess whether 
additional resources are needed. If that is not found to be the 
case, we will provide them.
    Mr. Roe. I thank you, and I thank the Chairman. I yield 
back.
    Ms. Brown. Mr. Chairman? Before you go to the next person, 
can I have a follow up question on that, mental health?
    The Chairman. Yes, ma'am.
    Ms. Brown. Sir, I have a question. You said that we are, 
can we hire? Are we not, are we trying to hire all of those 
people? Or are we working with other agencies as far as 
subcontracting out? Because if we, we are not going to be able 
to hire enough people. He talked about the group setting. Some 
people can benefit from the group setting. But everybody do not 
need that one on one, but some people do. So we cannot, based 
on the resources how can we better utilize the dollars to meet 
the needs?
    Dr. Petzel. Thank you, Congresswoman Brown. We do contract 
in the community. We do provide mental health on a fee basis 
non-VA care. And as the Secretary was just pointing out to me, 
a new modality that is becoming increasingly important is 
telemental health. Where we provide both evaluation and therapy 
in a telehealth setting, where the patient may be remotely, 100 
miles away. They are on a television screen with an appropriate 
supervisor, and the psychiatrist or psychologist is back at a 
larger medical center. It has been very successful in treating 
PTSD and other mental health disorders. And I think that this 
is going to become a more common practice as we move forward.
    Ms. Brown. Well, thank you. I sure would like to review 
that. Because I am a hands on, touching person, and I cannot do 
it over the television. But maybe I can see how it works.
    Dr. Petzel. Okay.
    Ms. Brown. Thank you.
    The Chairman. Mr. Michaud?
    Mr. Michaud. Thank you very much, Mr. Chairman. And thank 
you, Mr. Secretary, for coming down. Three questions, the first 
one is at the time we passed advance appropriation for the VA, 
my concern was what was going to happen on the IT side, 
particularly where health, they are building buildings and IT 
is delayed. Has that caused a problem so far within the system? 
Is my first question.
    My second question is many states have a prescription 
monitor program to help address the growing problems of 
prescription drug abuse. And as of now the VA doesn't report 
data in those programs in different states, which leaves an 
information gap for the people who are trying to address the 
problem. In light of the VA's commitment to deal with the 
substance abuse in a better integrated way, are you willing to 
work with states to provide that data to the states?
    And my third question is, it is my understanding that an 
RFP for the PC3s will be issued sometime in March or April. I 
am concerned that the VA may not be moving, or they are moving 
ahead without a well thought out strategy or vision for the 
PC3s. Can you explain what your expectations are for the PC3s? 
And are you going to work or incorporate some of the ideas, 
well we have done pilot programs under the HERO program, are 
you going to incorporate some of those particular ideas as 
well?
    Secretary Shinseki. Mr. Michaud, I will take the first 
question, and ask Dr. Petzel to take number two, and Secretary 
Baker to take the third one.
    As Members of this Committee will recall, IT used to be 
distributed throughout VA. With encouragement from this 
Committee and by the will of our leadership, we centralized the 
IT programs under a single office. That is our Office of 
Information and Technology under Secretary Baker.
    So we did this and it was the right decision. It took us a 
while to get it done, but we collapsed all of IT into a single 
office.
    Then subsequently we were given this wonderful mechanism 
that you all provided us called advance appropriations. When 
advance appropriations came on it allowed for our health care 
system to have a two-year budget process, really almost a 
continuous budget program because of a two-year submission 
every year.
    In advance appropriations you give us approval for medical 
services, medical facilities, and medical compliance and 
support programs. When you give us approval on medical 
facilities, that is hospitals and community-based outpatient 
clinics. And so we have authority to expend dollars and stand 
those facilities up except for medical IT which is captured 
over here in the IT budget. We are then a bit desynchronized. 
It becomes most obvious in a year when we have a continuing 
resolution. So from October we are executing our health care 
budget but if it is as late as April, as it was last year, it 
is not until April that we can release the IT funding to then 
catch up with those facilities. We are a little desynchronized 
and I am looking for ways to try to solve that.
    Another downside is the IT budget perhaps looks bigger than 
it needs to be. Therefore when there are decisions being made 
about whether or not this budget, IT budget, can be executed, 
as happened last year, we lost $300 million of IT funding which 
was in the IT account but really belonged over to health care. 
We are looking for ways to try to resolve this issue. With 
that, Dr. Petzel?
    Dr. Petzel. Thank you, Mr. Secretary. Congressman Michaud, 
we are very interested in the monitoring program. And by law we 
have been unable to participate up to date. My understanding is 
there is legislation in the offing to make it possible for us 
to do that and we will be a delightful participant in that 
program. I think it is very, very important for veterans and 
for the community at large.
    Mr. Baker. Thank you, Congressman. Two points for you, and 
I really appreciate your question related to the tie to health 
care. Because as I commented earlier about 80 percent of what 
my organization does is directly in those hospitals and helping 
support veterans.
    I want to make sure we are going to answer your question 
right. When you said PC3s, my thinking was you were asking 
about our acquisition about desktop computers? With that----
    Mr. Michaud. No, sorry. No, the patient centered community 
care.
    Mr. Baker. We will let Dr. Petzel have that one instead of 
me.
    Mr. Michaud. Okay.
    Dr. Petzel. Thank you, Roger. That is mine. And you are 
referring to our PACT program, the patient accountable care 
teams. This is the central feature of a cultural transformation 
that is occurring within our delivery system. Patient 
centeredness, team care, continuous improvement, data driven, 
evidence based, providing value and a population component, and 
prevention component to what it is doing. And we do want to 
incorporate those things into the community projects that we 
are involved in, such as ARCH and such as Project HERO. 
Absolutely.
    Mr. Michaud. So you intent to incorporate what you learned 
from those two programs into the----
    Dr. Petzel. We absolutely do.
    Mr. Michaud. Thank you. Thank you, Mr. Chairman.
    The Chairman. Mr. Turner? You are recognized.
    Mr. Turner. Thank you, Mr. Chairman. The complexities of 
this budget are such, maybe you could just help me shed a 
little light on what efforts will be made to help veterans 
secure mortgages? And I know the VOW Act is now kicked in. Can 
you let me know, or let us know, how any of the efforts to help 
veterans get capital for business start ups have taken effect? 
Thank you.
    Secretary Shinseki. Thank you, Congressman. Let me call on 
Secretary Hickey to address the mortgage piece of this.
    General Hickey. Thank you, Congressman for your question. 
VA's loan program has been very active. In fact, for 14 
quarters now we have shown the Nation how to keep from having 
seriously delinquent loans. We have in fact, over the last year 
alone, kept 73,000 veterans and their family members in their 
homes. We see that as a homelessness prevention program. This 
is not something we just serve our veterans for. In fact, we 
serve our servicemembers quite heavily as well, and we engage 
with them in the same respects.
    From a home loan perspective, moving forward we see an 
increase in the demand for home loans for our veterans and 
servicemembers, and we are responding in kind and have some 
good results associated with that.
    Mr. Turner. Do you have any numbers?
    General Hickey. I do, sir. The total number of loans that 
we have to date for 2011, is 357,594 VA home loans. I would 
also share with you that though we help and assist our veterans 
and servicemembers with VA loans, we are also very actively 
engaged with those who choose not to use a VA loan and use 
another loan. We are happy to work with them when they find 
themselves in trouble and help to act on their behalf to keep 
them in their home and keep them solvent in their family 
environment.
    Mr. Turner. Thank you. Any comment on the efficacy of the 
VOW Act in regard to business loans?
    General Hickey. So sir, I can take that. Specifically for 
business loans, what I would offer you, under VOW certainly are 
the tax credits that are provided in the provision of the law. 
Certainly even better for those businesses that choose to hire 
our disabled veterans who have been out of work for a while. So 
we encourage that. We do provide resources to help educate and 
provide employment opportunities for our veterans. 
Specifically, since 1 October last year, we have also added to 
the Post 9/11 G.I. Bill education through four-year degree 
programs, the opportunities to participate in non-degree 
programs, and we have a full 8,000 veterans who are using their 
G.I. Bill benefit to do that today. So I would say that is the 
active part of that piece of the discussion that we are 
involved and engaged in with our veterans.
    Mr. Turner. Thank you. I yield back.
    Mr. Miller. Sergeant Major? Mr. Walz?
    Mr. Walz. Thank you, Mr. Chairman. Thank you, Mr. Secretary 
and to your team for the work you have done. As a veteran I can 
say I am proud of the work you are doing and the care you are 
extending to our veterans. Also, thank you to everyone else who 
is here today. This is certainly a team effort, as you well 
know. The second panel that will be speaking are unwavering 
supporters of our VA but always they can be our harshest 
critics, as they should be. And so I am very proud of the work 
that we have all done. I often say this is, this seems to me 
many times to be the most positive place on Capitol Hill. It is 
about coming together, working together across the aisle to 
find solutions. So I am very appreciative of that. And I also 
think maybe, I see a lot of folks around today with our purple 
lanyards on. A lot of your employees that are out there in like 
the Minneapolis VA and those things. I go a lot of times to 
visit our warriors but there is an awful lot of heroes in the 
likes of yourself and your team that have served in uniform 
too, so thank you for that.
    I would also associate, I know the Chairman started out, 
and I too express my concern with sequestration is simply bad. 
It is a failure of this Congress. It, the Constitution is very 
clear about tasking us to make the hard decisions to cut 
programs and eliminate them if they are not working, but to 
make sure we are funding those that are working. So I am deeply 
concerned with sequestration, too, trying to see how this works 
out. The silver lining might be though, and I don't know, I 
would ask again, if there, what attempts are being made during 
this where DoD is going through trying to understand what 
sequestration means or whatever? Is it another opportunity for 
us to try and look at collaboration? I know when you do this 
budgeting, or are budgeting of DoD and VA the separate silos 
again? Or how are we getting that seamless transition? I know 
it is a broad question but I am always trying to figure out if 
there is a way to merge those two.
    Secretary Shinseki. Well Congressman, I assure you that 
there is lots of effort between both the Secretary of Defense 
and myself to bring our two large departments together. It is a 
constant dialogue between us, as it was with Secretary Gates. I 
met with Secretary Gates I think four times in the last five 
months of his tenure as Secretary, so I can tell you how much 
energy and importance he gave to it. I have met with Secretary 
Panetta several times now. We will be meeting again on the 
27th, working through the issues that are common to both of us 
which are about young men and women in uniform, and veterans, 
one and the same. So how do we create that seamless transition 
we are all looking for?
    Much of it has to be electronic and that is why I push so 
hard to protect what we have set aside here in the IT budget. I 
just want to assure you it is a solid relationship. There are 
still warts on it, and things we need to work through, but we 
now have an integrated agreement on an integrated electronic 
health record.
    Mr. Walz. That is great.
    Secretary Shinseki. It has taken us about three years 
actually two years, to get here with a joint, common, open 
architecture platform that we are both now putting our thoughts 
together on how to build. Hopefully in the near future this 
thing will be fielded.
    Mr. Walz. No, I am certainly glad to hear that and I know 
the commitments there. But I think all of us know it will end 
up being better care for our veterans, and the plus side is it 
will save us money. I think that is trying to get the 
efficiencies out of government.
    I would just end with, I know we have got a lot of folks 
who want to ask questions, Mr. Chairman, but I could not agree 
more on this issue of synchronizing IT back over to the advance 
appropriations. And I would say, Mr. Chairman, and tell my 
colleagues, Representative Betty McCollum has been working on 
this. She and I have been working together to put something 
forward. I think this can be done as a rule change or something 
out of this Committee to allow for that to happen. Because the 
fact of the matter is we can build a new hospital and put in a 
wonderful x-ray machine but we cannot coordinate the transfer 
of those files and the infrastructure that, it would be the 
equivalent now if the plumbing was not part of the advance 
funding on that hospital and you could not put the plumbing in 
the building. I mean, that is how integrated IT is. And it is 
just simply an antiquated piece of legislation, in my opinion. 
I think you guys can do it better. And again, I would make the 
argument if we do it on the front end and we plan accordingly, 
I think we will save money as well as integrating.
    So that piece is out there. We are working on it. Your 
folks have been very good about articulating that to us. So 
with that, again, thank you. We will continue to go through the 
budget. But I too would echo my sentiments that in a very, very 
difficult budgeting time we cannot forsake our veterans. We 
must make those hard choices and I think this budget is doing 
that. So I thank you. Mr. Chairman?
    The Chairman. Mr. Runyan?
    Mr. Runyan. Thank you, Mr. Chairman. And I want to kind of 
roll out with Congressman Walz was saying, about integrating. 
Because I applaud you, Secretary Shinseki, because every time 
we talk to you we talk about accountability. One of the biggest 
issues I think here, and I know we have had conversations, 
there are about 300,000 people in the Veterans Administration, 
correct? Sometimes I question the ability of how long your 
tentacles are to get that down into this administration. 
Because at the end of the day, we have the conversations here 
in these Committees. We all agree that we want, our purpose is 
to take care of veterans. And how we are going to do that 
within this Committee is dedicating funds for that. But if 
people are not being held accountable in the administration, 
and they are there using money that is there to benefit 
veterans, I think is one of the biggest oversights, and a big 
thing we have to do in oversight here in this Committee is to 
do that and to force that down.
    And the two points I want to raise on that, and they are 
not budget related, but in the end of the day they are budget 
related because it does not allow the money to get down, and we 
have had several hearings on here about updating regulations to 
current practices. Now we had the fiduciary hearing last week 
about the same thing, which the regs have not been updated 
since the seventies. Current, you know, and we are implementing 
more and more procedures on outdated instructions and protocol 
on how to do this. Times have changed.
    And in that same process, and it goes right back to your 
accountability aspect of it, you know, the metrics of how we do 
this. I think the one metric that needs to be at the top of the 
list every single time is customer satisfaction. And I think 
that is what is missing in a lot of this. We all, every under 
secretary has their numbers that they come out and talk about, 
and we have the benchmarks that a lot of time in Congress we 
put on you. But at the end of the day, is the customer 
satisfied? Because that is what we hear day in and day out, and 
that is what we are in the business to do.
    And I think there is a lot when I go back to, you know, the 
accountability and you being able to get down to the grassroots 
level and actually, whether it is access to care, all that type 
of stuff, we need to get there. And going back to what Ms. 
Brown was saying, and talking about, and we talk about it 
across the board, with veterans hiring preference in the VA. I 
applaud you guys for that. But my one question, and I will take 
it for the record and I will stop because I am pretty sure you 
do not have the number on it, what is the retention, the 
longevity of those veterans you actually do hire throughout 
this process? Because I think that is a key issue as we move 
forward. It is one thing to give them a job for six months. 
They get frustrated, possibly, with the way this administration 
works. And I think that is one thing we can clear up. Because 
obviously in a constrained budget environment we are in, I do 
not think there is enough money we can appropriate to take care 
of veterans. But I think internally there is plenty of room 
there that we have to take a serious look at, to make the 
customer satisfaction the number one goal. And I think any 
private industry in this country that does that well has a 
great, great leader like yourself that can get down and sink 
down to the grassroots level. And I would just appreciate a 
comment if you do have any retention on veterans hiring 
preference.
    Secretary Shinseki. Yes, Mr. Runyan, you are right. I do 
not have the longevity data here today, so I will be happy to 
provide it for the record.
    I just want to assure you that we want customer 
satisfaction, we are a services organization. Customer 
satisfaction in this kind of an organization ranks very high. 
We make tremendous efforts to try to ensure that we are getting 
a sense for what our veterans and eligible family members think 
of our services.
    Steve Muro here runs the largest cemetery system in the 
country. Seventy-four percent of his workforce are veterans. 
For the last ten years he has been the top customer 
satisfaction entity in the country. That is not because we say 
so, but the University of Michigan ACSI Customer Satisfaction 
Index rates them above Lexus, above Google, above all the 
others, hands down.
    We are not quite up to his standard across the VA. But in 
VHA our pharmaceutical effort has received both J.D. Powers as 
well as Malcolm Baldrige recognitions. We have evidence where 
we know how to do it right in some places, and you are right, 
what we need to do is make sure that is uniform across the 
board.
    Mr. Runyan. Yeah, and I agree. And just to keep the 
pressure on you, I mean customer satisfaction for a long time 
was very high at Arlington Cemetery also and we see what we 
have ended up there. So it is the due diligence of not only 
your administration but this Committee to keep that up. And 
with that, I yield back, Chairman.
    The Chairman. Mr. McNerney?
    Mr. McNerney. Thank you, Mr. Chairman. Thank you, Secretary 
Shinseki and staff. I just want to say, I want to congratulate 
you. Back home I am hearing from the veterans that this is not 
the VA that was there ten years ago. The VA is responsive, it 
is reaching out, it is getting things done. And I like to think 
it has to do with the leadership of the group in front of us, 
with the budget that has been increased over the last several 
years, and with this Committee. So I want to congratulate 
ourselves.
    But there is still a tremendous amount to do. For example, 
last week, we had a hearing on the fiduciaries. And it was just 
breathtakingly stark, the difference in viewpoint between what 
the VA administrators were saying and what the beneficiaries 
were saying. And both of them had legitimate points of view. 
The administrators were trying to follow the regulations to the 
best of their ability, and they have to do that. And yet there 
was significant fall out. So there is still a lot of 
collaboration, there is a lot of language that needs to be 
discussed, a lot of hard work to make sure that this end of the 
programs are responsive to the veterans, not just to some sort 
of framework that is out there. And so we need to pat ourselves 
on the back and yet we need to take a deep breath and plow 
forward. But I am really proud to be a part of this Committee 
and to work with this group.
    So I have a few questions. The online veterans benefits 
system will be a critical component in the claims process. Can 
you give me an update as to where we are, and what hiccups you 
have seen in this system?
    Secretary Shinseki. Secretary Hickey?
    General Hickey. Thank you, Congressman. I believe you are 
speaking about our Veterans Benefits Management System?
    Mr. McNerney. Yes.
    General Hickey. It is our paperless IT system that brings 
us from an essentially pencil and paper environment into an 
environment where we are working on a claim in an electronic 
method.
    We have been through phase one. I think you have heard 
about it, and many of you I believe have come with us to see 
what is going on in Providence, Rhode Island, and also in Salt 
Lake City. We have been through phase two where we have done 
some more additions to functionality in the system and tested 
it. We have run nearly a thousand claims through it now, and we 
are completing those claims in about 120 days per claim. We are 
moving, and right now, we are in phase three of that process. 
We are expanding, scoping, and scaling it so that by the fourth 
quarter of this year, we will have 16 regional offices on the 
system, and then 40 by the end of the calendar year in 2013.
    In terms of issues we are seeing, as in any new system, as 
you develop it, you see points that you want to make 
adjustments to and shape and change. We have had active 
involvement and engagement from super users sitting right next 
to coders and developers to make that happen. We are working 
closely with OIT on a day-to-day and week-to-week basis to 
ensure that we close any gaps that we have, and do.
    Critical to that is this fiscal year 2013 budget and every 
dollar that is in it that is associated with VBMS.
    Mr. McNerney. Well, thank you. The Vocational 
Rehabilitation and Employment Program is also very valuable, 
and peer to peer and so on. But I hear from back home that 
there is an average counseling ratio of one counselor to 145 
veterans. What can we do to reduce that ratio to make it more 
responsive?
    General Hickey. Congressman, thank you for asking that 
question. We actually are right, now today. Our target is 125 
to one. We believe that is an appropriate workload. We are at 
139 today, so we are closing in on that gap, and we will close 
it even further. We are taking new steps to meet earlier in the 
process with our veterans. You will see this budget reflects a 
growth in VetSuccess on Campus vocational and rehabilitation 
employment counselors. We get those counselors out where our 
student veterans are today, to help them both in the adjustment 
and in their graduation rates using their G.I. Bill. Also you 
will see this budget reflects a growth of VR&E counselors at 
our wounded, ill, and injured sites so that we start the 
planning process with them earlier rather than waiting for them 
to exit service and come into the veteran community.
    Mr. McNerney. Okay, well it sounds good. Mr. Secretary, one 
last question. The VA cites management improvement as one of 
the areas where it can achieve savings. Can you elaborate on 
that a little bit, give me some details?
    Secretary Shinseki. I am going to call on Dr. Petzel.
    Mr. McNerney. Okay.
    Dr. Petzel. Thank you, Mr. Secretary. Congressman, we have 
a number of management improvements that have been put in 
place, in fact, in the previous year and we are elaborating on 
this year. As an example, in non-VA care where we spend about 
$4 billion, we now are able to use Medicare prices for 
reimbursement for both the facilities and the professional fee. 
Previously we were only using Medicare for the professional 
fee. This is going to save us over $100 million this coming 
year.
    Secondly, we are reducing non-VA hospitalization, contract 
hospitalization. Third, we have dramatically decreased the cost 
of dialysis. We now have a regulation allowing us to charge 
Medicare prices. We have renegotiated contracts with all of our 
providers and have saved literally hundreds of millions of 
dollars over the cost in 2010 of dialysis. And those are just a 
few examples of the many things we are doing.
    Secretary Shinseki. Mr. McNerney I just want to have Mr. 
Muro add one piece to this with the first Notice of Death 
office and what we have achieved with it.
    Mr. Muro. Thank you, Mr. Secretary. Congressman, our First 
Notice of Death office collects information on veterans deaths. 
And by doing so we are able to go into our VA system, our 
electronic system, and annotate that the veteran has passed 
away, which ensures timely discontinuation of payments to the 
deceased. And we are working now with VHA to cancel 
appointments and to cancel medication shipments that are going 
out. By doing this, we are able to save the funding that would 
have gone out to the veterans and prevent collections from 
veterans families after they pass.
    The Chairman. Mr. Bilirakis?
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it 
very much. And thank you, Mr. Secretary, for all of your good 
work on behalf of our heroes. I have one question. I have been 
closely following the many implications of the many provisions 
of the Affordable Health Care Act, particularly the HHS 
contraception mandate. General, I know that one of your 
priorities is ending veterans homelessness, and of course it is 
our priority on this Committee as well. I also know that the VA 
partners with many faith-based organizations to reduce veterans 
homelessness. Has the VA taken into consideration the 
repercussions of the HHS mandate, particularly if these faith-
based entities choose to pay fines rather than violate their 
religious tenets by providing contraception? And that such 
fines could potentially reduce resources available to meet the 
needs of homeless veterans?
    Mr. Filner. I thought we would get through a whole hearing 
without you mentioning contraception.
    Secretary Shinseki. Congressman, I would say there is more 
work to be done here. The President has announced a policy that 
would ensure employers affiliated with religious organizations 
that they will not have to pay or refer for contraceptive 
services. The administration has said we will work 
collaboratively with organizations that self-fund to address 
their concerns. Our local community partners, of which we have 
many across the country, thus far, like VA are committed to our 
goal of ending veterans homelessness by 2015 and there is no 
indication that they will be deterred from their commitment to 
that goal of ending veterans homelessness. But as I say, we are 
early in the discussions.
    Mr. Bilirakis. Okay. I would like to continue to work with 
you on this issue. Thank you, Mr. Secretary. I yield back.
    The Chairman. Ms. Sanchez?
    Ms. Sanchez. Thank you, Mr. Chairman. And I want to thank 
all of our panelists for being here today to answer questions. 
I think the questions are many and I am going to get through 
the most important questions that I have fairly quickly. 
Secretary Shinseki, I recently had the opportunity to visit the 
patient aligned care center at the Long Beach VA facility. And 
I want to applaud the efforts there to provide an integrated 
system of care. But one of the things that has been brought to 
my attention is the levels of staffing for the new models that 
will be put in place. I heard from doctors, nurses, and other 
practitioners to discuss how thinly they feel that they are 
being stretched in this new system. And it is a system that 
they want to see succeed. I mean, they are employed there 
because they believe in the mission, they want to provide the 
service. But I am wondering if you could maybe go into a little 
bit of detail as to how the $433 million that is proposed for 
patient centered care, how that will go towards staffing to 
make sure that we have the staff available to meet the needs of 
those veterans?
    Secretary Shinseki. I am going to call on Dr. Petzel for 
the details of this.
    Ms. Sanchez. Sure.
    Dr. Petzel. Thank you, Mr. Secretary. Congressman Sanchez, 
when we implemented the PACT program several years ago, the 
first thing that we did was a survey of what we called PACT 
readiness, one of which was to determine how many support 
people that were in place for each one of the providers in a 
PACT clinic. The desirable ratio agreed to in the entire health 
care community is three people per provider. We found that 
there were places that were reaching that goal, and others that 
weren't. One of the major things that has been involved in the 
PACT new model financing has been to provide the medical 
centers with, and the clinics, with the number of people that 
they need in order to support the provider.
    I will look specifically at Long Beach, and I can in fact 
get back to you. But our goal, and we are very close to it as I 
understand, is to have three support people per provider in 
each one of our clinics.
    Ms. Sanchez. Okay. Because I, you know, I hear stories 
about staffing being stretched thin and, you know, no new 
hires, or people leave and then are not replaced. And so the 
concern is to have the appropriate amount of people available 
to provide the services that are needed. And I would appreciate 
you following up with me about that.
    To the Secretary, I know that you and I have previously 
discussed some of my concerns, specifically with respect to the 
VA employing female specialists to assist specifically female 
veterans with VA services. And I know that the administration's 
budget contains $403 million to address the needs of women 
veterans. I am wondering if you can tease that out a little bit 
and provide more specifics on how that money will be used to 
address the growing needs of the female veteran population?
    Secretary Shinseki. Thank you, Congresswoman. I am going to 
call on Dr. Petzel for the details, but this is to confirm that 
you and I have had discussions about this.
    Dr. Petzel. Thank you, Mr. Secretary. Our goal is to ensure 
that every female veteran has a choice of providers, and that 
if they wish to, they will be able to be seen by a female 
provider. About 75 percent of women choose to have a female 
provider and we are able to meet that need in virtually every 
setting except perhaps some remote community-based outpatient 
clinics, where we just do not have those sorts of facilities 
available.
    I can for the record, give you the details about how much 
staffing, what kind of staffing would be associated with the 
$403 million increase that we are seeing in women's health 
programs. I do not have that number at the tip of my fingers. 
But it is important to us, as I am sure it is to you, that 
women have a choice. That if they wish to see a female provider 
they are afforded that opportunity.
    Ms. Sanchez. Yeah, one of the things on my tour of the Long 
Beach facility was they do have a sort of separate women's 
clinic area where women can choose, you know, that to be their 
point of entry to the system.
    Dr. Petzel. About 60 of our largest medical centers have 
specific women's centers, women's health centers, where all of 
the services are provided in that same environment. The rest of 
them are associated with women specific primary care clinics, 
when they are not as large. And then in community-based 
outpatient clinics, we have trained the primary care providers 
in the necessities of women's health.
    Ms. Sanchez. Great. I appreciate your time and look forward 
to the additional information. I will yield back.
    The Chairman. Thank you. Mr. Huelskamp?
    Mr. Huelskamp. Thank you, Mr. Chairman. And Mr. Secretary, 
good to see you here. I appreciate the conversation with you 
and your staff last week. And I have a couple of questions. I 
appreciate the recent question about choices and opportunities. 
It made reference to rural areas. That would describe much of 
my congressional district, and, but I often get asked the 
question, ``Mr. Congressman, we served our country, however, we 
have difficulty accessing the medical care we have been 
promised.'' And actually this past weekend one of the smaller 
communities in my district, there was a newspaper article about 
them finishing the construction of a new hospital, a $24 
million hospital, for a community of 3500 folks. And there are 
veterans in Scott City, Kansas. But if you look at, and pull up 
the Web site, it indicates if you would like to access health 
care through the system your closest opportunity would be 69.5 
miles, that is a CBOC. If you want to access a hospital, your 
closest hospital is 203 miles. What do I tell my veterans, Mr. 
Secretary, when they say, ``You know, we would like to attend 
our local hospital, or we would like to receive care in our 
local hospital. We would like to receive care from our local 
doctor.'' What am I supposed to tell them, other than, ``Get in 
the car and drive 69.5 miles or drive 203 miles to the nearest 
VA hospital?''
    Secretary Shinseki. Congressman, fair question. If there is 
one thing we have focused on for the last three years it is how 
to serve veterans closer to home. It is not either a VA CBOC or 
a VA hospital. We have the option to provide fee basis service. 
We also provide contract care. I am not familiar with the 
specific instance here, we will go take a look at it. Let me 
ask Dr. Petzel to fill in the gaps here.
    Dr. Petzel. Thank you, Mr. Secretary. Congressman 
Huelskamp, we also have two pilot programs where we are looking 
at specifically what you have been talking about. Project HERO, 
which is in its last year, and Project ARCH, which is just 
beginning. And I know that Kansas is one of the network areas 
where we are piloting Project ARCH.
    Both of these are multipurpose, but a primary thing is to 
look at the feasibility of providing fee care and contract 
care. And as importantly if not more importantly, the cost of 
providing fee or contract care. We intend to explore once the 
results of these pilots are available the feasibility of doing 
more of these kinds of efforts. Forty-three percent of our 
veterans are rural. A large percentage of that 43 percent are 
highly rural, as you find I think in large parts of Kansas.
    Mr. Huelskamp. And I appreciate that. And I will follow up 
on that, and I appreciate the pilot project in Pratt, which is 
about 60 miles from a hospital.
    Dr. Petzel. Right.
    Mr. Huelskamp. We are talking about folks that are 200 
miles away, that if they were to drive to the nearest VA 
hospital they would be passing along probably 20 community 
hospitals. My veterans are saying, ``Can't we just have a card 
like in Medicare that we would not have to have a special pilot 
project? We simply would access our local doctor in our local 
hospital.'' And they are not talking about a pilot program, and 
which is in, and initially it looks like Pratt is not working 
very well and we appreciate data as we go along. But what are 
we supposed to tell them? That it is coming sometime in the 
future. Meanwhile they have probably the best medical care they 
are going to get within 250 miles, is at their local hospital, 
just down the street.
    Dr. Petzel. As I said, there is the fee basis option in 
some of these communities if they are eligible for that. And 
telehealth and telehome health----
    Mr. Huelskamp. But I appreciate that, doctor.
    Dr. Petzel. --are becoming a much large part of what we do 
rurally.
    Mr. Huelskamp. What makes them eligible?
    Dr. Petzel. I would like to respond for the record to that.
    Mr. Huelskamp. Sure.
    Dr. Petzel. But basically it is service-connection and 
being treated for a service-connected disability. Otherwise, 
they would not be eligible. Unless they are a part of one of 
these pilots.
    Mr. Huelskamp. Well I presume they were eligible, had 
service-connected injuries. But they can go to their hospital? 
Who do they call to say, ``I would like to go to the Scott City 
Hospital rather than driving to Wichita for care?''
    Dr. Petzel. They would talk to the intake people at their 
local hospital. And this is done commonly. Again, if they are 
service-connected, and they live that distance, more than 60 
miles, that would be someone that we would often give a fee 
card to, to get care in the community.
    Mr. Huelskamp. Yeah, I appreciate that. And one follow up 
as well. The question referenced the Affordable Care Act. I am 
very troubled by the mandates that have been proposed about 
religious organizations. But Mr. Secretary, the religious 
organizations have already responded. They think it is a 
distinction without a difference, and it is going to be 
difficult to expect people of faith to participate in 
Affordable Care Act with these particular type of mandates. So 
I appreciate it. I would like to be involved in the discussion 
as well. Mr. Secretary, it is very troubling when we have a 
First Amendment and many Americans feel like these mandates 
violate the First Amendment. So I appreciate the time. Thank 
you, Mr. Chairman.
    The Chairman. Mr. Carnahan?
    Mr. Carnahan. Thank you, Mr. Chairman, and also special 
thanks for your commitment to come out to St. Louis next week 
to follow up an oversight visit at Cochran VA Medical Center. 
And Mr. Secretary, really to you and all your team for the work 
you have done for our veterans, but also close to home on 
behalf of the folks in St. Louis and veterans there for the 
work you have done to help turn things around at Cochran. The 
targeted investments there, we get good reports back from our 
veterans about improvements there. And reiterate my invitation, 
I hope you will come out when they open up that new state of 
the art sterile processing department there that you and your 
team can be a part of that. We think that is an important 
success story that we want to be sure and share with the 
community, and to our veterans.
    And since we last spoke I had another issue, close to home 
issue raised, but also I think it has some implications 
nationwide. And it has to do with the Veterans Benefits 
Administration claims processing centers. One large one, as you 
know, in St. Louis employs a number of our veterans there. My 
understanding is that the VA is getting into a contract with a 
Xerox subsidiary, ACS, to outsource parts of the claims 
processing. I am hearing reports from staff in St. Louis they 
are being asked to train contractor replacements. And I had 
five particular questions I wanted to submit for the record and 
hope we can get some detailed answers to, but I would like to 
see if we can get a brief answer here at the hearing.
    First, did VBA comply with the law requiring there to be a 
public/private competition before direction converting this 
kind of work? This was a change in the law that was championed 
by our former Missouri U.S. Senator Kit Bond to address these 
kind of issues.
    Secondly, do we know this contract is actually saving money 
in terms of supplying those kind of services?
    And why is this contract being put in place now when many 
millions have been invested in pilot programs all over the 
country as part of this transformation? And the national roll 
out of these projects was to be completed next year, was my 
understanding.
    Fourthly, are you aware of this particular contractor we 
have heard reports of a not very good track record in providing 
services to the Federal government.
    And finally, with regard to our veterans and their high 
jobless rates now, why is VBA not using its new hiring 
authority under the Vow to Hire Heroes Act instead of assigning 
this work out to contractors? In St. Louis alone, I know nearly 
half of those employees are veterans.
    I know that is a mouthful but I wanted to get that on the 
record. And I am going to ask if you could address that briefly 
within the time we have.
    Secretary Shinseki. Congressman, thanks. I am not familiar 
with that contract personally and so I will provide you a full 
answer for the record.
    Mr. Carnahan. Great. Thank you. I appreciate that. Again, I 
think that has impact nationally in terms of those services I 
think are very important, but also close to home in our region 
of St. Louis.
    Mr. Filner. Congressman, would the director of VBA know 
more about the contract to get a quick answer? I mean, somebody 
must know the contract.
    General Hickey. So thank you, Congressman. I think you are 
referring to the VBMAP (Veterans Benefits Management Assistance 
Program) contract with ACS Federal Solutions?
    Mr. Carnahan. Right.
    General Hickey. Absolutely. We followed all the provisions 
for the VBMAP contract. And what it is, and I will explain it 
very quickly, it is a short-term ability for us to essentially 
do two things: one, push through some claims to get them ready 
to rate because we grew our rater workforce last year 
significantly, and we need to have work for them to rate in 
order to get through that backlog which, as you all well know, 
is over 500,000 claims today.
    Two, it is not meant to be long-term, but we are looking at 
how they do the work, trying to take lessons from that to bring 
them into VBA, and finding the ways in which we are 
incorporating lessons as we move forward on our transformation 
model.
    So I understand the initial concern from the workforce. I 
have sent a letter out to them this week telling them that 
nobody is going to lose their job over this. Nobody is going to 
be replaced as a result of this, so I just want you to know 
that. We are----
    Mr. Carnahan. Excuse, if I, just if I could interrupt? So 
no current employees are expected to lose their positions?
    General Hickey. No, sir.
    Mr. Carnahan. You are strictly using this as a, to 
supplement and take care of a backlog?
    General Hickey. Yes, sir. For the short-term, yes, sir.
    Ms. Brown. Will the gentleman yield?
    Mr. Carnahan. Yes, I would yield.
    Ms. Brown. Let me just say, that sounds good. But when you 
all put the contract out, why is it that you did not have some 
criteria, whoever is getting the contract why cannot they use 
veterans where possible? I mean, that should have been a part 
of the RFP, or whatever, when you sent the proposal out, and it 
still can be a part of whoever has the contracts should have 
some preference for veterans when they are qualified and they 
have a very high unemployment. I am not saying you are going to 
do additional work, you have additional money, we should have 
an opportunity to hire additional veterans.
    General Hickey. Congresswoman Brown, that is a great 
question. And I will tell you that ACS has made a concerted 
effort to do that. In fact, 15 percent of the folks in this 
contract are veterans.
    Mr. Filner. Fifteen? Or 50, did you say?
    General Hickey. Fifteen percent right now, but they are 
continuing to go to----
    Mr. Filner. Is that required or is that just their 
voluntary thing?
    General Hickey. They are voluntarily doing this----
    Mr. Filner. But the question was, why do we not insist on 
it in their contracts? And why is it not 50 instead of 15? I 
mean, why are we complimenting them on doing this, it still 
sounds small to me. You are issuing the contract: Put the 
mandates on the requirements that we want. Why can we not do 
that?
    General Hickey. So Congressman, we have had conversations 
back and forth with the contractor to encourage them----
    Mr. Filner. You are not answering the question. You are 
having conversations with the contractor. Why does the contract 
not specify and mandate that preference level so you do not 
need the conversations that is part of their requirement? And 
as, if Mr. Carnahan is correct, that they may not even have a 
history of doing this, I mean, put it in the contract. Why are 
you going through these voluntary conversations?
    General Hickey. Congressman----
    Secretary Shinseki. Fair enough, Mr. Filner. We will take a 
look at this.
    Mr. Filner. Oh, come on. You can give me some general 
answer. Are you saying we cannot do it legally? Or we do not--
--
    Secretary Shinseki. I do not know the answer to that 
question.
    Mr. Filner. Yeah, but she must know the answer. Why, I mean 
come on. This is not rocket science here. You issue contracts a 
hundred times a day. Why can we not have contracts that do 
this?
    Secretary Shinseki. You can. And I do not know the 
circumstances of this contract and I would like----
    Mr. Filner. But she apparently does, so why did we not do 
it here?
    General Hickey. So Congressman, I will go back to our 
acquisition folks to ask----
    Mr. Filner. Oh come on, you know, you guys know the answer 
to this. Why are you so afraid to just tell us?
    Secretary Shinseki. I am not sure it was not in the 
contract, Mr. Filner. That is what I need to go check.
    Mr. Filner. Well but she sure, she did not say it was or 
was not.
    General Hickey. Congressman----
    Mr. Filner. You said, you started off your testimony, ``I 
know the contract.'' So did it specify or not?
    General Hickey. I will find out and give you for the 
record, exactly what the contract----
    Mr. Filner. --I mean, I don't understand this. Come on. You 
know this better than you are saying here.
    Ms. Brown. Reclaiming my time that I probably do not have--
--
    Mr. Carnahan. I will yield the time that I do not have.
    The Chairman. Three and a half minutes ago you had--we do, 
if you would, but we have one more Member who has not asked a 
question.
    Ms. Brown. Right. He probably will be okay with me 
finishing. What we want in this Committee, with the high 
unemployment, close to 30 percent, one place that we can start, 
and one complaint I constantly get, is that the VA that does 
billions of dollars of work do not do it with veterans. I mean, 
there are opportunities for, someone asked the question earlier 
about helping veterans' businesses, we should have some kind of 
a grants program, but part of all, everything we do should have 
some opportunity for veterans to participate. We should set the 
standards with the VA. I mean, it is a business. Government is 
a business, regardless of what some of these people in this 
Committee and in this Congress think. It is a big business. And 
it employs a lot of people and it has a lot of opportunities. I 
think about it as my grandmama's sweet potato pie. We should 
all have the opportunity to get a slice of that pie. Thank you.
    The Chairman. I'm sorry, Mr. Donnelly is before you. Mr. 
Donnelly?
    Mr. Donnelly. Thank you, Mr. Chairman. You always show 
great wisdom. Mr. Secretary, I just want to thank you and your 
team for everything you have done for our veterans. I talk to 
our veterans all the time and they say they have never had the 
type of care and the type of services that they have received 
in recent years. So to everybody, I want to thank you very, 
very much. And especially on behalf of the folks in the South 
Bend, Indiana region for the center that is going there. And 
then also to the vets groups for your dedication, and to the 
employees. And from my home state of Indiana who have made it 
possible for these people to get the kind of care they have 
received, I want to thank you very, very much for that.
    And then to Mr. Muro, I mentioned this to you once before 
that my mom is in one of the military cemeteries. They do an 
extraordinary job there. I try to get there as often as I can 
and it has always been a place that we take great, great pride 
in. So thank you very much for that.
    And then my question is this, on the patient centered care 
initiative, when we talk about differences, what are the 
differences we can expect as we move forward, as we go more 
towards this? What are the improvements we can be looking for?
    Dr. Petzel. That is an excellent question. And I would like 
to just go through what patient centered care means. It means 
two things, first of all. Number one, it means that the 
patients are in control of their health care. That they have 
access to the information and the advice, the counsel they need 
to be an important part of the decision process. And then the 
second thing that it means is that the whole care system 
revolves around the needs of the patient. That is, they have 
access to the care they need in that place, in a 
chronologically and geographically reasonable fashion. The 
scheduling of patients is around the needs of the patient. So 
we have after hours clinics, we have Saturday clinics, 
etcetera.
    And then it translates into the way we deliver care. The 
medical care system has been disease oriented in the past, I 
think as Dr. Roe would probably agree. The idea was you were 
treating somebody with diabetes, you were treating somebody 
with hypertension, or obesity. That is shifting to a much more 
holistic view of how you take care of a person. That is, you 
are treating the individual and you are providing care for the 
things that they need. The blood sugar level may be important 
to us in the diabetic patient. But his or her mobility, his or 
her lifestyle may be a much more important thing to them than 
those blood chemistries. And we need to take into account what 
is important.
    So it is number one, personalizing the care. Number two, it 
is care that is aimed at taking care of the entire person as 
opposed to taking care of a specific disease entity. And then 
thirdly is, it is integrated, and it is coordinated. So that 
you get all of the services that you need under the auspices of 
that PAC team. They take responsibility for everything that you 
might need in your health care environment.
    Mr. Donnelly. And I do not know if this is you again, Dr. 
Petzel. But one of my concerns has always been for our soldiers 
who are coming home, our servicemen and women, that they be 
able to somehow without any stigma receive the mental health 
care that might be needed as they make this transition. And I 
know, General, you said that you are working closely with DoD 
on transition issues and working together. But I am, I just 
want to make sure that for these young men and women when they 
come home that so many of the things they have seen and dealt 
with and may wake up at night thinking about, that there is 
some way to, and I know we work hard to do this, but that there 
be no stigma, and that there be an opportunity for them to be 
able to pick up the phone as we have, with many of the programs 
we have to get the care they need.
    Dr. Petzel. Thank you again, Mr. Secretary, and 
Congressman. There are several things that are happening right 
now that are, I think, are going to have a real impact on the 
stigma and the destigmatization of mental health. Number one is 
we have a campaign out called Make the Connection, where 
veterans who have had mental health issues are relating how 
important it was to them to be able to talk to somebody at the 
VA about their problems. And it is a very effective, we would 
be delighted to present the Committee with a copy of the 60-
second spot that is being used across the Nation.
    The second thing is that we are trying to integrate mental 
health care into our primary care setting so that when you 
visit your primary care provider you can also have your mental 
health issues dealt with so that you do not have to go to a 
separate mental health clinic. Because some people are really 
quite reluctant actually to go.
    Mr. Donnelly. I think that is a big step.
    Dr. Petzel. And for women particularly, we have 
incorporated behavioral health and mental health providers into 
the women's health centers so that, again, they do not have to 
go to a separate mental health clinic in order to have their 
mental health needs treated. We think that the integration of 
primary care and mental health is a big important wave of the 
future.
    Mr. Donnelly. Thank you very much. Mr. Chairman, thank you.
    The Chairman. Thank you. Mr. Reyes?
    Mr. Reyes. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, and all of you for accompanying us. I apologize for 
being late, but we had Secretary Panetta in the Armed Services 
Committee this morning and one of the main topics was BRAC, 
which always gets the attention of every Member of Congress. So 
I apologize for being late, but I also want to associate myself 
with the comments of the Members here expressing appreciation 
for your leadership and the quality of health care that is 
being given to our veterans, and the outreach that has 
dramatically improved under your leadership. We appreciate 
that.
    In regard to customer service I was wanting to. I happened 
to be at a Veterans Day parade the day after one of the 
presidential candidates had proposed privatizing health care by 
giving vouchers to veterans. There was unanimous opposition 
from the veterans there at that parade against privatizing or 
giving vouchers for health care. They are extremely satisfied 
with the quality of health care that they get, at least in my 
district in El Paso.
    I also had an opportunity a few months back to go to the VA 
hospital in Houston. In regard to women veterans, Houston 
hospital has a separate women's health care facility that is 
working tremendously well. So to the extent that we can make 
that a strategy throughout the VA system, I would strongly 
recommend and urge that we follow it. In talking to some of the 
women veterans there, they definitely felt more at ease having 
a facility that they could go to themselves. They definitely 
felt that they were getting the kind of attention that made a 
real difference to them. So I would urge that we do that as 
much as possible.
    The other thing that I saw there, which was pretty 
interesting, was that one of the doctors had developed a system 
of tracking the day to day surgical operations by using a 
computer software program. And I have mentioned it to the 
Committee before. The question I have is, within the system, is 
there a way that best practices can be proposed so that they 
can be incorporated around the country using those kinds of 
improvements?
    Secretary Shinseki. Congressman, I am going to call on Mr. 
Baker to talk about this program that you have seen. We have 
similar interests. Going back to your first comment about women 
veterans, we are doing everything we can to stay out ahead of 
what we know are going to be growing numbers over the next ten 
years. As I indicated earlier, between 2009 and this budget, 
2013, we have increased funding for women's programs by 124 
percent. Then if you roll this out one more year to 2014, with 
the advance appropriations, our investments go up 158 percent. 
I expect there will be more growth. What I am trying to assure 
you of is we are trying to stay out ahead of the requirements. 
Identify the requirements, where they are, and get resources 
where they need to be.
    Let me turn to Mr. Baker on the second part of your 
question.
    Mr. Baker. Thank you, Congressman. One of the things that 
has made the VA electronic health record system great is 
exactly what you described. Doctors looking at the problem and 
helping develop the software, or even developing the software 
themselves. Most of what we have right now grew up in that 
fashion.
    The sort of thing you are describing, where an individual 
doctor has put together a package tends to move through our 
system if you will very democratically. If it is good, other 
people pick it up. And if it is not, something else tends to 
take its place. We have a long history of doing that. We have a 
whole program for doing that, it is called Class 3 software in 
our vernacular. There are at last count about 12,000 different 
pieces of Class 3 software in the system, some of them used 
broadly and some of them used in only one facility. So they 
grow up exactly that way. But innovation in Vista is what has 
made it great and it is exactly that approach that that doctor 
has taken.
    Mr. Reyes. Great, thank you. Mr. Chairman, I have a 
question for the record from one of our colleagues, Congressman 
Hinojosa from the Rio Grande Valley. The VA clinic has been in 
operation now for a year and they have nothing but good things 
to say, except for a couple of issues on reimbursement. So can 
I give it to you for the record?
    Secretary Shinseki. Absolutely. I will be happy to provide 
an answer for the record.
    Mr. Reyes. Thank you. Thank you very much, Mr. Chairman.
    The Chairman. Ms. Brown, you are recognized for one final 
question.
    Ms. Brown. Thank you. First of all, I would like to submit 
for the record a story today in the Washington Post about 
members of the Reserve component. I understand the VA has no 
direct responsibility for active duty medical care but what is 
the VA doing to supplement what the Department of Defense to 
care for those heroes once they return home? I want to submit 
that, I am sure, without objections. And going back to what----
    The Chairman. Now wait a minute. I get to say without 
objection.
    Ms. Brown. Oh, all right. I did not read the script, Mr. 
Chairman.
    The Chairman. Without objection.
    Ms. Brown. Thank you. And going back to the, what we said 
about the Corps and high unemployment, it goes back to, and I 
guess we could work together if you need additional language or 
information as far as the hiring of veterans, of contracting 
with veterans and minority businesses. If it is something that 
we need to do on our part, I am certain that we will. Because 
with this influx of addition of veterans, even the Job Corps, 
we need to see what we can do.
    I was talking to the Mayor of Jacksonville just a couple of 
days ago. And we were talking about the fact that we have this 
unemployment, and we are working together, and they have the 
big conferences for the veterans. Even though a lot of times 
they get hired they do not stay on but about the month. So the 
problem is we need more than just the companies willing to hire 
them. We need to make sure that they have the skills, the 
counseling, the technology they need to stay on the job. And so 
that is long term. It is just not helping them to get the job, 
but helping them to keep the job.
    Lastly, Mr. Secretary, I know the question came up about 
women's health care. I want to make sure, I do not care who the 
VA is contracting with, women are not second class citizens, 
women veterans. Are they able to get the medical, medication or 
whatever they need to take care of themselves as they deem 
necessary?
    Secretary Shinseki. Yes, to that last question. To the 
first question you had regarding National Guard and Reserve, 43 
percent of our beneficiaries in the benefits we handle are 
National Guard and Reserve veterans of the Global War on 
Terrorism. I am not sure why the disconnect here. But if you 
have particulars we would like to follow up and resolve them.
    On the contract, we will look at this. Congresswoman, you 
know for three years I have pushed veterans employment, and I 
would not let something get in the way of doing a better job at 
this. I will go look at this contract because I am not familiar 
with it, but if we need help I would be happy to work with you 
on it.
    Ms. Brown. Yes, sir. And I just was not speaking of that 
one contract, I am speaking of the policy pertaining to how we 
handle contracts. Are we partnering with veterans businesses, 
small businesses, minority businesses? I guess that is what I 
am saying.
    Secretary Shinseki. Absolutely. As you may know, we run a 
National Veteran Small Business Conference every year. We did 
one in New Orleans last year. We had a tremendous turn out. We 
used this as a training opportunity where veteran owned small 
businesses and service-disabled veteran small business owners 
can come in and get tutored on what it takes to be successful. 
They also have an opportunity to speak directly with VA's 
contract manager so they have a good idea of what proposals 
ought to look like. We are going to do it again in Detroit the 
last week in June of this year.
    Ms. Brown. Okay.
    Secretary Shinseki. We are going to link to the small 
business conference, a jobs fair to hire veterans as well. 
There will be two events going on simultaneously. We have 
government and for-profit businesses in the area of Detroit who 
are going to participate, offering jobs and also mentoring 
small business owners.
    Ms. Brown. Back to the question of women, I want to be 
clear we are talking about birth control. Are they able to get 
whatever they need, as they deem necessary?
    Secretary Shinseki. Congresswoman, I am not a physician, 
but I believe those services are provided when requested.
    Ms. Brown. Thank you. This is very important to women 
veterans. Lastly, Mr. Secretary, you are really a bright spot 
in the administration. And I know it is very difficult dealing 
with the multiplicity of what we have here. But I want to thank 
you for your service, and I am very impressed that you 
committed to come to St. Louis. You have my written request to 
come to Orlando. Thank you.
    The Chairman. Thank you very much. Members, I appreciate 
your questions. Mr. Secretary, thank you very much for your 
patience. And you and your team are now excused. Thank you, 
sir.
    I would like to remind everybody there is a second panel.
    The Chairman. If I could get everybody to return to their 
seats I would appreciate it. Thank you to the second panel for 
making your way to the table, reminding Members that we are 
supposed to have our first vote at 1:30.
    This second panel includes people who we all know very 
well. We appreciate you being here today to testify.
    Mr. Carl Blake, the National Legislative Director of the 
Paralyzed Veterans of America; Raymond Kelley, Director of 
National Legislative Services for the Veterans of Foreign Wars 
of the United States; Mr. Jeffrey Hall, the Assistant National 
Legislative Director of the Disabled American Veterans; Diane 
Zumatto, who is probably the newest person at the table, but 
has been before this Committee before, National Legislative 
Director for AMVETS; and Tim Tetz, the Director of National 
Legislative Commission for The American Legion.
    Thank you all for being here today. Each of your written 
statements will be included in the hearing record and you will 
each be recognized for five minutes.
    I don't know who is going to begin first. Mr. Blake, you 
are recognized for five minutes.

   STATEMENTS OF CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR, 
  PARALYZED VETERANS OF AMERICA, RAYMOND C. KELLEY, DIRECTOR, 
NATIONAL LEGISLATIVE SERVICES, VETERANS OF FOREIGN WARS OF THE 
  UNITED STATES; JEFFREY HALL, ASSISTANT NATIONAL LEGISLATIVE 
  DIRECTOR OF THE DISABLED AMERICAN VETERANS; DIANE ZUMATTO, 
    NATIONAL LEGISLATIVE DIRECTOR, AMVETS, TIMOTHY M. TETZ, 
 DIRECTOR, NATIONAL LEGISLATIVE COMMISSION, THE AMERICAN LEGION

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman. Chairman Miller, 
Ranking Member Filner, Members of the Committee, on behalf of 
the co-authors of the Independent Budget, Paralyzed Veterans of 
America is pleased to be here today to discuss the fiscal year 
2013 budget request for the Department of Veterans Affairs.
    Since you already have my full written statement for the 
record that includes most of the analysis of the Independent 
Budget recommendations, I am going to limit my comments to some 
observations and thoughts on the budget request specifically, 
and some of the comments made here this morning.
    I will begin by saying the Independent Budget certainly 
appreciates the increases provided for by the Administration 
for the VA programs for fiscal year 2013. That being said, it 
does not eliminate our concerns that you raised and many 
Members of the Committee have raised regarding sequestration 
and its impact on veterans health care programs specifically.
    We find it quite troubling that the Office of Management 
and Budget has taken months to come up with a position that we 
feel like should be pretty well spoken, and the fact that it 
has taken this long certainly is worrisome to us and we 
appreciate your introduction of H.R. 3895, that we believe will 
correct that problem once and for all.
    We also appreciate the fact that the VA has been 
particularly in recent years very open to working with the 
veteran service organizations more so than in the past, of 
course we believe it could be done more, but we certainly 
appreciate the fact that they have brought us more into the 
fold as they have moved forward, particularly with their 
transformation of their VBA claims process.
    All that being said I am going to focus on a couple of 
concerns that I have specifically.
    There was a lot of discussion here this morning about 
efficiencies in particular. The Administration continues its 
presumption for program improvements and efficiencies to the 
tune of more than $1.2 billion I believe in 2013 and in 2014.
    What is more troubling to me is the discussion that I 
believe you raised, Mr. Chairman, about this excess resources 
that apparently they have identified to the tune of 
approximately $3 billion in 2012, about $2 billion I think they 
say in 2013.
    It sort of begs the question, how has the Administration 
determined that they have $3 billion too much for 2012 when we 
have seven months of this fiscal year still to finish? If they 
came back after the fact and said we had all this extra money 
that would be one thing, but sort of in midstream, it is 
certainly a concern for it. It doesn't mean that it wouldn't 
necessarily be realized, but it is certainly a concern.
    They identify health care services in particular which was 
a big chunk of it, they identify long-term care. I wonder where 
are those savings for long-term care? Does that mean that there 
are fewer veterans taking advantage of VA's long-term care 
programs? This given fact that the veterans population is 
actually aging.
    So we have some concerns about that. And the fact that they 
don't even meet what they are mandated to meet as far as their 
capacity requirement for long-term care.
    We also have concerns about this roller coaster ride of 
medical care collections estimates. I would note that two years 
ago the fiscal year 2012 collections estimate was $3.7 billion. 
Last year when they submitted the 2012 budget, it was revised 
to $3.1 billion. And I would note that this year's budget shows 
that their estimate is now $2.7 billion. So that is a $1 
billion change over the course of the last two years, and I 
understand there are factors that play into those changes, but 
the fact is that that difference in resources which they factor 
into their ability to provide health care services has to have 
some sort of an impact on the delivery of services in a timely 
fashion and quality services to veterans. So I think these 
things need to be teased out.
    I go back to the excess resources they have. As important 
as I would consider that issue, I would think that there would 
be more than a couple of bulleted points or a paragraph in a 
four volume document explaining that. That might be the most 
important fact that they outline in their entire budget, 
because that certainly has an impact on everything going 
forward. So we certainly hope that the Committee will pursue 
that and that the VA will come forward with more information 
about it.
    Lastly I would direct my comments towards the 2014 advance 
appropriation. While the Independent Budget does not offer 
specific budget recommendations for that for any number of 
reasons, a couple of things jump out at me about the 2014 
recommendation. Given our concerns about whether 2013 is 
actually a sufficient budget put forward, it could arguably be 
a fairly small increase for 2014. Additionally they project a 
very huge jump in medical support and compliance over previous 
years funding. I would point out that I believe that is the 
part of the administrative arm of the medical care side of the 
VA, so that would certainly give us pause. At the same time 
there is an even larger decrease projected for medical 
facilities.
    While I know they project some transfers of resources and 
staffing in medical facilities to medical services, I would 
also note that the budget shows a substantial decrease in non-
recurring maintenance in 2014, a very substantial decrease.
    So with all those thoughts, Mr. Chairman, I would like to 
thank you for the opportunity to be here today and we would be 
happy to answer any questions that you might have.

    [The prepared statement of Carl Blake appears in the 
Appendix]

    The Chairman. Thank you.
    Mr. Kelley.

                 STATEMENT OF RAYMOND C. KELLEY

    Mr. Kelley. Mr. Chairman, Members of the Committee, on 
behalf of the 2.1 million members of the Veterans of Foreign 
Wars and our auxiliaries thank you for the opportunity to 
testify today.
    As a partner of the IB the VFW is responsible for the 
construction portion of the budget, so I will limit my remarks 
to that.
    I would like to start by thanking the secretary and his 
team. His work has improved the service for and the lives of 
veterans. So Mr. Secretary, thank you for that.
    A vast growing and aging infrastructure continues to create 
a burden on VA's overall construction and maintenance 
requirements. These facilities are the instruments that are 
used to deliver the care to our injured and ill veterans. Every 
effort must be made to insure that these facilities are a safe 
and sufficient environment to deliver that care.
    A VA budget that does not adequately fund facility 
maintenance and construction will reduce the timeliness and 
quality of care.
    Since 2004 utilization in VA has grown from 80 percent to 
121 percent, and during that same time facility conditions has 
dropped from 81 percent to 71 percent. This is having an impact 
on the delivery of health care.
    To determine and monitor the condition of its facilities, 
VA conducts facility condition assessments, or FCAs. These 
assessments include inspections of building systems such as 
electrical, mechanical, structural, and architectural safety 
and water protection.
    The FCA review team can grant a rating between an A and an 
F. A through C is a new facility to an average facility, a D 
rating is below average, an F rating means the condition is 
critical and requires immediate attention. To correct the D's 
and F's, VA would need to invest nearly $10 billion.
    VA is requesting $400 million for 4 of the 21 partially-
funded VHA major construction projects in fiscal year 2013, 
leaving well over $5 billion remaining in partially-funded 
projects dating back to fiscal year 20007.
    These projects include improving seismic deficiencies, 
providing spinal cord injury centers, completing a polytrauma 
blind rehab and research facility, as well as expanding mental 
health facilities.
    This request is too low to support the ever growing need of 
veterans, therefore, the IB partners request that Congress 
provide funding of $2.3 billion for VHA major construction 
accounts and the total of $2.8 billion for all major 
construction accounts. This will allow VA to complete all 
current partially-funded major construction seismic 
corrections, and a mental health center, and fund the four VA 
identified projects for 2013.
    Although VA's funding request for minor construction 
account is lower than the IB request, this level of funding 
will allow VA to fund more than 120 minor construction 
projects.
    Even though nonrecurring maintenance is funded through VA's 
medical facilities account and not through the construction 
account, it is critical to VA's capital infrastructure.
    NRM embodies the many small projects that together provide 
the long-term sustainability and usability of VA's facilities.
    VA is requesting $774 million in NRM for fiscal year 2013, 
but to keep pace with the need and to reduce the backlog of 
NRM, $2.1 billion would be needed.
    The IB is not requesting this amount of funding for NRM, 
only pointing out the actual need to reach VA strategic goals.
    An enhanced use lease provides VA the authority to lease 
land or buildings as long as that lease is consistent with VA's 
mission. Although enhanced use lease can be used for a wide 
range of activities, the majority of these leases result in 
housing for homeless veterans and assisted living facilities.
    In 2013, VA has 19 buildings or parcels of land that are 
planned for enhanced use lease; however, that lease authority 
has expired and we encourage Congress to reauthorize it so VA 
can continue to put empty and underused life space to work for 
veterans.
    Mr. Chairman, thank you for the opportunity to testify 
today and I look forward to any questions you or the Committee 
may have.

    [The prepared statement of Raymond C. Kelley appears in the 
Appendix]

    The Chairman. Thank you, Mr. Kelley.
    Mr. Hall.

                   STATEMENT OF JEFFREY HALL

    Mr. Hall. Thank you, Mr. Chairman. Good morning to you and 
Ranking Member Filner and Members of the Committee. On behalf 
of the Disabled American Veterans and our 1.4 million members, 
all of whom are wartime disabled veterans, I am please to be 
here today to offer our recommendations of the Independent 
Budget as it relates to veterans benefits programs, judicial 
review, and the veterans benefits administration for fiscal 
year 2013.
    Mr. Chairman, we are now in the third year of VBA's latest 
effort to transform its outdated and inefficient claims 
processing system into a modern rules based digital system. 
Over the next year we will begin to see whether their 
strategies to transform these people, processes, and 
technologies will finally result in a cultural shift away from 
focusing on speed and production to a business culture of one 
of quality and accuracy, which is truly the only way to get the 
backlog of claims under control.
    Although we have been very pleased with VBA's increasing 
partnership with VSO stakeholders, we urge this Committee to 
provide constant and aggressive oversight of the many 
transformation activities that are going to take place 
throughout this year.
    Perhaps the most important initiative is the new veterans 
benefits management system, or VBMS, which we will begin 
rolling out in June with full deployment planned by the end of 
2013. As VBA works to complete, perfect, and deploy this vital 
new IT system, it is absolutely crucial that sufficient 
resources are provided.
    We note that the budget for VBMS this year drops down from 
$148 million for fiscal year 2012 to $128 million for fiscal 
year 1013. We hope that this Committee will thoroughly examine 
whether that level of funding is sufficient to complete this 
essential program.
    In order to sustain VBA's transformation efforts, the 
Independent Budget for fiscal year 2013 recommends maintaining 
current staffing levels in most business lines. Given the large 
increases in claims processors over the past few years, we 
believe that VBA's focus should now be on properly training new 
and existing employees.
    That is why we are concerned about recent reports from the 
field indicating that VBA is already short on training dollars 
and cutting back on the Challenge training program done at its 
centralized training academy. Yet at the same time, we have 
heard that the VBA is instituting a new round of mandatory 
overtime for compensation service employees which at time and a 
half would have significant impact or implications.
    We hope that the Committee will look into these questions 
to insure that VBA's focus and resources remain on quality and 
accuracy and not just production.
    The VR&E budget proposal for fiscal year 2013 does request 
funding for approximately 150 new counselor designated for the 
expansion into the integrated disability evaluation system and 
for the VetSuccess on campus program, both of which we support; 
however, in order to reach their target of having one counselor 
for every 125 veterans served, they will need approximately 195 
additional counselors for fiscal year 2013 in order to meet the 
projected workload increase.
    The IB also recommends a staffing increase at the Board of 
Veterans Appeals. Although the board is currently authorized to 
have 544 full-time employee equivalents, its adopted budget for 
fiscal year 2012 only supported 532, and for fiscal year 2013, 
the budget request would further reduce the FTEE to 527.
    Looking at historical appeals rates and the rising number 
of original compensation claims, the IB recommends that VBA be 
given the sufficient funding for the authorized workforce in 
2013 of at least 585 FTEE.
    Mr. Chairman, the IB also recommends that Congress this 
year finally enact legislation to repeal the inequitable 
requirement that veterans military longevity retired pay be 
offset by an amount equal to their disability compensation if 
rated less than 50 percent disabled. Congress has previously 
removed this offset for veterans with service-connected 
disabilities rated 50 percent or greater and should pass 
legislation to treat all veterans equitably.
    We also recommend that Congress eliminate the survivor 
benefit plan and the dependency and indemnity compensation 
offset. Under current law the amount of an annuity under the 
survivor benefit plan must be reduced on account of and by an 
amount equal to dependency and indemnity compensation for 
survivors and dependents. This offset is inequitable because 
there is no duplication of benefits since payments under the 
SBP and the DIC programs are made for different purposes.
    And finally, Mr. Chairman, the IB strongly recommends that 
Congress and VA determine the most practical and equitable 
manner of providing compensation for non-economic loss and the 
loss of quality of life suffered by service-connected disabled 
veterans and then move expeditiously to implement this new 
component.
    The Institute of Medicine and the congressionally mandated 
Veterans Disability Benefits Commission and even the Dole 
Shalala Commission all recommended that the current disability 
benefits system be reformed to include non-economic loss and 
the loss of quality of life as factors in compensation.
    Both the Canadian and Australian disability compensation 
programs already do just that and it is time that we did the 
same for the brave men and women who have suffered permanent 
disabilities affecting their entire lives in their service to 
this great Nation.
    Mr. Chairman, this concludes my statement, I would be happy 
to answer any questions.

    [The prepared statement of Joseph A. Violante appears in 
the Appendix]

    The Chairman. Thank you very much.
    Ms. Zumatto.

                   STATEMENT OF DIANE ZUMATTO

    Ms. Zumatto. Distinguished Members of the House Veterans' 
Affairs Committee thank you for this opportunity to you share 
the IB's recommendations in what we believe to be the most 
financially responsible way while still insuring the quality 
and integrity of the care and benefits earned by American 
veterans.
    In light of this Nation's unresolved fiscal crisis, the 
IBVSOs have serious concerns about the potential reductions in 
VA spending which will seriously impact our veterans, their 
families, and survivors.
    That being said, my main focus today will be the NCA.
    The single most important obligation of the NCA is to honor 
the memory, achievements, and sacrifices of our veterans who so 
nobly served in this Nation's armed forces. These acts of self-
sacrifice by our veterans obligate America to preserve, 
rehabilitate, and expand our national cemetery system as 
necessary.
    These venerable and commemorative spaces are part of 
America's historic material culture. They are museums of art 
and American history. They are fields of honor and hallowed 
grounds and they deserve our most respectfully stewardship.
    The sacred tradition of our national cemeteries spans 
roughly 150 years back to the time when the earliest military 
cemeteries were situated at battle sites, at field or general 
hospitals, and at former prisoner of war sites.
    The NCA currently maintains stewardship of 131 of the 
Nation's 147 national cemeteries as well as 33 Soldiers' lots.
    Since 1862 when President Lincoln signed the first 
legislation establishing the national cemetery concept, more 
than three million burials have taken place in national 
cemeteries, which are currently located in 39 states and Puerto 
Rico.
    As of late 2010 there were more than 20,021, 21 acres of 
historic landscape, funerary monuments, and other architectural 
features included within established NCA cites.
    VA estimates that of the roughly 22.4 million veterans 
alive today, that approximately 14.4 percent of them will 
choose a national or state veteran cemetery as their final 
resting place.
    With the transition of an additional one million 
servicemembers into veteran status over the next 12 months, 
this number is expected to continue rising until approximately 
2017.
    The NCA, which is the Nation's largest cemetery system, 
invested an estimated $39 million into the National Shrine 
Initiative in fiscal year 2011 in its efforts to improve the 
appearance of our national cemeteries.
    While an NCA survey conducted in October 2011 indicated 
that process continues to be made in reaching its performance 
measures, more needs to be done.
    In order to adequately meet the demands for interment, 
gravesite maintenance, and related essential elements of 
cemetery operations, the IBVSOs recommend $280 million for the 
NCA's operations and maintenance budget in fiscal year 2013 
with an annual increase of $20 million until the operational 
standards and measures goals are reached. This request also 
includes $20 million for the National Shrine Initiative.
    Finally the IBVSOs call on the Administration and Congress 
to provide the resources needed to meet the sensitive and 
critical nature of the NCA's mission and to fulfill the 
Nation's commitment to all veterans who have served their 
country so honorably and faithfully.
    The state cemetery grants program compliments the NCA's 
mission by establishing gravesites for veterans in areas unable 
to fulfill veteran burial needs. In fiscal year 2011 the 
cemetery grants budget was $46 million, and that funded 16 
cemeteries, including the establishment of five new ones. The 
IB recommends an increase to $51 million for 2013 in order to 
meet rising demands which should peek in 2017.
    Since burial benefits were first introduced in 1917 they 
have continually evolved, and this process needs to continue in 
order for this benefit to meet 21st Century needs and expenses.
    Benefits should be split into two categories. Veterans 
within the accessibility model and those outside the 
accessibility model.
    Plot allowances as well as burial benefits for both service 
and non-service-connected veterans need to be increased to meet 
rising costs.
    That is the conclusion of my statement.

    [The prepared statement of Diane Zumatto appears in the 
Appendix]

    The Chairman. Thank you very much.
    Mr. Tetz.

                  STATEMENT OF TIMOTHY M. TETZ

    Mr. Tetz. Chairman Miller and Ranking Member Filner, thanks 
for the opportunity to join this distinguished panel and 
present the American Legion's viewpoint on the 2013 VA budget.
    If the VA budget were a house that was up for sale, you 
would have a lot of prospective buyers. The curb appeal of this 
budget is phenomenal. You have an expansion of existing 
programs for homeless, rural, women, and student veterans, you 
have activation of new much needed medical facilities 
throughout the Nation, and you have an increase in minor 
construction funding.
    VA proposed increased funding to eliminate the backlog of 
claims and homelessness and expand access.
    If the VA budget were a house, it would have the granite 
counter tops, walk-in closets, a fenced yard, and every modern 
amenity a prospective buyer would want. Buy it now because it 
is undervalued for the market. Everyone has their eyes on this 
one.
    One small problem, it is not the gem it is made out to be. 
Yes, certainly there are some things to celebrate, but there 
are many more things we should be worried about.
    One such worry is the funding of the major, minor, and 
nonrecurring maintenance and construction accounts. As we 
outlined in our testimony through the SCIP process, the VA has 
identified more than $50 billion in construction projects that 
are necessary in the coming ten years.
    We appreciate the additional $792 million in medical 
services account that will help the activation of Las Vegas, 
Orlando, Denver, and New Orleans health centers. The veterans 
of these regions have waited years for these facilities, yet it 
strikes me stupid that the VA would only ask for $608 million 
in minor construction money and $532 million in major 
construction for the remainder of the projects that SCIP has 
identified. At this pace, the 10-year plan will go on for 50 
years.
    Today's 30-year-old sergeant who just returned from 
Djibouti will be a nursing home resident if the VA facility was 
built.
    The VA construction budgets must be increased to meet the 
real needs identified by the SCIP plan.
    The American Legion also supports the increased funding for 
the NCA. Secretary Muro and the thousands that work for NCA are 
the heroes in the VA, they exceed every standard from veteran 
contracting to employment of veterans to monetary savings 
through operational efficiencies, yet they are beginning to 
feel the budget pinch and need an increase to meet those 
requirements.
    The budget proposes a seven percent increase in the medical 
care collection funds. VA points to increased collections in a 
legislative fix to bill private insurer rates rather than the 
Medicare rate. Neither the proposal or increased collections 
have been successful in the past.
    What happens when VA falls short on MCCF collections? VA 
must scrimp and save elsewhere. Maybe they don't hire their 
full staff, maybe they put off purchasing upgraded equipment, 
perhaps they put off training or other programs. In the end it 
is the veteran who suffers. It will be the veteran who has to 
wait longer for his claim to be processed. It will be the 
veteran who must wait two months for her appointment. It will 
be the veteran who won't have the latest technology to diagnose 
cancer early.
    The MCCF fund is budget gimmickry at its best. It is 
unrealistic and a poor excuse for an increase in an increased 
budget.
    So if the VA budget is our dream home, I am going to 
encourage you to invest in buyer's insurance, you are going to 
need it.
    I am not the most experienced person in this room or even 
at this table, yet I can guarantee that some of the selling 
features of this VA budget are never going to see the light of 
day. If we look at that 10.5 percent increase, we are talking 
about $13.3 billion. Take away the $9.6 billion of mandatory 
spending for compensation, education, and disability claims. 
That was earned with the blood, sweat, and tears of our 
military. Now you are left with $3.7 billion. Take away the 
$500 million of rollover savings that the VA hasn't spent from 
a previous fiscal year and you are left with $3.2 billion.
    Some argue Congress will never agree upon the tax cuts and 
spending cuts elsewhere in the budget to come up with the $1 
billion to fund the Veterans Job Corps, so Veterans Job Corps 
becomes just another dream for the 20,000 jobless veterans, and 
we are left with only $2.2 billion increase in the VA budget. 
Take out the $200 million of MCCF collections and you are left 
with a VA budget increase of $2 billion.
    Now $2 billion isn't much to scoff at, there are plenty of 
agencies that would love to have a $2 billion increase in their 
budget, but how are we going to meet the needs of a million 
veterans who are returning from Iraq and Afghanistan? How are 
we going to keep pace with the escalating costs of care, 
construction needs, and badly needed technology improvements? 
Two billion dollars is not quite two percent, 1.6 to be exact, 
and if the Office of Management and Budget comes in later this 
year and asks for two percent from the VA, it is game over.
    Our house, our wonderful house with such great curb appeal 
is nothing more than a house of cards. We have left our 
Nation's heroes with nothing more than broken promises, 
meaningless letters, and intolerable wait times.
    Our Nation's veterans deserve real increases with real 
money that can meet their real needs.
    We must not, you cannot put forth a budget based on pipe 
dreams of collections, hopes of grand compromises that generate 
$1 billion, and putting off purchases of infrastructure 
investments for today or tomorrow.
    The American Legion implores you to take a thorough review 
of this budget, weed out the parts that are unrealistic or may 
never happen, make sure you adequately fund both the minor and 
major construction accounts, allow VA to remain a leader in 
prosthetic and medical research, and assist the VA in breaking 
the back of the backlog.
    That is going to cost money, real money. Your task is to 
make sure your priorities find and protect that money. Protect 
it as you were protected by those who served. Find it for it is 
your time to serve now, your time to serve our Nation's 
veterans and give them a budget they deserve.
    Thank you for the opportunity to present the American 
Legion views, I look forward to answering your question.

    [The prepared statement of Timothy M. Tetz appears in the 
Appendix]

    The Chairman. Thank you very much for your testimony.
    I was going to ask for further explanation of the gimmickry 
that you had talked about in your testimony, I think you have 
been pretty clear with it.
    But Mr. Blake, you too also referenced some of the way the 
numbers have been fudged, and I just want to ask, where do you 
think the VA is being less than transparent?
    Mr. Blake. I don't know that is an easy question to answer, 
but if it is a question of transparency, I go back to my point 
about this $3 billion in excess funding.
    I wouldn't consider just simply saying we have got $2.9 
billion in excess funding and that is it, transparent. They 
didn't give us any--there are no details to that other than 
some mild breakdowns they say approximately $2.6 billion I 
think in health care services, a couple hundred million in 
long-term care, and another hundred or so million in other 
health care programs I think, but that is not very specific.
    So I think there needs to be a full accounting of where 
that money is, how it--you know, why it is excess?
    And I go back to my point that I don't know how we can 
decide up front that we have an excess of resources unless we 
have just preordained that we are going have an excess of 
resources, which means that somehow or the other, perhaps we 
are not going to meet the full demand that is going to come to 
the VA within the next seven months.
    So you know, I am not suggesting--I think there just needs 
to be more clarification about some of these savings that their 
claim, that they are going to realize and excess money that 
they have.
    The Chairman. I mean to a layman who is not a CPA, it 
appears that they have a very difficult time budgeting. We have 
all talked about that, and each of you have brought that up in 
your comments. Does it instill confidence in you, number one, 
that they could be that far off in their numbers? And number 
two, do you agree with their ability to take that money then 
and use it as they choose without coming back to Congress to 
reprogram the money?
    Mr. Tetz. Mr. Chairman, I think from our perspective what 
we are seeing on the--out in the field we are seeing you have 
got medical center directors who are not given their full 
allotment of money who are saying where did the money go? You 
gave me these increases and we are not getting them and seeing 
it down here, and then magically at the end of the year they 
are reprioritized albeit for sometimes very good programs, but 
there needs to be a better dialogue.
    If we are here on the hill lobbying as a group for 
increased funding for program X, Y, or Z and you no longer need 
it for program Z, well, shouldn't we be part of the group that 
you come to and say where do you want us to use this money now?
    Mr. Blake. Not fully understanding this excess money that 
they have, it would seem to me, that at least the health care 
services portion must be governed by the model, which we have 
obviously put a lot of stake in, and it concerns me that they 
have apparently, you know, rerun the model and found that they 
had that much extra savings, which that is not necessarily out 
of the realm of possibility, but that is a four to five percent 
difference in its funding needs, that is pretty substantial 
when you are talking about a budget this big.
    So I would really like to know what--it almost seems that 
it would have to be sweeping assumption changes to have that 
much of a difference in the change in its resources. So you 
know, I think they would almost have to identify, you know, 
some of these ideas.
    In their budget request last year they projected a need for 
certain I think $900 million was their contingency fund, but 
they said that they built in there some assumptions about 
economic factors without really assigning a good dollar figure 
to that. I mean is that part of this? You know, there certainly 
needs to be a better accounting of it than we just have this 
much extra money.
    The Chairman. Any other comments?
    Mr. Filner.
    Mr. Filner. Thank you. I just want to again thank you for 
your incredible work on this that allows us to ask these 
questions. I mean you have given us some--I want you as my 
realtor too.
    There are some real questions here, and to say, we have 
extra resources for a VA that would like to do a lot more, it 
really weakens the whole argument for the next budget, right? I 
mean, if you say you don't have this money, or you have this 
extra money.
    I just also want to say for the record that I see in the 
audience, who stayed from the first panel, Secretary Petzel, 
Secretary Hickey, Secretary Muro, Secretary Baker, thank you 
for staying. I think it is important that you do hear directly 
our questions, so thank you very much for staying for the 
second panel.
    So we will take this critique seriously and try to do what 
we can to make sure that your concerns are met.
    Thank you so much.
    The Chairman. Mr. Michaud.
    Mr. Michaud. Thank you very much, Mr. Chairman.
    A question for each of you. It relates to what you talked 
about this morning when you look at the maintenance and 
construction budget, but it also is actually a separate piece 
of legislation that I would like to get your opinion on because 
it relates to the construction piece.
    Last week in the House of Representative we passed 1734, 
the Civilian Property Realignment Act, which sets up a BRAC 
process where this group will look at facilities that are 
currently out there. DoD is exempted from it. VA, we tried to 
get it exempted but it failed. So the VA is part of that BRAC 
type process if the Senate passes it.
    And I have two major problems with it. Number one is we do 
not know, over the next five years, the soldiers that come back 
exactly what facilities they are going to be needing, which 
could cause a problem with more space.
    And number two, under that process that money doesn't stay 
within the VA, it goes in to pay down the debt. So we are 
talking assets that VA currently has and actually taking that 
money for something else.
    Have you seen that legislation and if so are you supportive 
or do you oppose it?
    Mr. Kelley. The VFW hasn't taken a position on the piece of 
legislation, but what I will add is that we are satisfied with 
the BUR process that VA uses to assess their facilities to see 
if it needs to be repurposed, if it can demolished, what to do 
with that property.
    It is a very usable model, so I would--my knee jerk 
reaction without making a stance on this bill would be that 
allow BUR to do its job, don't let the larger government 
influence what VA needs to do with its property.
    Mr. Hall. I just concur with my colleague, Ray, on that.
    Mr. Tetz. I think, Mr. Michaud, the American Legion doesn't 
have a formal position on that bill, but obviously we have been 
through the cares process, the BUR process now, and when we 
look at the enhanced use lease agreements and that overall 
structure, you bring up a great point, how are we going to 
address the veterans' needs in five years from now, and when we 
sell something in the northeast that people aren't using today 
are we truly doing that?
    And keeping that as close to the users, and that being the 
veterans and the VA, certainly would be in the best interest of 
our Nation's veterans.
    Mr. Michaud. Okay. Thank you very much.
    Well, I would suggest that you pay attention to the 
legislation because it passed the House, it is on its way to 
the Senate. I agree with the rest of it except for the VA part 
for the reasons that I mentioned.
    My next question, if you look at the budget, the VA budget 
they are adding $433 million in 2013. The budget requests VA--
well, it states that it has a specific plan to support the 
cultural changes necessary to become a more patient-centered 
health care system.
    Have your organizations been part of this transformation 
efforts? Have you seen the plans that the VA offers? To each 
Member of the panel.
    Mr. Blake. I think that is PACT is what they are calling 
it.
    Mr. Michaud. Yes.
    Mr. Blake. The Independent Budget has some discussion on 
PACT, and what I will say is, we don't necessarily believe PACT 
is a bad thing, it is a model that is pretty commonly used in 
the private sector for health care delivery.
    That being said, what we have heard is the way staffing is 
being done for these PACT teams and the resources are being 
allocated, doesn't seem to fit the way it is supposed to be 
done. That is what we have heard.
    There is certainly more discussion about it in the IB and I 
am not the expert on it, but you know, it is something we 
definitely have within our--it is one of the major issues going 
on within VHA as far as its transformation that we are 
concerned about.
    Mr. Tetz. Mr. Michaud, as the only Member on the panel not 
part of the IB, we have had similar briefings from the VA. 
Obviously patient care is utmost concern. I can get back to 
your staff on our individual basic, but many of those models 
basically take and throw the entire organization and super 
structure on its ear and say instead of paying attention to the 
nurses and the doctors, we are now going to pay attention to 
the patients, and when they do so, sometimes the nurses and 
doctors aren't willing to give up that care.
    And so to instrumentally change, that really has to be 
believed in from top to bottom all through the program.
    Mr. Michaud. I see I only got seven seconds left, so just a 
yes or no question. Each one of you, have you seen the plan? 
Yes or no?
    Mr. Blake. I personally have probably seen the cover of the 
plan, but I know my staff has seen the plan that specifically 
works on it, yes.
    Mr. Kelley. Same as Carl, we have staff that has looked at 
this and has talked with VA. I am not personally fully aware of 
all aspects of it though.
    Mr. Hall. Same for DAV, I have not seen it, but we have 
individuals that deal with that issue specifically.
    Ms. Zumatto. I actually have not seen the plan yet and I 
don't have any staff to look at it, so obviously I need to get 
it.
    Mr. Tetz. And with the exception of Diane, I agree with the 
rest of them, we have staff that review this.
    The Chairman. Mr. Walz.
    Mr. Walz. Thank you, Mr. Chairman, and thank you all for 
being here. There is literally millions of veterans that stand 
with you that you represent, them and their families, and I 
can't tell you as a member of several organizations how proud I 
am to have you here. These are the conversations we have to 
have. I know each and every one of you is the staunchest 
supporting there is of VA, and because of that you will be the 
harshest critics, so I always appreciate the very candid 
responses that you give.
    And I would have to say, Tim, I loved your analogy. I am 
also a big fan though of Extreme Makeover. We can do this.
    And the President's budget and the VA budget is a 
suggestion. Constitutionally we hold the purse strings, we hold 
the final decisions. So this is where democracy works its best 
and works its will, and it is very important that we have this, 
so I want to thank you for that.
    And again, I would also be the first to say Members of 
Congress are experts at gross generalizations, so I want to be 
very careful of what I do on this, but I do concur and I think 
some of you brought up some things that I am hearing 
personally, and I go out and talk to people in the field. I 
talk to those directors, and I talk to the nurses, and I talk 
to the people that are cleaning the rooms to hear what is going 
on.
    And one of the things that I am hearing, and this came from 
one of my areas, we have out in Minnesota, listing one of them, 
we have dental equipment and the space needed ready to stand up 
three new dental facilities or ability to deliver that care; 
however, we haven't hired anybody to do it. So it is boxed up 
sitting there and that is going.
    Does that surprise any of you? Maybe I am just looking at 
where you are at. If that is the case again that our intent was 
to fund and put it out there and make that available, how are 
we making sure it happens?
    And I am wondering, and I think Carl brought up a good 
point along with the Chairman, of how do we account--is not 
standing those dental clinics accounting for some of the money 
that is not spent that is going back to go elsewhere? Because I 
wanted the dental clinics, that is what I voted for and that is 
what I wanted to see.
    So I am just curious to get with you on this. And I say 
that being very careful of a gross generalization, being very 
careful of the dreaded disease around here, somebody told me 
and we did it, it needs to be more accurate than that, but I am 
hearing it from you somewhat echoed.
    If somebody could give me just your feeling on this. Is 
that kind of what is happening here? Are we not given the 
ability to follow through on some of the things that we are 
doing or intended to do?
    Mr. Tetz. Mr. Walz, the system, we are saving, task force 
at the American Legion stands up and sends around the 
facilities nationwide has made their visits this year and they 
continue to do so, and it is not uncommon for us to come across 
empty facilities like this or empty rooms where you are, hey, 
when we have the right people we can have this telehealth 
center.
    The problem with telehealth, and it is a great program and 
I agree with Dr. Petzel on the future that it has, telehealth 
requires somebody to be there to open up to office on the one 
end, the rural end, and somebody to be there, the professional 
on the other end, to take it. If you don't have those people, 
all this infrastructure in the world doesn't do anything for 
veterans.
    Mr. Walz. Yeah, and I think for me it is about following 
through and I think best made plans are best intentions, but I 
am pretty certain if those three dental areas were up they 
would be full, we could keep them full if we had the dentists, 
the dental hygienists, everything else that goes with it, so I 
am concerned.
    And that leads me to my next question. Again, don't want to 
over generalize, but this comes from a claim processor out 
there. They are being asked to do 20 hours of overtime each 
month, pressure is incredibly high, they lost three mid-range 
folks who just simply didn't want to do it anymore, and that 
happens in every business.
    Again, I don't want to over generalize, but I heard you 
mention it, I am hearing it, and kind of if there is smoke 
there is fire.
    Has this been a problem that you are seeing? I think Mr. 
Hall you mentioned this in yours. And I know this directly from 
the person who came to me and again said it, but with the 
disclaimer on that if you are hearing it too.
    Mr. Hall. We are hearing it. We are hearing it as an 
organization, I think other members of the IB may be. I have 
personally heard it because I have friends that work for the VA 
in various places, and it was just basically said as mandatory 
overtime. There is no choice. It is not, you know----
    Mr. Walz. Yeah, that is the way it is being described to 
me.
    Mr. Hall. So the mandatory however they get the 20 hours, 
two and a half Saturdays or one hour extra every day, whatever 
it may be.
    The biggest concern to those individuals and shared by us 
is not necessarily the mandatory overtime, it is to quote them, 
where are they getting the money for this if we are cutting 
training? How are they requiring this, you know, for me to come 
in on a Saturday to do this, but yet we are cutting the 
training? We are already disenchanted by the training that we 
don't receive, so----
    Mr. Walz. I want to give them the flexibility if they need 
to do overtime or whatever, but I just don't think it is a good 
model to rely on. It always makes me question----
    Mr. Hall. I think it is certainly sending the wrong 
message.
    Mr. Walz. It is unsustainable too.
    Mr. Hall. Right.
    Mr. Walz. Okay. Well, very good.
    Again, I appreciate what all of you do. I think, and like I 
said, I have seen some really bad homes on that show turn out 
really nice, and so the 20-year high school lunchroom 
supervisor in me remains optimistic, Tim, that we will get 
this, a lot of folks working hard. This room and this Committee 
is in absolute agreement that our job is to deliver the best 
care that can be possibly be given to our veterans and I 
appreciate you playing a huge part in that. So thank you all.
    I yield back, Mr. Chairman.
    The Chairman. Thank you very much.
    Mr. Michaud, any more questions?
    Mr. Michaud. No, just a comment if I might on Mr. Walz' 
last issue about the facility that has dental care.
    I know we have a facility in Maine that has just opened up, 
a CBOC that actually could provide dental health care, but the 
VA is not going to provide it because they are saying the need 
is not there, which I disagree with.
    But here is a situation, Mr. Chairman, if you look at one 
of the biggest issues on trooper readiness for the guard and 
reserve is actually dental care, and I think there is an 
opportunity for the VA to work collaboratively with the DoD, 
particularly the national guard and reserves to provide those 
types of services, because there are actually guard and 
reservists who are dentists that could actually do the work if 
they were able to share the facilities, and I think that will--
and I know Minnesota has a lot of guard and reserves there as 
well.
    So I think if there was more collaboration in the health 
care area with DoD and the VA, I think we could actually get 
more bang for the buck.
    And I yield back.
    The Chairman. Thank you very much, and I concur with your 
comments in regards to greater sharing of services between DoD 
and VA, and I would like to say thank you to the witnesses on 
the second panel.
    Again, thank you to the witnesses of the first panel that 
are still remaining here.
    We have got a long way to go in this process, but I would 
ask unanimous consent that all Members would have five 
legislative days to revise and extend their remarks and add 
extraneous materials, and in the absence of Ms. Brown, I will 
go ahead and say without objection, and with, that this hearing 
will be adjourned.

    [Whereupon, at 1:22 p.m., the Committee was adjourned.]



                            A P P E N D I X

                              ----------                              

               Prepared Statement of Chairman Jeff Miller
    Good morning, and welcome to this morning's hearing to review the 
Administration's Fiscal Year 2013 budget request for the Department of 
Veterans Affairs. Mr. Secretary, I thank you and your team for joining 
us today.
    Although we are still combing through the budget, a process that 
will likely involve further follow-up questions after this hearing, I 
think it's safe to say that viewed in context of an extraordinarily 
tight fiscal climate, a 4.3% increase in discretionary spending is 
certainly positive.
    That said, outcomes are what really matter . . . veterans don't 
care about numbers, they want their claims decided faster, their health 
care taken care of, and their aging facilities upgraded.
    I do have some questions about how this funding request relates to 
the actual resource requirement, but I'll get to those later. I want to 
use the remainder of my time to talk about the issue of sequestration 
and VA.
    Mr. Secretary, let me begin by saying that I agree with you and the 
President that sequestration is not desirable, whether it is applied to 
DoD, VA, or any agency. I think all of us agree on that.
    I also agree that specific guidance as to how sequestration will be 
carried out and its impact at the operational level is something that 
will likely be determined a bit farther down the road, but not much 
farther. For example, will there be layoffs? Will maintenance needs be 
postponed? Will facility activations be delayed? Those are details that 
I'm curious whether VA has looked at, and they probably should have 
already, but I can understand if we aren't quite at that point yet.
    Finally, we are in agreement that there is an ambiguity in the law 
with respect to VA that requires a clarifying legal decision that only 
the Office of Management and Budget can make.
    That is where my agreement with the Administration and its series 
of non-responses to me, and other Committee Members, ends. For months 
I've been trying to get clarity about what we, as a Committee, and 
veterans, as our constituency, deserve to have resolved. Namely, 
because of a conflict in the law, is VA even part of the picture should 
a sequester order occur? Do we have cause to be concerned?
    There is no such ambiguity with respect to DoD. There is no 
ambiguity with respect to most other non-defense programs. All know 
that those agencies are definitively in play.
    But because the Administration has not clarified the matter, no one 
can say if VA is completely exempt or not. I have legal opinions from 
lawyers from both the Congressional Research Service and the Government 
Accountability Office saying, in their judgment, VA appears to be 
completely exempt. They provided these opinions to me in a matter of 
days, proving that the legal issues at hand aren't that complicated.
    But their judgments, mine, and that of others in Congress carry no 
weight presently. Only OMB can resolve this. After multiple requests 
from this Committee, a secretive legal opinion from VA lawyers 
delivered to OMB several months ago, and obvious concern expressed by 
veterans' organizations, the question still has been left to linger.
    The obvious question, is ``why?''. Why not resolve this now? The 
ambiguity will remain in law even if Congress and the President agree 
on finding $1.2 Trillion in cuts to avoid a sequester next January. 
This is an issue that needs clarifying once and for all.
    Mr. Secretary, I know you're not the holdup. And I don't direct 
this next comment at you. But I believe what we're seeing here is a 
cynical attempt to keep veterans twisting in the wind to create more 
pressure to act on the immediate sequester threat. I say to the 
President, there is enough pressure to act already without threatening 
veterans. One way or another, a decision must be made.
    I won't hold my breath any longer waiting for an OMB decision. I've 
introduced legislation to clarify the law as it stands now. The Protect 
VA Healthcare Act of 2012 would simply amend the law to conform to what 
Congress intended when it voted on the Budget Control Act. I ask all my 
colleagues here for their support. We need to get this resolved. If the 
President won't lead, then we must.
    With that, I yield to the Ranking Member for his opening statement.

                                 
                Prepared Statement of Hon. Bob Filner, 
                       Ranking Democratic Member
    Thank you, Mr. Chairman.
    Secretary Shinseki, I want to welcome you this morning, and I am 
looking forward to your testimony addressing the funding needs of the 
Department of Veterans Affairs for fiscal year 2013, and the agency's 
advance appropriation recommendation for the Medical Care accounts for 
fiscal year 2014.
    I would also like to thank the representatives of the veterans 
service organizations who co-author the Independent Budget, and The 
American Legion, for presenting us with their views as to the resource 
requirements of the VA. Every year this Committee relies on the 
veterans' community to provide an important insight into the needs of 
the VA, and the pressing issues facing veterans and their families.
    Mr. Secretary, I applaud your budget request this year. In a 
constrained fiscal environment your budget recognizes the reality of 
increased medical care costs and the importance of delivering the 
health care and benefits that our veterans have earned in a timely 
fashion. If you tell this Committee that you need these funding levels, 
then I will commit to you that I will work with my colleagues to ensure 
you get it.
    In discretionary funding you request a 4.5 percent increase, and a 
16.2 percent increase in mandatory funding, for an overall budget 
increase of 10.5 percent in 2013. The majority of these discretionary 
funds have already been provided through advance appropriations. I know 
this Committee will carefully assess your 2013 request, as well as the 
additional $165 million you are seeking to augment the amount already 
provided for the Medical Care accounts.
    Budgets represent a choice, and provide a window into the 
priorities of the VA. I believe many, if not all, of your priorities 
are the priorities of this Committee. I remain concerned, however, that 
at the end of the day you have the resources you need to fulfill your 
mission. In light of this, I believe we must ensure that your 
``operational improvements'' and other cost-saving claims are actually 
realized. We must ensure that your medical collections estimates are 
achievable. And we must ensure that your workload estimates, especially 
workload projections for our returning servicemembers are accurate.
    CBO recently released a report entitled ``The Veterans Health 
Administration's Treatment of PTSD and Traumatic Brain Injury Among 
Recent Combat Veterans.'' The report found that of those seeking care 
at VA, 28 percent of the OEF/OIF/OND cohort suffers from PTSD, TBI or 
both. Treatment in the first year for these conditions can be four to 
six times greater than for those who do not have these conditions. So 
while we have come a long way in the past 10 years, clearly there is 
much left to be done.
    Over the years I have looked to the Independent Budget for guidance 
as we make the tough decisions necessary to fully fund the VA and to 
ensure that our budget priorities meet our national priorities and 
aspirations. I look forward to hearing from the IB as to why they 
believe we need to add nearly $4 billion to the Administration's 
request, including $1.5 billion for medical care for FY2013. I also 
look forward to hearing the panel's views as to the sufficiency of the 
Administrations advance funding request for FY2014.
    Mr. Secretary, we have all worked together over the years to 
increase funding levels for the VA to meet the needs of our veterans. I 
am sure that we will do the same this year. But as scripture informs 
us, ``to who much is given, much is expected.'' I know that I speak for 
my colleagues on this Committee that we expect great results from you 
that will serve our veterans and their families.
    Thank you, Mr. Chairman. I yield back the balance of my time.

                                 
               Prepared Statement of Hon. Silvestre Reyes
    Thank you Chairman Miller and Ranking Member Filner for convening 
this important hearing. One of the most critical functions of this 
Committee is to ensure that we are providing the men and women who 
served our Nation with the health care, compensation, and support they 
have earned.
    Secretary Shinseki, thank you for your service and tireless 
dedication to all veterans and thank you for being here today. The VA 
is an incredibly diverse and dispersed agency and this Committee will 
spend the next few weeks studying the budget document provided by the 
Department.
    Today, I am particularly interested in hearing how the Department 
will deal with the difficult problem of unemployment among veterans - 
both those recently returned from Iraq and Afghanistan and those from 
other eras who are coping with long term unemployment. Adequate funding 
for VA health care continues to be a concern, and I look forward to 
working with you as we expand the VA's footprint in El Paso to meet the 
needs of the growing veterans population. Younger veterans dealing with 
prosthetics, brain and eye injuries, and post-traumatic stress bring 
new challenges to the VA, but these new issues cannot supplant the 
needs of older veterans who continue to deal with the effects of their 
service.
    There are no easy answers, but we owe those who sacrificed 
themselves in defense of our Nation nothing less than the health care 
and benefits that have earned with their service.

                                 
              Prepared Statement of Hon. Michael R. Turner
    Thank you, Chairman Runyan, for holding this important hearing. I 
would also like to recognize your advocacy on this issue within the 
House Armed Services Committee. Special thanks, as well, to all the 
panelists for their advocacy of victim's rights and determination to 
address the military culture and climate. I have worked with Anu and 
SWAN for several years now and their contribution to this issue have 
been instrumental in achieving many legal and policy changes.
    Before I start my remarks, I would like to point out that the great 
majority of the Servicemembers are patriotic citizens that serve their 
country honorably and selflessly. And while today's hearing may focus 
on the criminal behavior of a relative few, their behavior should not 
be used to broadly tarnish the reputation of the many Servicemembers 
who have honorably sacrificed for their country.
    I became involved in this issue in 2008 following the tragic murder 
of Lance Corporal Maria Lauterbach. Maria reported being sexually 
assaulted and was later murdered by a fellow Marine while she was 
stationed at Camp LeJeune, North Carolina. During the course of the 
investigation a Marine Corps representative told me that ``we lost two 
good Marines today.'' When, in fact, we had only lonst one good Marine, 
Maria Lauterbach, and another Marine who was a rapist and murder that 
tarnished the reputation of the Corps. Later, during the course of 
Congressional hearings on the subject, a Lieutenant General stated that 
Maria ``never alleged any violence or threat of violence in either 
sexual encounter.''
    These and several other incidents demonstrated a fundamental lack 
of understanding of the problem and how to deal with it. In addressing 
the issue of military sexual assault it is necessary to address some 
fundamental areas, namely: Command, Culture and Accountability. I think 
the hearing today strikes at the heart of the cultural element. Culture 
within the Department of Defense and the Department of Veterans 
Affairs.
    In working on sexual assault issues on the House Armed Services 
Committee and the Military Sexual Assault Prevention Caucus, which I 
co-chair with Niki Tsongas, we have sculpted legislation that aims to 
facilitate a culture that encourages victims to come forward and 
punishes the criminal actors that degrade our military. The personal 
nature of sexual assault makes it difficult for victims to come forward 
and discuss the details of their experience. This is compouned by 
policies that require victims to repeatedly relive the experience and 
re-victimize the victims. These additional stresses decrease the 
likelihood of victims coming forward and permit the retention of 
criminals. As Anu pointed out in her testimony, the DoD Sexual Assault 
Prevention and Response Office (SAPRO) report indicated that 86.5% of 
sexual assaults go unreported. The end result is that some of these 
ciminal later draw DoD and VA benefits, while their victims are left to 
fight to substantiate their PTSD claims.
    Addressing the issue before the Committee today is a step towards 
creating a more victim-centric system that improves our military by 
rewarding victims for coming forward and punishing the bad actors. In 
addressing this issue, Niki Tsongas and I included a provision in the 
Defense STRONG Act last year requiring the DoD to retain records 
prepared in connection with sexual assaults involving members of the 
Armed Forces or dependents of members. That provision was later 
included in the FY12 NDAA. This provision requires the Department of 
Defense to permanently retain records of sexual assault in the 
military, and ensures that a servicemember who is a victim of sexual 
assault has access to these records. Servicemembers find it difficult 
to obtain documentation proving their sexual assault once they have 
left the services because DoD destroys many of these documents after 
only a few years. It is our hope that improving this process will 
contribute to removing the negative stigma that surrounds the process 
and, thereby, improves military culture and climate.
Questions
    Col. Metzler and Mr. Murphy. What is the status of implementation 
of this new policy (HR1540 Sec 586)?

                                 
              Prepared Statement of Hon. Eric K. Shinseki
    Chairman Miller, Ranking Member Filner, Distinguished Members of 
the House Committee on Veterans' Affairs:
    Thank you for the opportunity to present the President's 2013 
Budget and 2014 advance appropriations requests for the Department of 
Veterans Affairs (VA). For the past three budget requests, the Congress 
has supported the very high priority that the President has placed on 
funding for programs that provide care and benefits for our Nation's 22 
million Veterans and their families. This submission seeks your support 
of the President's continued high priority support for Veterans who 
have earned this Nation's respect and the benefits and services we 
provide.
    We meet at an historic moment for our nation's Armed Forces, as 
they turn the page on a decade of war. Recently, the President outlined 
a major shift in the Nation's strategic military objectives - with a 
goal of a more agile, more versatile, more responsive military focused 
on the future. The President also outlined another important objective 
- keeping faith with those who serve as they depart the military and 
return to civilian life. As these newest Veterans return home, we must 
anticipate their transitions by readying the care, the benefits, and 
the job opportunities they have earned and they will need to smoothly 
and successfully make this transition.
    The President's 2013 Budget for VA requests $140.3 billion - 
comprised of $64 billion in discretionary funds, including medical care 
collections, and $76.3 billion in mandatory funds. The discretionary 
budget request represents an increase of $2.7 billion, or 4.5 percent, 
over the 2012 enacted level. Our 2013 budget will allow the Department 
to operate the largest integrated healthcare system in the country, 
with more than 8.8 million Veterans enrolled to receive healthcare; the 
eighth largest life insurance provider covering both active duty 
members as well as enrolled Veterans; a sizeable education assistance 
program serving over 1 million participants; a home mortgage service 
that guarantees over 1.5 million Veterans' home loans with the lowest 
foreclosure rate in the Nation; and the largest national cemetery 
system that continues to lead the country as a high-performing 
organization - for the fourth time in a 10-year period besting the 
Nation's top corporations and other federal agencies in an independent 
survey of customer satisfaction. In 2013, VA national cemeteries will 
inter about 120,000 Veterans or their family members.
    The Department of Veterans Affairs fulfills its obligation to 
Veterans, their families, and survivors of the fallen by living a set 
of core values that define who we are as an organization: ``I CARE''- 
Integrity, Commitment, Advocacy, Respect, and Excellence, - cannot be 
converted into dollars in a budget. But Veterans trust that we will 
live these values, every day, in our medical facilities, our benefits 
offices, and our national cemeteries. And where we find evidence of a 
lack of commitment to our values, we will aggressively correct them by 
re-training employees or, where required, removal. We provide the very 
best in high quality and safe care and compassionate services, 
delivered by more than 316,000 employees, who are supported by the 
generosity of 140,000 volunteers.
                        Stewardship of Resources
    Safeguarding the resources - people, money, time - entrusted to us 
by the Congress, managing them effectively and deploying them 
judiciously, is a fundamental duty at VA. Effective stewardship 
requires an unflagging commitment to apply budgetary resources 
efficiently, using clear accounting rules and procedures, to safeguard, 
train, motivate, and hold our workforce accountable; and to assure the 
proper use of time in serving Veterans on behalf of the American 
people.
    During the audit of the Department's fiscal year 2010 financial 
statement, VA's independent auditor certified that we had remediated 
all three of our remaining material weaknesses in financial management, 
which had been carried forward for over a decade. In terms of internal 
controls and fiscal integrity, this was a major accomplishment. We have 
also dramatically reduced the number of significant financial 
deficiencies since 2008, from sixteen to two.
    Another example of VA's effective stewardship of resources is the 
Project Management Accountability System (PMAS) developed by our Office 
of Information Technology. PMAS requires Information Technology (IT) 
projects to establish milestones to deliver new functionality to its 
customers every six months. Now entering its third year, PMAS continues 
to instill accountability and discipline in our IT organization. In 
2011, PMAS achieved successful delivery of 89 percent of all IT project 
milestones. VA managed 101 IT projects during the year, establishing a 
total of 237 milestones and successfully executing 212 of them. Of the 
25 IT projects that missed their delivery milestone date, more than 
half delivered within the next 14 days. Ensuring IT projects meet 
established milestones means that savings and delivery of solutions are 
achieved throughout development, and that Veterans reap improvements 
sooner. By implementing PMAS, we have achieved at least $200 million in 
cost avoidance by stopping or improving the management of 45 projects.
    VA's stewardship of resources continues with the expansion of our 
ASPIRE dashboard to the Veterans Benefits Administration (VBA). 
Originally established in 2010 for the Veterans Health Administration 
(VHA), ASPIRE publicly provides quality goals and performance measures 
of VA healthcare. The success of this approach was reflected in its 
contribution to VHA's receipt of the Annual Leadership Award from the 
American College of Medical Quality. On June 30, 2011, VBA established 
an ASPIRE website at http://www.vba.va.gov/reports/aspiremap.asp for 
aspirational goals and monthly progress for 46 performance metrics 
across six business lines. This new effort expands the Department's 
commitment to unprecedented public transparency by sharing performance 
and productivity data in the delivery of Veterans' benefits, including 
compensation, pension, vocational rehabilitation and employment, 
education, home loans, and insurance.
    Through the effective management of our acquisition resources, VA 
achieves positive results for Veteran-owned small businesses. VA leads 
the Federal government in contracting with Service-Disabled, Veteran-
Owned Small Businesses (SDVOSB). In 2011, more than 18 percent of all 
VA procurements were awarded to SDVOSBs, exceeding our internal goal of 
10 percent and far exceeding the government-wide goal of three percent.
    Finally, VA's stewardship achieved savings in several other areas 
across the Department. The National Cemetery Administration (NCA) 
assumed responsibility in 2009 for processing First Notices of Death to 
terminate compensation benefits to deceased Veterans. This allows the 
timely notification to next-of-kin of potential survivor benefits. 
Since that time NCA has avoided possible collection action by 
discontinuing $100.3 million in benefit payments. In addition, we 
implemented the use of Medicare pricing methodologies at VHA to pay for 
certain outpatient services in 2011, resulting in savings of over $160 
million without negatively impacting Veteran care and with improved 
consistency in billing and payment.
                           Veterans Job Corps
    In his State of the Union address, President Obama called for a new 
Veterans Job Corps initiative to help our returning Veterans find 
pathways to civilian employment. The budget includes $1 billion to 
develop a Veterans Job Corps conservation program that will put up to 
20,000 Veterans back to work over the next five years protecting and 
rebuilding America. Veterans will restore our great outdoors by 
providing visitor programs, restoring habitat, protecting cultural 
resources, eradicating invasive species, and operating facilities. 
Additionally, Veterans will help make a significant dent in the 
deferred maintenance of our Federal, State, local, and tribal lands 
including jobs that will repair and rehabilitate trails, roads, levees, 
recreation facilities and other assets. The program will serve all 
Veterans, but will have a particular focus on post-9/11 Veterans.
                Multi-Year Plan for Medical Care Budget
    Under the Veterans Health Care Budget Reform and Transparency Act 
of 2009, which we are grateful to Congress for passing; VA submits its 
medical care budget that includes an advance appropriations request in 
each Budget submission. This legislation requires VA to plan its 
medical care budget using a multi-year approach. This approach ensures 
that VA requirements are reviewed and updated based on the most recent 
data available and actual program experience.
    The 2013 budget request for VA medical care appropriations is $52.7 
billion, an increase of 4.1 percent over the 2012 enacted appropriation 
of $50.6 billion. This request is an increase of $165 million above the 
2013 advance appropriations enacted by Congress in 2011. Based on 
updated 2013 estimates largely derived from the Enrollee Health Care 
Projection Model, the requested amount would also allow VA to increase 
funding in programs to eliminate Veteran homelessness, fully fund the 
implementation of the Caregivers and Veterans Omnibus Health Services 
Act, support activation requirements for new or replacement medical 
facilities, and invest in strategic initiatives to improve the quality 
and accessibility of VA healthcare programs. Our multi-year budget plan 
continues to assume $500 million in unobligated balances from 2012 that 
will carryover and remain available for obligation in 2013 - consistent 
with the 2012 budget submitted to Congress.
    The 2014 request for medical care advance appropriations is $54.5 
billion, an increase of $1.8 billion, or 3.3 percent, over the 2013 
budget request.
                             Priority Goals
    Our Nation is in a period of transition. As the tide of war 
recedes, we have the opportunity, and the responsibility, to anticipate 
the needs of returning Veterans. History shows that the costs of war 
will continue to grow in VA for a decade or more after the operational 
missions in Iraq and Afghanistan have ended. In the next 5 years, 
another one million Veterans are expected to leave military service. 
Our data shows that the newest of our country's Veterans are relying on 
VA at unprecedented levels. Through September 30, 2011, of the 
approximately 1.4 million living Veterans who were deployed overseas to 
support Operation Enduring Freedom and Operation Iraqi Freedom, at 
least 67 percent have used some VA benefit or service.
    VA's three priorities - to expand access to benefits and services, 
eliminate the claims backlog, and end Veteran homelessness - anticipate 
these changes and identify the performance levels required to meet 
emerging needs. The 2013 Budget builds upon our multi-year effort to 
achieve VA's priority goals through effective, efficient, and 
accountable program implementation.
               Expanding Access to Benefits and Services
    Expanding access for Veterans is much more than boosting the number 
of Veterans walking in the front door of a VA facility. Access is a 
three-pronged effort that encompasses VA's facilities, programs, and 
technology. Today, expanding access includes taking the facility to the 
Veteran--be it virtually through telehealth, by sending Mobile Vet 
Centers to rural areas where services are sparse, or by using social 
media sites like Facebook, Twitter, and YouTube to connect Veterans to 
VA benefits and facilities. Expanding access also means finding new 
ways to break down artificial barriers so that Veterans are aware of 
and can gain access to VA services and benefits. Technology is the 
great enabler of all VA efforts. IT is not a siloed segment of the 
budget, providing just computers and monitors, but rather the vehicle 
by which VA is able to extend the reach of its healthcare to rural 
America, process benefits more quickly, and provide enhanced service to 
Veterans and their families.
    The 2013 budget request includes $119.4 million for the Veterans 
Relationship Management (VRM) initiative, which is fundamentally 
transforming Veterans' access to VA benefits and services by empowering 
VA clients with new self-service tools. VA has already made major 
strides under this initiative. VRM established a single queue for VBA's 
National Call Centers ensuring calls are routed to the next available 
agent, regardless of geography. Call-recording functionality was 
implemented that allows agents to review calls for technical accuracy 
and client contact behaviors. VA recently deployed ``Virtual Hold ASAP 
call-back'' technology. During periods of high call volumes, callers 
can leave their name and phone number instead of waiting on hold for 
the next available operator, and the system automatically calls them 
back in turn. The Virtual Hold system has made nearly 600,000 return 
calls since November 2011. The acceptance rate for callers is 46 
percent, exceeding the industry standard of 30 percent, and our 
successful re-connect rate is 92 percent. Since launching Virtual Hold, 
the National Call Centers have seen a 15 percent reduction in the 
dropped-call rate. In December 2011, VA deployed ``Virtual Hold 
Scheduled call-back'' technology, which allows callers to make an 
appointment with us to call them at a specific time. Since deployment, 
over 185,000 scheduled call-backs have already been processed.
    In December, VA deployed a pilot of its new ``Unified Desktop'' 
technology. This initiative will provide National Call Center agents 
with a single, unified view of VA clients' military, demographic, and 
contact information and their benefits eligibility and claims status 
through one integrated application, versus the current process that 
requires VA agents to access up to 13 different applications. This will 
help ensure our Veterans receive comprehensive and accurate responses.
    Key to expansion of access is the eBenefits portal - one of our 
critical VRM initiatives. eBenefits is a VA/DoD initiative that 
consolidates information regarding benefits and services and includes a 
suite of on-line self-service capabilities for enrollment/application 
and utilization of benefits and services. eBenefits enrollment now 
exceeds 1.2 million users, and VA expects enrollment to exceed 2.5 
million by the end of 2013. VA continues to expand the capabilities 
available through the eBenefits portal. Users can check the status of a 
claim or appeal, review the history of VA payments, request and 
download military personnel records, generate letters to verify their 
eligibility for Veterans' hiring preferences, secure a certificate of 
eligibility for a VA home loan, and numerous other benefit actions. In 
2012, Servicemembers will complete their Servicemembers' Group Life 
Insurance applications and transactions through eBenefits. Also, 2012 
enhancements will allow Veterans to view their scheduled VA medical 
appointments, file benefits claims online in a ``Turbo Claim'' like 
approach, and upload supporting claims information that feeds our 
paperless claims process. In 2013, funding supports enhanced self-
service tools for the Civilian Health and Medical Program of the 
Department of Veterans Affairs (CHAMPVA) and VetSuccess programs, as 
well as the Veterans Online Application for enrolling in VA healthcare.
    VA and the Department of Defense (DoD) have broken new ground in 
the development and implementation of the Integrated Disability 
Evaluation System (IDES). This system supporting the transition of 
wounded, ill, and injured Servicemembers is fully operational and 
available to Servicemembers as of October 1, 2011. Because of the 
complexity of these cases, the Veterans Benefits Administration devotes 
four times the level of staffing resources to processing IDES cases 
than claims from other Veterans. VA has reduced its claims processing 
time in IDES from 186 days in February 2011 to 104 days in December 
2011. The 2013 budget requests an additional $13.2 million and 90 FTE 
to support IDES enhancements.
    The DoD/VA team is further developing programs to enhance the 
transition of all Servicemembers to Veteran status. Together we are 
transforming the current Transition Assistance Program (TAP) from a 
series of discrete efforts to one that uses an outcome-based approach. 
This approach will be more integrated and, once complete will be mapped 
to the life cycle of every Servicemember, from recruitment through 
separation or retirement. In July 2011, VBA launched on-line TAP 
courseware, which provides the capability for Servicemembers to 
complete the course without attending the classroom session. VA and DoD 
also are collaborating on a policy for implementing mandatory TAP 
participation.
    VA will improve access to VA services by opening new or improved 
facilities closer to where Veterans live. The 2013 medical care budget 
request includes $792 million to open new and renovated healthcare 
facilities, including resources to support the activation of four new 
hospitals in Orlando, Florida; Las Vegas, Nevada; New Orleans, 
Louisiana; and Denver, Colorado. These new VA Medical Centers are 
projected to serve 1.2 million enrolled Veterans when they are 
operational. This budget also includes an initiative to establish a 
national cemetery presence in eight rural areas where the Veteran 
population is less than 25,000 within a 75-mile service area. In 
addition to expanding access at fixed locations, VA is deploying an 
additional 20 Mobile Vet Centers in 2012 to increase access to 
readjustment counseling services for Veterans and their families in 
rural and underserved communities across the country. These new 
specialty vehicles will expand the existing fleet of 50 Mobile Vet 
Centers already in service by 40 percent. In 2011, Mobile Vet Centers 
participated in more than 3,600 Federal, state, and locally sponsored 
Veteran-related events. More than 190,000 Veterans and family members 
made over 1.3 million visits to VA Vet Centers in 2011.
    The Board of Veterans Appeals (BVA) leverages video conference 
technology to increase the capability of, and access to, video hearings 
to provide Veterans with more options for a hearing regarding their 
appeal. The VA is currently upgrading this video conference technology 
both at BVA and at VBA regional offices. In 2011, the number of video 
hearings increased from 3,979 to 4,355 or 9.4 percent. The Board is 
also working with VBA and VHA to allow video hearings to be held from 
more locations in the field, which will be more convenient for 
Veterans. Initially, the expanded video capability will be used to 
reduce the backlog of hearings and the time Veterans have to wait for 
them.
    We are working harder than ever to reach out to women Veterans. 
Women represent about eight percent of the total Veteran population. In 
recent years, the number of women Veterans seeking healthcare has grown 
rapidly and it will continue to grow as more women enter military 
service. Women comprise nearly 15 percent of today's active duty 
military forces and 18 percent of National Guard and Reserves. For the 
estimated 337,000 women Veterans currently using the VA healthcare 
system, VA is improving their access to services and treatment 
facilities. The 2013 budget includes $403 million for the gender-
specific healthcare needs of women Veterans, an increase of 17.5 
percent over the 2012 level.
    VHA regularly updates its standards for improving and measuring 
Veterans' access to medical care programs. In 2010, VHA implemented new 
wait time measures that assess performance meeting the new standard of 
providing medical appointments within 14 days of the desired date, 
replacing the previous 30-day desired-date standard. In 2011, 89 
percent of medical care appointments for new patients occurred within 
14 days of the desired date, an increase of 5 percentage points over 
the 2010 level of 84 percent. The President's request for 2013 ensures 
we are able to continue to improve our performance in providing this 
service.
    Access improvements are central to VHAs new Patient-Aligned Care 
Teams (PACT) model. VA views appointments as a partnership. We are 
implementing a national initiative to reduce costly no-show 
appointments. Also, Veterans can manage appointments by visiting 
MyHealtheVet website, where they can view all of their pending 
appointments. In another effort to help Veterans make and keep 
appointments, VA is implementing a pilot program that offers child care 
to eligible Veterans seeking medical appointments at three VA medical 
centers in 2012 and 2013. The first of these facilities, the Buffalo 
VAMC, began providing services in October 2011. Each pilot site will be 
operated onsite by licensed childcare providers. Drop-in services will 
be offered free of charge to Veterans who are eligible for VA care and 
who are visiting a medical facility for an appointment.
    VA is taking full advantage of technology to expand access to its 
medical centers. In 2008, VA established a presence on Facebook with a 
single Veterans Health Administration (VHA) page. In 2009, VA 
established the Post-9/11 GI Bill Facebook page to raise awareness 
about the implementation of this new benefit program. With over 39,000 
subscribers (``or fans''), this page serves as our primary ``real-
time'' tool to communicate GI Bill news and directly interact with our 
clients. VA also launched a general VBA benefits page, which describes 
all of our services. VBA posts to its followers seven days a week and 
is followed in 18 different countries and 15 different languages. In 
June 2011, VA outlined a Department-wide social media policy that 
provides guidelines for communicating with VA online. By November 2011, 
VA had established Facebook pages for all 152 of its medical centers. 
This event marks an important milestone in our effort to transform how 
the Department communicates with Veterans and provides them access to 
healthcare and benefits. By leveraging Facebook, VA continues to 
embrace transparency and engage Veterans in a two-way conversation. VA 
currently has over 345,000 combined Facebook ``fans.'' As of January 
2012, the Department's main Facebook page has over 154,000 fans and its 
medical centers have a combined following of over 69,000.
                     Eliminating the Claims Backlog
    To transform VA for the benefit of Veterans, we must streamline the 
claims processing system and eliminate the claims backlog. We are 
vigorously pursuing a claims transformation plan that will adopt near-
term innovations and break down stubborn obstacles to providing 
Veterans the benefits they have earned.
    As we pursue a multi-focused approach to eliminate the claims 
backlog, workload in our disability compensation and pension programs 
continues to rise. VA has experienced a 48 percent increase in claims 
receipts since 2008, and we expect that the incoming claims volume will 
continue to increase by 4.2 percent in 2013, to 1,250,000 claims from 
1,200,000 in 2012. At the same time, Veterans are claiming many more 
disabilities, with Iraq and Afghanistan Veterans claiming an average of 
8.5 disabilities per claim - more than double the number of 
disabilities claimed by Veterans of earlier eras. As more than one 
million troops leave service over the next 5 years, we expect our 
claims workload to continue to rise for the foreseeable future. In 
2013, our goal is to ensure that no more than 40 percent of the 
compensation and pension claims in the pending inventory are more than 
125 days old. While too many Veterans will still be waiting too long 
for the benefits they have earned, it does represent a significant 
improvement in performance over the 2012 estimate of 60 percent of 
claims more than 125 days old, demonstrating that we are on the right 
path.
    VA is attacking the claims backlog through an aggressive 
transformation plan that includes initiatives focused on the people, 
processes, and technology that will eliminate the backlog. We are 
implementing a new standardized operating model in all our regional 
offices beginning this year that incorporates a case-management 
approach to claims processing. It establishes distinct processing lanes 
based on the complexity and priority of the claims and assigns 
employees to the lanes based on their experience and skill levels. 
Integrated, cross-functional teams work claims from start to finish, 
facilitating the quick flow of completed claims and allowing for 
informal clarification of claims processing issues to minimize rework 
and reduce processing time. More easily rated claims move quickly 
through the system, and the quality of our decisions improves by 
assigning our more experienced and skilled employees to the more 
complex claims. The new operating model also establishes an Intake 
Processing Center at every regional office, adding a formalized process 
for triaging mail and enabling more timely and accurate distribution of 
claims to the production staff in their appropriate lanes.
    VA is increasing the expertise of our workforce and the quality of 
our decisions through national training standards that prepare claims 
processors to work faster and at a higher quality level. Our training 
and technology skills programs will continue to deliver the knowledge 
and expertise our employees need to succeed in a 21st Century 
workplace. We are establishing dedicated teams of quality review 
specialists at each regional office. These teams will evaluate decision 
accuracy at both the regional office and individual employee levels, 
and perform in-process reviews to eliminate errors at the earliest 
possible stage in the claims process. Personnel trained by our national 
quality assurance staff comprise the quality review teams to assure 
local reviews are consistently conducted according to national 
standards.
    Using ``Design Teams,'' VBA is conducting rapid development and 
testing of process changes, automated processing tools, and innovative 
workplace incentive programs. The first Design Team developed a method 
to simplify rating decisions and decision notification letters that was 
implemented nationwide in December 2011. This new decision notification 
process streamlines and standardizes the development and communication 
of claims decisions. This initiative also includes a new employee job-
aid that uses rules-based programming to assist decision makers in 
assigning an accurate service-connected evaluation. VBA's 
Implementation Center, established at VBA headquarters as a program 
management office, streamlines the process of innovation to ensure that 
new ideas are approved through a governance process. This allows us to 
focus on initiatives that will achieve the greatest gains.
    VA continues to promote the Fully Developed Claims (FDC) Program. 
We believe utilization of the FDC Program will significantly increase 
as a result of the public release last month of 68 more Disability 
Benefits Questionnaires (DBQs), bringing the total number of DBQs 
publically available to 71. DBQs are templates that solicit the medical 
information necessary to evaluate the level of disability for a 
particular medical condition. Currently used by Veterans Health 
Administration examiners, the release of these DBQs to the public will 
allow Veterans to take them to their private physicians, facilitating 
submission of a complete claims package for expedited processing. VA 
plans an aggressive communications strategy surrounding the release of 
these DBQs that will promote the FDC program. We also continue to work 
with the VSO community to identify ways to boost FDC program 
participation and better inform and serve Veterans and their advocates.
    This year VA is also beginning national implementation of our new 
paperless processing system, the Veterans Benefits Management System 
(VBMS). We are implementing VBMS using a phased approach that will have 
all regional offices on the new system by the end of 2013. We will 
continue to add and expand VBMS functionality throughout this process. 
Establishment of a digital, near-paperless environment will allow for 
greater exchange of information and increased transparency to Veterans, 
our workforce, and stakeholders. Increased use of state-of-the-art 
technology plays a major role in enabling VA to eliminate the claims 
backlog and redirect capacity to better serve Veterans and their 
families. Our strategy includes active stakeholder participation 
(Veterans Service Officers, State Departments of Veterans Affairs, 
County Veterans Service Officers, and Department of Defense) to provide 
digitally ready electronic files and claims pre-scanned through online 
claims submission using the eBenefits web portal. VBA has aggressively 
promoted the value of eBenefits and the ease of enrolling into the 
system. The 2013 budget invests $128 million in VBMS.
                      Ending Veteran Homelessness
    The Administration is committed to ending homelessness among 
Veterans by 2015. Between January 2010 and January 2011 homelessness 
declined by 12 percent, keeping VA on track to meet the goal of ending 
Veteran homelessness in 2015. The VA's Homeless Veteran Registry is 
populated with over 400,000 names of current and formerly homeless 
Veterans who have utilized VA's Homeless Programs--allowing us to 
better see the scope of the issues so we can more effectively address 
them.
    In the 2013 Budget, VA is requesting $1.352 billion for programs 
that will prevent and treat Veteran homelessness. This represents an 
increase of $333 million, or 33 percent over the 2012 level. This 
budget will support our long-range plan to eliminate Veteran 
homelessness by reducing the number of homeless Veterans to 35,000 in 
2013 by emphasizing rescue and prevention.
    To get Veterans off the streets and into stable environments, VA's 
Grant and Per Diem Program awards grants to community-based 
organizations that provide transitional housing and support services. 
VA's goal is to serve 32,000 homeless Veterans in this program in 2013. 
Transitional housing is also provided through the Healthcare for 
Homeless Veterans program. Permanent housing is achieved with Housing 
Choice Vouchers in the Department of Housing and Urban Development 
(HUD)-VA Supportive Housing (HUD-VASH) Program, and by 2013 VA plans to 
provide case management support for the nearly 58,000 HUD Housing 
Choice vouchers available to assist our most needy homeless Veterans.
    Culminating two years of work to end homelessness among Veterans, 
the Building Utilization Review and Repurposing (BURR) initiative 
helped identify unused and underused buildings and land at existing VA 
property with the potential for repurposing to Veteran housing. The 
BURR initiative supports VA's goal of ending Veteran homelessness by 
identifying excess VA property that can be repurposed to provide safe 
and affordable housing for Veterans and their families. As a result of 
BURR, VA began developing housing opportunities at 34 nationwide 
locations for homeless or at-risk Veterans and their families using its 
Enhanced Use Lease (EUL) authority (now expired). The housing 
opportunities developed through BURR will add approximately 4,100 units 
of affordable and supportive housing to the projects already in 
operation or under construction, for an estimated total of 5,400 units.
    Although the Department's Enhanced Use Lease authority has expired, 
the Administration will work with Congress to develop future 
legislative authorities to enable the Department to further repurpose 
the properties identified by the BURR process. Beyond reducing 
homelessness among our Veterans, additional opportunities identified 
through BURR may include housing for Veterans returning from Iraq and 
Afghanistan, assisted living for elderly Veterans, and other possible 
uses that will enhance benefits and services to Veterans and their 
families.
    Of all claimants served by the Veterans Benefits Administration 
(VBA), homeless Veterans represent our most vulnerable population and 
require specialized care and services. The 2013 budget requests $21 
million for the Homeless Veterans Outreach Coordinator (HVOC) 
initiative, which would provide an additional 200 coordinators 
nationwide to expedite disability claims; acquire housing and prevent 
Veterans from losing their homes; expedite access to vocational 
training and job opportunities; and resolve legal issues at regional 
justice courts. These new case managers would significantly improve 
outcomes on behalf of the Nation's homeless Veterans. For example, the 
initiative would improve the timeliness of disability claims decisions 
for homeless and at-risk Veterans by reducing the claims processing 
times by nearly 40 percent between 2011 and 2015.
    In 2011, VHA hired 366 (or 90 percent of 407 total positions) 
homeless or formerly homeless Veterans as Vocational Rehabilitation 
Specialists to provide individualized supported employment services to 
unemployed homeless Veterans through the Homeless Veterans Supported 
Employment Program. Recent initiatives to increase employment of 
Veterans in Federal and other public-sector jobs will help to reduce 
homelessness and also ensure their families are supported. On January 
18, 2012, VA hosted a career fair for Veterans in Washington, DC. Over 
4,000 Veterans attended this event to explore and apply for thousands 
of public and private sector job opportunities.
    The VA also helps Veterans obtain employment with education and 
training assistance. The National Cemetery Administration (NCA) is 
helping to provide employment opportunities for homeless Veterans 
through a new, paid Apprenticeship Training Program serving Veterans 
who are homeless or at risk of homelessness. The program will be based 
on current NCA training requirements for positions such as Cemetery 
Caretakers and Cemetery Representatives. Veterans who successfully 
complete the program at national cemeteries will be guaranteed full-
time permanent employment at a national cemetery or may choose to 
pursue employment in the private sector. The Veterans Retraining 
Assistance Program is a joint effort with VA and the Department of 
Labor to provide 12 months of retraining assistance. The program is 
limited to 54,000 participants from October 1, 2012, through March 31, 
2014. Education and training assistance are preventive programs.
    Other preventive services programs include the Supportive Services 
for Veteran Families, which provides rapid case management and 
financial assistance, coordinated with community and mainstream 
resources, to promote housing stability. In time, VA will transition 
its homeless efforts primarily to prevention. Through coordinated 
partnerships with other Federal and local partners and providers, VA 
will assist at risk Veterans in maintaining housing, accessing 
supportive services that promote housing stability, and identifying the 
resources to rapidly re-house Veterans and their dependents if they 
should fall into homelessness. This shift to increased preventive 
efforts will require us to be much more knowledgeable about the causes 
of Veterans' homelessness, about the details of our current homeless 
and at-risk Veteran populations, and about creating action plans that 
serve Veterans at the individual level.
                          Medical Care Program
    The 2013 budget requests $52.7 billion for healthcare services to 
treat over 6.33 million unique patients, an increase of 1.1 percent 
over the 2012 estimate. Of those unique patients, 4.4 million Veterans 
are in Priority Groups 1-6, an increase of more than 64,000 or 1.5 
percent. Additionally, VA anticipates treating over 610,000 Veterans 
from the conflicts in Iraq and Afghanistan, an increase of over 53,000 
patients, or 9.6 percent, over the 2012 level.
Medical Care in Rural Areas
    The delivery of healthcare in rural areas faces major challenges, 
including a shortage of healthcare resources and specialty providers. 
In 2011, we obligated $18.8 billion to provide healthcare to Veterans 
who live in rural areas. Some 3.6 million Veterans enrolled in the VA 
healthcare system live in rural or highly rural areas of the country; 
this represents about 42 percent of all enrolled Veterans. For that 
reason, VA will continue to emphasize rural health in our budget 
planning, including addressing the needs of Native American Veterans. 
The 2013 budget continues to invest in special programs designed to 
improve access and the quality of care for Veterans residing in rural 
areas. For example, in the remote, sparsely populated areas of Montana, 
Utah, Wyoming and Colorado, VA has supported the development and 
expansion of a network-wide operational telehealth infrastructure that 
supports a virtual intensive care unit, tele-mental health services, 
and primary care and specialty care to 67 fixed and mobile sites. 
Again, IT investment is the foundation of our work in all of these 
areas.
    In rural areas with larger populations, funding supports the 
opening of new rural clinics, such as the one located in Newport, 
Oregon, which serves over 1,200 Veterans. This clinic is a unique 
partnership between VA and the local Lincoln County government. The 
county government provides clinical space, equipment and supplies, 
while VA funds the salaries for the primary care and mental health 
providers.
Mental Healthcare
    The budget requests $6.2 billion for mental health programs, for an 
increase of $312 million over the 2012 level of $5.9 billion. VA is 
increasing outreach opportunities to connect with and treat Veterans 
and their families in new, innovative ways. In April 2011, VA launched 
the first in a series of mobile smartphone applications, the PTSD 
Coach. It provides information about PTSD, self-assessment and symptom 
management tools, and information on how to get help. VA developed this 
technology in collaboration with DoD and with input from Veterans, who 
let the development team know what they did and did not want in the 
application (app). As of the end of 2011, the app had just over 41,000 
downloads in 57 countries. In addition, VA is developing PTSD Family 
Coach that will complement the Coaching into Care national call center, 
which provides support to family members of Veterans.
    In 2011, VA also launched Make the Connection, a national public 
awareness campaign for Veterans and their family members to connect 
with other Veterans to share common experiences, and ultimately to 
connect them with information and resources to help with the challenges 
that can occur when transitioning from military service to civilian 
society. This is an important effort in breaking down the stigma 
associated with mental health issues and treatment. The campaign's 
central focus is a website, www.MakeTheConnection.net, featuring 
numerous Veterans who have shared their experiences, challenges, and 
triumphs. It offers a place where Veterans and their families can view 
the candid, personal testimonials of other Veterans who have dealt with 
and are working through a variety of common life experiences, day-to-
day symptoms, and mental health conditions. The Web site also connects 
Veterans and their family members with services and resources they may 
need.
Long-term Medical Care
    As the Veteran population ages, VA will expand its provision of 
both institutional and non-institutional Long-Term Care services. These 
services are designed not just for the elderly, but for Veterans of all 
ages who have a serious chronic disease or disability requiring ongoing 
care and support, including those returning from Iraq and Afghanistan 
suffering from traumatic injuries. Veterans can receive long-term care 
services at home, at VA medical centers, or in the community. In 2013, 
the Long-Term Care budget request is $7.2 billion. VA will continue to 
provide long-term care in the least restrictive and most clinically 
appropriate settings by providing more non-institutional care closer to 
where Veterans live. This budget supports an increase of 6 percent in 
the average daily census in non-institutional long-term care programs 
in 2013, resulting in a total average daily census of approximately 
120,100.
                            Medical Research
    Medical Research is being supported with $583 million in direct 
appropriations in 2013, an increase of nearly $2 million above the 2012 
level. In addition, approximately $1.3 billion in funding support for 
medical research will be received from VA's medical care program and 
through Federal and non-Federal grants. Projects funded in 2013 will 
support fundamentally new directions for VA research. Specifically, 
research efforts will be focused on supporting development of New 
Models of Care, improving social reintegration following traumatic 
brain injury, reducing suicide, evaluating the effectiveness of 
complementary and alternative medicine, developing blood tests to 
assist in the diagnosis of post-traumatic stress disorder and mild 
traumatic brain injury, and advancing genomic medicine.
    The 2013 budget continues support for the Million Veteran Program 
(MVP), an unprecedented research program that advances the promises of 
genomic science. The MVP will establish a database, used only by 
authorized researchers in a secure manner, to conduct health and 
wellness studies to determine which genetic variations are associated 
with particular health issues. The pilot phase of MVP was launched in 
2011. Surveys were sent to 17,483 Veterans and approximately 20 percent 
of those then completed a study visit and provided a small blood 
sample. By the end of 2013, the goal is to enroll at least 150,000 
participants in the program. Like with so much of VA research, the 
impact will be felt not just through improved care for Veterans but for 
all Americans, as well.
                    Veterans Benefits Administration
    The 2013 budget request for the general operating expenses of the 
Veterans Benefits Administration (VBA) is $2.2 billion, an increase of 
$145 million, or 7.2 percent, over the 2012 enacted level. With the 
support of Congress, we have made great strides in implementing our 
comprehensive plan to transform the disability claims process. This 
budget sustains our investments in people, processes, and technology in 
order to eliminate the claims backlog by 2015. In addition, this budget 
request includes funding to support the administration of other VBA 
business lines.
Post 9-11 and other Education Programs
    The Post 9-11 GI Bill program provides every returning service 
member with the opportunity to obtain a college education. As expected, 
the Post-9/11 GI Bill program has become the most used education 
benefit that VA offers. Just as with the original GI Bill, today's 
program provides Veterans with tools that will help them contribute to 
an economically vibrant and strong America. In 2013, VA estimates that 
606,300 individuals will participate in this benefit program. The 
timeliness and accuracy of processing Post-9/11 GI Bill claims 
continues to improve. From 2010 to 2011, VA processing times for 
original and supplemental claims improved by 15 days (from 39 to 24 
days) and 4 days (from 16 to 12 days), respectively. Over the last two 
years, VA has successfully deployed a new IT system to support 
processing of Post-9/11 GI bill education claims. With improved 
automation tools in place, VA will be able to begin reducing education 
benefit processing staff in 2013.
Vocational Rehabilitation and Employment (VR&E)
    The VR&E program is designed to assist disabled Service-members in 
their transition to civilian life and obtaining employment. The budget 
request for 2013 is $233.4 million or a 14.2 percent increase from 
2012. The number of participants in the program increased to 107,925 in 
2011 and is expected to grow to over 130,000 by 2013.
    VA is also expanding VR&E counseling services available at IDES 
sites to assist Servicemembers with disabilities in jumpstarting their 
transition to civilian employment. In 2012, VA will assign 110 
additional counselors to the largest IDES sites, serving an additional 
12,000 wounded, ill, and injured Servicemembers. Funds requested in 
2013 will support further expansion, adding 90 more counselors to the 
program.
    In 2009, VA established a pilot program called VetSuccess on Campus 
to provide outreach and supportive services to Veterans during their 
transition from the military to college, ensuring that their health, 
education and benefit needs are met. By the end of 2012, the program 
will be operational on 28 campuses. The 2013 budget includes $8.8 
million to expand the program to a total of 80 campuses serving 
approximately 80,000 Veterans.
                    National Cemetery Administration
    VA honors our fallen soldiers with final resting places that serve 
as lasting tributes to commemorate their service and sacrifice to our 
Nation. The 2013 budget includes $258 million in operations and 
maintenance funding for the National Cemetery Administration (NCA). In 
2013, NCA estimates that interments will increase by 1,500 (1.3 
percent) over 2012. Cemetery maintenance workload will also continue to 
increase in 2013 over the 2012 levels: the number of gravesites 
maintained will increase by 82,000 (2.5 percent) and the number of 
developed acres maintained will increase by 138 (1.6 percent).
    The 2013 Budget will allow VA to provide more than 89.6 percent of 
the Veteran population, or 19.1 million Veterans, a burial option 
within 75 miles of their residence by keeping existing national 
cemeteries open, establishing new State Veterans cemeteries, as well as 
increasing access points in both urban and rural areas. VA's first 
grant to establish a Veterans cemetery on Tribal trust land, as 
authorized in Public Law 109-461, was approved on August 15, 2011. This 
cemetery will provide a burial option to approximately 4,036 unserved 
Rosebud Sioux Tribe Veterans and their families residing on the Rosebud 
Indian Reservation near Mission, South Dakota.
    NCA provides an unprecedented level of customer service, which has 
been achieved by always striving for new ways to meet the burial needs 
of Veterans. In 2011, NCA initiated an independent study of emerging 
burial practices including ``green'' burial techniques that may be 
appropriate and feasible for planning purposes. The study will also 
include a survey of Veterans to ascertain their preferences and 
expectations for new burial options. The completed study will provide 
comprehensive information and analysis for leadership consideration of 
new burial options.
                         Capital Infrastructure
    A total of $1.14 billion is requested in 2013 for VA's major and 
minor construction programs, an increase of 6.3 percent over the 2012 
enacted level. VA is also proposing legislation in 2013 that would 
enhance the ability of the Department to collaborate with other Federal 
Departments and Agencies, including the Department of Defense (DoD) on 
joint capital projects. This legislative proposal would allow 
appropriated funds to be transferred among Federal agencies to 
effectively plan and design joint projects when determined to be cost-
effective and improve service delivery to Veterans and Servicemembers.
Major Construction
    The major construction request in 2013 is $532 million in new 
budget authority. The major construction request includes funding for 
the next phase of construction for four medical facility projects in 
Seattle, WA; Dallas, TX; Palo Alto, CA; and St. Louis (Jefferson 
Barracks), MO. Additionally, funds are provided to remove asbestos from 
Department-owned buildings, improve facility security, remediate 
hazardous waste, fund land acquisitions for national cemeteries, and 
support other construction related activities.
Minor Construction
    In 2013, the minor construction request is $608 million. It would 
provide for constructing, altering, extending and improving VA 
facilities, including planning, assessment of needs, architectural and 
engineering services, and site acquisition and disposition. It also 
includes $58 million to NCA for land acquisition, gravesite expansions, 
and columbaria projects. NCA projects include irrigation and drainage 
improvements, renovation and repair of buildings, and roadway repairs.
                         Information Technology
    The 2013 budget requests $3.327 billion for Information Technology 
(IT), an increase of $216 million over the 2012 enacted level of $3.111 
billion. Veterans and their families are highly dependent upon the 
effective and efficient use of IT to deliver benefits and services. In 
this day and age, every doctor, nurse, dentist, claims processor, 
cemetery interment scheduler, and administrative employee in the VA 
cannot do his or her jobs without adequate IT support. Approximately 80 
percent of the IT budget supports the direct delivery of healthcare and 
benefits to Veterans and their families.
    We have made dramatic changes in the way IT projects are planned 
and managed at the VA. As described earlier in this testimony, the 
Project Management Accountability System (PMAS) has reduced risks by 
instituting effective monitoring and oversight capabilities and by 
establishing clear lines of accountability. Additionally, we have 
strengthened security standards in software development and established 
an Identity Access Management program that allows VA to increase on-
line services for Veterans.
    The IT infrastructure supports over 300,000 employees and about 10 
million Veterans and family members who use VA programs, making it one 
of the largest consolidated IT organizations in the world. This budget 
request includes nearly $1.8 billion for the operation and maintenance 
of the IT infrastructure, the backbone of VA. A sound and reliable 
infrastructure is critical to support the VA workforce and all of our 
facilities nationwide in the effective and efficient delivery of 
healthcare and benefits to Veterans. It is also critical that we 
support new facility activations, our major transformational 
initiatives, and the increased usage of VA services while maintaining a 
secure IT environment to protect Veteran sensitive information.
    Improving services for Veterans and their beneficiaries requires 
using advanced technologies. For example, VA will continue to utilize 
MyHealtheVet to improve access to information on appointments, lab 
tests and results, and reduce adverse reactions to medications. The 
2013 budget continues an investment strategy of funding the development 
of new technologies that will have the greatest benefit for Veterans.
    The delivery of high-quality medical care to an increasing number 
of Veterans is highly dependent upon adequate IT funding. VA's health 
IT investments have, and will continue, to greatly improve the delivery 
of medical care with regards to quality, patient safety and cost 
effectiveness. This includes transformation of mental health service 
delivery through IT enabled self-help, providing data and IT analytical 
tools for VA's research community, and creating an open exchange for 
collaboration and innovation in the development of clinical software 
solutions. Additionally, initiatives focused on ``Care at a Distance'' 
are heavily reliant on technology and require a robust IT 
infrastructure.
    The 2013 budget request for integrated Electronic Health Record 
(iEHR) is $169 million. The iEHR is a joint initiative with DoD to 
modernize and integrate electronic health records for all Veterans to a 
single common platform. We must take full advantage of this historic 
opportunity to deliver maximum value through joint investments in 
health IT. When DoD and VA healthcare providers begin accessing a 
common set of health records, iEHR will enhance quality, safety, and 
accessibility of healthcare - setting the stage for more efficient, 
cost-effective healthcare systems. In 2013, we plan to leverage open 
source development to foster innovation and speed delivery for a 
pharmacy and immunization solution.
    An integral part of iEHR is the Virtual Lifetime Electronic Record 
(VLER), which is enabling VA transformation. VLER creates information 
interoperability between DoD, VA, and the private sector to promote 
better, faster and safer healthcare and benefits delivery for Veterans. 
The 2013 budget will ensure continued delivery of enhanced clinical and 
benefits information connections and build increased capability to 
support women's healthcare. Additionally, we will develop a modern 
memorial affairs system for the dynamic mapping of gravesite locations. 
The 2013 budget request for VLER is $52.9 million.
    In addition, the 2013 budget requests $92 million in the IT 
appropriation for VBMS. As noted earlier, the VBMS initiative is the 
cornerstone of VA's claims transformation strategy. It is a 
comprehensive solution that integrates a business transformation 
strategy to address people and processes with a paperless claims 
processing system. Achieving paperless claims processing will result in 
higher quality, greater consistency and faster claims decisions. 
Nationwide deployment of VBMS is on target to begin in 2012 with 
completion in 2013.
    This budget also includes funding to transform the delivery of 
Veterans' benefits. The 2013 IT budget requests $111 million for the 
Veterans Relationship Management (VRM) initiative. We will use this 
funding to improve communications between Veterans and VA that occur 
through multiple channels--phone, web, mail, social media, and mobile 
apps. It will also provide new tools and processes that increase the 
speed, accuracy and efficiency of information exchange, including the 
development of self-service technology-enabled interactions to provide 
access to information and the ability to execute transactions at the 
place and time convenient to the Veteran. In 2013, Veterans will see 
enhanced self-service tools for the Civilian Health and Medical Program 
of the Department of Veterans Affairs (CHAMPVA) and VetSuccess 
programs, as well as the Veterans Online Application for enrolling in 
VA healthcare.
                          Legislative Program
    VA has outlined in this budget a strong legislative program that 
will advance our mission to end Veteran homelessness and help Wounded 
Warriors by improving our system of grants for home alterations so 
Veterans can better manage disabilities and live independently. Our 
legislative proposals would also make numerous other common-sense 
changes that improve our programs, including provisions that will 
reduce payment complexities for both our student Veterans and the 
schools using the Post 9/11 GI Bill.
                                Summary
    VA is the second largest Federal department with over 316,000 
employees. Our workforce includes physicians, nurses, counselors, 
claims processors, cemetery groundskeepers, statisticians, engineers, 
IT specialists, police, and educators. They serve Veterans at our 
hospitals, community-based outpatient clinics, Vet Centers, mobile Vet 
Centers, claims processing centers, and cemeteries. Through the 
resources provided in the President's 2013 Budget, VA is enabled to 
continue improving the quality of life for our Nation's Veterans and 
their families and to completing the transformation of the department 
that we began in 2009. Thanks to the President's leadership and the 
solid support of all members of the Congress, we have made huge strides 
in our journey to provide all generations of Veterans the best possible 
care and benefits that they earned through selfless service to the 
Nation. We are committed to continue that journey, even as the numbers 
of Veterans will increase significantly in the coming years, through 
the responsible use of the resources provided in the 2013 budget and 
2014 advance appropriations requests.

                                 
                    Prepared Statement of Carl Blake
    Chairman Miller, Ranking Member Filner, and members of the 
Committee, as one of the four co-authors of The Independent Budget 
(IB), Paralyzed Veterans of America (PVA) is pleased to present the 
views of The Independent Budget regarding the funding requirements for 
the Department of Veterans Affairs (VA) health care system for FY 2013.
    As the country faces a difficult and uncertain fiscal future, the 
Department of Veterans Affairs likewise faces significant challenges 
ahead. Following months of rancorous debate about the national debt and 
federal deficit during the summer of 2011, Congress agreed upon a 
deficit reduction measure, P.L. 112-25, that could lead to cuts in 
discretionary and mandatory spending for VA. The coauthors of The 
Independent Budget--AMVETS, Disabled American Veterans, Paralyzed 
Veterans of America, and the Veterans of Foreign Wars--have serious 
concerns about the potential reductions in VA spending. While changes 
to benefits programs and cuts to discretionary programs have unique 
differences, the impact of these possibilities will be equally 
devastating for veterans and their families.
    Discretionary spending in VA accounts for approximately $62 
billion. Of that amount, nearly 90 percent of that funding is directed 
toward VA medical care programs. The VA is the best health-care 
provider for veterans. Providing primary care and specialized health 
services is an integral component of VA's core mission and 
responsibility to veterans. Across the nation, VA is a model health-
care provider that has led the way in various areas of medical 
research, specialized services, and health-care technology. The VA's 
unique system of care is one of the nation's only health-care systems 
that provides developed expertise in a broad continuum of care. 
Currently, the Veterans Health Administration serves more than 8 
million veterans and provides specialized health-care services that 
include program specific centers for care in the areas of spinal cord 
injury/disease, blind rehabilitation, traumatic brain injury, 
prosthetic services, mental health, and war-related polytraumatic 
injuries. Such quality and expertise on veterans' health care cannot be 
adequately duplicated in the private sector. Any reduction in spending 
on VA health-care programs would only serve to degrade these critical 
services.
    Moreover, The Independent Budget veterans service organizations 
(IBVSOs) are especially concerned about steps VA has taken in recent 
years in order to generate resources to meet ever-growing demand on the 
VA health-care system. In fact, the FY 2012 and FY 2013 advance 
appropriation budget proposal released by the Administration last year 
included ``management improvements,'' a popular gimmick used by 
previous Administrations to generate savings and offset the growing 
costs to deliver care. Unfortunately, these savings were often never 
realized leaving VA short of necessary funding to address ever-growing 
demand on the health-care system. We believe that continued pressure to 
reduce federal spending will only lead to greater reliance on gimmicks 
and false assumptions to generate apparent but illusory funding. In 
fact, the Government Accountability Office (GAO) outlined its concerns 
with this budget accounting technique in a report released to the House 
and Senate Committees on Veterans' Affairs in June 2011. In its report, 
the GAO states:

       If the estimated savings for fiscal years 2012 and 2013 do not 
materialize and VA receives appropriations in the amount requested by 
the President, VA may have to make difficult tradeoffs to manage within 
the resources provided.

    This observation reflects the real possibility that exists should 
VA health care, as well as other programs funded through the 
discretionary process, be subject to spending reductions.
    At the same time, Congress once again failed to fulfill its 
obligations to complete work on appropriations bills funding all 
federal departments and agencies, including VA, by the start of the new 
fiscal year on October 1, 2011. Fortunately, as has become the new 
normal, last year the enactment of advance appropriations shielded the 
VA health-care system from the political wrangling and legislative 
deadlock.
    In February 2011, the Administration released its budget submission 
for VA for FY 2012, recommending an overall discretionary funding 
authority of $61.9 billion, approximately $3.6 billion less than The 
Independent Budget recommended last year. The Administration's 
recommendation included a revised estimate for total Medical Care of 
approximately $53.9 billion for FY 2012, including approximately $3.1 
billion in medical care collections. The budget also included $509 
million in funding for Medical and Prosthetic Research, a substantial 
decrease of approximately $72 million below the FY 2011 funding level.
    The IBVSOs expressed serious concerns about the downward revision 
of the Medical Care estimates for FY 2012. While we certainly 
understood that the Administration revised the estimates for Medical 
Care down by $713 million due to the proposed federal pay freeze (a 
factor not included in the FY 2011 appropriations bill), the revised 
budget included ideas of greater concern. Specifically, the IBVSOs had 
reservations about the outline of an ill-defined contingency fund that 
would provide $953 million more for Medical Services for FY 2012. 
Moreover, we were especially troubled that VA presumed ``management 
improvements'' of approximately $1.1 billion to be directed toward FY 
2012 and FY 2013. The use of management improvements or efficiencies is 
a gimmick that has been commonly used in the past to reduce the 
requested level of discretionary funding; yet rarely did VA realize any 
actual savings from those gimmicks. This is particularly troubling in 
light of the fact that we have been told that the VA's efforts to 
achieve those efficiencies explicitly outlined in the FY 2012 Budget 
Request have failed.
    Finally, we were concerned about the revised estimate in Medical 
Care Collections from the originally projected $3.7 billion (included 
in last year's advance appropriations recommendation and supported by 
Congress) to now only $3.1 billion. Given this revision in estimates, 
we believed then, as we do now, that the VA budget request, and 
ultimately the funding provided through the appropriations process, was 
insufficient for VA to meet the demand on the health-care system.
    For FY 2012, The Independent Budget recommended that the 
Administration and Congress provide $65.5 billion in discretionary 
funding to VA, an increase of $4.9 billion above the FY 2011 operating 
budget level, to adequately meet veterans' health-care and benefits 
needs. Our recommendations included $55 billion for health care and 
$620 million for medical and prosthetic research.
    The Administration also included an initial estimate for the VA 
health-care accounts for FY 2013. Specifically, the budget request 
called for $55.8 billion in total budget authority, with $52.5 billion 
in discretionary funding and approximately $3.3 billion for medical 
care collections. Deeper analysis of the Administration's budget 
documents seems to suggest that the VA actually believed then that it 
needed approximately $56.6 billion in total funding authority to meet 
all of the health care demands placed on the system. Given the 
pressures being placed on VA as a result of deficit and debt reduction, 
we have serious concerns whether VA will be able to meet new demand 
with the resources that it is being provided.
Funding for FY 2013
    For FY 2013, The Independent Budget recommends approximately $57.2 
billion for total medical care, an increase of $3.3 billion over the FY 
2012 operating budget level provided as an advance appropriation by 
P.L. 112-10, the ``the Department of Defense and Full-Year Continuing 
Appropriations Act for FY 2011.'' Meanwhile, the Administration 
recommended an advance appropriation for FY 2013 of approximately $52.5 
billion in discretionary funding for VA medical care as a part of its 
FY 2012 Budget Request. When combined with the $3.3 billion 
Administration projection for medical care collections, the total 
available operating budget recommended for FY 2013 is approximately 
$55.8 billion.
    The medical care appropriation includes three separate accounts--
Medical Services, Medical Support and Compliance, and Medical 
Facilities--that comprise the total VA health-care funding level. For 
FY 2013, The Independent Budget recommends approximately $46.0 billion 
for Medical Services. Our Medical Services recommendation includes the 
following recommendations:

       Current Services Estimate . . . . . . . . . . . . . . . . . . . 
. . $43,855,969,000
       Increase in Patient Workload . . . . . . . . . . . . . . . . . . 
. $1,510,394,000
       Additional Medical Care Program Costs . . . . . . . . . . 
$675,000,000
       Total FY 2013 Medical Services. . . . . . . . . . . . . . . . 
$46,041,363,000

    Our growth in patient workload is based on a projected increase of 
approximately 110,000 new unique patients--priority groups 1-8 veterans 
and covered nonveterans. We estimate the cost of these new unique 
patients to be approximately $1 billion. The increase in patient 
workload also includes a projected increase of 96,500 new Operation 
Enduring Freedom and Operation Iraqi Freedom (OEF/OIF), as well as 
Operation New Dawn (OND) veterans at a cost of approximately $349 
million. Our recommendations represent an increase in projected 
workload in this population of veterans over previous years as a result 
of the withdrawal of forces from Iraq, the drawdown of forces in 
Afghanistan, and a potential drawdown in the actual number of service 
members currently serving in the Armed Forces. And yet, we believe that 
growth in demand for this cohort specifically could be far greater 
given the changing military policies mentioned above.
    Finally, our increase in workload includes the projected enrollment 
of new priority group 8 veterans who will use the VA health-care system 
as a result of the Administration's continued efforts to incrementally 
increase the enrollment of priority group 8 veterans by 500,000 
enrollments by FY 2013. We estimate that as a result of this policy 
decision, the number of new priority group 8 veterans who will enroll 
in VA should increase by 125,000 between FY 2010 and FY 2013. Based on 
the priority group 8 empirical utilization rate of 25 percent, we 
estimate that approximately 31,250 of these new enrollees will become 
users of the system. This translates to a cost of approximately $134 
million. When compared to the projections that the Administration had 
previously made for increased utilization for this Priority Group, we 
believe that our recommendations are on target for those projections.
    Lastly, The Independent Budget believes that there are additional 
projected funding needs for VA. Specifically, we believe there is real 
funding needed to restore the VA's long-term-care capacity (for which a 
reasonable cost estimate can be determined based on the actual capacity 
shortfall of VA) and to provide additional centralized prosthetics 
funding (based on actual expenditures and projections from the VA's 
prosthetics service). In order to restore the VA's long-term care 
average daily census (ADC) to the level mandated by Public Law 106-117, 
the ``Veterans Millennium Health Care and Benefits Act,'' we recommend 
$375 million. In order to meet the increase in demand for prosthetics, 
the IB recommends an additional $300 million. This increase in 
prosthetics funding reflects a significant increase in expenditures 
from FY 2011 to FY 2012 (explained in the section on Centralized 
Prosthetics Funding) and the expected continued growth in expenditures 
for FY 2013. Additionally, it is worth noting that the VA has actively 
implemented the new caregiver program mandated by Public Law 111-163, 
the ``Caregivers and Veterans Omnibus Health Services Act.'' However, 
we believe that still greater funding should be appropriated, above 
what the VA has currently allocated for this program, in order to more 
effectively and efficiently operate the program.
    For Medical Support and Compliance, The Independent Budget 
recommends approximately $5.6 billion. Finally, for Medical Facilities, 
The Independent Budget recommends approximately $5.6 billion. While our 
recommendation does not include an additional increase for nonrecurring 
maintenance (NRM), it does reflect a FY 2013 baseline of approximately 
$900 million. While we appreciate the significant increases in the NRM 
baseline over the last couple of years, total NRM funding still lags 
behind the recommended two to four percent of plant replacement value. 
In fact, VA should actually be receiving at least $2.1 billion annually 
for NRM (Refer to Construction section article ``Increase Spending on 
Nonrecurring Maintenance).
    For Medical and Prosthetic Research, The Independent Budget 
recommends $611 million. This represents a $30 million increase over 
the FY 2012 appropriated level. We are particularly pleased that 
Congress has recognized the critical need for funding in the Medical 
and Prosthetic Research account in the last couple of years. Research 
is a vital part of veterans' health care, and an essential mission for 
our national health care system.
    Lastly, Mr. Chairman, I would like to note one late change to our 
IB budget recommendations for State Home Construction Grants which 
arose after we went to press. Late last week VA finally released the FY 
2012 grant priority list for State Home repair, renovation and new 
construction projects and there was a significant increase in State 
matching funds certified as available. After reviewing the newly 
released Priority List for FY 2012, there are now $321 million worth of 
Priority 1 State Home projects for which the States have certified 
matching funds available. As a result, the federal funding required for 
Priority 1 projects will be at least $204 million in FY 2013, and that 
number is likely to rise even higher as States approve additional 
matching funding this year for a backlog of projects currently 
estimated at $400 million. While this recommendation is not reflected 
specifically in The Independent Budget, this change reflects what we 
believe our recommendation should now be.
Advance Appropriations for FY 2014
    As we have noted in the past, P.L. 111-81 required the President's 
budget submission to include estimates of appropriations for the 
medical care accounts for FY 2013 and subsequent fiscal years. With 
this in mind, the VA Secretary is required to update the advance 
appropriations projections for the upcoming fiscal year (FY 2013) and 
provide detailed estimates of the funds necessary for the medical care 
accounts for FY 2014. Moreover, the law also requires a thorough 
analysis and public report of the Administration's advance 
appropriations projections by the Government Accountability Office 
(GAO) to determine if that information is sound and accurately reflects 
expected demand and costs.
    The GAO's responsibility is more important than ever, particularly 
in light of their findings concerning the FY 2012 budget submission 
last year. The GAO report that analyzed the FY 2012 Administration 
budget identified serious deficiencies in the budget formulation of VA. 
Yet these concerns were not appropriately addressed by Congress or the 
Administration. This analysis and the subsequent lack of action to 
correct these deficiencies simply affirm the ongoing need for the GAO 
to evaluate the budget recommendations of VA.
    In the end, it is easy to forget, that the people who are 
ultimately affected by wrangling over the budget are the men and women 
who have served and sacrificed so much for this nation. We hope that 
you will consider these men and women when you develop your budget 
views and estimates, and we ask that you join us in adopting the 
recommendations of The Independent Budget.
    This concludes my testimony. I will be happy to answer any 
questions you may have.
Information Required by Rule XI 2(g)(4) of the House of Representatives
    Pursuant to Rule XI 2(g)(4) of the House of Representatives, the 
following information is provided regarding federal grants and 
contracts.
                            Fiscal Year 2012
    No federal grants or contracts received.
                            Fiscal Year 2011
    Court of Appeals for Veterans Claims, administered by the Legal 
Services Corporation--National Veterans Legal Services Program-- 
$262,787.
                            Fiscal Year 2010
    Court of Appeals for Veterans Claims, administered by the Legal 
Services Corporation--National Veterans Legal Services Program-- 
$287,992.

                                 
                  Prepared Statement of Raymond Kelley
    MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
    On behalf of the more than 2 million men and women of the Veterans 
of Foreign Wars of the U.S. (VFW) and our Auxiliaries, I would like to 
thank you for the opportunity to testify today. The VFW works alongside 
the other members of The Independent Budget (IB) - AMVETS, Disabled 
American Veterans and Paralyzed Veterans of America - to produce a set 
of policy and budget recommendations that reflect what we believe would 
meet the needs of America's veterans. The VFW is responsible for the 
construction portion of the IB, so I will limit my remarks to that 
portion of the budget.
    With an infrastructure that is more than 60 years old, the 
Department of Veterans Affairs (VA) has a monumental task of 
maintaining and improving its vast network of facilities to ensure the 
Veterans Health Administration (VHA) can provide accessible, high-
quality health care to our nation's veterans. Currently, VA owns 5,300 
buildings and manages more than 800 leases. In 2005, VA began using the 
Federal Real Property Council (FRPC) Tier 1 performance measures to 
assess its capital portfolio goals. \1\ The two measures that directly 
affect patient services are utilization and condition. In 2004, VA's 
utilization was at 80 percent, well below capacity. That utilization 
grew to 121 percent in 2010, and is projected to grow even more in the 
coming years. During the same time period, the condition of VA's 
infrastructure decreased from 81 percent to 71 percent. \2\ These 
trends show that funding for the next few years will be critical for VA 
to fulfill its mission.
---------------------------------------------------------------------------
    \1\ FY 2012 Budget Submission, Construction and 10 Year Capital 
Plan, February 2011, Vol. 4 of 4, p. 9.3-11, 12
    \2\ Ibid, p. 9.3-13, 14
---------------------------------------------------------------------------
    VA has developed the Strategic Capital Investment Plan (SCIP) to 
address the critical deficiencies in its infrastructure. SCIP uses six 
criteria to assess deficiencies, or gaps, in its ability to deliver 
efficient, high-quality, accessible services and care for veterans. The 
six gap criteria are access, utilization, space, condition, energy, and 
other (which includes safety, security, privacy, and seismic 
corrections). \3\ It was also determined that to close all these gaps 
it would cost between $53 billion and $65 billion. \4\
---------------------------------------------------------------------------
    \3\ Ibid, p. 8.2-4
    \4\ Ibid, p. 81-1
---------------------------------------------------------------------------
    To determine and monitor the condition of its facilities, VA 
conducted a Facility Condition Assessment (FCA). These assessments 
include inspections of building systems, such as electrical, 
mechanical, plumbing, elevators, and structural and architectural 
safety; and site conditions consisting of roads, parking, sidewalks, 
water mains, water protection. The FCA review team can grant ratings of 
A, B, C, D, and F. Assessment ratings A through C conclude the assessed 
is in new to average condition. D ratings mean the condition is below 
average and F means the condition is critical and requires immediate 
attention. To correct these deficiencies, VA will need to invest nearly 
$10 billion. \5\
---------------------------------------------------------------------------
    \5\ Ibid, p. 9.3-14 15
---------------------------------------------------------------------------
    To close the gaps in access, VA will need to invest between $30 
billion and $35 billion dollars in major and minor construction and 
leasing. The remaining $20 billion is needed to close the remaining 
nonrecurring maintenance deficiencies.
Major Construction Accounts:
    By estimation of the Department of Veterans Affairs, the cost to 
implement all currently identified gaps in major construction, Congress 
will have to authorize and appropriate between $20 billion and $24.5 
billion over the next 10 years. Currently, there are 35 major 
construction projects that are authorized, dating back as far as 2004. 
Only three of these projects are funded through completion. The total 
unobligated amount for all currently congressionally budgeted major 
construction projects is $2.8 billion. \6\ Yet the total funding 
requested for FY 2012 major construction accounts was only $725 
million.
---------------------------------------------------------------------------
    \6\ FY 2012 Budget Submission, Construction and 10 Year Capital 
Plan, February 2011, Vol. 4 of 4, p. 2-85
---------------------------------------------------------------------------
    At this level of funding, it will take VA more than 25 years to 
complete its current 10-year capital investment plan. The Independent 
Budget veterans service organizations (IBVSOs) understand that fiscally 
difficult times call for spending restraints, but without quality, 
accessible medical centers, VA will not be able to deliver quality, 
accessible care. The IBVSOs recommend $2.8 billion to complete all 
partially funded and future major construction needs to close all 
identified gaps by 2021.
Minor Construction Accounts:
    To close the minor construction gaps within its 10-year timeline, 
VA will need to invest nearly $8 billion in Veterans Health 
Administration minor construction alone. \7\ Minor construction 
projects allow VA to address issues of functional space within existing 
buildings and improve facility conditions at cost less than $10 
million. In past years VA and Congress requested and appropriated 
nearly 10 percent of the total need to close the minor construction 
gaps. However, the Administration and Congress decreased funding for 
minor construction by about $250 million over the past two years. If 
this rate of investment is continued, it will take more than 16 years 
to complete all current minor construction gaps. Congress and VA must 
put minor construction back on track by investing 10 percent of the 
total cost to complete the 10-year minor construction plan. With this 
in mind, The Independent Budget recommends $969 million in FY 2013 to 
achieve this goal.
---------------------------------------------------------------------------
    \7\ FY 2012 Budget Submission, Construction and 10 Year Capital 
Plan, February 2011, Vol. 4 of 4, p. 1-4
---------------------------------------------------------------------------
Nonrecurring Maintenance Account:
    Even though nonrecurring maintenance (NRM), which is funded through 
VA's Medical Facilities account and not through the construction 
account, it is critical to VA's capital infrastructure. NRM embodies 
the many small projects that together provide for the long-term 
sustainability and usability of VA facilities. NRM projects are one-
time repairs, such as modernizing mechanical or electrical systems, 
replacing windows and equipment, and preserving roofs and floors, among 
other routine maintenance needs. Nonrecurring maintenance is a 
necessary component of the care and stewardship of a facility. When 
managed responsibly, these relatively small, periodic investments 
ensure that the more substantial investments of major and minor 
construction provide real value to taxpayers and to veterans as well. 
Accordingly, to fully maintain its facilities, VA needs an NRM annual 
budget of at least $2.1 billion.
    Given the low level of funding NRM accounts have historically 
received, The Independent Budget veterans service organizations 
(IBVSOs) are not surprised that basic facility maintenance remains a 
challenge for VA. In addition, the IBVSOs have long-standing concerns 
about how this funding is apportioned once received by VA. Because NRM 
accounts are organized under the Medical Facilities appropriation, it 
has traditionally been apportioned using the Veterans Equitable 
Resource Allocation (VERA) formula. This formula was intended to 
allocate health-care dollars to those areas with the greatest demand 
for health care, and is not an ideal method to allocate NRM funds. When 
dealing with maintenance needs, this formula may prove 
counterproductive by moving funds away from older medical centers and 
reallocating the funds to newer facilities where patient demand is 
greater, even if the maintenance needs are not as intense. The IBVSOs 
are encouraged by actions the House and Senate Veterans' Affairs 
Committees have taken in recent years requiring NRM funding to be 
allocated outside the VERA formula, and we hope this practice will 
continue.
Capital Leasing:
    The Department of Veterans Affairs enters into two types of leases. 
First, VA leases properties to use for each agency within VA, ranging 
from community-based outpatient clinics (CBOC) and medical centers, to 
research and warehouse space. These leases do not fall under the larger 
construction accounts, but under each administration's and staff office 
operating accounts. \8\
---------------------------------------------------------------------------
    \8\ FY 2012 Budget Submission, Construction and 10 Year Capital 
Plan, February 2011, Vol. 4 of 4, p. 8.2-88.
---------------------------------------------------------------------------
    The second type of lease, called enhanced-use lease (EUL), allows 
VA to lease property they own to an outside-VA entity. These leases 
allow VA to lease properties that are unutilized or underutilized for 
projects such as veterans' homelessness and long-term care. Proper use 
of leases provides VA with flexibility in providing care as veterans' 
needs and demographics changes.
    VA has moved to leasing many of its CBOCs and specialty clinics to 
increase access of primary and specialty care in local communities as 
well as a way to be more modular as veterans' demographics change. The 
Independent Budget veterans service organizations (IBVSOs) see the 
value in providing quick, accessible health care, but caution a leasing 
concept that will rely on contracting inpatient care. Not having 
accessible inpatient care can and has left VA looking for ways to treat 
veterans in their greatest time of need. As Strategic Capital 
Investment Planning continues to move forward and more leases are 
entered into, some of which may have in patient alternatives, the 
IBVSOs will be continue to be vigilant to ensure that VA has viable 
contingency plans for inpatient care.
    EUL gives VA the authority to lease land or buildings to public, 
nonprofit, or private organizations or companies as long as the lease 
is consistent with VA's mission and that the lease ``provides 
appropriate space for an activity contributing to the mission of the 
Department.'' \9\ Although EUL can be used for a wide range of 
activities, the majority of the leases result in housing for homeless 
veterans and assisted living facilities. In 2013, VA has 19 buildings 
or parcels of land that are planned for EUL. \10\ The IBVSOs encourage 
VA to continue to improve their transparency of potential EUL 
properties. Improving dialog with veterans in the communities will 
reduce the backlash that often occurs when VA property is being 
repurposed.
---------------------------------------------------------------------------
    \9\ Title 38, U.S.C., paragraph 8162, as amended through Public Law 
112-7, enacted March 31, 2011, printed May 2, 2011.
    \10\ FY 2012 Budget Submission, Construction and 10 Year Capital 
Plan, February 2011, Appendix 10 Year Capital Plan, p. 10-46 -10-49.
---------------------------------------------------------------------------
Empty or Underutilized Space at Medical Centers:
    The Department of Veterans Affairs maintains approximately 1,100 
buildings that are either vacant or underutilized. An underutilized 
building is defined as one where less than 25 percent of space is used. 
It costs VA from $1 to $3 per square foot per year to maintain a vacant 
building.
    Public Law 108-422 incentivized VA's efforts to properly dispose of 
excess space by allowing VA to retain the proceeds from the sale, 
transfer, or exchange of certain properties in a Capital Asset Fund. 
Further, that law required VA to develop short- and long-term plans for 
the disposal of these facilities in an annual report to Congress. With 
this in mind, VA has begun a review of buildings and properties for 
finding possible reuse or repurpose opportunities. Building Utilization 
Review and Repurposing or BURR will focus on identifying sites in three 
major categories; housing for veterans who are homeless or at risk for 
being homeless; senior veterans capable of independent living and 
veterans who require assisted-living and supportive services. The three 
phases planned include identifying campuses with buildings and land 
that are either vacant or underutilized; sites visit to match the 
supply of building and land with the demand for services and 
availability of financing and lastly identifying campuses using VA's 
enhanced-use leasing authority. Under the BURR initiative, if no 
repurposing is identified, VA will begin to assess its vacant capital 
inventory by demolishing or disposing of buildings that are unsuitable 
for reuse or beyond their usefulness.
    The IBVSOs have stated that VA must continue to develop these 
plans, working in concert with architectural master plans, community 
stakeholders and clearly identifying the long-range vision for all such 
sites.
Program for Architectural Master Plans:
    A facility master plan is a comprehensive tool to examine and 
project potential new patient care programs and how they might affect 
the existing health-care facility design. It also provides insight with 
respect to growth needs, current space deficiencies, and other facility 
needs for existing programs and how they might be accommodated in the 
future with redesign, expansion, or contraction.
    In many past cases VA has planned construction in a reactive 
manner. Projects are first funded and then placed in the facility in 
the most expedient manner, often not considering other future projects 
and facility needs. This often results in short-sighted construction 
that restricts rather than expands options for the future.
    The Independent Budget veterans service organizations (IBVSOs) 
believe that each VA medical center should develop a comprehensive 
facility master plan to serve as a blueprint for development, 
construction, and future growth of the facility; $15 million should be 
budgeted for this purpose. We believe that each VA medical center 
should develop a comprehensive facility master plan to serve as a 
blueprint for development, construction, and future growth of the 
facility.
    VA has undertaken master planning for several VA facilities, and we 
applaud this effort. But VA must ensure that all VA facilities develop 
master plan strategies to validate strategic planning decisions, 
prepare accurate budgets, and implement efficient construction that 
minimizes wasted expenses and disruption to patient care.
Preservation of VA's Historic Structures:
    The Department of Veterans Affairs has an extensive inventory of 
historic structures that highlight America's long tradition of 
providing care to veterans. These buildings and facilities enhance our 
understanding of the lives of those who have worn the uniform, of those 
who cared for their wounds, and of those who helped to build this great 
nation. Of the approximately 2,000 historic structures in the VA 
historic building inventory, many are neglected and deteriorate year 
after year because of a lack of any funding for their upkeep. These 
structures should be stabilized, protected, and preserved because they 
are an integral part our nation's history.
    The cost for saving some of these buildings is not very high 
considering that they represent a part of American history. Once gone, 
they cannot be recaptured. For example, the Greek Revival Mansion at 
the VA Medical Center in Perry Point, Maryland, built in the 1750s can 
be restored and used as a facility or network training space for about 
$1.2 million. The Milwaukee Ward Memorial Theater, built in 1881, could 
be restored as a multipurpose facility at a cost of $6 million. These 
expenditures would be much less than the cost of new facilities and 
would preserve history simultaneously.
    The IBVSOs encourage VA to use the tenants of Public Law 108-422, 
the ``Veterans Health Programs Improvement Act,'' in improving the 
plight of VA's historic properties. This act authorizes historic 
preservation as one of the uses of the proceeds of the capital assets 
fund resulting from the sale or leases of other unneeded VA properties.
    Mr. Chairman, this concludes my testimony and I look forward to any 
questions you and the Committee may have.
 Information Required by Rule XI2(g)(4) of the House of Representatives
    Pursuant to Rule XI2(g)(4) of the House of Representatives, VFW has 
not received any federal grants in Fiscal Year 2011, nor has it 
received any federal grants in the two previous Fiscal Years.

                                 
                Prepared Statement of Joseph A. Violante
    Chairman Miller, Ranking Member Filner and Members of the 
Committee:
    On behalf of the Disabled American Veterans (DAV) and our 1.2 
million members, all of whom are wartime disabled veterans, I am 
pleased to be here today to present recommendations of The Independent 
Budget (IB) for the fiscal year (FY) 2013 budget related to veterans 
benefits, judicial review and the Veterans Benefits Administration 
(VBA). The Independent Budget is jointly produced each year by DAV, 
AMVETS, Paralyzed Veterans of America and Veterans of Foreign Wars. 
While there are dozens of recommendations in this year's Independent 
Budget related to VBA's benefit programs and claims processing reform, 
I will only highlight some of the most critical ones in my testimony, 
and commend the full text of the IB that is now available online.
    Mr. Chairman, we are now in the third year of VBA's latest effort 
to transform its outdated, inefficient, and inadequate claims-
processing system into a modern, automated, rules-based, and paperless 
system. VBA has struggled for decades to provide timely and accurate 
decisions on claims for veterans benefits, especially veterans 
disability compensation, and there have been numerous prior reform 
attempts that began with great promise, only to fall far short of 
success. Over the next year we will begin to see whether their 
strategies to transform the people, processes and technologies will 
finally result in a cultural shift away from focusing on speed and 
production to a business culture of quality and accuracy, which is the 
only way to truly get the backlog under control.
RESOURCE RECOMMENDATIONS
Adequate Staffing for the Veterans Benefits Administration
    In order to sustain the transformation efforts underway at VBA, The 
Independent Budget for FY 2013 generally recommends maintaining current 
staffing levels in the Veterans Benefits Administration, with only 
modest increases for the Vocational Rehabilitation and Employment 
Service and the Board of Veterans Appeals. Due to substantial support 
from Congress, VBA's Compensation Service experienced significant 
staffing increases between fiscal years 2008 and 2010, which supported 
an increase in the number of claims processed each of those years. 
Unfortunately, however, an even larger increase in new and reopened 
claims volume contributed to a rising backlog. Historically, it takes 
approximately two years for a new Veterans Service Representative (VSR) 
to acquire sufficient knowledge and experience to be able to work 
independently with both speed and accuracy. It takes an additional 
period of at least two years of training to become a Rating Veterans 
Service Representative (RVSR) with the skills to accurately complete 
most rating claims. As such, the full productive capacity of the 
employees hired in recent years are only now becoming evident.
    This year VBA will roll out a new operating model for processing 
claims for disability compensation, which will change the roles and 
functions of thousands of VSRs and RVSRs at Regional Offices across the 
country. VBA is also planning to launch new IT systems, including the 
Veterans Benefits Management System (VBMS) and expand the functionality 
of their e-Benefits system. Together these transformations are expected 
to have a significant effect on the productive capability of VBA's 
workforce. While these changes are being fully implemented, and the 
effect on workforce requirements analyzed, the Independent Budget 
veterans service organizations (IBVSOs) do not recommend an increase in 
staffing for VBA's Compensation Service for FY 2013. However, we do 
recommend that VBA initiate a scientific study to determine the 
workforce necessary to effectively manage its rising workload in a 
manner that produces timely and accurate rating decisions.
    Moving forward, should there be a decline in personnel dedicated to 
producing rating decisions, an increase in claims or the backlog, or 
should any of the long-awaited VBA information technology initiatives 
fail to produce the projected reductions in processing times for 
claims, Congress must be prepared to act swiftly to intervene with the 
additional staffing resources.
Staffing Increase for Vocational Rehabilitation and Employment Service
    The IBVSOs do recommend that funding for VA's Vocational 
Rehabilitation and Employment Service (VR&E) be increased to 
accommodate at least 195 additional full-time employees for the VR&E 
Service for FY 2013 and at least 9 new full-time employees to manage 
its expanding campus program.
    The Government Accountability Office (GAO) conducted a study in 
2009 to assess VR&E's ability to meet its core mission functions. GAO 
found that 54 percent of VBA's 57 regional offices reported they had 
fewer counselors than needed, 40 percent said they have fewer 
employment coordinators than needed and 90 percent reported that their 
caseloads have become more complex since veterans began returning from 
Afghanistan and Iraq.
    VBA's current caseload target is one counselor for every 125 
veterans served; however, feedback received by the IBVSOs from 
counselors in the field suggested an actual workload as high as one to 
145. Based on comparisons with state vocational rehabilitation programs 
and discussions with VR&E personnel, even the 1:125 ratio may be too 
high to effectively manage VR&E's workload, particularly in providing 
service to seriously disabled veterans. However, to reach the 1:125 
standard, VR&E needs approximately 195 new staff counselors.
    The VA VetSuccess on Campus program places a full time Vocational 
Rehabilitation Counselor and a part time Vet Center Outreach 
Coordinator on college campuses to help the transition from military to 
civilian and student life. The President's 2012 budget submission 
requested funding to support further expansion of the program beyond 
the eight existing sites to nine more campuses: the University of South 
Florida, Cleveland State University, San Diego State University, 
Community College of Rhode Island, Arizona State University, Texas A&M, 
Central Texas, Rhode Island College, and Salt Lake Community College. 
The Independent Budget recommends that Congress provide funding for at 
least nine additional full-time employees in FY 2013 to manage this 
expanding campus program.
Staffing Increase for the Board of Veterans Appeals
    The Independent Budget also recommends a staffing increase at the 
Board of Veterans Appeals of at least 40 full-time employee equivalents 
(FTEE) for FY 2013. Based on historical trends, the number of new 
appeals to the Board averages approximately five percent of all claims 
received, so as the number of claims processed by VBA is expected to 
rise significantly, so too will the Board's workload rise 
commensurately. With the number of claims processed at VBA having risen 
to over one million, and projected to rise even higher, it is virtually 
certain that the Board's workload will begin to rise even faster.
    The Board is currently authorized to have 544 FTEEs; however, its 
budget in FY 2011 could only support 532 FTEEs. Expected workload 
projections by the Board indicate that the authorized level for FY 2013 
should be closer to 585 FTEEs. The IBVSOs are concerned that unless 
additional resources are provided to the Board, its ability to produce 
timely and accurate decisions will be constrained by an inadequate 
budget, and either the backlog will rise or accuracy will fall. Neither 
of these outcomes is acceptable. At a minimum, Congress increase 
funding to the Board in order to sustain 585 FTEE in FY 2013.
Dedicated Courthouse for the Court of Appeals for Veterans Claims
    Mr. Chairman, I would also like to highlight a recommendation in 
this year's Independent Budget concerning the United States Court of 
Appeals for Veterans Claims. During the 24 years since the Court was 
formed in accordance with legislation enacted in 1988, it has been 
housed in commercial office buildings, making it the only Article I 
court that does not have its own courthouse. The IBVSOs believe that 
the Veterans Court should be accorded at least the same degree of 
respect enjoyed by other appellate courts of the United States. 
Congress previously acted on this in fiscal year 2008 by allocating $7 
million for preliminary work on site acquisition, site evaluation, 
preplanning for construction, architectural work, and associated 
studies and evaluations for the construction of the courthouse. It is 
time for Congress to provide the funding necessary to construct 
permanent courthouse in a location of honor and dignity befitting the 
Veterans Court and the veterans it serves.
VETERANS BENEFITS REOMMENDATIONS
    The Veterans Benefits Administration provides an array of benefits 
to our nation's veterans, including disability compensation, dependency 
and indemnity compensation, pensions, vocational rehabilitation, 
education benefits, home loans, and life insurance. Unfortunately, the 
failure to regularly adjust benefit rates or to tie them to realistic 
annual cost-of-living adjustments (COLAs), can threaten the 
effectiveness of other these benefits. For example, the annual COLAs do 
not take into account the rising cost of some basic necessities, such 
as food and energy. In addition to prudent increases in a number of 
specific benefits programs to meet today's rising costs of living, The 
Independent Budget includes a number of recommendations designed to 
make several existing benefits more equitable for all veterans, 
particularly disabled veterans.
Eliminate Remaining Concurrent Receipt Penalties
    Today, many veterans retired from the armed forces based on 
longevity of service must forfeit a portion of their retired pay, 
earned through faithful performance of military service, before they 
can receive VA compensation for service-connected disabilities. This is 
inequitable: military retired pay is earned by virtue of a veteran's 
career of service on behalf of the nation, careers of usually more than 
20 years. Entitlement to compensation, on the other hand, is paid 
solely because of disability resulting from military service, 
regardless of the length of service. Most nondisabled military retirees 
pursue second careers after serving in order to supplement their 
income, thereby justly enjoying a full reward for completion of a 
military career with the added reward of full civilian employment 
income. In contrast, military retirees with service-connected 
disabilities do not enjoy the same full earning potential.
    In order to place all disabled longevity military retirees on equal 
footing with nondisabled military retirees, there should be no offset 
between full military retired pay and VA disability compensation. 
Congress has previously removed this offset for veterans with service-
connected disabilities rated 50 percent or greater. Congress should 
enact legislation to repeal the inequitable requirement that veterans' 
military longevity retired pay be offset by an amount equal to their 
disability compensation if rated less than 50 percent.
Repeal the DIC - SBP Offset
    The current requirement that the amount of an annuity under the 
Survivor Benefit Plan (SBP) be reduced on account of and by an amount 
equal to dependency and indemnity compensation (DIC) for survivors of 
disabled veterans is inequitable and should be repealed.
    A veteran disabled in military service is compensated for the 
effects of service-connected disability. When a veteran dies of 
service-connected causes, or following a substantial period of total 
disability from service-connected causes, eligible survivors or 
dependents receive DIC from the Department of Veterans Affairs. This 
benefit indemnifies survivors, in part, for the losses associated with 
the veteran's death from service-connected causes or after a period of 
time when the veteran was unable, because of total disability, to 
accumulate an estate for inheritance by survivors.
    Survivors of military retirees have no entitlement to any portion 
of the veteran's military retirement pay after his or her death, unlike 
many retirement plans in the private sector, however they may 
participate in the survivor benefit plan (SBP), which makes deductions 
from their spouses military retirement pay to purchase a survivors' 
annuity. Upon the military retirees death, the annuity is paid monthly 
to eligible beneficiaries under the plan. If the veteran died of other 
than service-connected causes or was not totally disabled by service-
connected disability for the required time preceding death, 
beneficiaries receive full SBP payments. However, if the veteran's 
death was a result of military service or after the requisite period of 
total service-connected disability, the SBP annuity is reduced by an 
amount equal to the DIC payment. When the monthly DIC rate is equal to 
or greater than the monthly SBP annuity, beneficiaries lose all 
entitlement to the SBP annuity.
    This offset is inequitable because there is no duplication of 
benefits since payments under the SBP and DIC programs are made for 
different purposes. Under the SBP, coverage is purchased by a veteran 
and paid to his or her surviving beneficiary at the time of the 
veterans death. On the other hand, DIC is a special indemnity 
compensation paid to the survivor of a servicemember who dies while 
serving in the military, or a veteran who dies from service-connected 
disabilities. In such cases DIC should be added to the SBP, not 
substituted for it. Surviving spouses of federal civilian retirees who 
are veterans are eligible for DIC without losing any of their purchased 
federal civilian survivor benefits. The offset penalizes survivors of 
military retirees whose deaths are under circumstances warranting 
indemnification from the government separate from the annuity funded by 
premiums paid by the veteran from his or her retired pay. Congress 
should fully repeal the offset between dependency and indemnity 
compensation and the Survivor Benefit Plan.
Adaptive Housing and Automobile Grants
    Service-connected disabled veterans who have impairments or loss of 
use of at least one of their hands, feet or eyes may be eligible for 
several grants to adapt their housing or automobiles, including the 
Specially Adapted Housing Grant and the Automobile and Special Adaptive 
Equipment Grants. However when veterans who have already received these 
grants are forced to move to a new home, or stay temporarily in someone 
else's home, or need to replace an outdated automobile, they are 
restricted in accessing the full benefits of this program. To remedy 
this, Congress should establish a supplementary housing grant that 
covers the cost of new home adaptations for eligible veterans who have 
used their initial, once in-a-lifetime grant on specially adapted homes 
they no longer own and occupy. A separate grant should be provided for 
special adaptations to homes owned by family members in which veterans 
temporarily reside. VA should also be authorized to provide a 
supplementary auto grant to eligible veterans in an amount equaling the 
difference between their previously used one-time entitlement and the 
increased amount of the grant.
Compensation for Quality of Life and Noneconomic Loss:
    Mr. Chairman, our nation's 3.2 million service disabled veterans 
rely greatly on VA's disability compensation program as an essential 
source of financial support for themselves and their families. However, 
a number of recent studies and commissions have all agreed that VA's 
disability compensation program does not do enough and should be 
revised to compensate for the loss of quality of life and other non-
economic losses that result from permanent disabilities suffered while 
serving in the armed forces.
    In 2007, the Institute of Medicine (IOM) published a report 
entitled, ``A 21st Century System for Evaluating Veterans for 
Disability Benefits,'' recommending that the current VA disability 
compensation system be expanded to include compensation for noneconomic 
loss and loss of quality of life. The IOM report stated that, ``... 
Congress and VA have implicitly recognized consequences in addition to 
work disability of impairments suffered by veterans in the Rating 
Schedule and other ways. Modern concepts of disability include work 
disability, nonwork disability, and quality of life (QOL) . . . ``
    The congressionally-mandated Veterans Disability Benefits 
Commission (VDBC), established by the National Defense Authorization 
Act of 2004 (P.L. 108-136), in 2007 also recommended that the, ``... 
veterans disability compensation program should compensate for three 
consequences of service-connected injuries and diseases: work 
disability, loss of ability to engage in usual life activities other 
than work, and loss of quality of life.'' That same year, the 
President's Commission on Care for America's Returning Wounded 
Warriors, chaired by former Senator Bob Dole and former Health and 
Human Services Secretary Donna Shalala, also agreed that the current 
benefits system should be reformed to include noneconomic loss and 
quality of life as a factor in compensation.
    The Independent Budget concurs with all these recommendations and 
calls on Congress to finally address this deficiency by amending title 
38, United States Code, to clarify that disability compensation, in 
addition to providing compensation to service-connected disabled 
veterans for their average loss of earnings capacity, must also include 
compensation for their noneconomic loss and for loss of their quality 
of life. The Canadian Veterans' Affairs disability compensation program 
and the Australian Department of Veterans' Affairs disability 
compensation program already do just that. It is now time for our 
Congress and VA to determine the most practical and equitable manner in 
which to provide compensation for noneconomic loss and loss of quality 
of life and then move expeditiously to implement this updated 
disability compensation program.
CLAIMS PROCESSING REFORM RECOMMENDATIONS
    Over the past decade, the number of veterans filing claims for 
disability compensation has more than doubled, rising from nearly 
600,000 in 2000 to over 1.4 million in 2011. This workload increase is 
the result of a number of factors over the past decade, including the 
wars in Iraq and Afghanistan, an increase in the complexity of claims 
and a downturn in the economy causing more veterans to seek VA 
assistance. Furthermore, new presumptive conditions related to Agent 
Orange exposure (ischemic heart disease, B-cell leukemia and 
Parkinson's disease) and previously denied claims, resulting from the 
Nehmer decision added almost 200,000 new claims this year; leading to a 
workload surge that will level off in 2012. During this same decade, 
VBA's workforce grew by about 80%, rising from 13,500 FTEE in 2007 to 
over 20,000 today, with the vast majority of that increase occurring 
during the past four years.
    Yet despite the hiring of thousands of new employees, the number of 
pending claims for benefits, often referred to as the backlog, 
continues to grow. As of February 4, 2012, there were 891,402 pending 
claims for disability compensation and pensions awaiting rating 
decisions by the VBA, an increase of more than 114,000 from one year 
ago, and almost double the 487,501 that were pending two years prior. 
The number of claims pending over 125 days, VBA's official target for 
completing claims, reached 591,243, which is a 66% increase in one year 
and more than twice 185,040 from two years ago.
    But more important than the number of claims processed is the 
number of claims processed correctly. The VBA quality assurance program 
is known as the Systematic Technical Accuracy Review (STAR)and is now 
available publicly on VA's ASPIRE Dashboard. The most recent STAR 
measure for rating claims accuracy for the one-year period ending 
September 2011 is 84 percent, about the same level as one year prior, 
and slightly lower than several years earlier. However, the VA Office 
of Inspector General (VAOIG) reported in May 2011 that based on 
inspections of 45,000 claims at 16 of the VA's 57 regional offices 
(VAROs), claims for disability compensation were correctly processed 
only 77 percent of the time. This error rate would equate to almost 
250,000 incorrect claims decisions in just the past year.
Cultural Change Needed to Fix Claims-Processing System:
    Under the weight of an outdated information technology system, 
increasing workload and growing backlog, the VBA faces a daunting 
challenge of comprehensively transforming the way it processes claims 
for benefits in the future, while simultaneously reducing the backlog 
of claims pending within its existing infrastructure. While there have 
been many positive and hopeful signs that the VBA is on the right path, 
there will be critical choices made over the next year that will 
determine whether this effort will ultimately succeed. It is essential 
that Congress provide careful and continuing oversight of this 
transformation to help ensure that the VBA achieves true reform and not 
just arithmetic milestones, such as lowered backlogs or decreased cycle 
times.
    One of the more positive signs has been the open and candid 
attitude of VBA leadership over the past several years, particularly 
progress towards developing a new partnership between VBA and veterans 
service organizations (VSOs) who assist veterans in filing claims. The 
IBVSOs have been increasingly consulted on a number of the new 
initiatives underway at VBA, including disability benefit 
questionnaires (DBQs), Veterans Benefit Management System (VBMS), and 
many, but not all business process pilots, including the I-LAB at the 
Indianapolis Regional Office. Building upon these efforts, VBA must 
continue to the reach out to its VSO partners, not just at central 
office, but also at each of the 57 regional offices.
    In order to drive and sustain its transformation strategies 
throughout such a massive organization, VBA must change how it measures 
and rewards performance in a manner designed to achieve the goal of 
getting claims decided right the first time. Unfortunately, most of the 
measures that VBA employs today are based primarily on production 
goals, rather than quality. This bias for speed over accuracy has long 
been VBA's cultural norm, and it is not surprising that management and 
employees today still feel a tremendous pressure to meet production 
goals first and foremost. While accuracy has been and remains one of 
the performance standards that must be met by all employees, new 
performance standards adopted over the past two years appear to have 
done little to create sufficient incentives to elevate quality above 
production.
    Over the next couple of crucial years, it will be particularly 
important for VBA and Congress to remain focused on the principal goal 
of enhancing quality and accuracy, rather than focusing on reducing the 
backlog. VBA should change the way it measures and reports progress so 
that there are more and better indicators of quality and accuracy, at 
least equal in weight to measures of speed and production. In addition, 
VBA should develop a systematic way to measure average work output for 
each category of its employees in order to establish more accurate 
performance standards, which will also allow the VBA to better project 
future workforce requirements.
Implementing a New Operating Model for Processing Claims:
    As the Veterans Benefits Administration begins to implement a new 
operating model for processing claims for disability compensation, it 
must give priority to ``best practices'' that have been validated to 
increase quality and accuracy, not just speed and production. VBA has 
conducted more than 40 different pilot programs and initiatives looking 
at new ways of establishing, developing, rating, and awarding claims 
for benefits. Dozens of other ideas flowed from individual employees 
and regional offices, leadership retreats, and an internal ``innovation 
competition,'' leading to new initiatives such as quick pay, walk-in 
claims, and rules-based calculators.
    In order to test how best to integrate these and other pilots and 
initiatives conducted over the past two years, VA established the I-LAB 
at the Indianapolis Regional Office to develop a new end-to-end 
operating model for claims processing. The I-LAB settled on the 
segmentation of claims as the cornerstone principle for designing the 
new operating model. The traditional triage function was replaced at 
the I-LAB with an Intake Processing Center, staffed with experienced 
claims processor, whose responsibility was to divide claims along three 
separate tracks; Express, Core, and Special Ops. The Express lane is 
for simpler claims, such as fully developed claims, claims with one or 
two contentions, or other simple claims. The Special Ops lane is for 
more difficult claims, such as those with eight or more contentions, 
longstanding pending claims, complex conditions, such as traumatic 
brain injury and special monthly compensation, and other claims 
requiring extensive time and expertise. The Core lane is for the 
balance of claims with between three and seven contentions, claims for 
individual unemployability (IU), original mental health conditions, and 
others.
    VBA has seen some early indications that productivity could 
increase through the use of the new segmentation strategy at the I-LAB; 
however, it may still be too soon to judge whether such results would 
be reproduced if applied nationally. While the VBA certainly needs to 
reform its claims-processing system, it must first ensure that proper 
metrics are in place in order to make sound decisions about the 
elements of its new operating model.
    By the end of 2011, the VBA stood up an Implementation Team to 
develop a strategy and plan for implementing the new operating model 
for processing claims. With the Secretary's ambitious goal of 
processing all claims in less than 125 days with an accuracy rate of 98 
percent by 2015, VBA's strategy calls for 2012 to be a year of 
transition; full implementation of the new operating model is planned 
for 2013; in 2014, the VBA anticipates stabilization and assessment of 
the new system; and 2015 is planned as the year of ``centers of 
excellence,'' an apparent reference to a future state that will 
centralize some VBA activities or functions.
    Critical to the success of this implementation strategy will be the 
choices made by VBA this year. It will also be absolutely essential for 
Congress to provide strong oversight to ensure that the enormous 
pressures on VBA to show progress toward eliminating or reducing the 
claims backlog does not result in short term gains at the expense of 
long-term reform.
Stronger Training, Testing and Quality Control
    Mr. Chairman, training, testing, and quality control must be given 
the highest priority within the Veterans Benefits Administration if the 
current claims processing reform efforts are to be successful. Training 
is essential to the professional development of individuals and tied 
directly to the quality of work they produce, as well as the quantity 
they can accurately produce. However, the IBVSOs remain concerned that 
under the rising pressure of increasing workload and backlogs, VBA 
managers and employees often choose to cut corners on training in order 
to focus on production at all costs. It is imperative that efforts to 
increase productivity not interfere with required training of 
employees, particularly new employees who are still learning their job.
    Furthermore, after employees have been trained it is important that 
they are regularly tested to ensure that they have the knowledge and 
competencies to perform their jobs. A GAO report published in September 
2011 found that there did not exist a nationwide training curriculum 
for VBA's Decision Review Officers (DROs), despite the fact that 93 
percent of regional managers interviewed supported such an national 
training program, as did virtually every DRO interviewed. We would note 
that following a recent DRO examination in which a high percentage 
failed to achieve acceptable results, the VBA required all DROs to 
undergo a one-week training program to enhance their knowledge and job 
skills. This is exactly the type of action that should regularly occur 
within an integrated training, testing, and quality control program.
    In 2008, Congress enacted Public Law 110-389, the Veterans' 
Benefits Improvement Act of 2008, which required VBA to develop and 
implement a certification examination for all claims processors and 
managers. While tests have been developed and conducted for VSRs, 
RVSRs, and DROs, the tests for supervisory personnel and coaches have 
yet to be completed. VBA cannot accurately assess its training or 
measure an individual's knowledge, understanding, or retention of the 
training material without regular testing. The IBVSOs believe it is 
essential that all VBA employees, coaches, and managers undergo regular 
testing to measure job skills and knowledge, as well as the 
effectiveness of the training. At the same time, VBA must ensure that 
certification tests are developed that accurately measure the skills 
and knowledge needed to perform the work of VSRs, RVSRs, DROs, coaches, 
and other managers.
    One of the most promising developments over the past year is VBA's 
new initiative to stand up Quality Review Teams (QRTs) in every 
regional office. Developed from a review of the best practices used at 
certain high-performing regional offices, the QRT program will assign 
full-time, dedicated employees whose sole function is to seek out and 
correct errors in claims processing. QRTs will also work to develop in-
process quality control measures to prevent errors before decisions are 
made. The IBVSOs strongly support this program and recommend that VBA 
make service in a QRT unit a career path requirement for those seeking 
to rise to senior positions in Regional Offices or at VBA's 
headquarters in Washington, DC.
    Mr. Chairman, the only way the VBA can make and sustain long-term 
reductions in the backlog is by producing better quality decisions in 
the first instance. The only way to institutionalize such a cultural 
shift within the VBA is by developing and giving priority to training, 
testing and quality control programs.
New Information Technology Systems
    After two years of development, VBA's Veterans Benefits Management 
System (VBMS) is planned to be rolled out nationally beginning in June 
of this year. The VBMS is designed to provide a comprehensive, 
paperless, and rules-based method of processing and awarding claims for 
VA benefits, particularly disability compensation and pension. The 
IBVSOs have been especially pleased with VBA efforts to incorporate the 
experience and perspective of our organizations throughout the VBMS 
development process. Understanding the important role that VSO service 
officers play in the claims process, VBA proactively sought frequent 
and substantive consultation with VSOs, both at the national VBMS 
office and at the pilot locations. The IBVSOs are confident that this 
promising partnership will strengthen VBMS for VBA, VSOs, and most 
importantly, veterans seeking VA benefits.
    As VBA turns the corner on VBMS development leading to deployment, 
it is imperative that Congress provide full funding to complete this 
essential IT initiative. In today's difficult fiscal environment, there 
are concerns that efforts to balance the federal budget and reduce the 
national debt could result in reductions to VA programs, including IT 
programs. Over the next year Congress must ensure that the funding 
required and designated for the VBMS is protected from cuts or 
reprogramming, and spent as Congress intended.
    Another key IT component is e-Benefits, VA's online portal that 
allows veterans to apply for, monitor, and manage their benefits over 
the Internet. With more than 2 million users registered, e-Benefits 
provides a web-based method for veterans to file claims for disability 
and other benefits that will ultimately integrate that information 
directly into the VBMS to adjudicate those claims. As with VBMS, it is 
crucial that Congress and the VBA provide e-Benefits full funding in 
order to support the ongoing transformation of the claims processing 
system.
    Mr. Chairman, the IBVSOs remain concerned about VBA's plans for 
transitioning legacy paper claims into the new VBMS work environment. 
While VBA is committed to moving forward with a paperless system for 
new claims, it has not yet determined how to handle reopened paper 
claims; specifically whether, when or how they would be converted to 
digital files. Because a majority of claims processed each year are for 
reopened or appealed claims and because files can remain active for 
decades, until all legacy claims are converted to digital data files, 
VBA could be forced to continue paper processing for decades. Requiring 
VBA employees to learn and master two different claims processing 
systems--one that is paper-based and the other digital--would add 
unnecessary complexity and could negatively affect quality, accuracy, 
and consistency.
    While there are very difficult technical questions to be answered 
about the most efficient manner of transitioning to all-digital 
processing, particular involving legacy paper files, the IBVSOs believe 
the VBA should do all it can to shorten the length of time this 
transition takes to complete, and should provide a clear roadmap for 
eliminating legacy paper files, one that includes clear timelines and 
resource requirements. While this transition may require significant 
upfront investment, it will pay dividends for the VBA and veterans in 
the future.
    Mr. Chairman, that concludes my statement and I would be happy to 
answer any questions you or other members of the Committee may have.
Executive Summary
VBA AND GOE RESOURCE RECOMMENDATIONS
    In order to sustain the transformation efforts underway at VBA, The 
Independent Budget recommends generally maintaining current staffing 
levels for FY 2013 in the Veterans Benefits Administration, with modest 
increases for the Vocational Rehabilitation and Employment Service 
(VR&E) and the Board of Veterans Appeals.

      Increase funding for VR&E to allow 195 new counselors to 
reach recommended staffing rations and 9 new full-time employees to 
manage its expanding campus program
      Increase funding to the Board to allow 40 FTEE to keep up 
with rising workload.
      Provide the funding necessary to construct a permanent 
courthouse for the United States Court of Appeals for Veterans Claims.
VETERANS BENEFITS RECOMMENDATIONS
      Congress should enact legislation to repeal the 
inequitable requirement that veterans' military longevity retired pay 
be offset by an amount equal to their disability compensation if rated 
less than 50 percent.
      Congress should fully repeal the offset between 
dependency and indemnity compensation (DIC) and the Survivor Benefit 
Plan (SBP).
      Congress and VA should determine the most practical and 
equitable manner to provide compensation for noneconomic loss and loss 
of quality of life for service connected disabled veterans and move 
expeditiously to implement this new component.
CLAIMS PROCESSING REFORM RECOMMENDATIONS
      Congress must provide close and continuing overslight of 
VBA's transformation of their claims processing system in order to 
ensure that it is built on the principal of enhancing quality and 
accuracy, rather than simply reducing the backlog by any means.
      Congress must fully fund VBA's new IT systems, 
particularly the Veterans Benefits Management System (VBMS) and e-
Benefits.
      All VBA employees, coaches, and managers should undergo 
regular training and testing to measure job skills and knowledge, as 
well as the effectiveness of the training.

                                 
                 Prepared Statement of Diane M. Zumatto
    Chairman Miller, Ranking Member Filner, Congressman Walz and 
distinguished members of the committee, as an author of The Independent 
Budget (IB), I thank you for this opportunity to share with you the 
IB's recommendations in what we believe to be the most fiscally 
responsible way of ensuring the quality and integrity of the care and 
benefits earned by Americans veterans.
    The venerable and honorable history of our national cemeteries 
spans roughly 150 years and the earliest military graveyards were, not 
surprisingly, situated at battle sites, near field or general hospitals 
and at former prisoner-of-war sites. With the passage of the National 
Cemeteries Act of 1973 (P.L. 93-43), the Department of Veterans' 
Affairs (VA) became responsible for the majority of our national 
cemeteries. The single most important obligation of the National 
Cemetery Administration (NCA) is to honor the memory of America's brave 
men and women who have selflessly served in this nation's armed forces. 
Many of the individual cemeteries, monuments, grave stones, grounds and 
related memorial tributes within the NCA system are richly steeped in 
history and represent the very foundation of these United States.
    With the signing of the Veterans Programs Enhancement Act of 1998 
(P.L. 105-368) officially re-designated the National Cemetery System 
(NCS) to the now familiar National Cemetery Administration (NCA). The 
NCA currently maintains stewardship of 131 of the nation's 147 national 
cemeteries, as well as 33 soldiers' lots. Since 1862, when President 
Abraham Lincoln signed the first legislation establishing the national 
cemetery concept, more than 3 million burials have taken place in 
national cemeteries currently located in 39 states and Puerto Rico. As 
of late 2010, there were more than 20,021 acres of landscape, funerary 
monuments, grave markers and other architectural features, much of it 
historically significant, included within established installations in 
the NCA.
    VA estimates that approximately 22.4 million veterans are alive 
today and with the transition of an additional 1 million service 
members into veteran status over the next 12 months, this number is 
expected to continue to rise until approximately 2017. On average, 14.4 
percent of veterans choose a national or state veterans' cemetery as 
their final resting place. As new national and state cemeteries 
continue to open and as our aging veterans' population continues to 
grow, we continue to be a nation at war on multiple fronts. The demand 
for burial at a veterans' cemetery will continue to increase.
    The Independent Budget veterans service organizations (IBVSOs) 
would like to acknowledge the dedication and commitment demonstrated by 
the NCA leadership and staff in their continued dedication to providing 
the highest quality of service to veterans and their families. It is in 
the opinion of the IBVSOs that the NCA continues to meet its goals and 
the goals set forth by others because of its true dedication and care 
for honoring the memories of the men and women who have so selflessly 
served our nation. We applaud the NCA for recognizing that it must 
continue to be responsive to the preferences and expectations of the 
veterans' community by adapting or adopting new interment options and 
ensuring access to burial options in the national, state and tribal 
government-operated cemeteries. We also believe it is important to 
recognize the NCA's efforts in employing both disabled and homeless 
veterans.
NCA Accounts
    In FY 2011, the National Cemetery Administration operated on an 
estimated budget of $298.3 million associated with the operations and 
maintenance of its grounds. The NCA had no carryover for FY 2011. The 
NCA was also able to award 44 of its 48 minor construction projects and 
had four unobligated projects that will be moved to FY 2012. 
Unfortunately, due to continuing resolutions and the current budget 
situation, the NCA was not able to award the remaining four projects.
    The IBVSOs support the operational standards and measures outlined 
in the National Shrine Commitment (P.L. 106-117, Sec. 613) which was 
enacted in 1999 to ensure that our national cemeteries are the finest 
in the world. While the NCA has worked diligently improving the 
appearance of our national cemeteries, they are still a long way from 
where they should be.
    The NCA has worked tirelessly to improve the appearance of our 
national cemeteries, investing an estimated $39 million into the 
National Shrine Initiative in FY 2011. According to NCA surveys, as of 
October 2011 the NCA has continued to make progress in reaching its 
performance measures. Since 2006, the NCA has improved headstone and 
marker height and alignment in national cemeteries from 67 percent to 
70 percent and has improved cleanliness of tombstones, markers and 
niches from 77 percent to 91 percent. Although the NCA is nearing its 
strategic goal of 90 percent and 95 percent, respectively, for height 
and alignment and cleanliness, more funding is needed to continue this 
delicate and labor-intensive work. Therefore, the IBVSOs recommend the 
NCA's Operations and Maintenance budget to be increased by $20 million 
per year until the operational standards and measures goals are 
reached.
    The IBVSOs recommend an Operational and Maintenance budget of $280 
million for the National Cemetery Administration for FY 2013 so it can 
meet the demands for interment, gravesite maintenance and related 
essential elements of cemetery operations. This request includes $20 
million for the National Shrine Initiative.
    The IBVSOs call on the Administration and Congress to provide the 
resources needed to meet the critical nature of the NCA's mission and 
to fulfill the nation's commitment to all veterans who have served 
their country so honorably and faithfully.
State Cemetery Grant Programs
    The State Cemetery Grants Program (SCGP) complements the National 
Cemetery Administration's mission to establish gravesites for veterans 
in areas where it cannot fully respond to the burial needs of veterans. 
Several incentives are in place to assist states in this effort. For 
example, the NCA can provide up to 100 percent of the development cost 
for an approved cemetery project, including establishing a new cemetery 
and expanding or improving an established state or tribal organization 
veterans' cemetery. New equipment, such as mowers and backhoes, can be 
provided for new cemeteries. In addition, the Department of Veterans' 
Affairs may also provide operating grants to help cemeteries achieve 
national shrine standards.
    In FY 2011, the SCGP operated on an estimated budget of $46 
million, funding 16 state cemeteries. These 16 state cemeteries 
included the establishment or ground breaking of five new state 
cemeteries, three of which are located on tribal lands, expansions and 
improvements at seven state cemeteries, and four projects aimed at 
assisting state cemeteries to meet the NCA national shrine standards. 
Since 1978, the Department of Veterans' Affairs has more than doubled 
the available acreage and accommodated more than a 100 percent increase 
in burials through this program.
    With the enactment of the ``Veterans Benefits Improvement Act of 
1998,'' the NCA has been able to strengthen its partnership with states 
and increase burial services to veterans, especially those living in 
less densely populated areas without access to a nearby national 
cemetery. Through FY 2010, the state grant program has established 75 
state veteran's cemeteries in 40 states and U.S. territories. 
Furthermore, in FY 2011 VA awarded its first state cemetery grant to a 
tribal organization.
    The Independent Budget veteran's service organizations recommend 
that Congress fund the State Cemetery Grants Program at $51 million for 
FY 2013. The IBVSOs believe that this small increase in funding will 
help the National Cemetery Administration meet the needs of the State 
Cemetery Grant Program, as its expected demand will continue to rise 
through 2017. Furthermore, this funding level will allow the NCA to 
continue to expand in an effort of reaching its goal of serving 94 
percent of the nation's veteran population by 2015.
Veteran's Burial Benefits
    Since the original parcel of land was set aside for the sacred 
committal of Civil War Veterans by President Abraham Lincoln in 1862, 
more than 3 million burials have occurred in national cemeteries under 
the National Cemetery Administration.
    In 1973, the Department of Veterans' Affairs established a burial 
allowance that provided partial reimbursement for eligible funeral and 
burial costs. The current payment is $2,000 for burial expenses for 
service-connected deaths, $300 for nonservice-connected deaths and a 
$700 plot allowance. At its inception, the payout covered 72 percent of 
the funeral costs for a service-connected death, 22 percent for a 
nonservice-connected death and 54 percent of the cost of a burial plot.
    Burial allowance was first introduced in 1917 to prevent veterans 
from being buried in potter's fields. In 1923 the allowance was 
modified. The benefit was determined by a means test until it was 
removed in 1936. In its early history the burial allowance was paid to 
all veterans, regardless of their service connectivity of death. In 
1973, the allowance was modified to reflect the status of service 
connection.
    The plot allowance was introduced in 1973 as an attempt to provide 
a plot benefit for veterans who did not have reasonable access to a 
national cemetery. Although neither the plot allowance nor the burial 
allowance was intended to cover the full cost of a civilian burial in a 
private cemetery, the recent increase in the benefit's value indicates 
the intent to provide a meaningful benefit. The Independent Budget 
veterans' service organizations are pleased that the 111th Congress 
acted quickly and passed an increase in the plot allowance for certain 
veterans from $300 to $700 effective October 1, 2011. However, we 
believe that there is still a serious deficit between the original 
value of the benefit and its current value.
    In order to bring the benefit back up to its original intended 
value, the payment for service-connected burial allowance should be 
increased to $6,160, the non-service-connected burial allowance should 
be increased to $1,918 and the plot allowance should be increased to 
$1,150. The IBVSOs believe Congress should divide the burial benefits 
into two categories: veterans within the accessibility model and 
veterans outside the accessibility model.
    Congress should increase the plot allowance from $700 to $1,150 for 
all eligible veterans and expand the eligibility for the plot allowance 
for all veterans who would be eligible for burial in a national 
cemetery, not just those who served during wartime. In addition, 
Congress should increase the service-connected burial benefits from 
$2,000 to $6,160 for veterans outside the radius threshold and to 
$2,793 for veterans inside the radius threshold.
    Congress should increase the nonservice-connected burial benefits 
from $300 to $1,918 for all veterans outside the radius threshold and 
to $854 for all veterans inside the radius threshold. The 
Administration and Congress should provide the resources required to 
meet the critical nature of the National Cemetery Administration's 
mission and to fulfill the nation's commitment to all veterans who have 
served their country so honorably and faithfully.
Education, Employment and Training
    During this time of persistent unemployment in our country, the 
veterans' community as a whole has been hit disproportionately hard, 
but for Iraq and Afghanistan veterans and Reserve Component members, 
the job prospects are particularly bleak. Estimates as recent as 
October 2011 suggest that the unemployment rate among veterans 
returning from Iraq and Afghanistan is at least 3 percent greater than 
the national average. In consideration of the tremendous sacrifices our 
veterans have made for this nation, Congress and the Administration 
must make a concerted effort to guarantee that all veterans have access 
to education, employment and training opportunities to ensure success 
in an unfavorable civilian job market.
    Assisting those who have honorably served to secure the proper 
skills, certifications and degrees so that they can achieve personal 
success is and should always be central to our support of veterans. In 
addition, disabled veterans often encounter barriers to entry or 
reentry into the workforce. The lack of appropriate accommodations on 
the job can make obtaining quality training, education and job skills 
especially problematic. These difficulties, in turn, contribute to low 
labor force participation rates and leave many disadvantaged veterans 
with little choice but to rely on government assistance programs. At 
present funding levels, entitlement and benefit programs cannot keep 
pace with the current and future demand for such benefits. The vast 
majority of working-age veterans want to be productive in the 
workplace, and we must provide greater opportunities to help them 
achieve their career goals. Thankfully, Congress passed the VOW to Hire 
Heroes Act in recognition of these veterans' employment challenges 
which an important step in improving veterans' job prospects.
Education
    In 2008, Congress enacted the Post-9/11 GI Bill and ensured that 
today's veterans have greater opportunities for success after their 
years of voluntary service to our nation. The Independent Budget 
veterans' service organizations (IBVSOs) were pleased with the quick 
passage of this landmark benefit and worked with Congress to quickly 
correct unforeseen inequities via the ``Post-9/11 Veterans Education 
Assistance Improvement Act of 2010.'' When it was signed into law, 
leaders in Congress and in the veterans' advocacy community touted the 
prospect that the Post-9/11 GI Bill could create a new ``Greatest 
Generation,'' offering critical job skills and training to a new 
generation of leaders.
    The IBVSOs are concerned that the Post-9/11 GI Bill may be 
vulnerable to budgetary attacks as the conflicts in Iraq and 
Afghanistan draw to a close. The benefits of the Post-9/11 GI Bill must 
continue to remain available to honor the sacrifice of our nation's 
veterans. To support this request, the Department of Veterans' Affairs 
must develop the metrics to accurately measure the short- and long-term 
impacts of these educational benefits. The IBVSOs believe that the 
Post-9/11 GI Bill is an investment, not only in the future of our 
veterans but also our nation.
Training and Rehabilitation Services: Vocational Rehabilitation and 
        Employment
    Vocational rehabilitation for disabled veterans has been part of 
this nation's commitment to veterans since Congress first established a 
system of veterans' benefits upon entry of the United States into World 
War I in 1917. Today the Vocational Rehabilitation and Employment 
(VR&E) Service, through its VetSuccess Program, is charged with 
preparing service-disabled veterans for suitable employment or 
providing independent living services to those veterans with 
disabilities severe enough to render them unemployable. Approximately 
48,000 active duty, Reserve and Guard personnel are discharged 
annually, with more than 25,000 of those on active duty found ``not fit 
for duty'' as a result of medical conditions that may qualify for VA 
disability ratings. With a disability rating the veteran would 
potentially be eligible for Vocational Rehabilitation and Employment 
services. According to the most recent report from the Government 
Accountability Office (GAO) on VR&E services, the ability of veterans 
to access VR&E services has remained problematic.
    The task before Vocational Rehabilitation and Employment's (VR&E) 
VetSuccess program is critical, and the need becomes clearer in the 
face of the statistics from the current conflicts. Since Sept. 11, 
2001, there have been more than 2.2 million service members deployed. 
Of that group, more than 941,000 have been deployed at least two or 
more times. As a result, many of these service members are eligible for 
disability benefits and VR&E services if they are found to have an 
employment handicap. Specifically, 43 percent may actually file claims 
for disability. Due to the increasing number of service members 
returning from Iraq and Afghanistan with serious disabilities, VR&E 
must be provided the resources to further strengthen its program. There 
is no VA mission more important than that of enabling injured military 
personnel to lead productive lives after serving their country. In the 
face of these facts, of concern to The Independent Budget veterans 
service organizations (IBVSOs) are the current constraints placed on 
VR&E as a result of an average client to counselor ratio of 145:1 
compared to the VA standard of 125:1. VR&E, working through outside 
contractors, continues to refine and refocus this important program so 
it can maximize its ability to deliver services within certain 
budgetary constraints. Given the anticipated caseload that future 
downsizing of the military will produce, a more concise way to 
determine staffing requirements and a more rigorous manpower formula 
must be developed.
    With this in mind, the IBVSOs recommend that VA needs to strengthen 
its Vocational Rehabilitation and Employment (VR&E) program to meet the 
demands of disabled veterans, particularly those returning from the 
conflicts in Afghanistan and Iraq. It must provide a more timely and 
effective transition into the workforce and provide placement follow-up 
with employers for a minimum of six months. Congress must provide the 
resources for VR&E to establish a maximum client to counselor standard 
of 125:1 and a new ratio of 100:1 to be the standard. VR&E must place a 
higher emphasis on academic training, employment services and 
independent living to achieve the goal of rehabilitation of severely 
disabled veterans. Congress should provide the resources to support the 
expansion of VR&E's quality assurance staff to increase the frequency 
of site visits.
    Congress must also conduct oversight to ensure that Vocational 
Rehabilitation and Employment (VR&E) program services are being 
delivered efficiently and effectively. VR&E must develop and implement 
metrics that can identify problems and lead to solutions that 
effectively remove barriers to veteran completion of VR&E programs.
Transition Assistance Programs
    The Transition Assistance Program (TAP) was developed to assist 
military families leaving active service. The Department of Labor (DOL) 
began providing TAP employment workshops in 1991, pursuant to section 
502 of the ``National Defense Authorization Act for Fiscal Year 1991'' 
(P.L. 101-510). It is an interagency program delivered in partnership 
by DOL and the Departments of Veterans Affairs, Defense (DOD) and 
Homeland Security (DHS). Returning to civilian life is a complex and 
exciting time for service members. TAP and the Disabled Transition 
Program (DTAP) will, generally, now be mandatory thanks to the ``VOW to 
Hire Heroes Act'' (P.L. 112-56) and will result in the program becoming 
an even greater benefit in meeting the needs of separating service 
members as they transition into civilian life.
    As part of the new TAP, eligible members will be allowed to 
participate in an apprenticeship or pre-apprenticeship program that 
provides them with education, training, and services necessary to 
transition to meaningful employment. These new TAP classes will also 
upgrade career counseling options and resume writing skills, as well as 
ensuring the program is tailored for the 21st century job market. TAP 
is also available for eligible demobilizing service members in the 
National Guard and Reserves. The news is that efforts to improve both 
TAP and DTAP are under way.
    The IBVSOs recommend that all Transition Assistance Program (TAP) 
classes should include in-depth VA benefits and health-care education 
sessions and time for question and answer sessions. The Departments of 
Veterans Affairs, Defense, Labor and Homeland Security should design 
and implement a stronger Disabled Transition Assistance Program (DTAP) 
for wounded service members who have received serious injuries, and for 
their families. Chartered veterans service organizations should be 
directly involved in TAP and DTAP or, at the minimum, serve as an 
outside resource to TAP and DTAP. The DOD, VA, DOL and DHS must do a 
better job educating the families of service members on the 
availability of TAP classes, along with other VA and DOL programs 
regarding employment, financial stability and health-care resources. 
Congress and the Administration must provide adequate funding to 
support TAP and DTAP to ensure that active duty as well as National 
Guard and Reserve service members receives proper services during their 
transition periods.

    February 13, 2012

    The Honorable Representative Jeff Miller, Chairman
    U.S. House of Representatives
    Committee on Veterans' Affairs
    335 Cannon House Office Building
    Washington, D.C. 20510

    Dear Chairman Miller:

    Neither AMVETS nor I have received any federal grants or contracts, 
during this year or in the last two years, from any agency or program 
relevant to the February 15, 2012, House Veterans Affairs Committee 
hearing on the U.S. Department of Veterans Affairs Budget Request for 
Fiscal Year 2013.

    Sincerely,

    Diane M. Zumatto
    AMVETS National Legislative Director

                                 
                 Prepared Statement of Timothy M. Tetz
    Chairman Miller and Members of the Committee:
    The American Legion welcomes this opportunity to comment on the 
President's budget request.
    As thousands of troops return from deployments to Iraq and 
elsewhere in a shifting of our national security focus, it's 
encouraging to see that President Obama's Fiscal Year 2013 budget for 
the Department of Veteran Affairs (VA) pivots to meet the needs caused 
by this reprioritization. On the surface, a double-digit increase in an 
operational budget would be the envy of any agency during these dire 
fiscal times. Yet, few agencies would be anxious to be faced by the 
bulla of thousands of new clients and their corresponding claims and 
care.
    While grateful for this increase, The American Legion remains 
concerned this increase is not only short of meeting the ultimate need, 
but also a byproduct of budget and funding gimmickry that will 
ultimately endanger veteran care if unsuccessful. Moreover, we remain 
concerned these increases are directed not towards the veteran and his/
her care, but rather to the VA's bureaucratic structure that already is 
unable to meet present needs of veterans.
                  Advanced Appropriations for FY 2014
    Due to the successful passage of the Veterans Health Care Budget 
Reform and Transparency Act of 2009 (P.L. 111-81) three of the four 
accounts that make up the Veterans Health Administration (VHA) are 
funded in advance of the regular budget cycle. Those three accounts - 
medical services, medical support and compliance, and medical 
facilities - are funded one year in advance and supplemented as 
necessary during following year.
    While The American Legion supported the advance appropriation 
model, we remain concerned accurate projections on population and 
utilization and other challenges still remain.
    For example, one challenge came to our attention this year 
regarding the procurement of medical equipment and Information 
Technology (IT) products. When IT within the VA was combined together 
across the entire agency in 2007, it was intended to improve 
efficiency, contracting, management and other challenges inherent with 
three disjointed IT management teams. This has proved somewhat 
successful.
    However we hearing that procurement of medical equipment and IT is 
hampered at medical facilities due to budget implementation failures 
caused by continuing resolutions. While a VA medical center director 
would have operational funding beginning October 1 because of advance 
appropriations, much needed purchases of IT or medical equipment might 
be delayed due to a budget impasse in Congress. This has a detrimental 
impact on the enrolled veteran and his/her care.
                            Medical Services
    Over the past two decades, VA has dramatically transformed its 
medical care delivery system. Through The American Legion visits to a 
variety of medical facilities throughout the nation during our System 
Worth Saving Task Force, we see firsthand this transformation and its 
impact on veterans in every corner of the nation.
    While the quality of care remains exemplary, veteran health care 
will be inadequate if access is hampered. Today there are over 22 
million veterans in the United States. While 8.3 million of these 
veterans are enrolled in the VA health care system, a population that 
has been relatively steady in the past decade, the costs associated 
with caring for these enrolled veterans has escalated dramatically.
    For example between FY2007 and FY 2009, VA enrollees increased from 
7.8 million to 8.1 million. During the same period, inpatient 
admissions increased from 589 thousand to 662 thousand. Outpatient 
visits also increased from 62 million to 73 million. Correspondingly, 
costs to care for these enrolled veterans increased from $29.0 billion 
to $39.4 billion. This 36 percent increase during those two years is a 
trend that dramatically impacts the ability to care for these veterans.
    While FY2010 numbers seemingly leveled off - to only 3 percent 
annual growth - will adequate funding exist to meet veteran care needs? 
If adequate funding to meet these needs isn't appropriated, VA will be 
forced to either not meet patient needs or shift money from other 
accounts to meet those needs going forward.
    Even with the opportunity for veterans from OIF/OEF to have up to 
five years of health care following their active duty period, we have 
not seen a dramatic change in overall enrollee population. Yet The 
American Legion remains concerned that the population estimates are 
dated and not reflective of the costs. If current economic woes and 
high unemployment rates for veterans remain, VA medical care will 
remain increasingly enticing for a veteran population that might not 
have utilized those services in different times.
    Finally, ongoing implementation of programs such as the PL 111-163 
``Caregiver Act'' will continue to increase demands on the VA health 
care system and therefore result in an increased need for a budget that 
adequately deals with these challenges.
    The final FY 2013 advanced appropriations for Medical Services was 
$41.3 billion. In order to meet the increased levels of demand, even 
assuming that not all eligible veterans will elect to enroll for care 
and keep pace with the cost trend identified above, there must be an 
increase to account for both the influx of new patients and increased 
costs of care.
The American Legion recommends increasing the FY 2014 budget for VA 
        Medical Services to $44 billion.
                     Medical Support and Compliance
    The Medical Support and Compliance account consists of expenses 
associated with administration, oversight, and support for the 
operation of hospitals, clinics, nursing homes, and domiciliaries. 
Although few of these activities are directly related to the personal 
care of veterans, they are essential for quality, budget management, 
and safety. Without adequate funding in these accounts, facilities will 
be unable to meet collection goals, patient safety, and quality of care 
guidelines.
    The American Legion has been critical of programs funded by this 
account. We remain concerned whether patient safety is being adequately 
addressed at every level. We are skeptical if patient billing is 
performed efficiently and accurately. Moreover, we are concerned that 
specialty advisors/counselors to implement OIF/OEF outreach, 
``Caregiver Act'' implementation, and other programs are properly 
allocated. If no need for such individuals exists, should the position 
be placed within a facility? Simply throwing more money at this 
account, increasing staff and systems won't resolve all these problems.
    During the previous budget, this account grew by nearly 8% to $5.31 
billion. While some growth is necessary to meet existing cost 
increases, The American Legion questions the necessity for that rate to 
continue at this time.
The American Legion recommends increasing the FY 2014 budget for VA 
        Medical Support and Compliance to $5.52 billion.
                           Medical Facilities
    During the FY 2012 budget cycle, VA unveiled the Strategic Capital 
Investment Planning (SCIP) program. This ten-year capital construction 
plan was designed to address VA's most critical infrastructure needs 
within the VA. Through the plan, VA estimated the ten-year costs for 
major and minor construction projects and non-recurring maintenance 
would total between $53 and $65 billion over ten years. Yet during the 
FY 2012 budget, these accounts were underfunded by more than $4 
billion.
    The American Legion is supportive of the SCIP program which 
empowers facility managers and users to evaluate needs based on patient 
safety, utilization, and other factors. While it places the onus on 
these individuals to justify the need, these needs are more reflective 
of the actuality as observed by our members and during our visits. Yet, 
VA has taken this process and effectively neutered it through budget 
limitations thereby underfunding the accounts and delaying delivery of 
critical infrastructure.
    So while failing to meet these needs, facility managers will be 
forced to make do with existing aging facilities. While seemingly 
saving money in construction costs, the VA will be expending money 
maintaining deteriorating facilities, paying increased utility and 
operational costs, and performing piecemeal renovation of properties to 
remain below the threshold of major or minor projects.
    This is an inefficient byproduct of budgeting priorities. Yet, as 
will be noted later, the reality remains that the SCIP program is 
unlikely to be funded at complete levels necessary to deliver on the 
ten year plan. Therefore, this account must be increased to meet the 
short term needs within the existing facilities.
    With a final FY 2013 Advance Appropriations budget of $5.74 
billion, The American Legion recommends an FY 2014 budget increase to 
$6 billion to ensure facilities are maintained to proper levels, 
particularly in an austerity period where much needed improvements by 
construction are being neglected and facilities are expected to extend 
their normal operating life.
The American Legion recommends increasing the FY 2014 Medical 
        Facilities budget to $6 billion.
                    Medical and Prosthetic Research
    The American Legion has maintained a position that VA research must 
focus on improving treatment for medical conditions unique to veterans. 
Because of the unique structure of VA's electronic medical records 
(EHR), VA research has access to a great amount of longitudinal data 
incomparable to research outside the VA system. Because of the ongoing 
wars of the past decade, several areas have emerged as ``signature 
wounds'' of the Global War on Terror, specifically Traumatic Brain 
Injury (TBI), Posttraumatic Stress Disorder (PTSD) and coping with the 
aftereffects of amputated limbs.
    Much media attention has focused on TBI from blast injuries common 
to Improvised Explosive Devices (IEDs) and PTSD. As a result, VA has 
devoted extensive research efforts to improving the understanding and 
treatment of these disorders. Amputee medicine has received less 
scrutiny, but is no less a critical area of concern. Because of 
improvements in body armor and battlefield medicine, catastrophic 
injuries that in previous wars would have resulted in loss of life have 
led to substantial increases in the numbers of veterans who are coping 
with loss of limbs.
    As far back as 2004, statistics were emerging which indicated 
amputation rates for US troops were as much as twice that from previous 
wars. By January of 2007, news reports circulated noting the 500th 
amputee of the Iraq War. The Department of Defense response involved 
the creation of Traumatic Extremity Injury and Amputation Centers of 
Excellence, and sites such as Walter Reed have made landmark strides in 
providing the most cutting edge treatment and technology to help 
injured service members deal with these catastrophic injuries.
    However, The American Legion remains concerned that once these 
veterans transition away from active duty status to become veteran 
members of the communities, there is a drop off in the level of access 
to these cutting edge advancements. Ongoing care for the balance of 
their lives is delivered through the VA Health Care system, and not 
through these concentrated active duty centers.
    Many reports indicate the state of the art technology available at 
DOD sites is not available from the average VA Medical Center. With so 
much focus on ``seamless transition'' from active duty to civilian life 
for veterans, this is one critical area where VA cannot afford to lag 
beyond the advancements reaching service members at DOD sites. If a 
veteran can receive a state of the art artificial limb at the new 
Walter Reed National Military Medical Center (WRNMC) they should be 
able to receive the exact same treatment when they return home to the 
VA Medical Center in their home community, be it in Gainesville, Battle 
Creek, or Fort Harrison.
    American Legion contact with senior VA health care officials has 
concluded that while DOD concentrates their treatment in a small number 
of facilities, the VA is tasked with providing care at 152 major 
medical centers and over 1,700 total facilities throughout the 50 
states as well as in Puerto Rico, Guam, American Samoa and the 
Philippines. Yet, VA officials are adamant their budget figures are 
sufficient to ensure a veteran can and will receive the most cutting 
edge care wherever they choose to seek treatment in the system.
    The American Legion remains concerned about the ability to deliver 
this cutting edge care to our amputee veterans, as well as the ability 
of VA to fund and drive top research in areas of medicine related to 
veteran-centric disorders. There is no reason VA should not be seen at 
the world's leading source for medical research into veteran injuries 
such as amputee medicine, PTSD and TBI.
    Current VA research also is unduly focused on confirming the 
effectiveness of treatments for PTSD and TBI already in use within the 
VA system. The American Legion remains concerned that little to no 
effort is being expended seeking truly experimental and cutting edge 
treatment. While there is a wealth of treatments already in use, we 
cannot know we are truly providing the best care for these veterans 
without pushing the boundaries of science and truly being a world 
leader in research.
    In FY 2011 VA received a budget of $590 million for medical and 
prosthetics research. Only because of the efforts of the House and 
Senate, was this budget kept at that level during the FY 2012 budget 
due to significant pressure from The American Legion. Even at this 
level, The American Legion contends this budget must be increased, and 
closely monitored to ensure the money is reaching the veteran at the 
local medical facility.
The American Legion recommends FY 2013 budget for Medical and 
        Prosthetics Research be increased to $600 million.
                  Medical Care Collections Fund (MCCF)
    In addition to the aforementioned accounts which are directly 
appropriated, medical care cost recovery collections are included when 
formulating the funding for VHA. Over the years, this funding has been 
contentious because the VA budget often included proposals for 
enrollment fees, increased prescription rates, and other costs billed 
directly to veterans. The American Legion has always ardently fought 
against these fees and unsubstantiated increases.
    Beyond these first party fees, VHA is authorized to bill health 
care insurers for nonservice-connected care provided to veterans within 
the system. Other income collected into this account includes parking 
fees and enhanced use lease revenue. The American Legion remains 
concerned that the expiration of authority to continue enhanced use 
leases will greatly impact not only potential revenue, but also 
delivery of care in these unique circumstances. We urge Congress to 
reauthorize the enhanced use lease authority with the greatest amount 
of flexibility allowable.
    However, the collection of fees and insurance payments comprises 
nearly 98% of the revenue gathered within this account. In the previous 
budget cycle, this account was budgeted to decrease to $2.77 billion. 
The American Legion remained skeptical that the VA was meeting these 
deadlines even at a reduced level. We were well aware that failure to 
meet these budgeted amounts equated to a reduction in appropriations 
and therefore a reduction in services at some level.
    In the first quarter of FY 2011, VHA reported a 12.3% decrease 
below the budgeted collections - an amount totaling nearly $100 
million. They remained below projections for the second quarter of FY 
2011 when the Senate Veterans' Affairs Committee shared our concern in 
a letter requesting detailed plans on how VA was going to improve on 
MCCF collections. To date, our fears have not been assuaged that VA can 
actually deliver on projected savings, even when reduced during the 
previous budget cycle.
    In May 2011, the VA Office of Inspector General (OIG) issued a 
report auditing the collections of third party insurance collections 
within MCCF. Their audit found that ``VHA missed opportunities to 
increase MCCF by . . .46%.'' Because of ineffective processes used to 
identify billable fee claims and systematic controls, it was estimated 
VHA lost over $110 million annually. In response to this audit, VHA 
assured they'd have processes in place to turn around this trend.
    Yet even if those reassurances were met, the MCCF collection would 
not meet the quarterly loss beneath the budgeted amounts. Without those 
collections, savings must be garnered elsewhere to meet these 
shortfalls, thereby causing facility administrators and VISN directors 
to make difficult choices that ultimately negatively impact veterans 
through a lack of hiring, delay of purchasing, or other savings 
methods.
    It would be unconscionable to increase this account beyond the 
previous levels that were not met. To do so without increasing co-
payments or collection methods would be counterproductive and mere 
budget gimmickry. While we recognize the need to include this in the 
budget, The American Legion cannot support a budget that penalizes the 
veteran for administrative failures.
The American Legion recommends budgeting $2.95 billion for Medical Care 
        Cost Collections.
                       Appropriations for FY 2013
    The remainder of the accounts within VA are being allocated funding 
for FY 2013. These include funding for general operation of VA Central 
Office (VACO), the National Cemetery Administration (NCA) and Veteran 
Benefits Administration.
                 Veteran Benefits Administration (VBA)
    Any discussion of the VBA must include discussion of the 
unconscionable backlog of veterans' benefits claims. Despite 
improvements to the claims processing system enabling VBA to process 
claims more rapidly, the backlog has continued to grow as the influx of 
claims each year continues to exceed a million claims a year over the 
past three years. Additional claims resulting from additions to 
presumptive conditions associated with the aftereffects of the chemical 
herbicide Agent Orange have contributed to this backlog. The American 
Legion can further foresee significant increases to claims as more 
service members return from wars in Afghanistan and Iraq and are 
assimilated into the veteran population. Further cuts to military 
manpower will drive more veterans into the civilian populace and as 
service members transition from active duty to the civilian world, more 
claims will continue to pour in. Many of these claims arise because DOD 
fails to conduct appropriate physical examinations upon discharge or 
retirement of service members.
    Despite improvements to claims processing by the beginnings of 
implementation of the Veterans Benefits Management System (VBMS), the 
VBA's fully electronic claims processing system, the overall VBA will 
be strained beyond their already struggling capacity without proper 
funding to adequately address the backlog. While there have been 
significant improvements in funding to VBA over the past six years, 
this trend must continue if there is any hope to stave off disaster. 
The system is already strained to its limits and is struggling to even 
``tread water.'' Further improvements in this area must be made so that 
veterans can finally receive prompt and accurate service addressing 
their needs for injuries and conditions sustained during their active 
duty service, as well as the residual aftereffects of that selfless 
service.
    VBA is also deeply involved in a massive overhaul of the ratings 
schedule for payment of disability for every major body system. 
Potential changes to ratings for mental health disorders and major 
musculoskeletal groups will be rolled out over the coming years, and 
implementation of these changes will require extensive training of VBA 
personnel to ensure they are properly administering the benefits 
system. The American Legion has long been critical of training within 
VBA, and lack of proper training contributes to high error rates which 
further tie up the claims systems with lengthy appeals that would be 
unnecessary if the claims had been decided properly, by properly 
trained personnel, on the claim review.
    In other areas of compensation, pension and fiduciary programs 
administered within VBA have been undergoing consolidation. Whether or 
not these consolidations contribute to savings and more efficient 
operation is a matter of open debate. The American Legion contends 
consolidation has often created more problems than it has solved, and 
often necessitated additional personnel at the local level to fix 
problems created by removing staff to remote areas out of direct 
contact with the veterans they purport to serve.
    Furthermore, by VBA's own admission, consolidation of fiduciary 
programs has resulted in pulling personnel away from claims processing 
to be moved to the new fiduciary hubs, thereby creating a vacuum in 
claims processing, an area already tasked to the limit. Given the 
lengthy training period necessary to bring new claims processing hires 
up to speed and effectiveness this only portends more problems in the 
already troubled claims processing arena.
    Increased funding in this area is necessary to provide for a surge 
of new employees to handle the massive caseload, more extensive and 
better organized training targeted to address key areas of deficiency 
in claims processors, and to ensure personnel adequate for full use of 
the VBMS system. Furthermore, as the proliferation of pilot programs to 
solve the challenges of the claims systems continues to evolve, more 
funding will be needed to ensure the more advanced and effective 
business models can be replicated and implemented on a national level 
so there is consistency in every Regional Office.
    VBA's final FY 2012 appropriation was $2 billion a reduction from 
the FY 2011 levels. Given the dire need of enhancements in this area, 
The American Legion recommends a 10 percent increase in this budget for 
FY 2013 to account for the many areas of need, including increased 
staffing and training. As with all areas of VA budgeting, The American 
Legion is concerned that any increases in funding actually reach down 
to the regional level, rather than be swallowed up by an endlessly 
expanding VACO bureaucracy. Congress has shown good faith recognizing 
the dire need for funding to ensure veterans receive timely access to 
benefits, but oversight must be exercised to ensure this money actually 
reaches the veteran on the street.
The American Legion recommends budgeting $2.2 billion for the Veteran 
        Benefits Administration (VBA).
                         Information Technology
    Like the VBA budget, the Information Technology (IT) budget was 
slightly pared back in FY 2012. The American Legion was unable to gauge 
the progress gained on the 76 IT projects proposed during that budget 
cycle. In addition to the implementation and launch of the VBMS system, 
the greatest long awaited project is the launch of the joint VA and 
Department of Defense (DOD) lifetime record - Virtual Lifetime 
Electronic Record (VLER).
    The American Legion remains a strong advocate for the 
implementation of such recordkeeping, yet we are pessimistic the VA and 
DOD are making sufficient progress towards that end. As of right now, 
VA can only point to a hopeful deadline of five years to implement 
VLER, and The American Legion does not believe this was the will of 
Congress when the proposal of a records system to follow a veteran from 
induction through the rest of the life was passed into law.
    During the previous budgeting, VA was unable to provide information 
on the overall cost of creating such a system, but assured veteran 
advocates there was enough flexibility to address any costs associated 
with the project. In the meantime, several releases and announcements 
have been issued by VA towards the continued evolution of this project, 
but there is little to demonstrate we are any closer to producing a 
ready model. The American Legion calls upon Congress to continue to 
pressure VA and DOD to move towards this system as expeditiously as 
possible. With the development and launch of VBMS nearly complete, the 
entire IT focus should center on VLER.
    The American Legion's System Worth Saving Task Force focus on rural 
health care this year also recognizes significant challenges to IT 
infrastructure in the field of telehealth benefits. VA is expanding the 
use of telehealth as a means to reach rural veterans, yet obstacles 
remain, and the IT budget must reflect overcoming these challenges. 
Telehealth scheduling is still not fully integrated into VA health care 
scheduling solutions. Furthermore, significant questions about 
necessary bandwidth for providing telehealth in rural region remain to 
be answered.
    In order to provide the necessary resources for the nationwide 
rollout of VBMS, increase IT infrastructure to meet the needs of rural 
veterans through telehealth programs, and still maintain efforts 
towards development of VLER, The American Legion believes a small 
increase is justified within IT.
The American Legion recommends budgeting $3.3 billion for Information 
        Technology.
                      Major and Minor Construction
    After two years of study the Department of Veterans Affairs (VA) 
developed the Strategic Capital Investment Planning (SCIP) program. It 
is a ten-year capital construction plan designed to address VA's most 
critical infrastructure needs within the Veterans Health 
Administration, Veterans Benefits Administration, National Cemetery 
Administration, and Staff Offices.
    The SCIP planning process develops data for VA's annual budget 
requests. These infrastructure budget requests are divided into several 
VA accounts: Major Construction, Minor Construction, Non-Recurring 
Maintenance (NRM), Enhanced-Use Leasing, Sharing, and Other Investments 
and Disposal. The Fiscal Year (FY) 2012 VA budget identified more than 
5,000 capital projects needed to close all the identified 
infrastructure gaps over the ten year period. The VA estimated costs 
were between $53 and $65 billion.
    The American Legion is very concerned about the lack of funding in 
the Major and Minor Construction accounts. In FY 2012 The American 
Legion recommended to Congress that the Major Construction account be 
funded at $1.2 billion and the Minor Construction account be funded at 
$800 million. However, Congress only appropriated $589 million and $482 
million respectively to those accounts. Based on VA's SCIP plan, 
Congress underfunded these accounts by approximately $4 billion in FY 
2012. Clearly, if this underfunding continues VA will never fix its 
identified deficiencies within its ten-year plan. Indeed, at current 
rates, it will take VA almost sixty years to address these current 
deficiencies.
    The American Legion also understands there is a discussion to refer 
to SCIP in the future as a ``planning document'' rather than an actual 
capital investment plan. Under this proposal, VA will still address the 
deficiencies identified by the SCIP process for future funding requests 
but rather than having an annual appropriation, SCIP will be extended 
to a five year appropriation, similar to the appropriation process used 
by the Department of Defense as its construction model. Such a plan 
will have huge implications on VA's ability to prioritize or make 
changes as to design or project specifications of its construction 
projects. The American Legion is against this five year appropriation 
model and recommends Congress continue funding VA's construction needs 
on an annual appropriations basis.
    The American Legion recommends Congress adopt the 10-year action 
plan created by the SCIP process. Congress must appropriate sufficient 
funds to pay for needed VA construction projects and stop underfunding 
these accounts. In FY 2013 Congress must provide increased funding to 
those accounts to ensure the VA-identified construction deficiencies 
are properly funded and these needed projects can be completed in a 
timely fashion.
The American Legion recommends budgeting $5.3 billion for Major 
        Construction and $1.2 billion for Minor Construction projects 
        within VA.
                 State Veteran Home Construction Grants
    Perhaps no program facilitated by the VA has been as impacted by 
the decrease in government spending than the State Veteran Home 
Construction Grant program. For the past two fiscal years, Congress has 
appropriated $85 million towards the construction, upgrade, and 
expansion of long term care facilities operated by the states.
    This program is essential in providing services to a significant 
number of veterans throughout the country at a fraction of the daily 
costs of similar care in private or VA facilities. Yet, in order to 
qualify for the federal grant, states must put forward a percentage of 
the overall planning and construction costs. With a downturn in the 
economy, a majority of the states have been unable to leverage state 
funding for these projects. That coupled with a significant increase 
NCA funding to meet the backlog in 2009 helped eliminate the backlog 
that had been building.
    As the economy rebounds and states are pivoting towards resuming 
essential services, taking advantage of depressed construction costs, 
and meeting the needs of an aging veteran population, greater use of 
this grant program will continue. The American Legion encourages 
Congress to maintain the funding level of this program.
The American Legion recommends budgeting $85 million for State Veteran 
        Home Construction Grant program.
                 National Cemetery Administration (NCA)
    No aspect of the VA is as critically acclaimed as the National 
Cemetery Administration (NCA). In the 2010 American Customer 
Satisfaction Index, the NCA achieved the highest ranking of any public 
or private organization. This was not a one-time occurrence; it has 
been replicated numerous times in the past decade. In addition to 
meeting this customer service level, the NCA remains the highest 
employer of veterans within the federal government and remains the 
model for contracting with veteran owned businesses.
    The NCA is comprised of 131 national cemeteries. NCA was 
established by Congress and approved by President Abraham Lincoln in 
1862 to provide for the proper burial and registration of graves of 
Civil War dead. Since 1973, annual interments in NCA have increased 
from 36,400 to over 117,426 in 2011.
    While NCA met their goal of having 90 percent of veterans served 
within 75 miles of their home, their aggressive strategy to improve 
upon this in the coming five years will necessitate funding increases 
for new construction. Congress must provide sufficient major 
construction appropriations to permit NCA to accomplish this goal and 
open five new cemeteries in the coming five years. Moreover, funding 
must remain to continue to expand existing cemetery facilities as the 
need arises.
    The average time to complete construction of a national cemetery is 
7 years. The report of a study conducted pursuant to the Millennium 
Bill concluded that an additional 31 national cemeteries would be 
required to meet the burial option demand through 2020. In order to 
adequately fund these five new cemeteries, Congress must be prepared to 
appropriate the resources now.
The American Legion recommends budgeting $200 million for major and 
        minor construction projects within NCA in order to expand 
        existing facilities and begin procurement, planning, and 
        construction of new cemeteries.
    While the costs of fuel, water, and contracts have risen, the NCA 
operations budget has remained nearly flat for the past two budgets. 
Some of these expenses have been a result of efficiency transformations 
within the cemetery. Others have been due to the thriftiness of 
cemetery superintendants.
    Unfortunately recent audits have shown cracks beginning to appear 
because of these savings. Due predominantly to poor contract oversight, 
several cemeteries inadvertently misidentified burial locations. 
Although only one or two were willful violations of NCA protocols, the 
findings demonstrate a system about ready to burst.
    To meet the increased costs of fuel, equipment, and other resources 
as well as ever-increasing contract costs, The American Legion believes 
a small increase is necessary. In addition, we urge Congress to 
adequately fund the construction program to meet the burial needs of 
our nation's veterans.
The American Legion recommends budgeting $260 million for National 
        Cemetery Administration Operating Budget.
                      State Cemetery Grant Program
    The NCA administers a program of grants to states to assist them in 
establishing or improving state-operated veterans' cemeteries through 
VA's State Cemetery Grants Program (SCGP). Established in 1978, this 
program funds nearly 100% of the costs to establish a new cemetery, or 
expand existing facilities. For the past two budgets this program has 
been budgeted at $46 million to accomplish this mission.
    In 2007, the Dr. James Allen Veteran Vision Equity Act of 2007 
(Public Law 110-157) authorized VA under the SCGP to provide additional 
federal assistance to states for the operation and maintenance of state 
veterans cemeteries. Prior to passage of this law, VA could only 
provide federal funds for the establishment, expansion, and improvement 
of state veterans cemeteries. VA could not fund the operation or 
maintenance of state veterans cemeteries.
    The new authority granted by the Act authorizes VA to fund 
Operation and Maintenance Projects at state veterans cemeteries to 
assist states in achieving the national shrine standards VA achieves 
within national cemeteries. Specifically, the new operation and 
maintenance grants have been targeted to help states meet VA's national 
shrine standards with respect to cleanliness, height and alignment of 
headstones and markers, leveling of gravesites, and turf conditions. 
The Act authorizes VA to award up to a total of $5 million for such 
purposes each fiscal year to ensure state veterans cemeteries meet the 
highest standards of appearance and serve as national shrines to honor 
the Nation's military service members with a final resting place.
    In addition, this law allowed VA to provide funding for the 
delivery of grants to tribal governments for Native American veterans. 
Yet after the passage of this act, we have not seen the allocation of 
funding increased to not only meet the existing needs under the 
construction and expansion level, but also the needs from operation and 
maintenance and tribal nation grants. Moreover, as these cemeteries 
age, the $5 million limitation must be revoked to allow for better 
management of resources within the projects.
    State cemetery grants are managed through an intricate list of 
priority groups, assigning rank and priority to projects based on 
burial need, matching funds from the state or tribal government, and 
other factors. The 2012 priority list has over 100 applications for 
grants valued at over $250 million. Sixty applications, totaling over 
$150 million already have matching funds necessary to leverage the 
grant money from NCA. In order to meet this growing need, the grant 
funding must be increased.
The American Legion recommends budgeting $60 million for State Cemetery 
        Grant Program.
                               Conclusion
    In conclusion, The American Legion questions whether the increased 
budget will be adequate to meet the needs of the one-million returning 
service members from the Global War on Terror in addition to those 22 
million veterans from previous eras. We are hopeful savings generated 
through downsizing of the military are leveraged against the need of 
thousands of servicemembers who will be discharged to create the 
savings. Yet, we are more than pessimistic these will be accomplished 
without budget gimmickry such as carryover funds, lofty collection 
goals, and other schemes.
    As we've seen in previous years, when these sleights-of-hand are 
used, it almost always negatively impacts the care and benefits 
afforded to our nation's veterans. Too often while veteran advocates 
celebrate dramatically increased budgets, the veteran patient, 
claimant, or widow is left wondering where the money went. We must not 
do so again.
    Our nation's veterans deserve adequate and responsible funding to 
the fullest level possible. After over a decade of service, our newest 
era of veterans will join the ranks of generations of their brothers 
and sisters who are owed a great debt.
    Our debt is incurred by the sweat in the ungodly heat of Iraq. Our 
liability was predicated by the young Marine trudging up and down the 
rugged mountains of Afghanistan. This obligation was earned in the 
darkened cockpit of a medical evacuation flight jetting over the 
Atlantic. It is a debt of tears, blood and sacrifice and deserves to be 
repaid in honest true money.

                                 
                       Statements For The Record
      Prepared Statement of Association of the United States Army
    Mr. Chairman and Members of the Committees:
    Thank you for the opportunity to present the views of the 
Association of the United States Army (AUSA) concerning veterans' 
issues. Both in personal testimony and through submissions for the 
record there exists a long-standing relationship between AUSA and the 
House Committee on Veterans' Affairs. We are honored to express our 
views on behalf of our members and America's veterans.
    The Association of the United States Army is a diverse organization 
of almost 100,000 members - active duty, Army Reserve, Army National 
Guard, Department of the Army civilians, retirees and family members. 
An overwhelming number of our members are entitled to veterans' 
benefits of some type. Additionally, AUSA is unique in that it can 
claim to be the only organization whose membership reflects every facet 
of the Army family.
    Each year, the AUSA statement before the committee stresses that 
America's veterans are not ungrateful. Much of the good done for 
veterans in the past would have been impossible without the commitment 
of those who serve on the committee and the tireless efforts of its 
professional and personal staff.
    The inherently difficult nature of military service has never been 
more self-evident than during the current conflicts. While grateful for 
the good things done for veterans, AUSA reminds our elected 
representatives that we consider veterans benefits to have been duly 
earned by those who have answered the nation's call and placed 
themselves at risk.
    AUSA is heartened that Congress has expressed a commitment to 
support America's veterans. Despite this, many are concerned that the 
declining number of veterans in Congress might in some way lessen the 
value this institution places on veterans and their service to the 
nation. We, at AUSA, do not share this opinion. AUSA is confident that 
you - well-intentioned, patriotic men and women - will faithfully 
represent the interests of America's veterans during fiscal 
deliberations.
    As elected representatives, you must be responsible stewards of the 
federal purse because each dollar emanates from the American taxpayer. 
AUSA emphasizes that the federal government must remain true to the 
promises made to her veterans. We understand that veterans' programs 
are not above review, but always remember that the nation must be there 
for the country's veterans who answered the nation's call.
    Veterans seldom vote in a block, despite their numbers. This is one 
reason AUSA seeks this forum to speak for its members about veterans' 
issues. Our veterans have lived up to their part of the bargain; the 
Congress must live up to the government's part.
    Those who have volunteered to serve their country in uniform 
deserve educational benefits that support their transition to civilian 
life. AUSA applauds Congress for enacting the Post-9/11 Veterans 
Educational Assistance Act of 2008 and the more recent Post-9/11 
Veterans Improvement Act of 2010. These landmark pieces of legislation 
are helping educate a new generation of veterans by allowing them to 
enroll as a full-time students and to focus solely on education.
    With the Committee's support, the Department of Veterans' Affairs 
has implemented the largest increase in education benefits for our 
fighting men and women since World War II. AUSA has long endorsed a 
21st century GI Bill that is built on the principles of simplicity, 
equity and adequate reimbursement of the cost of education / training. 
As we work to fully realize Congressional intent for the program, AUSA 
believes consideration should be given to having hearings regarding a 
unified architecture for all GI Bill programs for active duty, Guard 
and Reserve under the principle of awarding benefits according to the 
length and type of duty performed.
    Because of Congress' establishment of the Gunnery Sergeant John D. 
Fry Scholarship program, children of an active duty member who died in 
the line of duty after September 10, 2001 are eligible for 
substantially the same benefits as the Post-9/11 GI Bill when they 
reach age 18. However, surviving spouses are eligible only for 
Survivors and Dependents Educational Assistance (DEA) (Chapter 35, 38 
USC) benefits, which for many means college or vocational training is 
unaffordable.
    For college attendance, DEA pays even less than the Montgomery GI 
Bill stretched out over 45 monthly payments (instead of 36 months for 
the MGIB). For full-time college enrollment, a surviving spouse 
receives just $936 per month. When Congress established the Post-9/11 
GI Bill in 2008, it authorized a one-time 20% rate hike to the MGIB, 
but overlooked DEA. Today, the potential total DEA benefit is $42,120 
compared to $51,336 under the MGIB. So surviving spouses receive 
substantially reduced benefits under DEA and are not eligible for a 
housing allowance or book stipend under the program. For many survivors 
with children, college or vocational training is beyond their reach.
    Therefore, AUSA urges Congress to authorize Post-9/11 GI Bill 
benefits for surviving spouses of the current conflict, the same 
educational benefit available to their children under the Gunnery Sgt. 
John D. Fry Scholarships, in lieu of Dependents and Survivors' 
Educational Assistance (DEA) benefits. As an interim measure, if 
resources are not available to raise DEA reimbursement to the Post-9/11 
GI Bill level, authorizing survivors of the current conflicts the Post-
9/11 GI Bill housing allowance and book stipend under DEA.
    Also, AUSA is concerned about the rising unemployment of Army and 
other veterans and believes additional full time counseling staff is 
needed for the Vocational Rehabilitation and Employment (VRE) program 
to support the increasing demand among the rising number of disabled 
veterans. VRE helps equip disabled veterans to transition back into the 
work force.
    AUSA strongly encourages Congress to raise education benefits for 
National Guard and Reserve service members under Chapter 1606 of Title 
10. For years, these benefits have only been adjusted for inflation. 
Currently, Reserve GI Bill benefits have fallen to less than 25 percent 
of the active duty benchmark giving them much less value as a 
recruiting and retention incentive. This also sends a signal to Reserve 
Component personnel that their service is undervalued. Further, a 
transfer of the Reserve MGIB-Select Reserve authority from Title 10 to 
Title 38 will permit proportional benefit adjustments in the future.
    Members of the National Guard called to active duty under Title 32 
in support of the current crisis do not receive veteran's status for 
their active duty military time. Those called to active duty under 
Title 10 do receive veteran's status. Similarly, Army Reserve personnel 
who are not called to active duty can complete a full reserve career 
and yet not be entitled to be called veterans. This inequity must be 
addressed. Your support in allowing Guard and Reserve members to earn 
veterans' status on equal footing with their active duty counterparts 
will send the message that Reserve Component personnel are part of the 
Total Force.
    Veterans' medical facilities must remain expert in the specialties 
which most benefit our veterans. These specialties relate directly to 
the ravages of war and are without peer in the civilian community. We 
are grateful for the significant increase in resources and 
appropriations, as well as the advanced appropriations process, 
provided by the Congress to the veterans' health care. That said, a way 
must be found to build on the inclusion of more Category 7 and 8 
veterans this year, so that ultimately all Category 7 and 8 veterans 
can receive care from the VA.
    AUSA applauds the unprecedented and historic legislation which 
authorized the unconditional concurrent receipt of retired pay and 
veterans' disability compensation for retirees with disabilities of at 
least 50 percent and the legislation that removed disabled retirees who 
are rated as 100 percent from the 10-year phase-in period. However, we 
cannot forget about the thousands of disabled retirees left out by this 
legislative compromise. The principle behind eliminating the disability 
offset for those with disabilities over 50 percent is just as valid for 
those 49 percent and below. AUSA urges that the thousands of disabled 
veterans left out of previous legislation be given equal treatment and 
that the disability offset be eliminated completely.
    Another critical area needs to be addressed. For chapter 61 
(disability) retirees who have more than 20 years of service, the 
government recognizes that part of that retired pay is earned by 
service, and part of it is extra compensation for the service-incurred 
disability. The added amount for disability is still subject to offset 
by any VA disability compensation, but the service-earned portion (at 
2.5 percent of pay times years of service) is protected against such 
offset.
    AUSA believes that a member who is forced to retire short of 20 
years of service because of a combat disability must be ``vested'' in 
the service-earned share of retired pay at the same 2.5 percent per 
year of service rate as members with 20+ years of service. This would 
avoid the ``all or nothing'' inequity of the current 20-year threshold, 
while recognizing that retired pay for those with few years of service 
is almost all for disability rather than for service and therefore 
still subject to the VA offset.
    Fortunately, legislation provided in previous defense bills extends 
Combat Related Special Compensation (CRSC) to retirees with less than 
20 years of service with combat or operations-related disabilities. 
Unfortunately, retirees with non-combat disabilities forced to retire 
short of 20 years of service still have to fund their VA compensation 
dollar-for-dollar from their disability retirement from DoD, and this 
year funding of concurrent receipt for these Chapter 61 medical 
retirees is not included in the administration's budget.
    AUSA supports legislation that establishes a presumption of service 
connection for veterans with Hepatitis C (HCV).
    The rules for interment in Arlington National Cemetery (ANC) have 
never been codified in public law. Twice the House has passed 
legislation to codify rules for burial in Arlington National Cemetery. 
However, the legislation has not passed in the Senate. AUSA supports a 
negotiated settlement of differences between the House and Senate 
concerning codification of rules for burial in Arlington National 
Cemetery. Further ``gray area'' reservists eligible for military 
retirement should be included among those eligible for interment at 
Arlington National Cemetery.
    AUSA remains opposed to the imposition of an annual deductible on 
veterans already enrolled in VA health care and any increase in the co-
payment charged to many veterans for prescription drugs. AUSA urges 
Congress to continue to oppose such fees.
    AUSA supports continuing congressional efforts to help homeless 
veterans find housing and other necessities, which would allow them to 
re-enter the workforce and become productive citizens.
    Terminally ill veterans who hold National Service Life Insurance 
and U.S. Government Life Insurance should, upon application, be able to 
receive benefits before death, as can holders of Servicemembers Group 
Life Insurance and Veterans Group Life Insurance. AUSA supports 
legislation to amend the U.S. Code appropriately.
    Much more needs to be done to ensure that returning combat 
veterans, as well as all other service men and women who complete their 
term of service or retire from service receive timely access to VA 
benefits and services. This issue encompasses developing and deploying 
an interoperable, bi-directional and standards-based electronic medical 
record; a ``one-stop'' separation physical supported by an electronic 
separation document (DD-214); benefits determination before discharge; 
sharing of information on occupational exposures from military 
operations and related initiatives. AUSA strongly recommends 
accelerated efforts to realize the goal of ``seamless transition'' 
plans and programs.
    We encourage the positive steps toward mutual cooperation taken 
recently by the Department of Defense (DOD) and the VA. The closer we 
can come to a seamless flow of a servicemember's personnel and health 
files from service entry to burial, the more likely it will be that 
former service members receive all the benefits to which they are 
entitled. AUSA supports closer DOD-VA collaboration and planning 
including billing, accounting, IT systems, patient records, but not 
total integration of facilities nor of VA/DOD healthcare systems.
    AUSA strongly supports preservation of dual eligibility of 
uniformed service retirees for VA and DOD healthcare systems. We 
applaud Congress' opposition to ``forced choice'' in the past and 
encourage you to hold the line in the future.
    AUSA recognizes that significant progress has been made in reducing 
the unacceptably high numbers of backlogged disability claims. The key 
to sustained improvement in claims processing rests on adequate funding 
to attract and retain a high quality workforce supported by investment 
in information management and technology.
    The committee safeguards the treatment of America's veterans on 
behalf of the nation. AUSA knows that you take this responsibility 
seriously and treat this privilege with the gratitude and respect it 
deserves. Although your tenure is temporary, the impact of your actions 
lasts as long as this country survives and affects directly the lives 
of a precious American resource - her veterans. As you make your 
decisions, please do not forget the commitment made to America's 
veterans when they accepted the challenges and answered the nation's 
call to serve.
    Thank you for the opportunity to submit testimony on behalf of the 
members of the Association of the United States Army, their families, 
and today's soldiers who are tomorrow's veterans.

                                 
                       MODULAR BUILDING INSTITUTE
    February 13, 2012

    Hon. Jeff Miller
    Chairman, House Veterans' Affairs Committee
    335 Cannon House Office Building
    Washington, DC 20510

    Dear Chairman Miller:

    On behalf of the Modular Building Institute, I want to thank you 
for holding a Hearing on the Department of Veterans Affairs Fiscal Year 
2013 budget request. The Modular Building Institute (MBI) is a not-for-
profit trade association established in 1983 that serves to represent 
companies involved in the manufacturing and distribution of commercial 
factory-built structures.
    Last year, the Modular Building Institute had the opportunity to 
testify in front of the House Veterans' Affairs Committee to discuss 
construction practices within the Department of Veterans' Affairs. We 
believe that the Department of Veterans' Affairs could greatly increase 
efficiency and reduce construction cost by adopting changes to their 
construction practices.
    Throughout the construction industry there has been concern with 
the Department of Veterans Affairs as to the solicitation of 
construction projects that call for a delivery system referred to as 
``Design-Bid-Build.'' This project delivery method is often more costly 
and less efficient than other delivery methods and its restrictive 
nature prohibits alternate forms of construction such as permanent 
modular, tilt-wall and pre-engineered steel construction from being 
able to participate in the bidding process.
    As is explained in greater detail throughout this letter, the 
Department of Veterans' Affairs could greatly improve the way it 
procures construction projects if it utilized an alternate project 
delivery system known as ``Design-Build.'' Over the past decade, the 
use of Design-Build has greatly increased in the United States, making 
it one of the most significant changes in the construction industry.
    The Design-Build method, which has been embraced by several 
government agencies, including the United States Army Corps of 
Engineers (USACE), streamlines project delivery through a single 
contract between the government agency and the contractor. This simple 
but fundamental difference not only saves money and time, improves 
communication between stakeholders, and delivers a project more 
consistent with the agency's needs, it also allows for all sectors of 
the construction industry to participate.
I. The Increased Use of a Design-Build Delivery System - How would it 
        benefit the Department of Veterans' Affairs?
    The Design-Build project delivery system offers the Department of 
Veterans Affairs a variety of advantages that other project delivery 
systems cannot. Typically, under the Design-Build approach, an agency 
will contract with one entity to both design and construct the project. 
This is in contrast with Design-Bid-Build, where an agency has to 
contract with multiple entities for various design and construction 
scopes during the construction project.
    By greater utilization of the Design-Build delivery system, the 
Department of Veterans Affairs can achieve these goals:

      Faster Delivery--collaborative project management means 
work is completed faster with fewer problems;
      Cost Savings--an integrated team is geared toward 
efficiency and innovation. Furthermore, with Design Build, construction 
costs are often known far earlier than in other delivery methods. 
Because one entity is typically responsible for the entire project, 
they are able to predict costs more accurately than when a Design-Bid-
Build system is utilized. The contracting for Design-Build services 
allows the agency several decision points during design. The decision 
to proceed with the project is made before substantial design 
expenditure and with knowledge of final project costs;
      Quality--Design-Builders meet performance needs, not 
minimum design requirements, often developing innovations to deliver a 
better project than initially foreseen;
      Single Entity Responsibility--one entity is held 
accountable for cost, schedule and performance. With both design and 
construction in the hands of a single entity, there is a single point 
of responsibility for quality, cost, and schedule adherence. The firm 
is motivated to deliver a successful project by fulfilling multiple 
objectives, such as with the budget and schedule for completion. With 
Design-Build, the owner is able to focus on timely decision making, 
rather than on coordination between designer and builder;
      Reduction in Administrative Burden--owners can focus on 
the project rather than managing separate contracts;
      Reduced Risk--the Design-Build team assumes additional 
risk. Performance aspects of cost, schedule and quality are clearly 
defined and responsibilities balanced. Change orders due to errors are 
virtually eliminated, because the design-builder had responsibility for 
developing drawings and specifications as well as constructing a fully-
functioning facility.
    Just to underscore the benefits of a Design-Build project delivery 
system, the Construction Industry Institute, in collaboration with 
Pennsylvania State University performed a study examining the various 
construction methods and found that:

      Unit Cost: Design-Build was typically 6% less costly than 
a Design-Bid-Build system;
      Delivery Speed: Design-Build was 33% faster than Design-
Bid-Build;
      Quality: Design-Build met and exceeded quality 
expectations at all levels

    Unfortunately, the Department of Veterans' Affairs has been 
unwilling to embrace the Design-Build construction method as much as 
other Federal Agencies. According to Department of Veterans Affairs 
personnel, only 20% of VA solicitations call for a Design-Build 
delivery system, while the rest rely on a Design-Bid-Build delivery 
method.
    As our nation prepares for an influx of returning warriors, it is 
imperative that we are able to provide them with the services that will 
help them assimilate into civilian life. Medical clinics, dental 
facilities, physical rehabilitation facilities, mental health treatment 
facilities as well as interim veteran housing will need to be provided 
in an efficient and cost effective manner. By adopting the Design-Build 
approach, the VA could provide these facilities in a compressed 
timeframe while ensuring that the product delivered is top quality.
II. Design-Build Utilized by Other Federal Agencies
    Over ten years ago, the Federal Acquisition Regulation (FAR) was 
changed to accommodate the Design-Build project delivery method. Since 
then, the Design-Build delivery method used by numerous Federal 
Agencies, including the United States Army Corps of Engineers has been 
utilized to bring thousands of facilities to completion on time and on 
budget, thus creating savings for the agencies and the taxpayer.
    Most Agencies have adopted the Design-Build method as their primary 
means of project delivery. While figures vary slightly, most Agencies 
estimate the overwhelming majority of their projects are solicited with 
a Design-Build delivery method:
    1. United States Army Corps of Engineers (USACE): 83-85% Design-
Build. According to Paul M. Parsoneault, construction management team 
leader, U.S. Army Engineers Military Programs Branch, when Congress 
approved the 2005 Base Realignment and Closure (BRAC) recommendations, 
the agency had to respond faster than ever before. ``There was no way 
possible to execute a historically large mission using the traditional 
delivery system,'' he said. ``We determined that, in terms of the Army, 
the default delivery system is design-build. We can deliver more 
quickly, and we can leverage the innovation of industry to provide us 
with the most cost-effective solutions to our requirements.''
    2. Navy Facilities Engineering Command (NAVFAC): 75% Design-Build. 
According to Joseph Gott, Director, NAVFAC, ``The largest reason we 
select a project for the design-build delivery vehicle is the single 
point of accountability and responsibility. We have an architect-
engineer and a design-build constructor on the same team and have a 
contract with one company.''
    3. Air Force Center for Engineering & Environment (AFCEE) 70% 
Design Build. This number comes from a report done by Mr. Terry G. 
Edwards (AFCEE).
    4. Federal Bureau of Prisons: The Federal Bureau of Prisons has 
relied exclusively on design-build project delivery. ``Design-build 
shortens the delivery period because it eliminates the procurement 
phase between the design and the construction phase,'' Pete Swift, 
deputy chief, Design and Construction Branch.
    By greater utilizing the Design-Build delivery system the 
Department of Veterans' Affairs would experience several time and cost 
benefits. With a Design-Build delivery method there are fewer 
unforeseen problems and when problems do arise, they are resolved more 
quickly. Projects delivered on or before deadline are the rule rather 
than the exception with the Design-Build delivery method.
III. A Design-Build System Opens Opportunities for Alternative Design 
        Offerings
    By utilizing a Design-Build philosophy, the Department of Veterans 
Affairs could allow for sectors of the construction industry, such as 
modular construction, tilt-wall and pre-engineered steel to offer 
products as well as project means and methods that are currently not 
exercised due to the restrictive nature of Design-Bid-Build project 
delivery methods.
    Numerous permanent modular contractors have performed services for 
the Department of Veterans Affairs but because of the limited amount of 
Design-Build solicitations, the opportunities are severely limited.
    Recently, the National Institute of Standards and Technology (NIST) 
released a report identifying modular construction as an underutilized 
resource and a breakthrough for the U.S. construction industry to 
advance its competitiveness and efficiency. One of the findings in the 
NIST report was ``Greater use of prefabrication, preassembly, 
modularization, and off-site fabrication techniques and processes.
    For those who specialize in alternative construction such as 
permanent modular, this report simply validated what has been known for 
a long time: Construction methods such as permanent modular leads to 
improved efficiency and productivity.
    By greater utilizing the Design-Build delivery system into the 
Department of Veterans' Affairs construction policies, the Department 
of Veterans Affairs could greatly increase the amount of projects that 
contractors utilizing alternative forms of construction could 
participate in and therefore experience the benefits as outlined in the 
NIST report.
    It should be noted that alternative construction methods such as 
permanent modular are not always the solution. There is no one perfect 
building system for every application. However, by expanding 
opportunities for them to be part of the process the Federal Government 
can be assured that it gets the `best value' by seeing all the options 
before awarding a contract.
IV. Conclusion
    Contractors that rely on a Design-Build delivery system have, and 
continue to overcome obstacles when it comes to working with the 
Department of Veterans Affairs. Moreover, in an era where the 
government is looking to trim costs wherever possible, the Department 
of Veterans' Affairs would be able to reduce construction costs, 
increase efficiency and provide our veterans with the quality 
facilities they deserve.
    The construction industry has seen great advances over the past ten 
years, and one of those is the Design-Build delivery system. More and 
more contractors are beginning to utilize Design-Build because of the 
advantages that are offered. However, until agencies such as the 
Department of Veterans Affairs decide to solicit more projects using a 
Design-Build method, these companies will be unable to participate. The 
members of MBI ask that the Veterans' Affairs Committee look into the 
issues discussed in the hopes of improving the way the VA procures 
facilities.
    On behalf of the Modular Building Institute I thank you for your 
time and attention to these matters. It is our hope the Committee can 
continue to rely on MBI as a valuable resource when it comes to issues 
relating to the construction industry.

    Respectfully Submitted,

    Tom Hardiman
    Executive Director
    Modular Building Institute

                                 
                           WARRIOR GROUP, INC
    February 15, 2012

    Hon. Jeff Miller
    Chairman, House Committee on Veterans' Affairs
    335 Cannon House Office Building
    Washington, DC 20515

    Dear Chairman Miller:

    On behalf of the Warrior Group, Inc. (Warrior), thank you for 
holding this Hearing examining the Department of Veterans Affairs 
budget request for Fiscal Year 2013. The Department of Veterans Affairs 
provides critical services to our nation's warriors and it is very 
important that we ensure our veterans receive the best care possible. 
To that end, we believe the Department of Veterans Affairs could take 
steps to improve the method in which they procure facilities by 
adopting a more efficient project delivery method that reduces agency 
risk, decreases total project costs and meets and exceeds quality 
expectations.
    The intent of this testimony is to provide a comprehensive overview 
of the advantages of a Design Build project delivery system. Over the 
past decade, the use of Design Build has dramatically increased in the 
United States. Its incorporation into federal procurement was codified 
in 1996 with the passage of the Clinger-Cohen Act, which allowed for a 
two-step procurement process. This Act gives agency officials the 
discretion to choose whether Design Build is an appropriate delivery 
method for a specific project.
    The Design-Build method streamlines project delivery through a 
single contract between the government agency and the contractor. This 
simple but fundamental difference not only saves money and time, 
improves communication between stakeholders, and delivers a project 
more consistent with an agencies needs.
    Currently, the Department of Veterans Affairs publishes the 
majority of their solicitations with a Design Bid Build delivery 
method. This project delivery method is often more costly and less 
efficient than other delivery methods and its restrictive nature 
prohibits alternate forms of construction such as permanent modular 
construction from being able to participate in the bidding process.
    At a time when Congress is looking to reduce spending wherever 
possible, the utilization of a Design Build delivery method is a great 
opportunity to reduce construction costs while at the same time 
ensuring quality facilities that meet or exceed expectations.
The Increased Use of a Design-Build Delivery System
    We have heard directly from agency personnel that the Department of 
Veterans Affairs solicits only 20% of their construction projects 
through a Design Build approach. This is in stark contrast to other 
government agencies that procure the majority of facilities using a 
Design Build approach.
    The Design-Build project delivery system offers the Department of 
Veterans Affairs a variety of advantages that other construction 
delivery systems cannot. Typically, under the Design-Build approach, an 
agency will contract with one entity to both design and construct the 
project. By greater utilizing the Design-Build delivery system, the 
Department of Veterans Affairs can achieve these goals:

      Faster Delivery
      Cost Savings
      Quality
      Single Responsibility
      Reduction in Administrative Burden
      Improved Budget Management

    Numerous federal agencies benefit from the inherent benefits of 
Design Build. The United States Army Corps of Engineers (USACE), Navy 
Facilities Engineering Command (NAVFAC), Air Force Center for 
Engineering and the Environment (AFCEE), Coast Guard and the Federal 
Bureau of Prisons issue the vast majority of their solicitations under 
the Design Build procurement method, and as a result, have benefited 
from increased efficiency, reduced construction schedules and lower 
costs.
    In contrast, the Department of Veterans Affairs continually resists 
efforts to adopt Design Build in a greater capacity. Recently, Agency 
officials were asked why the Department continues to rely on the Design 
Bid Build method of procurement. The response was ``because that's how 
we've always done it.'' We believe this issue mindset prohibits the 
consideration of a variety of factors all of which would suggest that a 
Design Build approach could benefit the Department in a multitude of 
ways. However, we believe that barring agency action, this issue should 
be effectively addressed through legislation or other actions that this 
Committee could undertake and champion on behalf of the construction 
community.
    A recent report by the Construction Industry Institute (CII) in 
collaboration with Penn State University examined the various 
construction methods and found that Design Build was typically 6-8% 
less costly than a Design Bid Build system; Design Build was 33% faster 
than Design Bid Build; and Design Build met and exceeded quality 
expectations at all levels.
    In addition to these advantages, a Design Build procurement process 
allows all sectors of the construction industry to compete. Alternative 
design offerings such as permanent modular construction, tilt-wall and 
pre-engineered steel would be able to participate in VA solicitations 
if the solicitations were issued using a Design Build delivery system. 
However, because of the limited amount of Design Build solicitations, 
the opportunities for alternate construction methods to be used on 
Department of Veterans Affairs are severely restricted.
    Admittedly, alternative construction methods such as permanent 
modular construction are not always the solution. Nevertheless, by 
expanding opportunities for them to be part of the process the 
Department of Veterans Affairs can be assured that it gets the `best 
value' by seeing all the options before awarding a contract.
Conclusion
    It is Warrior's belief that the Department of Veterans Affairs 
needs to make prompt, meaningful changes to their construction policies 
in order to enhance participation among all sectors of the construction 
industry as well as enjoy significant cost reductions and greater 
efficiency provided by embracing the Design Build project delivery 
system.
    We ask that this Committee look into the issues and recommendations 
we have presented in this testimony and act upon them promptly. We 
believe our suggestions will help Congress achieve its desire for 
greater efficiency and significant cost reductions within the 
Department of Veterans Affairs. Our recommendation is practical and can 
be readily implemented if there is the commitment from Department of 
Veterans Affairs to do so. As the evidence demonstrates, Design Build 
is an effective, efficient process that many federal agencies have 
successfully implemented. It is time the Department of Veterans Affairs 
follows suit.
    We thank the Committee for its attention to this important 
procurement matter.

    Respectfully Submitted,

    Gail Warrior
    President & CEO
    Warrior Group, Inc.

    Background on Warrior Group:

    Warrior is a general contractor that specializes in a form of 
alternate construction known as Permanent Modular Construction (PMC). 
Warrior was founded in 1997 and has performed numerous projects 
including permanent barracks installations at Ft. Sam Houston and Ft. 
Bliss. By incorporating a Design Build project delivery system with 
commercial modular design, Warrior Group has been able to increase 
efficiency, remove administrative issues, decrease construction costs 
and speed up the delivery and completion of its projects.

                                 
                   Materials Submitted For The Record
 PRE-HEARING QUESTIONS AND RESPONSES FROM CHAIRMAN JEFF MILLER TO THE 
                  DEPARTMENT OF VETERANS AFFAIRS (VA)
    Question 1: The Budget Control Act put in place statutory spending 
caps on discretionary spending over the next decade. Although the 
details of how annual appropriations to each Federal agency will fare 
under those spending caps is yet to be determined, it is probable that 
VA spending growth will be much more measured in the coming years.

    a. Is this an accurate assessment?

    Response: The Administration will continue to ensure that budget 
requests will allow VA to deliver on its promise to provide the 
services and benefits that Veterans have earned. The 2013 request for 
discretionary appropriations is an increase of 4.3 percent over the 
2012 enacted level. This rate of increase is higher than the 3.8 
percent increase in appropriations VA received in 2012 compared to the 
2011 level. This clearly demonstrates that our commitment to meet the 
needs of Veterans and their families is unwavering.
    Safeguarding the budgetary resources entrusted to us by the 
Congress by managing them effectively and spending them judiciously is 
part of our management culture and business process at VA. We are 
constantly looking at new ways to enhance our operations and programs 
to stretch every dollar provided even further and to improve how our 
programs and services are delivered to Veterans, their families, and 
survivors. VA officials take these responsibilities very seriously and 
strive to deliver maximum value for our Nation's Veterans.

    b. If so, and assuming that the demands placed on VA's health care 
system will only increase as a result of an aging population needing 
more expensive care, as well as the needs of returning war veterans, 
what strategic policy and administrative changes does VA envision 
needing to make in order to ensure quality of care does not 
deteriorate?

    Response: VA's commitment to providing high quality accessible 
health care services will not change. The budget includes an advance 
appropriations request for FY 2014 to meet the estimated health care 
demands of all enrolled Veterans as determined by VA's Enrollee 
Healthcare Projection actuarial model plus requirements for long-term 
care, CHAMPVA programs, and select initiatives. In order to ensure the 
continued high quality of VA health care, VA has and will continuously 
evaluate overall mission requirements through efforts such as: enhanced 
collaboration and coordination with the Department of Defense; 
continued refresh of the VA Strategic Plan; execution of planning, 
programming, budgeting, and evaluation (PPBE) processes through the VA 
Office of Corporate Analysis and
    Evaluation to support strategic decision-making and align resources 
to achieve VA priorities for Veterans; and leveraging robust data 
analysis and predictive modeling capabilities through the VA Office of 
Data Governance and Analysis to support strategic and programmatic 
planning, as well as policy development, with empirical analysis and 
appropriately aligning resources to mirror the long term demographic 
changes of our Veterans.

    c. What about funding for VA's aging infrastructure? Will the 
reality of a tight fiscal climate cause a shift in strategic thinking 
about meeting construction needs? Is the Strategic Capital Investment 
Plan (SCIP) still a realistic blueprint, or will funding restraints 
necessarily bring about a new plan?

    Response: The Strategic Capital Investment Planning (SCIP) process 
is a VA-wide planning tool VA uses to evaluate and prioritize its 
capital infrastructure needs for the current Budget cycle and for 
future years. SCIP quantifies the infrastructure gaps that must be 
addressed for VA to meet its long-term strategic capital targets, 
including providing access to Veterans, ensuring the safety and 
security of Veterans and our employees, and leveraging current physical 
resources to benefit Veterans.
    VA infrastructure funding requirements will continue to be balanced 
against other Department and National priorities. SCIP continues to be 
a critical and viable data- driven process that identifies all current 
and future gaps in safety, security, access, utilization and other 
related areas that most affect the delivery of benefits and services to 
Veterans. SCIP then evaluates the means, including specific projects 
(major, minor, non-recurring maintenance, leasing, or non-capital) to 
efficiently mitigate these gaps. SCIP continues to be a realistic 
blueprint in that it details a comprehensive methodology to mitigate 
all currently-identified capital needs. In a tight fiscal climate, this 
blueprint is an essential tool both this year and into the future, as 
SCIP projects are prioritized each year to ensure that only the highest 
priority projects are included in VA's annual budget request.
    VA will continue to update this plan in order to capture changes in 
the environment, including evolving Veteran demographics, newly-
emerging medical technology, advances in modern health care delivery 
and construction technology, and increased use of non-capital means 
(when appropriate) in a continuous effort to better serve Veterans, 
their families, and their survivors.

    Question 2: What is the Administration's view of how the Affordable 
Care Act, when and if (pending the Supreme Court's review and/or 
Congressional intervention) its requirements go into full effect, will 
impact the VA healthcare system? What is the Administration's forecast 
on whether heavily subsidized purchases of insurance off of health care 
exchanges will result in a potential exodus of veterans from the VA 
healthcare system?

    Response: On March 21, 2010, Secretary Shinseki stated ``As 
Secretary of Veterans Affairs, I accepted the solemn responsibility to 
uphold our sacred trust with our nation's Veterans. Fears that Veterans 
health care and TRICARE will be undermined by the
    health reform legislation are unfounded. I am confident that the 
legislation being voted on today will provide the protections afforded 
our nation's Veterans and the health care they have earned through 
their service. The President and I stand firm in our commitment to 
those who serve and have served in our armed forces. We pledge to 
continue to provide the men and women in uniform and our Veterans the 
high quality health care they have earned.''
    The national health care reform law, the Affordable Care Act (ACA), 
has strategic implications for VA; many Veterans will have new options 
for health care coverage under the new law starting in 2014, although a 
Veteran's ability to access health care at VA will not be diminished. 
VA has and will continue to review how the health care reform law may 
influence VA health care programs. VA will continue to offer the 
highest quality of health care to Veterans.

    Question 3: Based on VA's Enrollee Healthcare Projection Model, 
what is the total resource requirement for VA medical care in Fiscal 
Year 2013 and FY2014? Will the appropriation request (when combined 
with other sources of funding, e.g., carryover from prior years, 
medical collections, account reimbursements) meet what the Model 
projected as the resource requirement, or will policy proposals and/or 
management initiatives reflected in the budget reduce the appropriation 
request?

    Response: The total resource requirement for FY 2013 is $56.580 
billion and for FY 2014 is $57.929 billion based on the VA's Enrollee 
Healthcare Projection Model and requirements for Long-Term Care 
programs, Other Health Programs, Initiatives, Operational Improvements, 
and Legislative Proposals.
    Yes, the appropriation request, when combined with other sources, 
will meet the total requirement listed above. The details of the other 
sources is as follows: operational improvements of $1.284 billion in FY 
2013 and $1.328 billion in FY 2014, collections of $2.966 billion in FY 
2013 and $3.051 billion in FY 2014, reimbursements and prior year 
recoveries of $408 million in FY 2013 and $416 million in FY 2014, and 
a carryover of $500 million in FY 2013. The Administration will review 
the initial FY 2014 advance appropriations request during the next 
Budget cycle.

    Question 4: The Office of Management and Budget's ``Campaign to Cut 
Waste'' requires Federal agencies to reduce spending in certain 
categories by 20 percent below Fiscal Year 2010 levels. Please detail 
how VA is complying with this directive. Please outline what level of 
spending VA envisions in each of these categories in response to the 
directive and VA's strategy to deal with the funding reductions. What 
will happen to the savings realized from this effort?

    Response: VA is taking action to reduce spending in each of the 
categories covered in the Campaign to Cut Waste, as well as reducing 
spending for management support services contracts. On December 23, 
2011, VA provided OMB with its proposed plan for reduced spending 
levels - VA's total reduction target is $173 million. VA 
administrations and staff offices have reduction targets for each of 
the categories in 2012 and 2013, in concert with the overall approved 
reduction goals. All offices also developed reduction plans detailing 
how they will meet reduction goals and where these dollars will be 
applied once realized.
    Executive Order 13589, ``Promoting Efficient Spending,'' requires 
agencies to establish a plan for reducing ``the combined costs 
associated with the activities covered by sections 3 through 7 of the 
order. Accordingly VA did not set individual reduction targets by 
category but aggregates our reductions across target categories 
(travel, printing, IT devices, supplies, and management support 
services).
    VA's Chief Financial Officer CFO monitors monthly financial data 
related to the Campaign to Cut Waste to ensure planned actions are 
achieved and reports to OMB quarterly. VA will reinvest realized 
savings into VA programs.

    Question 5: In response to questions for the record submitted prior 
to the Committee's hearing on the FY 2012/2013 Budget Submission last 
year, the Department wrote that: ``VA has set aside $132 million in 
2011 and $208 million in 2012 for implementation of all sections of the 
Caregivers and Veterans Omnibus Health Services Act of 2010 (Public Law 
111-163); of these amounts, $30 million in 2011 and $66 million in 2012 
are for implementation of the enhanced programs for caregivers found in 
Sections 101-104 of that law.'' Please provide the following:

    a. The total amount spent in FY 2011 to implement the law.

    Response: The cost of Sections 101-104 in 2011 was $30.8 million. 
This includes $7.4 million for additional requirements such as the 
Caregiver Website, and the implementation of other evidence based 
practices and staffing that is not included in the answer to section d 
below.

    b. The total amount expected to be spent in FY 2012 to implement 
the law.

    Response: The total amount expected to be spent in FY 2012 is $251 
million.

    c. The total amount expected to be spent in FY 2013.

    Response: The total amount expected to be spent in FY 2013 is $278 
million.

    d. Provide a cost breakdown for each of the following services 
available to primary caregivers under Section 101 of this law, for FY 
2011 and FY 2012 to date:

    i. instruction and training
    ii. travel, lodging, and per diem expenses to attend training
    iii. lodging and subsistence for VA appointments
    iv. respite care
    v. ongoing technical support
    vi. counseling
    vii. monthly stipend
    viii. health coverage under the Civilian Health and Medical Program 
of the Department of Veterans Affairs (CHAMPVA) if not already covered 
under existing insurance

    Response:


----------------------------------------------------------------------------------------------------------------
                                                                   FY 2011                  1st QTR FY 2012
----------------------------------------------------------------------------------------------------------------
                             Instruction and Training                   $3,933,563                     $81,422
----------------------------------------------------------------------------------------------------------------
     Travel, lodging, and per diem expensed to attend                     $141,832                     $24,122
                                              training
----------------------------------------------------------------------------------------------------------------
          Lodging and subsistence for VA appointments                      $60,784                     $56,284
----------------------------------------------------------------------------------------------------------------
                                         Respite care                   $1,308,503                    $249,734
----------------------------------------------------------------------------------------------------------------
                            Ongoing technical support                  $10,687,172                  $3,146,041
----------------------------------------------------------------------------------------------------------------
                                        Mental Health                       $6,600                      $9,108
----------------------------------------------------------------------------------------------------------------
                                      Monthly stipend                  $11,002,530                 $16,568,583
----------------------------------------------------------------------------------------------------------------
                                                     CHAMPVA                                          $201,783
----------------------------------------------------------------------------------------------------------------


    Question 6: Does VA have sufficient resources in the FY 2012 budget 
to implement the provisions of the VOW to Hire Heroes Act of 2011 and 
has it adjusted its FY2013 budget to properly implement the Act's 
provisions? How will the Memorandum of Understanding between the 
Department of Labor and VA required for implementation of the VOW Act 
affect resource requirements?

    Response: VA has sufficient resources in the FY 2012 budget and FY 
2013 budget request to implement the Veterans Retraining Assistance 
Program (VRAP) provisions of the VOW to Hire Heroes Act of 2011. To 
ensure that VA can effectively implement VRAP, our 2013 budget request 
reflects the resources to support hiring 166 Veterans claims examiners 
to process claims. This temporary staffing increase equates to 85 full 
time equivalent (FTE) in 2012 and 90 FTE in 2013. These resources will 
allow us to manage increased workload and avoid disrupting current 
claims processing workload. VA will administer payments under VRAP from 
amounts appropriated for the payment of readjustment benefits. The 
Memorandum of Understanding between the Department of Labor and VA is 
not expected to affect resource requirements.

    Question 7: Please detail how VA's budget reflects the needed 
funding to adjust current IT systems for the Montgomery GI Bill to 
account for the re-training program added by the VOW to Hire Heroes Act 
of 2011?

    Response: The Veterans Retraining Assistance Program (VRAP) 
provision was signed into law on November 21, 2011, as part of the VOW 
to Hire Heroes Act of 2011. The Act authorizes VA to spend no more than 
$2 million in information technology expenses from the readjustment 
benefits account for the administration of this program. This is an in-
house development effort and funds from the readjustment benefits 
account will be used as needed to cover the project.

    Question 8: I understand that the funding for the long-term IT 
solution for the Post 9/11 GI Bill was decreased by $50 million. That 
reduction prevents development and fielding of the phase that fully 
automates the adjudication and payment system. What is VA's plan for 
this project? Will this project be a priority within IT funds requested 
in FY 2013?

    Response: The Consolidated Appropriations Act of 2012 (P.L. 112-74) 
provides $52 million for continued development of an automated claims 
processing system for the Post 9/11 GI Bill, known as the Long Term 
Solution (LTS). The initial end-to-end technology solution for 
automation of Post 9/11 GI Bill claims is expected in July 2012. FY 
2013 planning will focus on expanding the automated claims processing 
capabilities of the LTS system.

    Question 9: What is the negative impact, if any, of the expiration 
of VA's authority to pool mortgages under section 3720 of title 34 
U.S.C.?

    Response: Please note that the authority cited above is included 
under section 3720 of title 38 U.S.C., not 34 U.S.C. It expired on 
December 31, 2011.
    VA, in cooperation with OMB, is currently conducting a review of 
options relating to managing the Vendee Direct Loan Portfolio, 
including the potential of an extension of this authority. The review 
will focus on both the direct and indirect costs associated with Vendee 
loan sales.

    Question 10: Please provide a list of each Medical Center and 
Veterans Integrated Service Network (VISN) Director position vacant, by 
location, and the total number of days the positions have been vacant.

    Response: VA's SES positions are essential to fulfilling the 
Department's mission to care for the Nation's Veterans, their families 
and survivors. Upon Secretary Shinseki's appointment, President Obama 
directed him to transform the Department into a 21st century 
organization. Fulfilling this mandate requires that VA keeps executive 
positions filled and prioritizes filling them.
    When the Secretary arrived, he realized that transforming VA 
required him to change the way VA managed senior executives. In the 
fall of 2009, he centralized management of the entire executive cadre 
and established a corporate office to do so. In early 2010,
    VA hired a new director for the corporate office and began laying 
the foundation for corporate management. Since then, we have made vast 
improvements in the effectiveness of VA's executive cadre.
    We have revamped the SES performance management system into an 
effective tool for developing our strategic leaders to provide the best 
possible care and service to Veterans. Top VA leadership is involved in 
this process, and every executive's performance is rated by 2 levels of 
management. VA is preparing to implement the new government-wide SES 
performance appraisal system in FY 2012 and fully incorporate 
performance management into executive life cycle management and 
development.
    VA has developed a robust executive development program designed to 
ensure each executive is prepared for success. VA conducts executive on 
boarding to ease an executive's assimilation into VA's leadership 
cadre. VA develops an individual, tailored transition plan for each new 
executive that identifies specific actions or experiences the executive 
needs to fulfill within a specified time period. VA mentors each 
executive and assigns a coach to new executives. All VA executives are 
attending an executive training program that focuses on strategic 
leadership. We accomplish succession planning for executive cadre 
positions by moving executives to positions of greater scope and 
responsibility and developing replacements through VA's SES Candidate 
Development Program. VA also recruits executives from outside VA and 
outside the Federal government to ensure VA's executive cadre is 
diverse in the broadest sense.
    To attract and retain the best leaders, we use all the tools 
available to us including recruitment, relocation, and retention 
incentives, as well as, performance awards to recognize our highest 
performers.
    VA is aggressively managing executive recruitment and has 
reengineered the process to reduce the time required to fill jobs. For 
VA's executive cadre as a whole, the average time to fill jobs has been 
reduced from 102 days in FY 2009 to 83 days in first quarter FY 2012.
    There are past examples of individuals who were placed in complex 
or challenging medical center director positions for which they were 
not yet well prepared. The Secretary recognized this and instituted an 
enterprise approach to filling these key leadership positions - 
focusing on strategic leadership competencies and VA-wide needs. The 
selection process now requires greater senior leader engagement. 
Interviews are conducted at multiple levels and nominations are 
endorsed by 2 or more levels of management. The Secretary approves 
every SES selection.
    VA is focused on hiring the right person for the right position and 
investing in each executive's development. VA leadership has 
prioritized filling senior executive positions with the right people in 
a timely manner. This is critical to improving delivery of services to 
the Nation's Veterans.
    Of the 152 Medical Center Director positions, 19 (12 percent) are 
vacant as of February 2, 2012 for an average of 156 calendar days. 
Breakdown follows:

      8 of the 19 (42 percent) were vacated after 11/1/11, and 
have been vacant for an average of 33 days.
      7 of the 19 (37 percent) vacancies have nominations 
awaiting approval from the Office of Personnel Management (required) or 
an established start date within the next 30 days.
      6 of the 19 (32 percent) vacancies have nominations 
pending approval.
      6 of the 19 (32 percent) have interviews underway.
      5 of the 19 have been announced more than once because of 
the difficulty finding acceptable personnel with the right skills and 
competencies.

    Of the 21 VISN Director positions in VA, 4 (19 percent) are vacant 
as of February 2, 2012 for an average of 29 calendar days.

      Three of the 4 were vacated on December 31, 2011; one on 
January 14, 2012.
      Permanent VISN Directors for two of the vacancies will be 
placed on March 11, 2012.
      Candidates for the other two positions are under review.


  VA Medical Center and Veterans Integrated Service Network (VISN) Director positions vacant, by location, and
                                  total number of days vacant (as of 2/2/2012)
----------------------------------------------------------------------------------------------------------------
                                                 Medical Centers
-----------------------------------------------------------------------------------------------------------------
           Location                   Vacant            Number of Days Vacant                 Comments
----------------------------------------------------------------------------------------------------------------
                     Bath, NY            6/5/2011                            242                               Candidate identified
----------------------------------------------------------------------------------------------------------------
                  Buffalo, NY           7/29/2011                            188                               Candidate selected
----------------------------------------------------------------------------------------------------------------
                  Altoona, PA           9/25/2011                            130                               Candidate selected
----------------------------------------------------------------------------------------------------------------
                   Butler, PA           7/31/2011                            186                               Candidate selected
----------------------------------------------------------------------------------------------------------------
               Clarksburg, WV           1/31/2012                              2                               Candidate identified
----------------------------------------------------------------------------------------------------------------
                  Augusta, GA          11/20/2011                             74                               Candidates under review
----------------------------------------------------------------------------------------------------------------
                Montgomery, AL           9/2/2011                            153                               Candidates under review
----------------------------------------------------------------------------------------------------------------
                 Bay Pines, FL           4/1/2011                            307                               Candidates under review
----------------------------------------------------------------------------------------------------------------
                     Miami, FL           1/3/2012                             30                               Candidates under review
----------------------------------------------------------------------------------------------------------------
                  Danville, IL           1/2/2012                             31                               Candidate selected
----------------------------------------------------------------------------------------------------------------
                    Tomah, WI            6/3/2011                            244                               Candidate selected
----------------------------------------------------------------------------------------------------------------
                   Poplar, MO          12/18/2011                             46                               Candidates under review
----------------------------------------------------------------------------------------------------------------
                  Jackson, MS           1/29/2011                            369                               Candidate identified
----------------------------------------------------------------------------------------------------------------
                Harlingen, TX           9/25/2011                            130                               Candidates under review
----------------------------------------------------------------------------------------------------------------
                  Phoenix, AZ           6/18/2011                            229                               Candidate selected
----------------------------------------------------------------------------------------------------------------
                    Boise, ID            7/3/2011                            214                               Candidate identified
----------------------------------------------------------------------------------------------------------------
                  Spokane, WA           11/3/2011                             91                               Candidate selected
----------------------------------------------------------------------------------------------------------------
                San Diego, CA           5/22/2011                            256                               Candidates under review
----------------------------------------------------------------------------------------------------------------
              Minneapolis, MN          12/31/2011                             33                               Candidates under review
----------------------------------------------------------------------------------------------------------------
                                                       Vacancy average: 156 days
----------------------------------------------------------------------------------------------------------------
               VISN Directors
----------------------------------------------------------------------------------------------------------------
          VISN 7, Atlanta, GA          12/31/2011                             33                               Candidate identified
----------------------------------------------------------------------------------------------------------------
          VISN 15, Kansas, MO           1/14/2012                             19                               Candidates under review
----------------------------------------------------------------------------------------------------------------
         VISN 16, Jackson, MS          12/31/2011                             33                               Candidate selected
----------------------------------------------------------------------------------------------------------------
          VISN 19, Denver, CO          12/31/2011                             33                               Candidate selected
----------------------------------------------------------------------------------------------------------------
                                                        Vacancy average: 29 days
----------------------------------------------------------------------------------------------------------------

    Question 11: What does the VA Acquisition Academy provide that the 
Federal Acquisition Academy doesn't? Please explain why these two 
Academies are not duplicative in their purpose.

    Response: This response was prepared under the impression that the 
reference to the ``Federal Acquisition Academy'' was intended to be the 
``Federal Acquisition Institute (FAI).'' VA believes that its VA 
Acquisition Academy (VAAA) both compliments and supplements the 
trainings offered by FAI.
    As described by FAI, this program was established in 1976, under 
the Office of Federal Procurement Policy Act, FAI is charged with 
fostering and promoting the development of a federal acquisition 
workforce. FAI facilitates and promotes career development and 
strategic human capital management for the acquisition workforce. In 
conjunction with its partners, FAI seeks to ensure availability of 
exceptional training, provide compelling research, promote 
professionalism, and improve acquisition workforce management.
    VAAA was created in 2008 to train and recapitalize VA's acquisition 
workforce who are responsible for approximately $16 billion in 
acquisitions annually. The VAAA tailors its courses to VA and civilian 
agency education requirements while still meeting FAI's Federal 
Acquisition Certification standards. To our knowledge, the FAI provides 
approximately 1,400 seats for all Federal Contracting Officers (CO) and 
Contracting Officer Representatives (COR) annually. In contrast, VAAA 
annually provides over 3,300 seats to COs and over 2,000 seats to CORs. 
To date, VA's Acquisition Academy has delivered more than 6,700 seats 
of training to COs and more than 3,700 seats to COR training. VAAA is a 
fully staffed and functional training organization that can also be 
leveraged across all Federal agencies. In addition to providing 
training to VA employees, the academy has served more than 200 students 
from eight other Cabinet- level agencies.
    Since February 2010, VAAA has also been delivering Program 
Management training supporting Federal Acquisition Certification for 
Program/Project Management with over 10,000 seats delivered. VAAA's 
current program includes an on-the-job application component; a 
comprehensive performance based certification exam; and a robust 
effectiveness evaluation and continuous improvement process. The 
trainings described above are offered through the VAAA's Acquisition 
Internship School, Contracting Professional School, and Program 
Management School.

    Question 12: Please detail the total number of SES performance 
bonuses awarded in the preceding 12 month period and the total dollar 
amount of those awards.

    Response: For the 12-month period beginning February 1, 2011, and 
ending January 31, 2012, VA granted 244 SES performance awards and 
spent $2,823,922 on these awards. This includes 1 bonus deferred from 
the FY 2010 performance cycle. Performance awards are based on Fiscal 
Year performance and are normally awarded at the end of the calendar 
year.

                                 
 POST-HEARING QUESTIONS FROM CHAIRMAN JEFF MILLER TO THE DEPARTMENT OF 
                         VETERANS AFFAIRS (VA)
    1. In responses to pre-hearing questions VA stated that the 
Affordable Care Act (ACA) has ``strategic implications for VA.'' VA 
also stated in response to pre-hearing questions that it ``has and will 
continue to review how the health care reform law may influence VA 
health care programs.''

    a. What are the strategic implications?

    b. Please provide the results of any review VA has conducted to 
date regarding the influence the ACA may have on VA health care 
programs.

    2. VA's appropriation request is based, largely, on VA's Enrollee 
Health Care Projection Model (Model) estimates. Key components of the 
Model include the enrollee population and utilization.

    a. Recognizing the difficulty of forecasting utilization behavior, 
how were the ``strategic implications'' of the ACA on potential 
enrollment and utilization factored into the FY 2014 advance request?

    b. Going forward, how will the strategic implications of the ACA 
influence resource requests in subsequent budget submissions?

    3. What is the current backlog of non-recurring maintenance 
projects?

    4. The following questions are based on information provided to 
Committee staff on February 24, 2012, explaining the overestimation of 
resources in FY 2012 and FY 2013:

    a. When did VA first learn that it had significantly overestimated 
resource requirements for FY 2012 and FY 2013?

    b. When was the decision made to reallocate those overestimated 
resources in the ``initiative'' areas outlined in the February 24, 
2012, briefing materials?

    c. Who made that decision?

    d. When were the resources actually provided to the field for each 
of those initiatives?

    e. It appears that VA made significant downward adjustments from 
what the Model suggested was necessary for non-recurring maintenance 
(NRM). Please explain what the Model's original estimate was based on 
and, given the backlog of NRM projects, why VA decided to significantly 
reduce money allocated for NRM. Is it that a large number of NRM 
projects that comprise the backlog aren't deemed critical, i.e., 
maintenance can be deferred because healthcare to veterans or employee 
safety won't be compromised? Please explain VA's decision making 
process in this area.

    f. One of the initiatives VA reallocated overestimated money for 
was ``Improving Mental Health.'' Please describe that initiative.

    5. What changes in law are required (e.g., extended or increased 
authorizations, etc.) to allow the resources requested in the FY 2013 
budget to be spent? Please list the dollar amounts that, if 
appropriated, VA will not have authority to spend absent Congressional 
authorization.

    6. What is the 3-year average expenditure on VA's bonus program 
(performance, retention, and relocation)?

    7. At a recent Congressional staff briefing on VA's major medical 
lease program it was revealed that delays associated with 7 health care 
centers authorized in Public Law 111-82 were largely attributable to an 
internal debate among senior VA leaders about the wisdom of moving 
forward with them at all. Who were the senior VA leaders responsible 
for holding these projects back from their original schedule? When was 
the decision made to ultimately move forward with them? Please provide 
documentation of when the decision was made to ultimately move forward 
with these projects.

    8. Please provide information on how the FY 2012 budget will/has 
changed to fully implement the VOW to Hire Heroes Act and how the 
budget request for FY 2013 will satisfy requirements to fully implement 
this Act.

    a. How much will the FY2013 outreach budget be used to promote the 
retraining program of the VOW to Hire Heroes Act?

    b. Will VA's outreach plan for the VOW to Hire Heroes Act contain 
ways to partner with agencies like DoD, IRS, DOL, and others to provide 
information to eligible veterans?

    c. Does the outreach plan include funding for a national 
advertising program?

    9. VA's response to the Committee's pre-hearing questions indicated 
that it was planning to hire additional FTE for the Education Service 
to process applications for the retraining provision of the VOW to Hire 
Heroes Act of 2011. However, the budget request for FY 2013 shows a 
reduction in the number of FTE at the education service.

    a. Can you please describe this apparent variance?

    b. Would keeping these additional FTE on staff reduce processing 
times for the Retraining assistance provided under the VOW to Hire 
Heroes Act of 2011?
NCA Questions
    10. Please provide an update on NCA's efforts to reconcile cemetery 
placement maps and headstones at all VA cemeteries.

    a. How many cemeteries have completed this review?

    b. How many cemeteries are still in need of this review?

    c. How many misidentified graves were found?

    d. What steps were taken to notify families and correct these 
errors?

    e. What is the department going to do to ensure these types of 
mistakes never happen again?

    11. Please describe the reason behind increases in both of NCA's 
``personal services'' and ``other accounts''?

    12. Please provide more information on how VA will choose the two 
new cemeteries or plots of land to be open to new burial under NCA's 
new rural commitment and how VA would provide upkeep at these 
cemeteries and if this upkeep will be contracted out.

    13. The Millennium Study identified a significant number of one-
time repairs required at NCA cemeteries. In response, Congress has 
increased NCA's budget for these and other identified repairs over the 
last decade.

    a. How many projects did VA confirm as needing repairs following 
the Millennium Study and what was the cost of addressing those repairs?

    b. Which projects have been addressed with funding provided, and 
how many remain (and how much will it cost to address them)?
VBA Mandatory Account Questions
    14. There has been rapid growth of Compensation and Pension 
obligations, going from $53.9 billion in FY2011 to an estimated $64.7 
billion FY 2013.

    a. What are the symptoms of this growth?

    b. Why do you believe we are seeing an increase in the average 
payment to veterans by almost $1,000 per payment?

    c. Do you believe that VA's current compensation system provides 
compensation that is directly related to a servicemember's disability 
and quality of life?

    15. Please expand on VA's legislative proposal to have Chapter 33 
tuition and fee payments paid directly to students instead of schools?

    a. What impact will this have on overpayments by VA to students 
when they change their rate of pursuit of study or drop out entirely?

    b. Will VA provide the tuition and fee payments in a lump sum or in 
monthly installments as is done under the Chapter 30 program?

    c. What fraud prevention measures would be instituted if this 
provision were to become law?

    16. One of VA's legislative proposals is to increase the funding 
for the contracting of educational and vocational rehabilitation 
counseling under chapter 36. What has been the utilization of the 
current funding and what improvements do you believe need to be made to 
improve participation in this program?

    17. In VA's response to the Committee's pre-hearing questions VA 
stated that OMB was currently reviewing what the impact will be on VA's 
home loan program if Congress does not re-authorizing the pooling 
authority for VA mortgages. This authority expired on December 31, 
2011. When do you expect this review to be completed?
VBA GOE Questions
    18. On page 2A-8 of Volume 3 of the budget submission, VA announced 
that its obligations for contract medical examinations will increase by 
11.8 million, or approximately 55,000 additional contract examinations. 
In what circumstances is VA relying on contract examinations rather 
than examinations provided by VHA?

    (a) At 4B-18, VA states that it is using three companies for 
contract examinations. What are the three companies?

    (b) What training mechanisms are in place to ensure that contract 
examinations meet the required adequacy standards?

    19. At 2A-13, VA states that the number of veterans in receipt of a 
total disability rating based on individual unemployability (TDIU) is 
gradually increasing. What portion of this increase is OIF/OEF 
Veterans?

    (a) Similarly, with regard to the increase in special monthly 
compensation (SMC) funding, are these numbers also going up because of 
the types of injuries seen in OIF/OEF Veterans or other factors?

    (b) Although VA's total number of claims increased by about 3 
million (at 2A-22), its overall benefits obligations increased by 
approximately $10 billion. What portion of this is due to:

        1. New claims from OIF/OEF Veterans?
        2. TDIU/SMC for OIF/OEF Veterans?
        3. Number/types of injuries seen in OIF/OEF Veterans?

    20. Throughout the budget, mention is repeatedly made that VA will 
track metrics for the number of claims that remain pending after VA's 
target processing time of 125 days. What is VA's planned response if 
these numbers are not being met?

    (a) Other than tracking through VBMS, is VA planning on utilizing 
any new strategies to reach this target goal?

    (b) What type of improved metrics/methodology is VA using to keep 
track of these statistics?

    21. At 4A-3, VA reiterates that ``our employees are the key to our 
success.'' Please elaborate on this assertion, as it appears that 
hiring many new employees since 2007 has not greatly contributed to 
reducing the backlog.

    (a) What actions are you taking to decrease training time? What is 
the basis for the frequently cited assertion that it takes 2 years to 
fully train an examiner?

    (b) Has VA made any recent updates to its training procedures?

    22. At 4A-4, how did you arrive at the case-management approach/
processing lanes?

    (a) Where is this system being tested?

    (b) Do you have initial results you can share?

    23. At 4A-4, what initial feedback have you received from the use 
of Disability Benefit Questionnaires?

    (a) Do you have any procedures in place to follow up with private 
physicians in compliance with the CAVC's decision in Savage v. 
Shinseki?

    (b) Does the use of DBQ's have the potential to save VA money on 
using contract examinations?


    24. At 4A-14; 4F-5 - you note that you are already using an 
entirely paperless process for insurance claims. Is this the same 
platform as VBMS?

    a. How is the scanning for insurance claim documents handled?

    b. Are there any data showing that this paperless system increases 
processing times or quality?

    c. Have there been any unforeseen costs associated with using this 
paperless processing or the insurance self-service website?


    25. At 4B-8 you mention a study by George Washington University on 
earnings loss and Musculoskeletal system. Please elaborate on the 
specifics of this study, including its intended completion date and its 
intended effect on the ongoing modernization of VA's rating schedule.

    26. At 5C-2, with regard to the newly authorized FTEs, how many 
will be attorneys and how many will be support staff?

    a. What training procedures does the Board have in place to handle 
so many new FTEs?

    b. What else is the Board looking at to address its backlog besides 
additional FTEs?

    27. Please describe what the budgetary impact will be on the recent 
expansion of T-SGLI for loss of reproductive organs? How will this 
decision impact future budget requests and what other injuries is VA 
considering adding for coverage under the TSGLI program?

    28. The budget documents stated that there are nearly 3,800 appeals 
still being processed for payments from the Filipino Veterans 
Compensation Fund and that over half of the 42,800 claims filed for 
compensation have been denied.

    a. When do you expect the remaining appeals to be resolved?

    b. Is there any idea of how much of the remaining appropriation 
will be left at the conclusion of the decisions on these appeals?

    c. What is your opinion on the potential for fraud in this program 
and what steps has the Department taken to ensure the correct 
adjudication of these claims?

    d. What is the status of the two ongoing law suits involving this 
account?

    29. Please provide more information about the rules-based process 
job aide that will be included in the first ``design team'' and if this 
system will be integrated with VBMS?

    a. What other type of rules-based systems will be part of the final 
VBMS system?

    b. What is VA's plan for scanning documents for the VBMS system? 
Will this be done with private contractors?

    c. Where will the scanning take place and what is the long-term 
scanning plan?

    d. Are you partnering with Veteran Service Organizations and other 
interested stakeholders as you develop the VBMS system?

    e. When do you expect all regional offices to use VBMS and not rely 
on other legacy systems?

    f. How will VBMS be integrated with the eBenefits and other VBA 
systems?

    g. VA's budget states that the nationwide deployment of VBMS will 
begin in FY2012 and be completed by the end of FY2013. Please provide a 
detailed schedule of this rollout.

    h. How has the functional requirements for VBMS evolved since the 
program was originally developed and funded? Has there been a reduction 
in the system requirements or functions from when VBMS was originally 
developed?

    30. The contracted Fast Track system is used to expedite the 
processing of presumptive Agent Orange claims. This system is being 
funded by VA Innovations Initiatives. Can you give some figures that 
reflect the cost of this system and its estimated long term usability?

    a. Using this system, how much oversight do you have on the medical 
evidence used in these claims and will this system provide 
communication between the medical evaluator and the person processing 
the claims?

    b. Could this result in an assembly line of Agent Orange claims 
approvals with little to no oversight of the origin and condition of 
the actual presumptive diagnosis?

    31. The budget states that VA's disability claims production has 
increased. That should be expected after such a large staffing increase 
over the last decade. What I'm interested in is the level of individual 
productivity of VA employees.

    a. What is the productivity level of each claims examiner?

    b. How many claims should each examiner be responsible for 
accurately deciding in a given year?

    c. Are you concerned about the continued reports by the Office of 
Inspector General that show major quality issues at the Regional 
Offices that they have visited?

    d. What steps will VBA take with this budget to improve overall 
quality production?

    32. VBA and AFGE recently modified article 67 of their master 
contract on skills certification. While I appreciate VA and AFGE's 
apparent move to meet the requirements of H.R. 2349, as amended, a bill 
passed by House last fall, I do have to question why an employee would 
not be held accountable under this modification for failure to pass 
this skills certification test as required by P.L. 110-389.

    a. While I understand this test is in place so a claims processor 
can move up a GS level, why does VA not administer testing to test 
current knowledge and competence?

    b. Will all employees and managers be required to take the skills 
certification test as required under both P.L. 110-389 and the modified 
article 67 of the master contract?

    c. Are you at all concerned that current certification testing 
shows only a 57% pass rate? What steps has VA taken to address issues 
surrounding this test and involve union partners in developing this 
test as required by P.L. 110-389?

    33. What statistical analysis was completed on the effectiveness of 
the 6.0 release of the Long Term Solution for Post 9/11 GI Bill Claims 
to justify the shifting of close to 200 FTE from the Education Service 
to the Compensation Service? How was the impact of the re-training 
provisions of the VOW to Hire Heroes Act taken into account and what is 
the target for the average days to process these type of claims?

    34. One of the largest complaints that we receive from veterans is 
the lack of customer satisfaction and consistent answers to questions 
provided by the GI Bill call center. What efforts have you undertaken 
to improve the dropped call rate and improve customer satisfaction at 
the call center?

    35. Please explain why there is a planned FTE reduction in the Loan 
Guaranty Service while the personal services line has a request for a 
$2.4 million increase?

    36. How much will the appraisal management services and the 
automated valuation management services cost and how will it add value 
to training and other benefits?

    37. What measures are in place to review the performance of the Vet 
Success on Campus program?

    38. Please provide more information about the Voc Rehab Service's 
plan to improve employment-based rehab by 15%.

    39. Please provide the justification for reducing the FTE for the 
Insurance Service by 21.
GOE, General Administration Questions
    40. What is the justification for the additional funding of 20 FTE 
for the Enterprise Program Management Office of the Office of Policy 
and Planning?

    41. What portion of the Office of Public and Intergovernmental 
Affairs budget is used on providing national advertising campaigns to 
inform veterans and the public about services and benefits provided by 
VA?

    42. The budget documents state that the National Veterans Outreach 
Office of the Office of Public and Intergovernmental Affairs is working 
to develop a system to track the performance of VA's outreach programs. 
When do you expect this tracking system to be complete and what type of 
data will it collect?

    43. Please provide more information about the Homeless Veteran 
Supportive Employment Program and what type of jobs and wages/salary 
the 360 homeless or formally homeless veterans are doing as part of 
this program.

    44. How does the Office of Public Affairs and Intergovernmental 
Affairs measure what percent of news coverage is positive or neutral in 
tone as listed in the office's performance measures?

    45. The performance measures for the Office of Congressional and 
Legislative Affairs tracks the percentage of testimony submitted to 
Congress within the required timeframe, percentage of responses to pre- 
and post-hearing questions that are submitted to Congress within the 
required timeframe, and the percentage of title 38 reports that are 
submitted to Congress within the required timeframe. What is the 
definition of the ``required timeframe'' for each of these measures and 
who sets this definition?

                                 
POST-HEARING RESPONSES FROM THE DEPARTMENT OF VETERANS AFFAIRS (VA) TO 
                          CHAIRMAN JEFF MILLER
    Question 1: In responses to pre-hearing questions VA stated that 
the Affordable Care Act (ACA) has ``strategic implications for VA.'' VA 
also stated in response to pre- hearing questions that it ``has and 
will continue to review how the health care reform law may influence VA 
health care programs.''

    a. What are the strategic implications?

    b. Please provide the results of any review VA has conducted to 
date regarding the influence the ACA may have on VA health care 
programs.

    Response: VA's assessment of ACA examined a number of different 
areas including:

      New health care coverage options for Veterans via 
Medicaid expansion;
      Premium tax credits and exchange eligibility;
      Reliance on VA by Veterans who are enrolled in or use 
multiple systems of care;
      Maintaining affiliations with academic medical centers;
      Ability to attract and maintain a highly skilled health 
care workforce; and
      Impact of Accountable Care Organizations (ACOs) and other 
payment reforms on VA costs, care coordination, and information 
sharing.

    VA has been proactive in understanding the potential impacts of ACA 
and in ensuring that VA health care programs remain responsive to 
Veterans' needs.

    Question 2: VA's appropriation request is based, largely, on VA's 
Enrollee Health Care Projection Model (Model) estimates. Key components 
of the Model include the enrollee population and utilization.

    a. Recognizing the difficulty of forecasting utilization behavior, 
how were the ``strategic implications'' of the ACA on potential 
enrollment and utilization factored into the FY 2014 advance request?

    b. Going forward, how will the strategic implications of the ACA 
influence resource requests in subsequent budget submissions?

    Response: In 2010, VA worked with its consulting health actuary, 
Milliman, to assess Veteran health care enrollment and reliance in the 
Commonwealth of Massachusetts before and after the implementation of 
universal health care mandate there. This analysis demonstrated no 
measurable impacts on either enrollment or reliance in the short term. 
Although the experience in Massachusetts may not mirror that of the 
country as a whole, there is insufficient evidence at this time to 
warrant any material change in the Model assumptions for the 2014 
advance appropriations request related specifically to ACA.
    VA is collaborating with other federal agencies to understand their 
activities regarding health reform to ensure a coordinated approach to 
implementing the law as currently enacted. This collaboration includes 
efforts to clarify Veteran eligibility related to the premium tax 
credit provided in the legislation as this will also impact VA's 
analysis.
    Based on updated analysis, VA will reassess potential changes to 
the 2014 advance appropriations request as a result of the ACA in the 
2014 Budget.

    Question 3: What is the current backlog of non-recurring 
maintenance projects?

    Response: The VA 2013 Long Range Capital Plan identifies 2,789 NRM 
projects with an estimated cost of $9.2 billion. The 2013 request 
includes $710 million to address the design needs for 180 of these 
projects.

    Question 4: The following questions are based on information 
provided to Committee staff on February 24, 2012, explaining the 
overestimation of resources in FY 2012 and FY 2013:

    a. When did VA first learn that it had significantly overestimated 
resource requirements for FY 2012 and FY 2013?

    Response: VA's FY 2012 President's Budget estimates for FY 2012 and 
the FY 2013 advance appropriation assumed that Federal employees would 
receive pay raises in those years. Prior to submission of the FY 2013 
President's Budget, the President imposed a freeze on Federal employee 
pay for Calendar Years 2011 and 2012. The FY 2013 President's Budget 
adjusted the FY 2012 and FY 2013 estimates to reflect that action, 
accounting for the majority of the revised estimate. Other adjustments 
in the FY 2013 President's Budget included updates to Long-Term Care 
and other utilization factors, as well as updates to morbidity and 
aging assumptions about the enrolled Veteran population.

    b. When was the decision made to reallocate those overestimated 
resources in the ``initiative'' areas outlined in the February 24, 
2012, briefing materials?

    Response: During the summer of 2011, VA officials reviewed and 
validated the revised estimates and their impact on the 2012 budget 
estimates and 2013 request. During the fall of 2011, VA worked with OMB 
to review budget requirements, the updated model projections, and VA's 
request to reinvest available funding from the updated estimates to 
programs that have been a priority to Veterans, VA, and the Congress, 
including activations of new or replacement medical facilities, 
implementation of the Caregivers and Veterans Omnibus Health Services 
Act of 2010, and eliminating Veteran homelessness. The results of those 
deliberations were released with the annual budget request in February 
2012.

    c. Who made that decision?

    Response: The decision occurred as part of the Administration's 
process that produced the President's 2013 Budget.

    d. When were the resources actually provided to the field for each 
of those initiatives?

    Response: For the FY 2012 appropriation, resources were provided to 
the field for these initiatives in October and November 2011. Resources 
for the FY 2013 advance appropriation have not yet been distributed to 
the field these funds will be distributed at the start of the fiscal 
year this October.

    e. It appears that VA made significant downward adjustments from 
what the Model suggested was necessary for non-recurring maintenance 
(NRM). Please explain what the Model's original estimate was based on 
and, given the backlog of NRM projects, why VA decided to significantly 
reduce money allocated for NRM. Is it that a large number of NRM 
projects that comprise the backlog aren't deemed critical, i.e., 
maintenance can be deferred because healthcare to veterans or employee 
safety won't be compromised? Please explain VA's decision making 
process in this area.

    Response: The model projects NRM based on what was obligated in the 
base year (in this case 2010) and adjusts the future years based upon 
cost trends and the changes in patient workload. Beginning with the FY 
2012 Budget, VA does not use the model estimate to develop its NRM 
request, but bases its estimate in part upon the Strategic Capital 
Investment Planning (SCIP) process. VA does an engineering-based review 
of the condition of all of its buildings on a rotating basis every 
three years. This process results in the development of VISN-level 
projects that are annually reviewed and ranked for the overall capital 
investment process. VA sets the funding level of the NRM program as 
part of its determination of the overall budget during the final 
deliberation process.
    The NRM decision-making process needs to be viewed within the 
Department's overall efforts to plan for infrastructure needs. 
Developed first in the FY 2012 budget process, SCIP is a VA-wide 
planning tool used to evaluate and prioritize capital infrastructure 
needs for the current Budget cycle and for future years. SCIP 
quantifies the infrastructure gaps that must be addressed for VA to 
meet its long-term strategic capital targets, including providing 
access to Veterans, ensuring the safety and security of Veterans and 
our employees, and leveraging current physical resources to benefit 
Veterans.
    VA has dedicated approximately 30 percent of its 2013 Capital 
Budget Request for NRM projects. The 2013 NRM request is $710 million. 
Of the $710 million requested, $632 million (89 percent) will fund 
projects already partially funded by Congress and projects determined 
by local needs. Within the spending targets established in the 
President's 2013 Budget request, VA's allocation for capital projects, 
including NRM projects, is one that:

      Emphasizes completing prior appropriated projects that 
provide healthcare, memorial, and benefits delivery services to 
Veterans;
      Impacts more VA medical centers (VAMC) and corrects more 
seismic, safety, and security issues in less time through a focus on 
minor construction projects;
      Completes a large number of grandfathered projects, 
attacking and reducing the capital backlog; and
      Recognizes the importance of alternative strategies to 
traditional capital approaches to meet overall needs, such 
telemedicine, extended hours, mobile clinics, and fee basis contract 
care.

    f. One of the initiatives VA reallocated overestimated money for 
was ``Improving Mental Health.'' Please describe that initiative.

    Response: The initiative to Improve Veterans Mental Health (IVMH) 
is one of VA's 16 major transformational initiatives. It began in FY 
2010 and is operationally aligned under the Office of Healthcare 
Transformation within the Veterans Health Administration (VHA). The 
overall goals of IVMH are to:

      Develop the infrastructure necessary to maintain full 
implementation of the VHA Handbook on Uniform Mental Health Services in 
VA Medical Centers and Clinics, including the needed IT resources, 
workforce development, and on-going monitoring and technical 
assistance;
      Initiate public health outreach and education to support 
Veterans' mental health in the communities in which they live, work, go 
to school, raise families, and otherwise contribute to society, 
including through the use of all available technologies; and
      Complete the 28 strategic actions in the Department of 
Veterans Affairs (VA)/ Department of Defense (DoD) Integrated Mental 
Health Strategy and strengthen the partnership between VA and DoD in 
support of the mental health of Servicemembers and Veterans

    Question 5: What changes in law are required (e.g., extended or 
increased authorizations, etc.) to allow the resources requested in the 
FY 2013 budget to be spent?Please list the dollar amounts that, if 
appropriated, VA will not have authority to spend absent Congressional 
authorization.

    Response: VA's complete list of expiring authority appears in 
Volume I of the fiscal year (FY) 2013 President's Budget: Legislative 
Authorization of Programs, page 3C-1. New authorities are requested and 
described on pages 3A-1 - 3A-14 and page 3B-1 of the same volume. The 
following are authorities which expire over the next year and would 
affect the VA budget with respect to either the spending of funds or 
collection of revenue:



----------------------------------------------------------------------------------------------------------------
                                                           P.L.-Citation
      Title        Section of U.S.C.- Public Law (P.L.)     (Most Recent     Expiration Date         Amount
                        Citation           Citation          Extension)
----------------------------------------------------------------------------------------------------------------
                        Programs for Homeless Veterans
----------------------------------------------------------------------------------------------------------------
Homeless Veterans  38 U.S.C. 2021(e)                P.L. 107-95        P.L. 112-37   9/30/12                N/A
    Reintegration                      section 5(a)(1)      section 10(b)
         Programs
----------------------------------------------------------------------------------------------------------------
         Housing     38 U.S.C. 2041                 P.L. 109-461       P.L. 112-37  12/31/12                N/A
   Assistance for                          section 705      section 10(e)
         Homeless
         Veterans
----------------------------------------------------------------------------------------------------------------
Grant Program for  38 U.S.C. 2061(c)                P.L. 107-95        P.L. 112After FY 2012     $235 million -
         Homeless                      section 5(a)(1)         section 13      (for funding)    reverts to $150
    Veterans with                                                                                       million
    Special Needs
----------------------------------------------------------------------------------------------------------------
       Financial   38 U.S.C. 2044(e)                P.L. 110-387       P.L. 112After FY 2012       $300 million
   Assistance for                          section 606      section 12(a)
       Supportive
     Services for
            Very Low-Income
         Veterans
      Families in
        Permanent
          Housing
----------------------------------------------------------------------------------------------------------------
                                 Medical Care Programs
----------------------------------------------------------------------------------------------------------------
   Treatment and   38 U.S.C. 2031(b)                P.L. 105-114       P.L. 112-37  12/31/12       $196 million
   Rehabilitation                       section 202(a)      section 10(c)
    for Seriously
 Mentally Ill and
         Homeless
       Veterans -
          General
        treatment
----------------------------------------------------------------------------------------------------------------
   Treatment and   38 U.S.C. 2033(d)                P.L. 105-114       P.L. 112-37  12/31/12           in above
   Rehabilitation                       section 202(a)      section 10(d)
    for Seriously
 Mentally Ill and
         Homeless
       Veterans -
       Additional
      services at
          certain
        locations
----------------------------------------------------------------------------------------------------------------
            Co-Payments and Medical Care Cost Recovery
----------------------------------------------------------------------------------------------------------------
 Co-Payments for          38 U.S.C.                 P.L. 111-163,      P.L. 111-163, 9/30/12         $3 million
    Hospital Care     1710(f)(2)(B)        section 517        section 517
 and Nursing Home
             Care
----------------------------------------------------------------------------------------------------------------
Medical Care Cost         38 U.S.C.                 P.L. 111-163,                    10/1/12       $980 million
         Recovery     1729(a)(2)(E)        section 518
 Authority (Third-
   party Billing)
----------------------------------------------------------------------------------------------------------------
General Operating Expenses, Veterans Benefits Administration
----------------------------------------------------------------------------------------------------------------
     Philippines   38 U.S.C. 315(b)                 P.L. 102-83        P.L. 112-74  12/31/12                N/A
  Regional Office                         section 2(a)        section 234
----------------------------------------------------------------------------------------------------------------
Contract Medical     38 U.S.C. 5101                 P.L. 108-183       P.L. 111-275 12/31/12       $251 million
 Disability Exams              note        section 704        section 809
     - (Temporary
    Authority for
   Performance of
          Medical
       Disability
  Examinations by
         Contract
      Physicians)
----------------------------------------------------------------------------------------------------------------
                                     Benefits Programs
----------------------------------------------------------------------------------------------------------------
Annual Disability    38 U.S.C. 1114                 P.L.85-857         P.L. 112-53  Annually       $772 million
     Compensation              note        section 302          section 2
   Cost of living
       Adjustment
----------------------------------------------------------------------------------------------------------------

    Question 6: What is the 3-year average expenditure on VA's bonus 
program (performance, retention, and relocation)?

    Response: The table, below, provides data on all VA monetary awards 
with effective dates between FY 2009 - 2012. Data are current as of 
March 31, 2012. SES performance awards are paid in the fiscal year that 
follows the fiscal year in which the actual performance occurs. For 
example, SES performance awards reported in FY 2012 were for FY 2011 
performance.


----------------------------------------------------------------------------------------------------------------
                     FY 2009                            NO. OF AWARDS                    TOTAL AWARDS
----------------------------------------------------------------------------------------------------------------
                          841 GROUP CASH AWARD                      43,316                          $ 22,183,613
----------------------------------------------------------------------------------------------------------------
                                     845 TRAVEL SAVINGS INCENTIVE       90                              $ 56,224
----------------------------------------------------------------------------------------------------------------
                                 849 INDIVIDUAL CASH AWARD (NRB)    81,105                          $ 49,421,708
----------------------------------------------------------------------------------------------------------------
                               878 PRESIDENTIAL RANK AWARD              15                             $ 616,196
----------------------------------------------------------------------------------------------------------------
                     879 SES PERFORMANCE AWARD                         166                           $ 2,833,629
----------------------------------------------------------------------------------------------------------------
                                 840 INDIVIDUAL CASH AWARD (RB)    100,820                         $ 140,573,419
----------------------------------------------------------------------------------------------------------------
                                  817 STUDENT LOAN REPAYMENT           103                             $ 695,052
----------------------------------------------------------------------------------------------------------------
                      825 SEPARATION INCENTIVE                           0                                   $ -
----------------------------------------------------------------------------------------------------------------
                                 842 INDIVIDUAL SUGGESTION/INVENTION AW222                              $ 51,492
----------------------------------------------------------------------------------------------------------------
          843 GROUP SUGGESTION/INVENTION AWARD                          19                               $ 7,350
----------------------------------------------------------------------------------------------------------------
                                  844 FOREIGN LANGUAGE AWARD             0                                   $ -
----------------------------------------------------------------------------------------------------------------
                                   848 REFERRAL BONUS                1,425                             $ 712,178
----------------------------------------------------------------------------------------------------------------
                       889 GROUP AWARD - OTHER                       1,412                             $ 672,846
----------------------------------------------------------------------------------------------------------------
                                    948 SPECIALTY CERTIFICATION AWARD  690                             $ 856,517
----------------------------------------------------------------------------------------------------------------
                                     950 EXEMPLARY JOB PERF/ACHIEV AW1,167                           $ 3,511,148
----------------------------------------------------------------------------------------------------------------
                                          885 LUMP SUM PERF PAYMENT (RB-I8PA)                            $ 9,800
----------------------------------------------------------------------------------------------------------------
                                          886 LUMP SUM PERF PAYMENT(RBNI15A)                            $ 14,028
----------------------------------------------------------------------------------------------------------------
                                          887 LUMP SUM PERF PAYMENT (NR241                             $ 351,896
----------------------------------------------------------------------------------------------------------------
                                   RECRUITMENT                       5,569                          $ 48,554,956
----------------------------------------------------------------------------------------------------------------
                                            RELOCATION                 755                           $ 9,698,672
----------------------------------------------------------------------------------------------------------------
                                     RETENTION                      14,532                         $ 105,995,029
----------------------------------------------------------------------------------------------------------------
                                          TOTAL                    251,670                         $ 386,815,753
----------------------------------------------------------------------------------------------------------------
                 AVERAGE EXPENDITURE PER AWARD                                                           $ 1,537
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                     FY 2010                            NO. OF AWARDS                    TOTAL AWARDS
----------------------------------------------------------------------------------------------------------------
                          841 GROUP CASH AWARD                      33,087                          $ 16,219,211
----------------------------------------------------------------------------------------------------------------
                                     845 TRAVEL SAVINGS INCENTIVE      149                              $ 91,717
----------------------------------------------------------------------------------------------------------------
                                 849 INDIVIDUAL CASH AWARD (NRB)    69,734                          $ 45,837,752
----------------------------------------------------------------------------------------------------------------
                               878 PRESIDENTIAL RANK AWARD              10                             $ 400,510
----------------------------------------------------------------------------------------------------------------
                     879 SES PERFORMANCE AWARD                         197                           $ 2,856,968
----------------------------------------------------------------------------------------------------------------
                                 840 INDIVIDUAL CASH AWARD (RB)    125,029                         $ 175,450,691
----------------------------------------------------------------------------------------------------------------
                                  817 STUDENT LOAN REPAYMENT           271                           $ 1,962,845
----------------------------------------------------------------------------------------------------------------
                      825 SEPARATION INCENTIVE                           0                                   $ -
----------------------------------------------------------------------------------------------------------------
                                 842 INDIVIDUAL SUGGESTION/INVENTION AW182                              $ 43,394
----------------------------------------------------------------------------------------------------------------
          843 GROUP SUGGESTION/INVENTION AWARD                          43                               $ 5,385
----------------------------------------------------------------------------------------------------------------
                                  844 FOREIGN LANGUAGE AWARD             0                                   $ -
----------------------------------------------------------------------------------------------------------------
                                   848 REFERRAL BONUS                  860                             $ 506,987
----------------------------------------------------------------------------------------------------------------
                       889 GROUP AWARD - OTHER                       2,948                           $ 1,177,164
----------------------------------------------------------------------------------------------------------------
                                    948 SPECIALTY CERTIFICATION AWARD  998                           $ 1,268,761
----------------------------------------------------------------------------------------------------------------
                                     950 EXEMPLARY JOB PERF/ACHIEV AW1,585                           $ 2,308,593
----------------------------------------------------------------------------------------------------------------
                                          885 LUMP SUM PERF PAYMENT (RB-13LPA)                          $ 25,647
----------------------------------------------------------------------------------------------------------------
                                          886 LUMP SUM PERF PAYMENT(RBNI51A)                            $ 57,036
----------------------------------------------------------------------------------------------------------------
                                          887 LUMP SUM PERF PAYMENT (NR327                             $ 323,085
----------------------------------------------------------------------------------------------------------------
                                   RECRUITMENT                       3,456                          $ 34,215,756
----------------------------------------------------------------------------------------------------------------
                                            RELOCATION                 762                           $ 9,107,085
----------------------------------------------------------------------------------------------------------------
                                     RETENTION                      15,430                         $ 110,919,319
----------------------------------------------------------------------------------------------------------------
                                          TOTAL                    255,132                         $ 402,777,907
----------------------------------------------------------------------------------------------------------------
                 AVERAGE EXPENDITURE PER AWARD                                                           $ 1,579
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                     FY 2011                            NO. OF AWARDS                    TOTAL AWARDS
----------------------------------------------------------------------------------------------------------------
                          841 GROUP CASH AWARD                      33,307                          $ 15,417,012
----------------------------------------------------------------------------------------------------------------
                                     845 TRAVEL SAVINGS INCENTIVE      118                              $ 78,733
----------------------------------------------------------------------------------------------------------------
                                 849 INDIVIDUAL CASH AWARD (NRB)    78,976                          $ 51,546,813
----------------------------------------------------------------------------------------------------------------
                               878 PRESIDENTIAL RANK AWARD              12                             $ 460,861
----------------------------------------------------------------------------------------------------------------
                     879 SES PERFORMANCE AWARD                         238                           $ 3,457,762
----------------------------------------------------------------------------------------------------------------
                                 840 INDIVIDUAL CASH AWARD (RB)    140,486                         $ 182,847,647
----------------------------------------------------------------------------------------------------------------
                                  817 STUDENT LOAN REPAYMENT           471                           $ 3,351,101
----------------------------------------------------------------------------------------------------------------
                      825 SEPARATION INCENTIVE                           7                             $ 175,000
----------------------------------------------------------------------------------------------------------------
                                 842 INDIVIDUAL SUGGESTION/INVENTION AW165                              $ 47,880
----------------------------------------------------------------------------------------------------------------
          843 GROUP SUGGESTION/INVENTION AWARD                          83                              $ 42,030
----------------------------------------------------------------------------------------------------------------
                                  844 FOREIGN LANGUAGE AWARD             0                                   $ -
----------------------------------------------------------------------------------------------------------------
                                   848 REFERRAL BONUS                  641                             $ 355,678
----------------------------------------------------------------------------------------------------------------
                       889 GROUP AWARD - OTHER                       4,119                           $ 1,457,712
----------------------------------------------------------------------------------------------------------------
                                    948 SPECIALTY CERTIFICATION AWARD1,034                           $ 1,311,418
----------------------------------------------------------------------------------------------------------------
                                     950 EXEMPLARY JOB PERF/ACHIEV AW1,949                           $ 2,557,099
----------------------------------------------------------------------------------------------------------------
                                          885 LUMP SUM PERF PAYMENT (RB-I5PA)                            $ 7,648
----------------------------------------------------------------------------------------------------------------
                                          886 LUMP SUM PERF PAYMENT(RBN921A)                         $ 1,800,686
----------------------------------------------------------------------------------------------------------------
                                          887 LUMP SUM PERF PAYMENT (NR824                             $ 858,781
----------------------------------------------------------------------------------------------------------------
                                   RECRUITMENT                       2,477                          $ 28,858,378
----------------------------------------------------------------------------------------------------------------
                                            RELOCATION                 789                          $ 10,294,345
----------------------------------------------------------------------------------------------------------------
                                     RETENTION                      14,376                         $ 104,801,988
----------------------------------------------------------------------------------------------------------------
                                          TOTAL                    280,998                         $ 409,728,572
----------------------------------------------------------------------------------------------------------------
                 AVERAGE EXPENDITURE PER AWARD                                                           $ 1,458
----------------------------------------------------------------------------------------------------------------
                  3 YEAR AVERAGE (2009 - 2011)                                                           $ 1,525
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                   FY 2012 YTD                          NO. OF AWARDS                    TOTAL AWARDS
----------------------------------------------------------------------------------------------------------------
                          841 GROUP CASH AWARD                       4,125                           $ 2,055,677
----------------------------------------------------------------------------------------------------------------
                                     845 TRAVEL SAVINGS INCENTIVE       60                              $ 33,136
----------------------------------------------------------------------------------------------------------------
                                 849 INDIVIDUAL CASH AWARD (NRB)    15,335                           $ 9,627,059
----------------------------------------------------------------------------------------------------------------
                               878 PRESIDENTIAL RANK AWARD *             0                                   $ -
----------------------------------------------------------------------------------------------------------------
                     879 SES PERFORMANCE AWARD                         245                           $ 2,778,856
----------------------------------------------------------------------------------------------------------------
                                 840 INDIVIDUAL CASH AWARD (RB)    140,251                         $ 124,640,960
----------------------------------------------------------------------------------------------------------------
                                  817 STUDENT LOAN REPAYMENT            48                             $ 348,080
----------------------------------------------------------------------------------------------------------------
                      825 SEPARATION INCENTIVE                          33                             $ 809,185
----------------------------------------------------------------------------------------------------------------
                                 842 INDIVIDUAL SUGGESTION/INVENTION AWA47                              $ 13,814
----------------------------------------------------------------------------------------------------------------
          843 GROUP SUGGESTION/INVENTION AWARD                          15                               $ 9,733
----------------------------------------------------------------------------------------------------------------
                                  844 FOREIGN LANGUAGE AWARD             0                                   $ -
----------------------------------------------------------------------------------------------------------------
                                   848 REFERRAL BONUS                  177                              $ 85,665
----------------------------------------------------------------------------------------------------------------
                       889 GROUP AWARD - OTHER                         370                             $ 191,309
----------------------------------------------------------------------------------------------------------------
                                    948 SPECIALTY CERTIFICATION AWARD  449                             $ 569,834
----------------------------------------------------------------------------------------------------------------
                                     950 EXEMPLARY JOB PERF/ACHIEV AW1,112                           $ 1,171,759
----------------------------------------------------------------------------------------------------------------
                                          885 LUMP SUM PERF PAYMENT (RB-I0PA)                                $ -
----------------------------------------------------------------------------------------------------------------
                                          886 LUMP SUM PERF PAYMENT(R1,432A)                           $ 856,001
----------------------------------------------------------------------------------------------------------------
                                          887 LUMP SUM PERF PAYMENT (NR114                              $ 75,082
----------------------------------------------------------------------------------------------------------------
                                   RECRUITMENT                       1,171                          $ 10,380,721
----------------------------------------------------------------------------------------------------------------
                                            RELOCATION                 418                           $ 4,237,774
----------------------------------------------------------------------------------------------------------------
                                     RETENTION                      11,058                          $ 47,649,479
----------------------------------------------------------------------------------------------------------------
                                          TOTAL YTD                176,460                         $ 205,534,123
----------------------------------------------------------------------------------------------------------------
             AVERAGE EXPENDITURE PER AWARD YTD                                                            $1,165
----------------------------------------------------------------------------------------------------------------

    Question 7: At a recent Congressional staff briefing on VA's major 
medical lease program it was revealed that delays associated with 7 
health care centers authorized in Public Law 111-82 were largely 
attributable to an internal debate among senior VA leaders about the 
wisdom of moving forward with them at all. Who were the senior VA 
leaders responsible for holding these projects back from their original 
schedule? When was the decision made to ultimately move forward with 
them? Please provide documentation of when the decision was made to 
ultimately move forward with these projects.

    Response: In a briefing to the HVAC Committee staff on March 22, 
2012 on construction topics, Department staff extensively discussed 
several reasons for the delay in the leasing of Health Care Centers 
(HCCs) authorized in fiscal year 2010. These included difficulties in 
securing sites; making final determinations on the space and functional 
composition of the clinics; retaining support from private sector 
design teams; and a revalidation of VA HCC projects, among other 
reasons. In that discussion, on the topic of revalidation, Department 
staff advised the Committee staff that a Departmental revalidation of 
the concept of large HCCs was one of the factors that contributed to 
the delay but that the Department concluded that all seven clinics 
should continue moving forward. This decision was made in January of 
2011.

    Question 8: Please provide information on how the FY 2012 budget 
will/has changed to fully implement the VOW to Hire Heroes Act and how 
the budget request for FY 2013 will satisfy requirements to fully 
implement this Act.

    a. How much will the FY2013 outreach budget be used to promote the 
retraining program of the VOW to Hire Heroes Act?

    Response: VA has sufficient resources in the FY 2012 budget and FY 
2013 budget request to implement the Veterans Retraining Assistance 
Program (VRAP) provisions of the VOW to Hire Heroes Act of 2011. To 
ensure that VA can effectively implement VRAP, our 2013 budget request 
reflects the resources to support hiring 166 Veterans claims examiners 
to process claims. This temporary staffing increase equates to 85 full-
time equivalents (FTE) in 2012 and 90 FTE in 2013. These resources will 
allow us to manage increased workload and avoid disrupting current 
claims processing workload. VA will administer payments under VRAP from 
amounts appropriated for the payment of readjustment benefits. Although 
the outreach communication plan is currently under review by VA and 
DOL, we anticipate that the final plan will include a national 
advertising program. VA is still evaluating how much of the FY 2013 
outreach budget will support outreach efforts associated with VOW to 
Hire Heroes Act for FY 2013.

    b. Will VA's outreach plan for the VOW to Hire Heroes Act contain 
ways to partner with agencies like DoD, IRS, DOL, and others to provide 
information to eligible veterans?

    Response: Yes, VA's plan will focus on communications required to 
support the governance, adoption, and success of the VOW to Hire Heroes 
Act. VA and Department of Labor (DOL) are working jointly in developing 
an effective communication plan. The strategies within the plan are 
designed to guide VA, DOL, Department of Defense (DoD), and other 
stakeholders (i.e., Veterans service organizations and public/private 
sector organizations) in delivering key messages to Servicemembers, 
Veterans, family members, and caregivers about the value of VOW to Hire 
Heroes Act programs. The plan also includes the development of the VOW 
to Hire Heroes Act web site that will be a one-stop shop for Veterans 
and stakeholders to obtain information related to VOW to Hire Heroes 
Act. The utilization of social media is another critical component 
within the outreach plan. Ultimately, VA's outreach strategies are 
designed to increase awareness of and enrollment in the VOW to Hire 
Heroes Act programs.

    c. Does the outreach plan include funding for a national 
advertising program?

    Response: Although the communication plan is currently under review 
by VA and DOL, we anticipate that the final plan will include a 
national advertising program. VA is still evaluating how much of the FY 
2013 outreach budget will support outreach efforts associated with VOW 
to Hire Heroes Act for FY 2013.

    Question 9: VA's response to the Committee's pre-hearing questions 
indicated that it was planning to hire additional FTE for the Education 
Service to process applications for the retraining provision of the VOW 
to Hire Heroes Act of 2011. However, the budget request for FY 2013 
shows a reduction in the number of FTE at the education service.

    a. Can you please describe this apparent variance?

    Response: While VA's FY 2013 budget request shows a net reduction 
of FTE due to the attrition of temporary claims examiners hired to 
support the Post-9/11 GI Bill, our request includes additional FTE 
required to implement the Veterans Retraining Assistance Program (VRAP) 
of the VOW to Hire Heroes Act of 2011.

    b. Would keeping these additional FTE on staff reduce processing 
times for the Retraining assistance provided under the VOW to Hire 
Heroes Act of 2011?

    Response: VA's 2013 budget request reflects the resources to 
support hiring 166 Veterans claims examiners to process VRAP claims in 
FYs 2012 and 2013. This temporary staffing increase equates to 90 FTE 
in 2013. These resources will allow us to manage the increased workload 
and maintain current claims processing.
NCA Questions
    Question 10: Please provide an update on NCA's efforts to reconcile 
cemetery placement maps and headstones at all VA cemeteries.

    a. How many cemeteries have completed this review?

    Response: NCA is conducting the gravesite review in two phases. 
Phase I was initiated to review all gravesites involved in a raise and 
realign project. A second phase has been initiated to review all 
remaining gravesites. During Phase 1, NCA fully audited 22 national 
cemeteries and 1 soldiers' lot.

    b. How many cemeteries are still in need of this review?

    Response: Phase II involves review of all remaining burial sections 
in 109 national cemeteries as well as all soldiers lots administered by 
the Department of Veterans Affairs.

    c. How many misidentified graves were found?

    Response: During Phase 1, 1,588,372 gravesites were audited. NCA 
identified a total of 251 corrective actions for Phase 1 which included 
243 headstones or markers that needed to be reset or ordered, and 8 
caskets or urns that needed to be relocated.

    d. What steps were taken to notify families and correct these 
errors?

    Response: All NCA employees are the custodians of a sacred trust 
and strive to be the model of excellence in the delivery of burial 
benefits. We have created a culture of accountability in which errors 
are addressed immediately and openly. NCA regrets the grief and 
emotional hardship our errors cause and seeks to correct errors in 
consultation with family members. Where an error occurred, NCA 
corrected the error and contacted the affected families, wherever 
possible, to extend our sincerest apologies. NCA also ensured VA's 
congressional committees and the local congressional offices were 
notified of the issues.

    e. What is the department going to do to ensure these types of 
mistakes never happen again?

    Response: In April 2011, NCA implemented new procedures to 
strengthen internal controls and further enhance the accountability of 
remains interred in VA national cemeteries. These procedures require 
cemetery personnel to verify each gravesite location for second 
interments by checking the numbers and inscriptions of the gravesites 
in front of, behind, and to the left and right of the second interment. 
This step will alert the site crew to the potential for misaligned 
markers, either at the interment site or in an adjacent row.
    Additional procedures are being implemented to prevent these types 
of errors from occurring in the future. Contracts to raise and realign 
headstones and markers will require contractors to keep headstones or 
markers at the gravesite during the renovations. Such control measures 
will reduce the likelihood of inaccurate replacement of headstones and 
markers upon project completion. Also, NCA will hire certified 
contracting officer representatives at each of its Memorial Service 
Network offices to oversee future gravesite renovation projects. If 
employees or contractors need to move a headstone or marker for any 
reason, NCA will use its new process to track temporary movement or 
replacement of any headstone or marker within a national cemetery. NCA 
can accomplish these actions within the 2013 budget request.

    Question 11: Please describe the reason behind increases in both of 
NCA's ``personal services'' and ``other accounts''?

    Response: The increase in personal services is a result of the 
addition of 4 FTE for interment workload increases, increased benefits 
costs, and pay and staff composition changes. The increase in ``other 
services'' reflects higher maintenance cost due to more gravesites and 
developed acres.

    Question 12: Please provide more information on how VA will choose 
the two new cemeteries or plots of land to be open to new burial under 
NCA's new rural commitment and how VA would provide upkeep at these 
cemeteries and if this upkeep will be contracted out.

    Response: The location of the two new National Veterans Burial 
Grounds is dependent on the availability of land for these rural 
facilities. NCA will be looking for small tracts of land (2-5 acres) in 
already established public or private cemeteries in which to establish 
the new national cemetery presence. NCA plans to contract the grounds 
maintenance of these cemeteries under the oversight of the nearest 
national cemetery to ensure adherence to our National Shrine Standards. 
Burial operations will be conducted and supervised by NCA personnel.

    Question 13: The Millennium Study identified a significant number 
of one-time repairs required at NCA cemeteries. In response, Congress 
has increased NCA's budget for these and other identified repairs over 
the last decade.

    a. How many projects did VA confirm as needing repairs following 
the Millennium Study and what was the cost of addressing those repairs?

    Response: At the completion of the Millennium Study in 2002, a 
total of 929 projects at an estimated repair cost of $280 million were 
identified.

    b. Which projects have been addressed with funding provided, and 
how many remain (and how much will it cost to address them)?

    Response: To date, 401 projects with an estimated cost of $99 
million were completed at an actual cost of $135 million. NCA is 
evaluating the remaining 528 identified projects estimated at $180 
million to determine how they will be best addressed. Since the 
Millennium Study was conducted, new projects that require immediate 
attention have been identified. These emerging requirements will be 
addressed along with previously identified projects within the annual 
budget process.
VBA Mandatory Account Questions
    Question 14: There has been rapid growth of Compensation and 
Pension obligations, going from $53.9 billion in FY2011 to an estimated 
$64.7 billion FY 2013.

    a. What are the symptoms of this growth?

    Response: The growth in compensation and pension obligations is 
primarily attributable to estimated increases in compensation benefit 
payments to Veterans and survivors. Compensation benefit payments to 
Veterans account for approximately 82 percent of total compensation and 
pension program costs.
    Driving the growth in total compensation and pension obligations is 
the estimated increase in the number of Veterans and survivors added to 
the compensation rolls and their average payments. The average growth 
in the number of Veteran beneficiaries is 120,000 per year and average 
payment increases 6 percent each year. We expect these trends to 
continue. Another factor contributing to the increase in obligations is 
retroactive payments to Veterans and survivors with pending claims.

    b. Why do you believe we are seeing an increase in the average 
payment to veterans by almost $1,000 per payment?

    Response: The following factors contribute to the increase in 
annual average payments to Veterans: the average degree of disability 
continues to increase yearly as Veterans claim more disabilities and 
their disabilities progress; the average number of dependents included 
on Veterans' awards has increased 7 percent over the last four years 
the impact of enacted legislation or regulations, including new 
presumptive disabilities; the number of Veterans receiving special 
monthly compensation continues to increase; the increased number of 
Veterans receiving Individual Unemployability (IU); the number of 
retroactive payments released; and the fluctuation in the numbers of 
accessions and terminations resulting in net increases. Deviations in 
these factors alter average payments and historically increase 
compensation and pension obligations.

    c. Do you believe that VA's current compensation system provides 
compensation that is directly related to a servicemember's disability 
and quality of life?

    Response: VA disability compensation is a monthly benefit paid to a 
Veteran who is disabled by injuries or illnesses incurred or aggravated 
in military service. The intent of disability compensation in 38 U.S.C. 
Sec.  1155 is to compensate individuals for the ``average impairments 
of earning capacity'' resulting from the disability.
    There have been various commissions and studies that have examined 
the effectiveness and fairness of the disability compensation program.
    The 2007 Veterans' Disability Benefits Commission (VDBC) report, 
Honoring the Call to Duty: Veterans' Disability Benefits in the 21st 
Century, included survey results by the Center for Naval Analyses (CNA) 
on disability compensation as a replacement for the average impairment 
in earning capacity. This study found that compensation is generally 
adequate in replacing earned income losses due to service-connected 
disabilities.
    Although the statute requires that VA compensate for earnings loss, 
VA does address quality of life for certain disability patterns (e.g., 
amputations) by paying special monthly compensation above and beyond 
the schedular evaluation.
    In October 2009, VA began a comprehensive revision and update of 
all 15 body systems contained in the rating schedule. This 
modernization effort includes a more detailed analysis to determine if 
conditions are adequately compensated based on current associated 
evaluation levels.

    Question 15: Please expand on VA's legislative proposal to have 
Chapter 33 tuition and fee payments paid directly to students instead 
of schools?

    Response: Under the Post-9/11 GI Bill, VA issues payments for 
tuition and fees directly to schools on behalf of the student. Although 
the student does not directly receive the amount paid, the payment is 
made on the student's behalf, and the student is therefore considered 
to have received such payment. Sending payments directly to students 
would allow them to personally manage their financial obligations with 
the school and minimize some of the confusion created by having a third 
party (school) involved.

    a. What impact will this have on overpayments by VA to students 
when they change their rate of pursuit of study or drop out entirely?

    Response: Currently, when students change their rate of pursuit or 
withdraw from courses, VA reduces the amount of tuition and fees 
previously paid to the school and the student is held liable for any 
debt created. The schools have been directed by VA to follow their own 
refund policies. Frequently, the school refund policies will not 
coincide with the amount the student owes to VA, which causes confusion 
for the student when working with VA's Debt Management Center to settle 
outstanding debts. This legislative proposal would simplify the payment 
process, which will in turn aid the student in identifying the debt 
owed to VA. Additionally, it will eliminate the school's role in 
returning funds to either VA or the student, thereby streamlining the 
payment and debt collection processes.

    b. Will VA provide the tuition and fee payments in a lump sum or in 
monthly installments as is done under the Chapter 30 program?

    Response: The intent of this legislative proposal is to direct the 
tuition and fee payments from the schools to the students. As a result, 
the lump sum tuition and fee payments would go directly to the 
students.

    c. What fraud prevention measures would be instituted if this 
provision were to become law?

    Response: VA does not anticipate an increase of fraud if the 
tuition and fee payments are issued to the students as opposed to the 
school. Payment amounts will still be determined based on information 
received from the schools regarding net charges for tuition and fees. 
Additionally, VA will continue to require schools to report any changes 
to enrollments and will create any debts accordingly. VA will then be 
able to collect on debts established under the Post-9/11 GI Bill in the 
same manner as all other VA education benefits.

    Question 16: One of VA's legislative proposals is to increase the 
funding for the contracting of educational and vocational 
rehabilitation counseling under chapter 36. What has been the 
utilization of the current funding and what improvements do you believe 
need to be made to improve participation in this program?

    Response: In accordance with 38 United States Code (USC) Sec.  
3697, chapter 36 contract counseling is paid out of funds appropriated 
to VA. Payments may not exceed $6 million in any fiscal year. Please 
see the chart below for historical utilization.


----------------------------------------------------------------------------------------------------------------
             Fiscal Year                           Obligations                      New Ch. 36 Applicants
----------------------------------------------------------------------------------------------------------------
                               2009                            $5,473,711                                20,034
----------------------------------------------------------------------------------------------------------------
                               2010                            $3,609,488                                14,533
----------------------------------------------------------------------------------------------------------------
                               2011                            $3,474,418                                17,113
----------------------------------------------------------------------------------------------------------------

    FY 2010 and FY 2011 expenditures were lower following the 
termination of the National Acquisition Strategy contracts late in FY 
2009, leaving no contract vehicle available for Chapter 36 counseling 
except where regional offices were able to implement interim local 
contracts. The VetSuccess national contracts were awarded in late FY 
2011. VR&E continues to perform early outreach to Veterans to encourage 
participation in Chapter 36 services through job fairs as well as VR&E 
Coming Home to Work and Yellow Ribbon Reintegration Program events. The 
Coming Home to Work Program is VR&E's primary early intervention and 
outreach program where Servicemembers and Veterans work with a 
Vocational Rehabilitation Counselor to determine eligibility and 
entitlement to VR&E services. The Yellow Ribbon Reintegration Program 
is a DoD- wide effort to promote the well-being of National Guard and 
Reserve members, their families, and communities, by connecting them 
with resources, including VR&E benefits, throughout the deployment 
cycle. Recently, VR&E Service enhanced marketing strategies to reach 
more Veterans through the VetSuccess.gov site, which can be used by all 
Veterans, not only Veterans with disabilities. VBA is also modernizing 
the Transition Assistance Program and Disabled Transition Assistance 
Program, placing greater emphasis Chapter 36 services for transitioning 
Servicemembers.

    Question 17: In VA's response to the Committee's pre-hearing 
questions VA stated that OMB was currently reviewing what the impact 
will be on VA's home loan program if Congress does not re-authorizing 
the pooling authority for VA mortgages. This authority expired on 
December 31, 2011. When do you expect this review to be completed?

    Response: In cooperation with OMB, VA's review of options relating 
to managing the Vendee Direct Loan Portfolio is ongoing. The review 
focuses on both direct and indirect costs associated with vendee 
mortgage trusts and it will be completed in time to inform the Mid-
Session Review report to Congress. Vendee loans continue to accumulate 
in the existing portfolio. However, volume suggests that another 
securities offering would not be viable until sometime in early FY 
2013.
VBA GOE Questions
    Question 18: On page 2A-8 of Volume 3 of the budget submission, VA 
announced that its obligations for contract medical examinations will 
increase by 11.8 million, or approximately 55,000 additional contract 
examinations. In what circumstances is VA relying on contract 
examinations rather than examinations provided by VHA?

    Response: VBA contracts with private vendors in areas across the 
country where VHA is unable to support the volume of examination 
requests being submitted, and in rural areas where Veterans have to 
travel greater distances to attend VA examinations. Specifically, VBA 
has a contract in place to provide Integrated Disability Evaluation 
System (IDES) examinations at multiple facilities nationwide.

    a. At 4B-18, VA states that it is using three companies for 
contract examinations. What are the three companies?

    Response: VBA has contracted with QTC Medical Services, VetFed, and 
Veterans Evaluation Services to conduct medical disability 
examinations.

    b. What training mechanisms are in place to ensure that contract 
examinations meet the required adequacy standards?

    Response: All contracted physicians are required to complete the 
same level of training that VA physicians complete prior to conducting 
medical disability examinations. Each contract specifically requires 
each physician to complete training on the VA disability examination 
protocol. Additionally, they are required to complete VA-specific 
training courses directly related to the type of disability 
examinations that are being conducted. Completed examinations undergo 
quality review by both the contractor and VA.

    Question 19: At 2A-13, VA states that the number of veterans in 
receipt of a total disability rating based on individual 
unemployability (TDIU) is gradually increasing. What portion of this 
increase is OIF/OEF Veterans?

    Response: At the end of FY 2011, there were 18,749 Veterans with 
service after September 11, 2001, receiving TDIU. However, they are not 
all OIF/OEF Veterans. Budget forecasts are based on combined degrees of 
disability, not by period of service; therefore, VBA does not project 
total compensation funding associated with OIF/OEF Veterans.
    The 18,749 Post 9/11 Veterans represent 6.5 percent of the total 
Veteran population (287,133) in receipt of TDIU. Additionally, 
approximately 2.5 percent of all Post 9/11 Veterans in receipt of 
disability compensation are receiving TDIU.

    a. Similarly, with regard to the increase in special monthly 
compensation (SMC) funding, are these numbers also going up because of 
the types of injuries seen in OIF/OEF Veterans or other factors?

    Response: Since the end of FY 2009, the number of Post 9/11 
veterans in receipt of SMC has grown by one percent, while the overall 
percentage of veterans receiving SMC has grown 1.6 percent. The amount 
of SMC funding may be in part due to the types of injuries seen in OIF/
OEF/OND Veterans and the increased survival rate after serious injury. 
Another reason driving SMC rates in Veterans of prior conflicts is 
likely attributable to presumptive Agent Orange disabilities.

    b. Although VA's total number of claims increased by about 3 
million (at 2A-22), its overall benefits obligations increased by 
approximately $10 billion. What portion of this is due to:

       1. New claims from OIF/OEF Veterans?
       2. TDIU/SMC for OIF/OEF Veterans?
       3. Number/types of injuries seen in OIF/OEF Veterans?

    Response: The chart on page 2A-22 is the total number of Veterans 
and survivors on the rolls who are receiving compensation benefit 
payments and the total dollars associated with the benefit payments. 
Compensation payments are based on combined degree of disability and 
Veterans often receive compensation for multiple injuries or diseases. 
Budget forecasts are based on combined degrees of disability not by 
period of service; therefore, VBA does not project total compensation 
funding associated with OIF/OEF Veterans.

    Question 20: Throughout the budget, mention is repeatedly made that 
VA will track metrics for the number of claims that remain pending 
after VA's target processing time of 125 days. What is VA's planned 
response if these numbers are not being met?

    Response: Based on current projections, VBA is currently on track 
to reach this goal in 2015. However, as our environment over the next 
few years changes, we may face new challenges that impact our ability 
to reach our goal. Historically, unexpected events have created a surge 
in VBA workload. New presumptive conditions, court decisions, and 
legislative requirements add unexpected volume. We will continue to 
monitor these issues.

    a. Other than tracking through VBMS, is VA planning on utilizing 
any new strategies to reach this target goal?

    Response: VBA's Transformation Plan is based on more than 40 
initiatives in the areas of People, Processes, and Technology, selected 
from ideas submitted from employees and stakeholders. Transformation is 
not a ``one and done,'' flip-of-the-switch proposition - it is a 
dynamic process of intaking, researching, testing, and launching new 
ideas and initiatives. This process requires that VBA initiatives 
become more structured projects with a Program Manager/Team Lead and a 
standardized way of measuring the initiative's impact, schedule, and 
costs.
    VBA is using a Transformation Governance Framework to evaluate 
projects that directly impact our transformation goals. Existing and 
future transformation initiatives will progress through the 
Transformation Governance Framework, providing a formal review process 
for evaluating and implementing systemic improvements to VBA 
operations. Under this process, designated VBA teams, or ``Design 
Teams,'' are designing and testing initiatives through pilots and 
documenting results through a standard set of analytical reports and 
project management documents.

    b. What type of improved metrics/methodology is VA using to keep 
track of these statistics?

    Response: VBA established the Implementation Center Program 
Management Office at headquarters in September 2011 to plan and carry 
out the implementation of its Transformation Plan using program 
management principles, incorporating an integrated work-breakdown 
schedule that captures all dependencies, resourcing the implementation 
with field and corporate headquarters representatives, managing the 
rollout of the Veterans Benefits Management System (VBMS) and Veterans 
Relationship Management (VRM) technologies, preparing the regional 
offices with change management personnel and training, and effectively 
communicating the entire plan with a well-structured communications 
strategy to inform our workforce and our stakeholders of the 
implementation details. The Implementation Center is in the process of 
developing performance measures that will track the impact of the 
Transformation Plan initiatives.

    Question 21: At 4A-3, VA reiterates that ``our employees are the 
key to our success.'' Please elaborate on this assertion, as it appears 
that hiring many new employees since 2007 has not greatly contributed 
to reducing the backlog.

    Response: VBA's employees are integral in the successful 
implementation of our new operating model and achieving our 2015 
strategic goals. VBA's transformation plan is based on 40+ initiatives 
that are a product of more than 600 stakeholder and employee ideas. 
VBA's transformation plan requires highly skilled, motivated, and 
inspired employees who are Veteran-centric and work each day to provide 
Veterans, Servicemembers, their family members, and survivors the full 
range of benefits, support, and services. VBA is organizing its 
workforce into ``case management'' teams, managing work in the most 
efficient, effective ways possible, leveraging proven automated 
workflow tools. VBA is also increasing the expertise of its workforce 
through the use of national training standards and the Challenge 
training program that prepares employees to work faster at a higher 
quality level. VBA's training and technology skills programs will 
continue to deliver the knowledge and expertise VBA employees need to 
succeed in a 21st-Century workplace.

    a. What actions are you taking to decrease training time? What is 
the basis for the frequently cited assertion that it takes 2 years to 
fully train an examiner?

    Response: Training for new claims processors previously consisted 
of six months of combined centralized and ``home-station'' training. 
VBA has compressed this training into four weeks for Veterans Service 
Representatives and eight weeks for Rating Veterans Service 
Representatives. The centralized program utilizes practical application 
by working live claims under the supervision of subject matter experts.
    Upon returning to their home stations, employees work simple 
claims, have their work reviewed by mentors, and continue to receive 
training based upon their experience level.
    The two-year period of training includes on-the-job training that 
allows employees to acquire the many legal and medical skills required 
by the position, to include a working knowledge of Court decisions, 
learning the complexity of Parts 3 and 4 of the Regulations, and 
familiarizing themselves with the multitude of Rating Job Aids. As 
their knowledge and skills increase, employees receive training at the 
intermediate-level and progress to processing more complex claims such 
as diabetes, traumatic brain injury and their complications/secondary 
conditions, as well as SMC.

    b. Has VA made any recent updates to its training procedures?

    Response: Yes, the training for new claims processors has been 
completely revamped in the past year. VBA developed and delivered 
national training on the Quality Review Teams (QRT) and Simplified 
Notification Letters (SNL) transformation initiatives. VBA and VHA 
jointly developed mandatory training for all employees who process 
Military Sexual Trauma (MST) claims.
    This updated training includes several new virtual learning 
products that will be available for field use by the end of fiscal year 
2012 such as a ``Traumatic Brain Injury Training and Performance 
Support System (TPSS)'' module and Medical TPSS modules focusing on the 
body systems.

    Question 22: At 4A-4, how did you arrive at the case-management 
approach/processing lanes?

    Response: VBA's Transformation Plan is based on more than 600 ideas 
solicited from its employees, Veterans Service Organization partners, 
and other stakeholders, including this Subcommittee and your staffs. 
After evaluating a multitude of innovative ideas, VBA focused on the 40 
most promising, tested, and measured initiatives for inclusion in its 
Transformation Plan. The case management and processing lanes 
approaches have been incorporated into VBA's new transformation process 
model, which includes the intake processing center, segmented lanes, 
and cross-functional teams initiatives. The new model allows VBA 
employees to manage work in the most efficient and effective way 
possible, leveraging proven automated workflow tools. The intake 
processing center enables quick, accurate claims triage. Segmented 
lanes will improve the speed, accuracy, and consistency of claims 
decisions by organizing claims work into distinct categories, or lanes 
(Express, Core, and Special Operations), based on the amount of time 
required to process the claim. The cross-functional teams initiative 
consists of teams of cross-trained decision makers co-located to reduce 
rework time, increase staffing flexibility, and better balance workload 
by facilitating a case- management approach to completing claims.

    a. Where is this system being tested?

    Response: VBA initially implemented the new process model at the 
Indianapolis Regional Office (RO). The Wichita, Kansas; Fort Harrison, 
Montana; and Milwaukee, Wisconsin, ROs were selected as the three sites 
to pilot the new process model being implemented as part of the VBA 
Transformation Plan. The intake processing center, segmented lanes, and 
cross-functional teams initiatives were rolled out to Wichita on 
February 21, Fort Harrison on February 27, and Milwaukee on March 5. 
National deployment is expected by the end of fiscal year 2013.

    b. Do you have initial results you can share?

    Response: It is too early to report actual results of the 
performance of these initiatives. However, we project that the new 
operating model (including cross-functional teams, intake processing 
centers, and segmented lanes) has the potential to save 40 days in the 
processing of a claim, which currently stands at 246.1 days as of April 
30, 2012. The VBA Implementation Center will use dedicated resources to 
oversee the implementation of the Transformation Plan using a 
governance process that achieves standardization and sustainability. 
The Implementation Center is identifying and developing performance 
measures to track the impact of these initiatives.

    Question 23: At 4A-4, what initial feedback have you received from 
the use of Disability Benefit Questionnaires?

    Response: Generally, we have received favorable feedback on 
Disability Benefits Questionnaires (DBQs). The question and answer 
format of DBQs eliminates the need for examiners to prepare lengthy 
narratives and efficiently focuses on the specific evaluation criteria 
needed for a given disability. We have received much feedback on ways 
to improve content and format of the DBQs so that they more readily 
elicit information from examiners and better apply findings for 
accurate and consistent rating decisions. VBA continues to work closely 
with the Veterans Health Administration to make these improvements and 
updates.

    a. Do you have any procedures in place to follow up with private 
physicians in compliance with the CAVC's decision in Savage v. 
Shinseki?

    Response: The Court of Appeals for Veterans Claims (Court), in 
Savage v. Shinseki, held that if a private examination report 
reasonably appears to contain information necessary to properly decide 
a claim but it is ``unclear'' or ``not suitable for rating purposes,'' 
and the information reasonably contained in the report otherwise cannot 
be obtained, VA must either (1) ask the private examiner to clarify the 
report, (2) ask the claimant to obtain the necessary information to 
clarify the report, or (3) explain why such clarification is not 
needed.
    VA provided the field offices with an analysis of the decision, 
informing them of the Court's holding and impact of the decision. VA is 
amending its regulations and adjudication procedures to comply with the 
Court's holding.

    b. Does the use of DBQ's have the potential to save VA money on 
using contract examinations?

    Response: DBQs change the way medical evidence is collected, giving 
Veterans the option of having their private physician provide the 
medical information necessary to process their claim. VHA and VA-
contract physicians will be completing DBQs as well as private 
physicians.
    The medical disability examination contracts pay for each 
examination contractors complete. The potential for savings is based on 
exam avoidance, which means getting fully completed DBQs from VA 
primary care and private providers. Because the DBQs have just been 
released to the public, we do not have data on exam avoidance yet. 
However, we will monitor exam avoidance as part of our oversight 
efforts.

    Question 24: At 4A-14; 4F-5 - you note that you are already using 
an entirely paperless process for insurance claims. Is this the same 
platform as VBMS?

    Response: No, the Insurance Center is using a paperless platform 
that was uniquely designed for it in 1996. This platform is not 
compatible with other VBA benefit programs.

    a. How is the scanning for insurance claim documents handled?

    Response: The US Postal Service delivers mail to the Insurance 
Center four times a day. All mail and Veteran-related documents are 
immediately taken to the imaging unit where they are classified, 
scanned, and automatically routed to an Insurance Specialist to process 
them. The scanned items are immediately available for viewing on every 
Insurance desktop. The document imaging and routing processes are 
completed within two hours of each mail delivery.
    The insurance document imaging system currently contains over 16 
million documents.

    b. Are there any data showing that this paperless system increases 
processing times or quality?

    Response: The paperless system has significantly improved the 
timeliness and quality of disbursements. Payments of death claims, 
policy loans, and cash surrenders are the most important services the 
Insurance program provides to Veterans and beneficiaries.
    Before the paperless initiative, the average processing time for 
Insurance disbursements exceeded four days. Paperless processing has 
helped Insurance consistently reduce that time to less than two days 
while maintaining a 99 percent accuracy rate. The current 12-month 
average processing time for disbursements is 1.5 days.
    Paperless processing has also significantly improved Insurance's 
ability to provide information to policyholders. Before imaging, 
Insurance could only answer questions about beneficiary designations by 
retrieving the insurance folder, which could take two to three 
workdays. Since all beneficiary designations are now imaged, 
policyholders calling the Insurance Center now receive current 
beneficiary information in minutes, contributing to the 85 percent 
first-call-resolution rate.

    c. Have there been any unforeseen costs associated with using this 
paperless processing or the insurance self-service website?

    Response: There have been no unforeseen costs associated with these 
initiatives. The comprehensive use of imaging and automated procedures 
allowed the Insurance Center to retire its 2.5 million folders to the 
Federal Records Center in January 2002, saving $1 million annually in 
clerical and other charges.

    Question 25: At 4B-8 you mention a study by George Washington 
University on earnings loss and Musculoskeletal system. Please 
elaborate on the specifics of this study, including its intended 
completion date and its intended effect on the ongoing modernization of 
VA's rating schedule.

    Response: The study will evaluate the effectiveness of VA's rating 
schedule in compensating Veterans for average earnings impairment 
resulting from musculoskeletal service-connected disabilities. The 
findings of this study will provide the data necessary to determine 
whether current compensation rating levels reflect the average 
impairment in earning capacity for specific conditions in the current 
rating schedule. The expected completion date for the musculoskeletal 
body system earnings loss study is December 2012.

    Question 26: At 5C-2, with regard to the newly authorized FTEs, how 
many will be attorneys and how many will be support staff?

    a. What training procedures does the Board have in place to handle 
so many new FTEs?

    b. What else is the Board looking at to address its backlog besides 
additional FTEs?

    Response: The increase in BVA funding in Fiscal Year (FY) 2012 was 
to enable BVA to sustain its FY 2011 level of FTE with base funding, 
rather than through carryover funding. Therefore, while the increase 
was critical to maintain BVA's level of operations, the organization 
saw no increase in FTE for FY 2012. In this fiscal year, BVA has 
limited hiring to attrition hiring in both its attorney and 
administrative staffs.
    BVA has a robust training program in place for all newly hired 
attorneys, led by its Office of Learning and Knowledge Management 
(OLKM). Each new attorney is paired with an attorney mentor for a 
period of six months, during which time the mentor provides one- on-one 
training and reviews and provides feedback on draft decisions. OKLM has 
established a standardized methodology for mentors to follow in 
providing this direction. Additionally, OLKM organizes approximately 24 
hours of classroom training for new attorneys over the course of their 
first month to convey the basic substantive requirements of the law.
    Substantive trainings are provided for the entire Veterans Law 
Judge (VLJ) and attorney staff on an on-going basis. OLKM has created 
targeted training based, in part, on trends gleaned from BVA's quality 
review process, as well as based on outcomes in cases heard before the 
Court of Appeals for Veterans Claims and the Court of Appeals for the 
Federal Circuit. In addition, BVA has expanded medical training for its 
staff to address the increasing complexity of disability compensation 
appeals.
    Specifically, in FY 2011, BVA's VLJs and attorneys attended courses 
on topics such as Evaluating Lay Evidence & Making Credibility 
Determinations; Recent Significant CAVC and Federal Circuit Decisions; 
Speculation & Medical Opinions; Recent Trends in the Duty to Assist; 
Supervisory Training; Medical Training on the Back, Heart Disease, 
Knee, and Psychiatric Disorders; VA's Core Values & Characteristics; 
Women Veterans Issues; Disability Benefit Questionnaires; and ongoing 
Medical Advisor and Quality Review small group chat sessions.
    Newly hired employees within the Management, Planning, and Analysis 
Directorate (MPA) receive one-on-one coaching and training from an 
experienced mentor during their first 90 days on the job. Each employee 
also completes a new employee orientation, MPA-wide training, and VA/
BVA database systems training. Employees continue to receive task-
specific training conducted by the Branch Team Leads and Coach 
throughout the first year on the job.
    MPA conducts annual functional refresher training which allows for 
expansion or enhancement of an employee's current job duties and 
abilities. In addition, MPA-wide cross training enables an employee to 
perform additional duties outside of his or her current job function at 
the same level of responsibility, allowing MPA to meet organizational 
needs in response to human resource needs, re-engineering, 
restructuring, and/or program changes.
    For a cohesive approach to personal training goals, MPA's Training 
and Development Plan offers a series of ``training tracks'' that 
incorporate existing resources, both internal and external. Courses are 
built around job-specific tracks to provide a clear training plan for 
employees and managers. Training tracks are available in the following 
areas: Administrative Service Division, Decision Team Support Division, 
Financial Management Division, Supervisory and Management Development, 
and General Career Development. For off-site training the following 
resources are used for developing new and existing employees: Graduate 
School, Human Resources Institute, Office of personnel Management, VA 
Learning University, Talent Management System and VA Central Office 
Human Resource Service.
    To meet the challenge of the growing appeals workload, BVA has 
implemented efficiencies in two key areas: hearings and remands. The 
Department also submitted several legislative proposals to improve the 
appeals process. These initiatives are discussed more fully below.
    With respect to hearings, approximately 25 percent of appellants 
before BVA request a hearing before a VLJ. The majority of appellants 
request an in-person hearing (e.g., 66 percent in FY 2011). An average 
of 75 percent of scheduled in-person hearings in FY 2011 took place, 
meaning that 25 percent of those Veterans scheduled for hearings did 
not appear for the hearing. Data confirms that over the past five 
years, the national average show rate for field hearings is 73 percent. 
This leaves the VLJ who traveled to the field station with substantial 
blocks of time without scheduled activity, and thus, a loss of 
productive time to decide appeals.
    The annual hearing schedule depends on demand, and slots are 
allocated to field stations well in advance of the beginning of each 
fiscal year. In planning for the FY 2012 hearing schedule, BVA 
decreased the number of available field hearings offered by 25 percent 
in favor of increasing video teleconference (VTC) hearings, which take 
place between the VLJ in Washington, DC and the Veteran at his or her 
local Regional Office (RO). This results in both monetary and time 
savings for VA. VLJs will gain time in the office, with an anticipated 
increase in decisional output (ranging from 2 percent to 5 percent) 
over the next few years. Additionally, VA will save an estimated 
$864,000 in travel costs through 2015.
    Remands generate a substantial amount of rework for both VBA and 
BVA, which increases workload, while also greatly increasing the delay 
for Veterans. In FY 2011, BVA remanded 44 percent of appeals before the 
Board (21,464) to the Agency of Original Jurisdiction (AOJ), generally 
VBA. Historically, approximately 75 percent of all remands return to 
the Board. VLJs determined that 40 percent of FY 2011's remands (8,585) 
could have been avoided if the RO properly processed and reviewed the 
case in accordance with existing laws and regulations.
    BVA has analyzed the data from its Remand Reasons Database 
(collecting reasons for remands since 2004) and determined that the top 
reason for remand is inadequate medical examinations and opinions. To 
reduce the number of remands that are returned to the Board, BVA has 
partnered with the Veterans Health Administration (VHA) to develop 
training tools and provide direct training to VA clinicians to improve 
VA compensation and pension examinations. Additionally, BVA and VBA 
have agreed to a mandatory joint training program to aid in 
standardizing adjudication across the system, driven by the most common 
reasons for remand. BVA has established an interactive training 
relationship with VBA's key organizations involved in the appellate 
process, i.e., the Systemic Technical Accuracy Review (STAR) staff, 
Decision Review Officers, and the Appeals Management Center staff. The 
goal of these efforts is to reduce the number of avoidable remands in 
the system.
    VA has submitted legislative proposals to Congress that would 
streamline the appellate process. Specifically, VA has proposed a 
provision that would allow BVA to determine the most expeditious type 
of hearing for those appellants who request a hearing before a VLJ. The 
proposal includes a ``good cause'' exception for those appellants who 
do not desire a video conference hearing. VA has also proposed an 
automatic waiver provision, establishing a presumption that an 
appellant, or his or her representative, has waived RO consideration of 
any evidence he or she files after filing the Substantive Appeal to the 
Board. This would eliminate readjudication of the appeal by the RO in 
some cases, in favor of the Board directly addressing the evidence. 
Additionally, VA has proposed reducing the time period to file a Notice 
of Disagreement (NOD) from 365 days to 180 days, to ensure timely 
processing of appeals and less rework due to stale evidence.

    Question 27: Please describe what the budgetary impact will be on 
the recent expansion of T-SGLI for loss of reproductive organs? How 
will this decision impact future budget requests and what other 
injuries is VA considering adding for coverage under the TSGLI program?

    Response: The Insurance Center estimates a cost of $11.7 million 
for 260 retroactive claims resulting from the expansion of TSGLI for 
genitourinary (GU) losses.
    After completing an outreach mailing in February 2012 to Veterans 
identified as having sustained GU injuries, we expect to see most of 
the retroactive GU claims filed and paid during the second half of FY 
2012. We are projecting that about 65 claims (one-fourth of the 
projected total retroactive claims) will be filed in FY 2013 for an 
estimated cost of
    $2.9 million. For FY 2014 and future years, we expect 35 claims per 
year attributable to GU losses for an annual cost of $1.6 million.
    These payments will have no impact on VA's future budget requests. 
The branches of service cover the cost of TSGLI claims in excess of 
premiums received for the TSGLI program, this includes funding for the 
GU claims.
    At the present time, VA is not considering adding additional 
payable losses to the TSGLI program.

    Question 28: The budget documents stated that there are nearly 
3,800 appeals still being processed for payments from the Filipino 
Veterans Compensation Fund and that over half of the 42,800 claims 
filed for compensation have been denied.

    a. When do you expect the remaining appeals to be resolved?

    Response: As of April 11, 2012, 963 appeals were pending at the 
Manila VA Regional Office (VARO). Of those, 217 were Notices of 
Disagreement and 746 have filed a formal appeal. Of the 746 formal 
appeals, 70 are currently pending at the Board of Veterans' Appeals.
    We are unable to provide a completion date at this time as these 
cases are in various stages of the appeals process. While there are 
many variables involved in resolving the 963 appeals, the Manila VARO 
considers these appeals one of their highest priorities.

    b. Is there any idea of how much of the remaining appropriation 
will be left at the conclusion of the decisions on these appeals?

    Response: We estimate an unobligated balance of $39.5 million at 
the end of FY 2013.

    c. What is your opinion on the potential for fraud in this program 
and what steps has the Department taken to ensure the correct 
adjudication of these claims?

    Response: While the possibility for fraud in this program is high 
due to the problem of fraudulent or improper documentation from the 
1940s, the Manila VARO has mitigated this risk by:

      Training employees to identify potentially fraudulent 
claims;
      Utilizing its fiduciary unit to personally deliver 
payments if any type of fraud is suspected; and
      Using an ID Verification System that allows VARO 
employees to identify Veterans by photograph when they visit the VARO.

    Upon receipt of a claim for benefits based on service with the 
Philippine Commonwealth Army, a recognized guerrilla organization, or 
the Special Philippine Scouts, Manila VARO personnel conduct a search 
to determine if the claimant previously forfeited entitlement or should 
be considered for forfeiture of benefits by reason of fraudulent action 
on another claim.

    d. What is the status of the two ongoing law suits involving this 
account?

    Response: The two lawsuits are De Fernandez v. U.S. Department of 
Veterans Affairs and Recinto v. U.S. Department of Veterans Affairs. 
Both were filed in the U.S. District Court for the Northern District of 
California. Although in April 2011 the district court granted VA's 
motion to dismiss Recinto, the plaintiffs appealed the district court's 
decision to the U.S. Court of Appeals for the Ninth Circuit. That 
appeal has been fully briefed, but is still pending. The Government's 
motion to dismiss De Fernandez has been fully briefed in the district 
court, but not yet argued. It remains pending in the district court.

    Question 29: Please provide more information about the rules-based 
process job aide that will be included in the first ``design team'' and 
if this system will be integrated with VBMS?

    Response: As part of the first Design Team, VBA created a 
standardized and simplified rating notification letter that goes to 
Veterans using more clear language. The simplified notification letter 
(SNL) standardizes and streamlines the decision-notification process 
and helps integrate essential information into one simplified 
notification, while reducing complexity and time. SNL reduced 
complexity and time by 10-20 percent in testing. This initiative was 
fully implemented nationally on March 12, 2012. This process has also 
begun to incorporate rater decision support tools that establish more 
consistent rater performance. These rules-based tools are currently 
being integrated into the Veterans Benefits Management System (VBMS).

    a. What other type of rules-based systems will be part of the final 
VBMS system?

    Response: Once more structured data is in place, VBMS will use 
rules to recommend decisions and create Veterans Claims Assistance Act 
(VCAA) letters. Additional rules- based functionality may be identified 
as feedback from end users is captured.

    b. What is VA's plan for scanning documents for the VBMS system? 
Will this be done with private contractors?

    Response: VBMS is taking a ``point forward approach'' to 
transitioning offices to fully functional paperless centers. All paper 
claims currently pending will continue to be processed in paper. Once 
VBMS is launched at an office, all new claims received will be 
processed in VBMS as paperless claims. However, end users will use VBMS 
to make decisions on both paper and paperless claims.
    VA is currently evaluating several scanning options, including the 
use of private contractors to conduct scanning operations.

    c. Where will the scanning take place and what is the long-term 
scanning plan?

    VBA Response: VBA's Transformation Plan includes a strategy for 
conversion to a paperless system that provides a combination of 
scanning and electronic or web-based submission of documents. The 
transition to a paperless system may take an extended period of time as 
we continue to encourage Veterans, Servicemembers, their families, and 
their representatives to take advantage of our web-based and electronic 
systems. As VBA pursues these advances and expands its strategy for 
converting to a paperless system, it will still continue to process 
paper claims.

    d. Are you partnering with Veteran Service Organizations and other 
interested stakeholders as you develop the VBMS system?

    Response: Throughout VBA's development and implementation of our 
Transformation plan, we have partnered with Veterans Service 
Organizations (VSOs) and other stakeholders. For example, in April 
2011, a subject matter expert from Disabled American Veterans 
participated in requirements-gathering sessions during a 30-day detail 
with VA. VA continues to involve VSOs and interested stakeholders on a 
regular basis to ensure that their interests are considered in VBMS 
development.

    e. When do you expect all regional offices to use VBMS and not rely 
on other legacy systems?

    Response: VBMS is expected to be deployed to all regional offices 
by the end of calendar year 2013. Once VBMS demonstrates the capability 
to process all claims end- to-end in an electronic environment without 
reverting to legacy systems, VA will evaluate retiring its legacy 
systems.

    f. How will VBMS be integrated with the eBenefits and other VBA 
systems?

    Response: Currently, VA is exploring Veterans On-Line Application 
(VONAPP) Direct Connect (VDC) as one of the integration points between 
VBMS and eBenefits. Claims filed through eBenefits will use VDC, and 
the information and data received will be loaded into VBMS. 
Requirements to integrate with other VBA systems are being identified 
and prioritized.

    g. VA's budget states that the nationwide deployment of VBMS will 
begin in FY2012 and be completed by the end of FY2013. Please provide a 
detailed schedule of this rollout.

    Response: VBMS began national deployment in March 2012, and is 
expected to be completed by the end of calendar year 2013. VBMS's 
rollout schedule follows:

                                              VBMS Rollout Schedule
                                           Regional Offices - FY 2012
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
               1                                       Wichita                                    3/26/2012
----------------------------------------------------------------------------------------------------------------
               2                                  Ft. Harrison                                    3/26/2012
----------------------------------------------------------------------------------------------------------------
               3                                      Hartford                                    7/16/2012
----------------------------------------------------------------------------------------------------------------
               4                                    Huntington                                    7/23/2012
----------------------------------------------------------------------------------------------------------------
               5                                       Houston                                    7/30/2012
----------------------------------------------------------------------------------------------------------------
               6                                              Cleveland                            8/6/2012
----------------------------------------------------------------------------------------------------------------
               7                                   New Orleans                                    8/13/2012
----------------------------------------------------------------------------------------------------------------
               8                                     Milwaukee                                    8/20/2012
----------------------------------------------------------------------------------------------------------------
               9                                         Boise                                    8/20/2012
----------------------------------------------------------------------------------------------------------------
              10                                      Portland                                    8/27/2012
----------------------------------------------------------------------------------------------------------------
              11                                       Phoenix                                    8/27/2012
----------------------------------------------------------------------------------------------------------------
              12                                      San Juan                                     9/3/2012
----------------------------------------------------------------------------------------------------------------
              13                                    Des Moines                                    9/10/2012
----------------------------------------------------------------------------------------------------------------
              14                                       Atlanta                                    9/17/2012
----------------------------------------------------------------------------------------------------------------
              15                                        Newark                                    9/24/2012
----------------------------------------------------------------------------------------------------------------

    Please note that the schedule for FY 2013 is still pending.

    h. How have the functional requirements for VBMS evolved since the 
program was originally developed and funded? Has there been a reduction 
in the system requirements or functions from when VBMS was originally 
developed?

    Response: VBMS requirements development and delivery have evolved 
from the VBMS proof-of-concept, referred to as the Virtual Regional 
Office. The current process elicits business requirements information 
from regional office SMEs every three weeks and systematically captures 
information in ``use cases'' utilizing narratives, process models, 
information models, decision models, and business acceptance criteria. 
Once complete, each use case is delivered to system developers, where 
it is broken down into user stories and corresponding story points, 
ready to be consumed by development teams in accordance with an agile-
like methodology.
    Not only has the VBMS program not experienced a reduction in the 
system requirements or functions, the number of requirements developed 
and delivered have increased over the past five months.

    Question 30: The contracted Fast Track system is used to expedite 
the processing of presumptive Agent Orange claims. This system is being 
funded by VA Innovations Initiatives. Can you give some figures that 
reflect the cost of this system and its estimated long term usability?

    Response: The Fast Track claims processing system is jointly funded 
by VA Innovation Initiatives (VAI2) and the Office of Information and 
Technology (OI&T). Fast Track was developed, certified, accredited, and 
deployed within 120 days for under $4 million and released Veterans Day 
2010. Subsequent enhancements were made totaling $3.5 million. The 
annual sustainment/operation and maintenance investment was under $2 
million. The year-to-date investment in Fast Track as of April 2012 is 
$11 million. On March 30, 2012, VA exercised option year 1, which 
begins July 1, 2012.

    a. Using this system, how much oversight do you have on the medical 
evidence used in these claims and will this system provide 
communication between the medical evaluator and the person processing 
the claims?

    Response: All documents submitted as part of Fast Track are 
reviewed by a Veterans Service Representative (VSR) and a Rating 
Veterans Service Representative (RVSR) for completeness and evidence of 
fraud or tampering. A sample of claims are also reviewed by the Quality 
Review Team. There is no direct communication between the VA person(s) 
processing the claim and the medical evaluator. If clarification is 
needed, a request is sent to the medical evaluator in writing.

    b. Could this result in an assembly line of Agent Orange claims 
approvals with little to no oversight of the origin and condition of 
the actual presumptive diagnosis?

    Response: There are currently very few diagnoses being received 
through the public- facing automated system. All incoming digital 
documents can be traced back to the originating IP address. The claims 
received through the Fast Track system receive the same level of 
development and oversight as claims received through any other means. 
All evidence received with the claim is reviewed, all evidence 
identified by the Veteran is developed, and the claims file is reviewed 
prior to making a disability determination. In addition, VBA conducts a 
monthly validation review of a random sample of disability benefits 
questionnaires received with claims both in paper and through the Fast 
Track system.

    Question 31: The budget states that VA's disability claims 
production has increased. That should be expected after such a large 
staffing increase over the last decade. What I'm interested in is the 
level of individual productivity of VA employees.

    a. What is the productivity level of each claims examiner?

    Response: VBA claims examiners are classified into two categories: 
Veterans Service Representatives (VSRs) and Rating Veterans Service 
Representative (RVSRs). VSRs and RVSRs must consistently and 
conscientiously exercise sound, equitable judgment in applying laws, 
regulations, policies, and procedures to ensure accurate information is 
disseminated to Veterans and accurate decisions are provided on all 
benefit claims administered by VA. Claims examiners are evaluated on 
two major criteria: production and quality. Production is captured by a 
points-based system, rather than a case-based system. The goal of the 
points-based system is to allow consistency in measuring an employee's 
production, as cases can often vary in complexity and require different 
lengths of time to complete. The national daily productivity goals for 
VSRs in association with their grade levels are as follows: GS-7 (4.5), 
GS-9 (5), GS-10 (5.5), and GS-11 (6).
    Due to the complexity of the position, RVSRs are not considered to 
be fully productive (i.e., journeyman) until they have reached 24 
months of experience. The associated weighted actions per day are 3.5 
for a journeyman RVSR. The national daily productivity goal for RVSRs 
in association with their experience levels are as follows: 7- 12 
months (1), 13-18 months (2), and 19-24 months (3).

    b. How many claims should each examiner be responsible for 
accurately deciding in a given year?

    Response: The national daily productivity goals for VSRs in 
association with their grade levels are as follows: GS-7 (4.5), GS-9 
(5), GS-10 (5.5), and GS-11 (6). The quality goals for VSRs are: GS-7 
(80 percent), GS-9 (85 percent), GS-10 (90 percent), and GS-11 (91 
percent). The national daily productivity goal for RVSRs in association 
with their experience levels are as follows: 7-12 months (1), 13-18 
months (2), and 19- 24 months (3). The rating decision accuracy goal 
for RVSRs with 0 to 24 months of experience is 80 percent. The 
associated quality goal for a journeyman RVSR (over 24 months 
experience) is 85 percent.
    At the end of February, the national rating accuracy was 85.5 
percent for compensation claims. This is an increase from the fiscal 
year 2010 rating quality of 83.8 percent.

    c. Are you concerned about the continued reports by the Office of 
Inspector General that show major quality issues at the Regional 
Offices that they have visited?

    Response: VBA continues to focus on improving the quality of claims 
decisions. However, a major component of the cases reviewed by the OIG 
during their recent regional office audits were claims that had been 
decided over a period of many years (going back at least as far as 
1999). In these cases, VA had awarded temporary 100 percent disability 
evaluations for Veterans whose conditions had not stabilized, and these 
Veterans should have been scheduled for follow-up disability 
examinations. However, in many cases the follow-up examinations were 
not scheduled, due in significant part to a national computer problem 
that caused correctly established future diaries to drop out of our 
claims processing system. This issue was identified in a separate and 
focused nationwide OIG audit of temporary 100 percent disability 
evaluations, the report of which was released in January 2011. OIG 
accepted VA's corrective action plan in response to this report and 
recommendations, which included fixes to our information technology 
system and reviews of all of these cases by our regional offices. 
Inclusion of these temporary 100 percent cases with known deficiencies 
in the overall quality findings for the regional offices does not give 
a true picture of the quality of the work being performed by VBA 
employees.
    Nevertheless, VBA recognizes that there is room for improvement in 
the service provided to Veterans, their families, and survivors. VBA's 
Transformation Plan will improve and standardize processes to improve 
quality, eliminate the claims backlog, achieve efficiencies, and 
reallocate capacity. VBA's Transformation initiatives such as Quality 
Review Teams (QRTs), Simplified Notification Letter (SNL), and 
Challenge training will help VA achieve its goal of 98 percent accuracy 
for benefits delivery. QRTs have been established at each regional 
office to bridge the gap between local and national quality metrics and 
foster consistency. The SNL initiative standardizes and streamlines the 
decision-notification process and helps integrate essential information 
into one simplified notification, while reducing complexity and time. 
The national-level Challenge training provides a standardized 
curriculum to new claims processers to help ensure high quality and 
productivity.
    VBA continually reviews all quality error trends and works closely 
with numerous VA entities, such as the Office of General Counsel, the 
Board of Veterans' Appeals, and the VHA's Disability Examination 
Office, to provide additional training and quickly identify, clarify, 
or correct policies, procedures, and processes that impact quality.

    d. What steps will VBA take with this budget to improve overall 
quality production?

    Response: The funding requested for FY 2013 budget, both for VBA 
and the Office of Information and Technology, which supports all of 
VBA's crucial IT investments, will support the ongoing phased 
implementation of VBA's Transformation Plan, which will improve the 
quality and timeliness of claims processing. VBA's initiatives are 
being implemented through a deliberate process and rolled out to 
regional offices (ROs) in a multi-year, phased approach that will 
ensure success and minimize risk. The successful execution of the plan 
is expected to result in a 14-point increase in quality in 2015 from FY 
2011.
    VBA has requested a total of $18 million in GOE funds to support 
the development, oversight, and implementation of transformation 
initiatives. While the $18 million requested includes implementation 
and oversight activities, the direct labor FTE and associated training 
funds for initiatives such as Quality Review Teams (QRTs), Simplified 
Notification Letter (SNL), and Challenge training are within the funds 
requested to support payroll and training for the 14,520 FTE requested 
in the Compensation and Pension programs.

    Question 32: VBA and AFGE recently modified article 67 of their 
master contract on skills certification. While I appreciate VA and 
AFGE's apparent move to meet the requirements of H.R. 2349, as amended, 
a bill passed by House last fall, I do have to question why an employee 
would not be held accountable under this modification for failure to 
pass this skills certification test as required by P.L. 110-389.

    a. While I understand this test is in place so a claims processor 
can move up a GS level, why does VA not administer testing to test 
current knowledge and competence?

    Response: P.L. 110-389, section 225 requires that an employee take, 
rather than pass, the skill certification test. Claims processor 
positions are complex in nature, and requiring time and training in 
order to become proficient. By the time an employee is eligible to take 
the test, the expectation is that they will have obtained a certain 
level of job competence. This knowledge is tested through the skills 
certification process. According to Article 67, employees will now be 
required to sit for periodic recertification as long as they remain in 
the position.

    b. Will all employees and managers be required to take the skills 
certification test as required under both P.L. 110-389 and the modified 
article 67 of the master contract?

    VBA Response: VBA is developing skills certification tests for all 
positions that are involved in the claims process, to include certain 
supervisory positions. Currently, there is a test for VSRs, RVSRs, 
Decision Review Officers (DROs), and Coaches. Other tests are currently 
being designed, such as for Senior VSRs. According to Article 67, 
eligible employees are required to take the skills certification test 
within a year from the article implementation.

    c. Are you at all concerned that current certification testing 
shows only a 57 percent pass rate? What steps has VA taken to address 
issues surrounding this test and involve union partners in developing 
this test as required by P.L. 110-389?

    Response: VBA is dedicated to improving the skills certification 
process. Work groups for each position were established that includes 
subject matter experts, union representatives, and other pertinent 
members. The work groups perform such tasks as, reviewing previous test 
results, working with contractors to re-design certain aspects of the 
test (i.e., improve test questions that may not be clear), and 
performing job assessments to ensure the right questions are being 
asked to best measure a participant's job skills.

    Question 33: What statistical analysis was completed on the 
effectiveness of the 6.0 release of the Long Term Solution for Post 9/
11 GI Bill Claims to justify the shifting of close to 200 FTE from the 
Education Service to the Compensation Service? How was the impact of 
the re-training provisions of the VOW to Hire Heroes Act taken into 
account and what is the target for the average days to process these 
type of claims?
    Response: VA does not plan to shift FTE from Education Service to 
Compensation Service. In FY 2009, VA used funds made available by the 
American Recovery and Reinvestment Act to hire temporary claims 
processors to address the Post-9/11 GI Bill workload surge. VA retained 
the temporary surge claims processors, and in 2012, VA will hire 
additional temporary claims processors to address additional workload 
resulting from Public Law 112-56, the Vow to Hire Heroes Act of 2011, 
and Public Law 111-377, the Post-9/11 Veterans Educational Assistance 
Improvements Act of 2010. The deployment of release 6.0 of the Long 
Term Solution for the Post -9/11 GI Bill will automate several segments 
of claims processing that are currently manual or only semi- automated. 
We are evaluating both the impact of LTS and emerging initiatives, such 
as VRAP, potential legislative changes, and workload increases on 
future FTE requirements.
    VA does not expect that the VRAP provisions of the VOW to Hire 
Heroes Act will have an impact on the Post-9/11 GI Bill Long Term 
Solution. VA plans to utilize the Benefits Delivery Network, a payment 
processing system used to process Montgomery GI Bill and other 
education benefits, to process all VRAP claims. VA estimates the 
average days to process these claims will be 23 days for original 
claims and 12 days for supplemental claims in FY 2012.

    Question 34: One of the largest complaints that we receive from 
veterans is the lack of customer satisfaction and consistent answers to 
questions provided by the GI Bill call center. What efforts have you 
undertaken to improve the dropped call rate and improve customer 
satisfaction at the call center?

    Response: Providing clear, courteous, and accurate information to 
Veterans, their families and survivors is a priority for VA. VA has 
implemented a Virtual Hold call back system to improve the dropped call 
rate during periods of peak call volumes, such as the beginning of 
school terms. When wait times exceed three minutes, VA offers callers 
the ability to hold their place in line and receive a call back, rather 
than holding on the phone. In addition, the Virtual Hold system allows 
callers to schedule a return call by providing their name and telephone 
number. All appointments are scheduled on average within 48 hours. 
Additionally, during enrollment periods, the Education Call Center 
deploys senior agents and case managers to assist with high call 
volume.
    VA records all incoming and outgoing calls at the call centers. 
Each month call recordings for each agent are evaluated to assess 
overall call quality. All calls are reviewed for technical proficiency, 
security identification protocol, client contact behaviors, and first-
call resolution. Through the second quarter of FY 2012, the overall 
monthly quality score for Education Call Center agents was 98 percent.
    We have a survey measurement system, known as the ``Voice of the 
Veteran'', that a caller completes after speaking with an agent. This 
survey assesses attributes such as knowledge of the agent, agent's 
concern for caller needs, and usefulness of information provided by VA 
employees to the Veteran. The surveys allow VA to monitor customer 
satisfaction and establish improvement plans as needed. The ``Voice of 
the Veteran'' satisfaction score for FYTD 2012 is 755 for Education. 
The service industry benchmark satisfaction score is 765.
    VA is piloting a new Client Relationship Management Unified Desktop 
that will provide contact history and a consolidated view of the 
Veteran's information in one location to enhance the service experience 
provided by VA employees. In addition, VA is developing an enhanced 
knowledge management system for call center agents that will ensure 
accurate and consistent information is provided to the caller and 
increase client satisfaction.

    Question 35: Please explain why there is a planned FTE reduction in 
the Loan Guaranty Service while the personal services line has a 
request for a $2.4 million increase?

    Response: While the number of FTE for the Loan Guaranty Program 
declines by 28, increases to salary and benefits from 2012 to 2013 
result in a net increase of $2.4 million in personal services. Salary 
and benefit increases are a result of the cost of living adjustment, 
changes in staff composition including grade and step, as well as 
increases to employee benefits such as health care, the government's 
share of employee retirement, and thrift savings contributions.

    Question 36: How much will the appraisal management services and 
the automated valuation management services cost and how will it add 
value to training and other benefits?

    Response: The Appraisal Management Service/Automated Valuation 
Model (AMS/AVM) initiative is being pursued as a contract for services. 
As of April 12, 2012, the Request for Proposals has not been published; 
therefore, the contract has not been awarded. Actual lifecycle costs 
are not yet available, but the FY 2013 budget estimates $4.2 million 
will be obligated for AVM/AMS.
    The combined project goals anticipate the refined analysis of VA 
fee appraiser and lender staff appraisal reviewer performance 
(scoring), which will allow VA to target both appraisers and lender 
personnel for training based on their actual performance. This risk-
based approach will allow VA to concentrate on those individuals 
placing VA at the highest risk while minimizing expenditures in 
training. As this risk-based performance measurement matures over time, 
VA expects the actual quality of the appraisal products to increase, 
benefiting both Veterans and taxpayers.
    Additional benefits of AVM/AMS include a standardized appraiser 
scorecard that provides data and reporting on deficiencies and improves 
the quality of the appraisal product being delivered; a streamlined, 
standardized, and improved appraisal review process that allows more 
timely, higher quality review completion; capacity for more detailed 
oversight; a reduction in risk of fraudulent/invalid valuations; and 
industry comparison metrics which allow VA to benchmark its program and 
performance against the conventional market.

    Question 37: What measures are in place to review the performance 
of the Vet Success on Campus program?

    Response: Performance measures for VetSuccess on Campus (VSOC) 
include retention rates, graduation rates, and Veteran-students' 
satisfaction. These measures will be used to determine effectiveness of 
the VSOC program at specific sites. In addition, VBA is considering the 
development of a Veteran-student survey to determine Veteran 
satisfaction with VSOC services. The survey results would provide 
information on ways to better meet the changing needs of Veterans in an 
effort to continue to increase graduation rates and employment of 
Veterans.
    Currently, VSOC counselors are required to complete and submit to 
VBA Central Office a recurring monthly report identifying and tracking 
the number of Veteran-students seeking VSOC services, the number of 
Veterans enrolled in VA education benefits, statistics on student 
activities, and details on networking and outreach activities. These 
reports are designed to gather pertinent information about services 
provided to Veterans on campus.

    Question 38: Please provide more information about the Voc Rehab 
Service's plan to improve employment-based rehab by 15 percent.

    Response: To address the need to assist more Veterans in obtaining 
employment and decrease unemployment rates among Veterans, VR&E Service 
developed a plan to increase employment-based rehabilitations 15 
percent by FY 2014. This plan includes strategies to increase 
employment at the national level with actions to be implemented at the 
local level. The plan includes:

      An eight-member workgroup to brainstorm ideas and 
implement best practices of employment coordinators;
      Quarterly training webinars to focus on stations with 
high unemployment rates;
      Participation in virtual career fairs to reach Veterans 
across the Nation, including rural areas;
      Sponsored employer forums to provide annual training to 
human resource personnel and hiring managers on special hiring 
authorities, tax credits, and special employer incentive programs;
      Enhanced annual employment coordinator training 
conference with a new curriculum and certificates for completion;
      National memberships with Chamber of Commerce, the 
Society of Human Resource Managers, the National Federation Executive 
Board, the National Association for Colleges and Universities, and the 
Governors' Board; and
      Continued enhancements to VetSuccess.gov, in coordination 
with VA for VETS, to increase employer registrations and connect 
Veterans to employers.

    Question 39: Please provide the justification for reducing the FTE 
for the Insurance Service by 21.

    Response: The reduction in FTE from FY 2012 to FY 2013 for the 
Insurance Center consists of 17 direct and four management support 
personnel. The direct FTE reduction is attributed to a projected 
decline in the workload associated with the Agent Orange presumptive 
conditions that were recently added, which we assumed to mostly impact 
FY 2012. In addition, Insurance expects a decline in the general 
workload for all other administered programs that are closed to new 
issues. The management support FTE reduction is based on the decline in 
direct Insurance personnel.
GOE, General Administration Questions
    Question 40: What is the justification for the additional funding 
of 20 FTE for the Enterprise Program Management Office of the Office of 
Policy and Planning?

    Response: The Office of Policy and Planning (OPP) is not requesting 
an additional 20 FTE or additional funding, simply a different source 
of funding. In FY 2012 OPP had funded the enterprise Program Management 
Office (ePMO) through reimbursements from the Administrations and 
Office of Information and Technology. In FY 2013, the budget requests a 
direct appropriation for that office. OPP's actual funding level 
remains the same as in fiscal 2012.
    The VA established the ePMO in late FY 2010 to ensure successful 
transition of the Department's major initiatives into operational 
status and foster the implementation of program management discipline, 
standards, and doctrine throughout the Department. Since its inception, 
the ePMO has executed a number of important actions including:

      Set the conditions for and implemented a world class 
program management organization, transforming Department-wide business 
processes, and fostering accountability throughout the Department;
      Mandated and executed detailed reviews and lockdowns of 
major initiatives to provide independent assessment of progress, 
identify barriers to success, and define solutions to ensure collective 
execution;
      Led cross-cutting teams to develop and complete overdue 
acquisition packages in support of the 16 major programs; and
      Provided program management support and operational 
planning direction to the 16 major initiatives deemed critical by the 
Secretary to transform VA into a 21st century organization.

    Question 41: What portion of the Office of Public and 
Intergovernmental Affairs budget is used on providing national 
advertising campaigns to inform veterans and the public about services 
and benefits provided by VA?

    Response: The 2013 budget for OPIA does not include funding for 
national advertising campaigns to inform veterans and the public about 
services and benefits provided by VA. OPIA leads Departmental efforts 
to develop advertising campaigns. For example, OPIA worked with VHA in 
the production and placement of public service announcements for the 
National Veterans Awareness Campaign.

    Question 42: The budget documents state that the National Veterans 
Outreach Office of the Office of Public and Intergovernmental Affairs 
is working to develop a system to track the performance of VA's 
outreach programs. When do you expect this tracking system to be 
complete and what type of data will it collect?

    Response: VA created the National Veterans Outreach Office (NVO) 
within the Office of Public and Intergovernmental Affairs (OPIA) in FY 
2010 to coordinate outreach throughout VA, and to standardize outreach-
related activities. We are working diligently towards being able to 
track the costs of outreach VA-wide. Among other approaches, this 
requires a proposal to build a universal system to track outreach 
across VA. This could potentially require IT funding and other 
resources and support. The NVO has made considerable progress in 
researching and analyzing VA's outreach programs and activities in 
2011, and has already developed a framework for an effective approach 
to tracking outreach in support of VA's major initiatives. The final 
plan includes building a process for VA's administrations (VHA, VBA and 
NCA) and staff offices to:

      provide Veterans with high-quality products and 
information on activities that are consistent;
      provide trained outreach coordinators to assist Veterans;
      evaluate and develop metrics to measure the effectiveness 
of outreach programs; and
      track costs associated with outreach programs.

    Recognizing the need for centralized outreach management, NVO has 
developed the first resources that provide critical and consistent 
information to VA's Outreach community:

      An intranet site that houses important information to 
enhance how VA Outreach coordinators execute outreach including 
policies and procedures, the National Veterans Outreach Guide, links to 
the Congressionally mandated 2010 Biennial Report to Congress on the 
VA's outreach activities, and other links. An online National Veterans 
Outreach Guide that provides best business practices, expert 
recommendations, proven examples of successful VA outreach activities 
in serving Veterans, and lessons learned. This guide outlines processes 
for how to conduct outreach events, track expenditures, measure the 
success of activities and tap into key VA resources and contacts, plus 
so much more.
      Next steps include finalizing a proposal, mentioned 
above, for a robust National Veterans Outreach System (NVOS) which will 
allow VA Outreach leaders to populate a series of fields with 
information about planned outreach activities. The NVOS will be an 
interactive tool that allows users to systematically and uniformly 
enter, store, organize, view, retrieve and report outreach-related data 
easily. The goal of the database is to provide a more advanced, easy-
to-use tool that may either be used in concert with existing data 
collection methods or replace less efficient and effective approaches. 
It would also provide the data necessary to extract any number of data 
pulls including the costs associated with outreach in a fiscal year and 
the number of events executed.

    Question 43: Please provide more information about the Homeless 
Veteran Supportive Employment Program and what type of jobs and wages/
salary the 360 homeless or formally homeless veterans are doing as part 
of this program.

    Response: The Homeless Veteran Supported Employment Program (HVSEP) 
is a collaborative effort between the Compensated Work Therapy (CWT) 
and the Veterans Health Administration (VHA) Homeless Programs. 
Homeless, formerly homeless, or at- risk of homelessness Veterans were 
hired as Vocational Rehabilitation Specialists (VRSs) at the GS-1715-5, 
7, or 9 levels; the exact amount of these salaries are dependent on the 
geographic location of the position. The VRSs are administratively 
assigned to and supervised by the CWT Program Manager and functionally 
assigned to work within the various homeless teams. These VRSs provide 
vocational assistance, customized job development, competitive 
community placement, and ongoing employment supports designed to 
improve employment outcomes among the homeless Veterans that they 
serve. As of March 30, 2012, 366 (91 percent) of the 402 approved full-
time equivalents (FTE) VRS positions were filled by homeless or 
formerly homeless Veterans in HVSEP.

    Question 44: How does the Office of Public Affairs and 
Intergovernmental Affairs measure what percent of news coverage is 
positive or neutral in tone as listed in the office's performance 
measures?

    Response: VA contracts with a private sector company to provide the 
Department's daily news clippings for senior leadership. That contract 
includes characterizations by the contractor of the tone of each news 
story. Tone is expressed as one of three categories: positive, neutral, 
or negative.

    Question 45: The performance measures for the Office of 
Congressional and Legislative Affairs tracks the percentage of 
testimony submitted to Congress within the required timeframe, 
percentage of responses to pre- and post-hearing questions that are 
submitted to Congress within the required timeframe, and the percentage 
of title 38 reports that are submitted to Congress within the required 
timeframe. What is the definition of the ``required timeframe'' for 
each of these measures and who sets this definition?

    Response: The definitions of ``required timeframe'' for testimony 
and questions for the record are set by the Committee. As per the 
Committee rules, written testimony is due 48 hours in advance of the 
hearing. The specific due date for questions for the record is set in 
the Committee letter transmitting the questions for the record to the 
Department. There are times when a due date is amended based on mutual 
agreement between committee and VA staff. If the due date is amended, 
the new date is used to compute the performance metric. The ``required 
timeframe'' for Title 38 reports is set by the applicable statue 
requiring the submission of the report.

                                 
 POST-HEARING RESPONSES FROM THE DEPARTMENT OF VETERANS AFFAIRS (VA), 
      SUBMITTED BY THE HON. BOB FILNER, RANKING DEMOCRATIC MEMBER
    Question 1: The budget request contains ``operational 
improvements'' that total $1.3 billion dollars.

    a. How is VA tracking the success of those operational 
improvements?

    Response: VA is tracking progress of each of the six operational 
improvements on a monthly basis with status reports from the field and 
the responsible program office.

    b. Who at VA is responsible for tracking the savings?

    Response: Each of the six operational improvements is assigned to a 
specific program office to track and report the monthly progress of 
each initiative as listed below. The VHA Office of Finance is 
responsible for consolidating the tracking of these savings.

    1.) Fee Care Payments Consistent with Medicare (VHA Business 
Office)

    2.) Fee Care (VHA Business Office)

    3.) Clinical Staff & Resource Realignment (VHA Office of Finance & 
VHA Office of Health Operations & Management)

    4.) Medical & Administrative Support (VHA Office of Finance & VHA 
Office of Health Operations & Management)

    5.) Acquisition Improvements (VHA Office of Health Operations & 
Management)

    6.) VA Real Property Cost Savings & Innovation Plan (VA Office of 
Management)

    c. The Committee would like mid-year fiscal year 2012, and 2013 
reports that delineate in detail, these savings.

    Response: VA will provide the mid-year data for FY 2012 when it is 
available. There is a time lag in reporting for some of the initiatives 
and we do not currently have the first full six months of data 
available for all six initiatives. Also, as identified in a recent GAO 
report (GAO-12-305, February 2012) and VA's response to that report, 
initiatives 3, 4, and 5 (listed in answer # 1b above) are being revised 
and are not anticipated to be completed until the end of May. The 
following is the current status for FY 2012:

                                                                Operational Improvements
                                                                   Dollars in Millions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Description                                                         FY 2012 as of:
--------------------------------------------------------------------------------------------------------------------------------------------------------
         Fee Care Payments Consistent with Medicare                                                 ($230) March 2012
                                   Fee Care Savings                                              ($109) February 2012
        Clinical Staff and Resource Realignment (1)                                                   $0 January 2012
       Medical & Administrative Support Savings (2)                                               ($69) December 2011
                       Acquisition Improvements (3)                                                    $45 March 2012
VA Real Property Cost Savings & Innovation Plan (4)                                                  ($66) March 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Total Operational Improvements                                                            ($519)
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1),(2),(3) Methodology under revision
(4) Updated quarterly

    Question 2: The Caregivers and Veterans Omnibus Health Services Act 
of 2010 significantly expanded benefits for caregivers and increased 
services for women and rural veterans. Your request for 2013 and 2014 
is $278 million, respectively.

    a. Have all of the sections of this law been fully implemented? If 
not, why not?

    b. Please provide to the Committee a full accounting of 
expenditures and a time line for the full implementation of the 
Caregivers Act to date.

    Response: Response: Many of the provisions of the Caregivers and 
Veterans Omnibus Health Services Act of 2010 have been implemented. The 
table below provides a status of each of these sections as of April 26, 
2012 and the narrative that follows provides an explanation of terms 
and an update on those provisions that are still in development. The 
``Amount Spent'' column refers to funds used to comply with Public Law 
111-163, not for the broader program referenced.


----------------------------------------------------------------------------------------------------------------
                                                                                     Amount Spent
   Title or                                               Date Completed or Target       (if        Date Amount
   Section              Summary              Status*             Completion          applicable)     Spent was
                                                                                       (000s)**        Pulled
----------------------------------------------------------------------------------------------------------------
     Title I   Family Caregiver Program             IO       May 5, 2011 (Interim        $36,219        2/29/12
                                                            Final Rule Published)
----------------------------------------------------------------------------------------------------------------
         201    Study on Women Veterans             IO           Awarded contract            $52         4/4/12
                                                                 February 1, 2012
----------------------------------------------------------------------------------------------------------------
         202      Training for MST/PTSD             IO   MST Coordinators and VISN-         $765       Data was
                                                          level Points of Contact                    pulled for
                                                            completed training by                      from the
                                                         June 30, 2011; Directive                  beginning of
                                                         establishing the training                       FY2011
                                                             as mandatory for all                       through
                                                         mental health and primary                 FY2012. Some
                                                          care providers approved                  of the listed
                                                          January 23, 2012. First                  $765, 000 has
                                                          annual report submitted                          been
                                                                  January 4, 2012                  obligated but
                                                                                                    not spent -
                                                                                                    but it will
                                                                                                    be spent by
                                                                                                     the end of
                                                                                                     this year.
----------------------------------------------------------------------------------------------------------------
         203    Women Veterans Retreats             IO    First retreat held June           $265       4/9/2012
                                                                          6, 2011
----------------------------------------------------------------------------------------------------------------
         204         Women and Minority             FI    May 5, 2010 (already in             $0
                    Advisory Committees                               compliance)
----------------------------------------------------------------------------------------------------------------
         205           Child Care Pilot             IO   First site began offering          $966      2/10/2012
                                                         services October 2, 2011
----------------------------------------------------------------------------------------------------------------
         206               Newborn Care             IO   Initial Guidance provided        $4,334      5/10/2012
                                                                  August 18, 2010
                                                             Final Rule published
                                                                December 19, 2011
----------------------------------------------------------------------------------------------------------------
         301   Education Debt Reduction             ID   Estimated publication of             $0
                                Program                         updated policy by
                                                                   September 2012
----------------------------------------------------------------------------------------------------------------
         302          Visual Impairment             ID             Regulations in             $0
                            Scholarship                    development; estimated
                                                         publication of final rule
                                                               by January 1, 2014
----------------------------------------------------------------------------------------------------------------
         303         Rural Health Pilot             NI       This is a permissive             $0
                               Programs                       authority and not a
                                                            statutory mandate. VA
                                                                believes numerous
                                                         interagency pursuits with
                                                          IHS and HHS make use of
                                                                   this authority
                                                            unnecessary. Notified
                                                             Committee on May 17,
                                                                            2012.
----------------------------------------------------------------------------------------------------------------
         304          Peer Outreach for             IO   Will begin hiring support            $0
                               Veterans                     specialists in fourth
                                                         quarter FY 2012; continue
                                                           hiring through FY 2013
                                                          (target completion: end
                                                                      of FY 2013)
----------------------------------------------------------------------------------------------------------------
         305       Travel/Reimbursement             ID         Beneficiary Travel             $0
                               Benefits                     Handbook re-published
                                                         July 23, 2010; estimated
                                                         publication of final rule
                                                              by December 1, 2013
----------------------------------------------------------------------------------------------------------------
         306   Physician Incentive Pilot            NI      Notified Committee of             $0
                                                             inadequate physician
                                                         interest to proceed with
                                                         the pilot on ZJanuary 4,
                                                                             2012
----------------------------------------------------------------------------------------------------------------
         307   VSO Transportation Grants            IO    Proposed rule published             $0
                                                               December 30, 2011;
                                                         estimated publication of
                                                         final rule by February 1,
                                                                             2013
----------------------------------------------------------------------------------------------------------------
         308            Amendment to P.L. 110-      FI    Federal Register notice             $0
               387, Section 403 (Project                 published August 15, 2011
                                  ARCH)
----------------------------------------------------------------------------------------------------------------
         401   Servicemember Eligibility            ID    Proposed rule published             $0
                       for Readjustment                  March 12, 2012; estimated
                             Counseling                  publication of final rule
                                                              by February 1, 2013
----------------------------------------------------------------------------------------------------------------
         402       Vet Center Referrals             IO    Proposed rule published             $0
                                                         March 12, 2012; estimated
                                                         publication of final rule
                                                              by February 1, 2013
----------------------------------------------------------------------------------------------------------------
         403      Veteran Suicide Study             IO   Data on suicide/mortality            $0
                                                         received or committed to
                                                           by 49 states; Advisory
                                                           Board meeting targeted
                                                            third quarter FY 2012
----------------------------------------------------------------------------------------------------------------
         501      Elimination of Annual            N/A             Not applicable             $0
                                Reports
----------------------------------------------------------------------------------------------------------------
         502   Gulf War Research Report            N/A             Not applicable             $0
----------------------------------------------------------------------------------------------------------------
         503           CHAMPVA Payments             IO      Estimated publication             $0
                                                            date of final rule by
                                                                December 31, 2014
----------------------------------------------------------------------------------------------------------------
         504        Patient Information             FI       Final rule published             $0
                             Disclosure                          February 8, 2011
                                                         Published revised VA Form
                                                         10-0137 in September 2011
----------------------------------------------------------------------------------------------------------------
         505         Quality Management             IO         Quality management             $0
                                                         officers in place; report
                                                          provided to Congress on
                                                                December 21, 2010
----------------------------------------------------------------------------------------------------------------
         506             Outreach Pilot             ID    Developing regulations;            $75       4/8/2012
                                                         estimated publication of
                                                              final rule in First
                                                                  Quarter FY 2013
----------------------------------------------------------------------------------------------------------------
         507       Residential TBI Care             IO   VA began pilot program on           $39       4/9/2012
                                                          assisted living October
                                                         6, 2009; VA is continuing
                                                           this pilot program and
                                                          will use the results to
                                                            determine best use of
                                                            section 507 authority
----------------------------------------------------------------------------------------------------------------
         508     IOM Project SHAD Study             IO   Study began June 1, 2011         $2,215      5/18/2012
----------------------------------------------------------------------------------------------------------------
         509            Non-VA TBI Care             IO           Written guidance           $335     05/17/2012
                                                          distributed to field on
                                                                  October 1, 2010
----------------------------------------------------------------------------------------------------------------
         510     Dental Insurance Pilot             ID    Proposed rule published             $0
                                                         March 1, 2012; estimated
                                                         publication of final rule
                                                               by January 1, 2013
----------------------------------------------------------------------------------------------------------------
         511   Prohibition of Copayments            IO     Information Technology             $0
                                                                changes partially
                                                         implemented September 19,
                                                         2011; additional changes
                                                         to be made in May, 2012.
                                                             Final rule published
                                                                  August 22, 2011
----------------------------------------------------------------------------------------------------------------
         512             Medal of Honor             FI       Final rule published             $0
                            Eligibility                           August 22, 2011
----------------------------------------------------------------------------------------------------------------
         513     Herbicide and Gulf War             FI       Final rule published             $0
                    Veteran Eligibility                           August 22, 2011
----------------------------------------------------------------------------------------------------------------
         514        Physician Assistant             FI         Position filled on             $0
                               Director                         February 27, 2011
----------------------------------------------------------------------------------------------------------------
         515   Special Committee on TBI             FI    First committee meeting             $0
                                                                   held June 2011
----------------------------------------------------------------------------------------------------------------
         516        HISA Grant Increase             IO       Payments being made;            $32    4th Quarter
                                                         estimated publication of                  FY 2010 - 2nd
                                                          final rule by September                    Quarter FY
                                                                          1, 2014                          2012
----------------------------------------------------------------------------------------------------------------
         517   Extension of Nursing Home           N/A             Not applicable             $0
                and Hospital Copayments
                              Authority
----------------------------------------------------------------------------------------------------------------
         518      Health Plan Repayment            N/A             Not applicable             $0
----------------------------------------------------------------------------------------------------------------
         601      Health Care Retention             ID           VA Handbook 5007             $0
                                                           revisions completed on
                                                                  March 12, 2012.
                                                              Retroactive premium
                                                           payment for registered
                                                                  nurses pending;
                                                          disbursement is pending
                                                             modification of DFAS
                                                            (estimated completion
                                                          second quarter FY 2013)
----------------------------------------------------------------------------------------------------------------
         602        Nurse Working Hours             ID    Developing policies for             $0
                                                         Handbook 5011; estimated
                                                           publication on October
                                                                         31, 2012
----------------------------------------------------------------------------------------------------------------
         603        Health Professional             ID             Regulations in             $0
                            Scholarship                    development; estimated
                                                         publication by January 1,
                                                                             2014
                                                              Anticipate awarding
                                                           scholarships beginning
                                                             summer 2014 semester
----------------------------------------------------------------------------------------------------------------
         604          Clinical Research             ID             Regulations in             $0
                            Scholarship                    development; estimated
                                                            publication by fourth
                                                                  quarter FY 2014
----------------------------------------------------------------------------------------------------------------
         701     GPD for Non-Conforming             NI       This is a permissive             $0
                               Entities                       authority and not a
                                                            statutory mandate. VA
                                                          believes it will not be
                                                             of practical use and
                                                          would be inefficient to
                                                                 pursue. Notified
                                                             Committee on May 17,
                                                                            2012.
----------------------------------------------------------------------------------------------------------------
  Title VIII        Non-Profit Research             FI          Published updated             $0
                           Corporations                       Handbook 1200.17 on
                                                                 December 8, 2010
----------------------------------------------------------------------------------------------------------------
    Title IX      Construction/Facility             FI                           Last facility$0eld
                                 Naming                      renaming ceremony on
                                                               September 11, 2010
----------------------------------------------------------------------------------------------------------------
        1001   Expanded Authority for VA            ID      Pending Department of             $0
                                 Police                   Justice (DoJ) approval;
                                                          VA defers to DoJ on the
                                                          timing of this approval
----------------------------------------------------------------------------------------------------------------
        1002          VA Police Officer             ID    Payments to begin Third             $0
                              Allowance                           Quarter FY 2012
----------------------------------------------------------------------------------------------------------------
* Status refers to fully implemented (FI), implemented and ongoing (IO), not implementing (NI), in development
  (ID), or not applicable (N/A). Fully implemented provisions are those where VA has completed all elements of
  the law and no further action is required. Implemented and ongoing are those are those provisions where VA is
  continuing to administer programs, benefits, or services as required by law. Provisions VA is ``not
  implementing'' refer to those where authority is permissive or where VA has notified the Committees that,
  after taking steps to implement the program, further implementation became unfeasible or inadvisable.
  Provisions that are ``in development'' are still undergoing necessary preparations (usually developing
  regulations) before the Department can begin administering benefits or services. ``Not applicable'' (NA)
  provisions refer to those sections where no Departmental action was required.
** Some entries in the ``Amount Spent'' column reflect $0. This may be for several reasons. First, the
  Department may have already been in compliance with the requirements of the law, and therefore no additional
  funds were needed. Second, there may have been no action called for by the Department (such as an extension of
  authority or an elimination of a report), or the law may have only modified VA's internal organization
  resulting in negligible costs (such as Title VIII's provisions regarding non-profit research corporations or
  the renaming of a facility). Third, the Department may be opting to not exercise a permissive authority in the
  law, in which case no additional funds were needed. Fourth, the Department may be working to execute a program
  but it has not yet begun to deliver the benefits (for example, if regulations are required and a final rule
  has not yet been published). Finally, the Department may not have a mechanism to reliably separate out the
  costs from a change required by the law and identify the additional resources allocated for a specific
  provision (for example, VA cannot calculate the actual increase in costs resulting from enrolling Medal of
  Honor recipients in a higher priority group).

Status of Provisions ``In Development'':
    Section 301 (Education Debt Reduction Program): On June 13, 2011, 
the Under Secretary for Health authorized implementation of the changes 
permitted in P.L. 111-163 while the revisions of VHA Directive 1021 and 
VHA Handbook 1021.01 were undergoing revision. VA anticipates the 
revised Directive and Handbook to be published by September 2012.
    Section 302 (Visual Impairment Scholarship Program): VA is drafting 
regulations and anticipates publication of a final rule by January 1, 
2014. VA is aiming to provide the first 30 Visual Impairment 
Scholarships for the summer semester of 2014.
    Section 305 (Travel/Reimbursement Benefits): VA is currently 
developing regulations to implement a broad update to VA's beneficiary 
travel program and is including the statutory revisions from section 
305 as part of that package. Beneficiary Travel benefits for family 
caregivers were implemented under current, existing authority. VA 
expects the remaining changes will be published by December 1, 2013.
    Section 401 (Servicemember Eligibility for Readjustment 
Counseling): VA published a proposed rule on March 12, 2012, and the 
period for public comment closed on May 12, 2012. At that time, we will 
draft a final rule to address any public comments and submit a proposed 
final rule to the Office of Management and Budget for a 90-day review 
period. We anticipate publication of a final rule by February 1, 2013.
    Section 506 (Outreach Pilot): VA is developing regulations to 
establish a pilot program and anticipates publication by the first 
quarter of FY 2013. The pilot program would be conducted through 
grantees during fiscal years 2013 and 2014 before ending in 2015, when 
VA will submit a report to Congress on the results of the program.
    Section 510 (Dental Insurance Pilot): The proposed rule was 
published March 1, 2012. The public comment period closed April 30, 
2012. At that time, we will draft a final rule to address any public 
comments and submit a proposed final rule to the Office of Management 
and Budget for a 90-day review period. We anticipate publication of a 
final rule by February 1, 2013. The Request for Proposal for the dental 
contracts will be issued to coincide with the publication of the final 
rule.
    Section 601 (Health Care Retention): VA has implemented all 
provisions of section 601 except subsection (k), which changes the rate 
of premium pay for registered nurses retroactive to May 5, 2010. VA is 
calculating the hours that are creditable as premium pay and will make 
these payments to eligible nurses when modifications to Defense 
Financing and Accounting Services (DFAS) are completed. VA expects this 
to be complete by the second quarter of FY 2013.
    Section 602 (Nurse Working Hours): VA has disseminated information 
about the statutory changes to its facilities; VA has proposed policy 
revisions regarding the restrictions on overtime duty for nurses and 
other occupations. Currently, a review is ongoing to compare proposed 
language with union contracts. VA would prefer to provide situational 
guidance as advisory supervisory guidance, rather than publishing a 
formal policy. This guidance would identify specific situations and 
provide advice on how to handle these scenarios, including when 
overtime remains appropriate. VA anticipates this guidance will be 
completed by October 31, 2012.
    Section 603 (Health Professional Scholarship): VA is developing 
regulations with a projected publication date by November 2013. VA 
anticipates providing the first 100 scholarship awards for the summer 
semester of 2014.
    Section 604 (Clinical Research Scholarship): VHA's Healthcare 
Retention and Recruitment Office is working with VHA's Office of 
Regulatory Affairs and Office of Research and Development to prepare 
draft regulations. VA estimates publication of these regulations by 
fourth quarter FY 2014.
    Section 1001 (Expanded Authority for VA Police): VA has developed a 
proposed policy defining the use of this expanded authority and has 
submitted it to the Department of Justice (DoJ) for review. When DoJ 
approves the policy, VA will begin implementing it.
    Section 1002 (VA Police Office Allowance): VA has updated specific 
uniform requirements in VA Handbook 0730 and completed a survey of 
costs. VA has also obtained policy approval from the VA administrations 
and its labor partners. VA will implement the new allowance beginning 
third quarter of fiscal year 2012.

    a. Please provide to the Committee a full accounting of 
expenditures and a time line for the full implementation of the 
Caregivers Act to date.

    Response: The table in the previous response includes an account of 
when each provision of the bill was fully implemented or when we 
anticipate it will be.

    Question 3: Please provide the Committee with a detailed timeline 
of the steps that led to the formulation of the FY 2013 budget request 
and FY 2014 advance appropriation recommendation.

    Response: The following is a timeline for formulation of the FY 
2013 budget request and FY 2014 advance appropriation request:

                                         Department of Veterans Affairs
                                     Timeline of Formulation of 2013 Budget
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                  April 2011                  VA issues internal call letter for 2013/2014 budget proposals
----------------------------------------------------------------------------------------------------------------
                    May 2011       VA Administrations develop 2013 budget, program, and legislative proposals;
                                           and the 2014 Advance Appropriation (AA) request for medical care
----------------------------------------------------------------------------------------------------------------
                   June 2011        VA construction budget proposals for 2013 prioritized through Strategic
                                                                  Capital Investment Planing (SCIP) process
----------------------------------------------------------------------------------------------------------------
                   July 2011                         VA leadership considers the 2013/2014 budget proposals
----------------------------------------------------------------------------------------------------------------
                 August 2011                                              VA prepares OMB budget submission
----------------------------------------------------------------------------------------------------------------
              September 2011                         VA submits 2013 budget to OMB with the 2014 AA request
----------------------------------------------------------------------------------------------------------------
               November 2011                         VA receives OMB Passback of 2013/2014 budget decisions
----------------------------------------------------------------------------------------------------------------
               December 2011                                    VA and OMB reach agreement on budget levels
----------------------------------------------------------------------------------------------------------------
                January 2012                           VA prepares 2013 Congressional Budget Justifications
----------------------------------------------------------------------------------------------------------------
               February 2012       President's 2013 Budget transmitted to Congress, including the President's
                                                                           2014 AA request for medical care
----------------------------------------------------------------------------------------------------------------

    Question 4: You have asked for $119.4 million for the Veterans 
Relationship Management (VRM) initiative. Please provide more detail on 
what VRM is and how this initiative will fundamentally transform 
veterans' access to VA benefits and services. In addition to providing 
more detail please answer the following questions:

    Response: The Veterans Relationship Management (VRM) initiative 
provides Veterans and VA clients with secure, on-demand access to 
comprehensive VA services and benefits. These enhancements ensure that 
VA clients have a direct path to consistently accurate information and 
can perform multiple, self-service transactions. VRM also provides VA 
employees with up-to-date tools to better serve Veterans and their 
families. VRM's accomplishments to date include:

      41 Self-Service Features Accessible via eBenefits: 
Examples of these features include: access to the Post-9/11 GI Bill 
application; the ability to generate letters such as service 
verification letters and preference letters for hiring; access to 10-
10EZ form to apply for VHA services; and the ability to apply for a 
Veteran's Group Life Insurance policy or view and update information 
for an existing policy.
      Improvements to Veterans On-Line Application (VONAPP) 
Direct Connect (VDC): VDC moves VBA closer to a paperless model by 
allowing users to securely submit and track claims for benefits 
electronically through the eBenefits portal. VDC presents pre-
populated, interview-style questions to users and navigates them 
through the entire online claim submission process. Currently, VA is 
exploring VDC as one of the integration points between the Veterans 
Benefits Management System (VBMS) and eBenefits. Claims filed through 
eBenefits will use VDC, and the information and data received will be 
loaded into VBMS.
      Enhanced Telephone Features: Callers to VBA's line are 
now routed to the best skilled agent through a national queue. Callers 
can also choose to be called back automatically rather than wait on 
hold, or pick a date and time to be called back. All calls are recorded 
for quality assurance to identify training needs, and select calls are 
included in a best quality call library.
      Customer Relationship Management/Unified Desktop (CRM/
UD): Pilots have been conducted to provide VA call center employees a 
view of VA clients' information through one integrated application 
rather than up to 13 applications during a single phone call. CRM/UD 
improves call center business processes, provides the capability to 
capture and track caller history, improves information presentation to 
facilitate first-contact resolution, and aids in personalizing call 
service to Veterans.

    In FY 2013, the VRM initiative will accomplish the following 
strategic business objectives:

      Expand access to information and services available 
online that promote Veteran self-service, including the capability to 
apply for benefits (electronic interview process) via the eBenefits 
portal;
      Expand CRM and telephone capabilities to provide clients 
with a higher quality of customer service and enhanced self-service 
options via interactive voice response;
      Identify and grant access to VA's external stakeholders, 
including VSOs, business partners, and service providers, through a 
stakeholder enterprise portal;
      Implement a personal identity management framework, 
allowing Veterans and their authorized representatives a standard and 
consistent way to verify their identity across VA, whether interacting 
by phone, e-mail, internet, or other access channels; and
      Expand upon information available to VA staff and 
communicated to clients.

    a. How are you tracking the accuracy of the answers provided once 
the veteran is either called back from the virtual hold or has a 
scheduled call back?

    Response: All calls are recorded. Each month, call recordings are 
evaluated locally for each agent and nationally by a quality assurance 
group. All calls are reviewed for technical proficiency, security 
identification protocol, client contact behaviors, and first-call 
resolution. We also use a Voice of the Veteran customer satisfaction 
survey in which callers assess attributes such as the agent's concern 
for caller needs and usefulness of information provided. This customer 
satisfaction survey system allows VA to monitor customer satisfaction 
and make improvements as needed.

    b. How are you tracking the accuracy of what the veteran is told?

    Response: Calls are tracked by technical proficiency, security 
identification protocol, customer service-client contact behaviors, and 
first-call resolution. Quality evaluations are consistently performed 
on a monthly basis, to include reviews of system data available at the 
time of the call, to ensure completeness of answers.

    Question 5: In the 2013 budget you request $433 million for the 
Patient-Centered Care initiative, a new model of patient-centered care, 
that is organized under the Enhancing the Veteran Experience and Access 
to Healthcare (EVEAH) initiative.

    a. What are the three major differences in this initiative that 
will help VA support the culture change necessary to become a more 
patient-centered health care system? Please be specific.

    b. How do you propose to establish a partnership among the primary 
care team, veteran patients, and their families or caregivers? What 
elements are in the plan and do you have a proposed timeline?

    c. You also state in your budget request that every one of our 
transformation efforts embody some component of patient- centered care. 
Please explain that statement and how it relates to the EVEAH.

    d. How many transformation efforts are currently underway and what 
are they?

    Response: The $433 million requested in the President's budget was 
for New Models of Care. These efforts to change the way we deliver 
health care for Veterans, as you note, all embody patient-centered 
concepts. We have a specific initiative in the Major Initiative called 
``Enhancing the Veteran Experience and Access to Health care'' (EVEAH) 
which contains a specific Patient Centered Care (PCC) sub-initiative 
focused on a more systematic change in VHA business and clinical 
practices. We have requested $120 million for EVEAH in FY 2013 and 
budgeted $55 million to support PCC.

    a. What are the three major differences in this initiative that 
will help VA support the culture change necessary to become a more 
patient-centered health care system? Please be specific.

    Response: The Office of Patient Centered Care (PCC) has 
responsibility for VA's effort to transform our clinical and business 
processes to be more Veteran centric. This fundamental change in our 
systems will allow VA to engage patients and their families in mutually 
beneficial and respectful health care partnerships that improve health 
outcomes and patient satisfaction. The office will work directly with 
Network and medical center leadership to bring about these changes. To 
accomplish this goal they have created a virtual office with field-
based experts capable of assisting medical center leadership with this 
transformation.
    A literature review suggested that some private sector 
organizations that have adopted similar patient care principles have 
realized economic returns on that investment. For example, some studies 
have found that patients tend to have shorter hospital stays. After 
reviewing the evidence, we felt that there was not enough specific data 
to do a formal return on investment analysis. That said, patient 
centered care approaches are rapidly becoming the norm in private 
health care. The Joint Commission has recently published proposed 
standards that will be incorporated into their accreditation 
requirements. Recognizing the evolving industry standards and the needs 
of Veterans, VA has undertaken this initiative to craft standards and 
programs that are best aligned with our very unique mission and patient 
population. We do expect many of the necessary changes at the patient 
care level can easily be accomplished within existing resources and 
will improve patient satisfaction and quality outcomes.
    Much of the resources for the New Models of Care initiative have 
been used to fund pilot projects at medical centers. These projects are 
designed to help facilities with local innovations. We have also 
established 5 (and plan 4 more) Centers of Excellence to adapt, test, 
evaluate, and refine patient centered care concepts. The new PCC office 
will also be responsible for developing, evaluating, and implementing 
broad strategies to change current practices and organizational culture 
consistent with our patient-centered care goals. They will have a major 
role in ensuring that all these efforts are integrated and aligned with 
operational plans.

    b. How do you propose to establish a partnership among the primary 
care team, veteran patients, and their families or caregivers? What 
elements are in the plan and do you have a proposed timeline?

    Response: Over the last three years, our efforts to transform 
primary care into a patient centered medical home model (our Patient 
Aligned Care Teams or PACT) have focused on staffing and building the 
necessary infrastructure. A major training effort has been underway for 
the last two years to train all PACT teams across the country and to 
assist teams to change their clinical practices to meet the goals of 
this transformation. This training has included information on 
relationship-based care.
    One of the underlying principles of the medical home model is 
active patient engagement. We intend that patients will be able to 
develop a personal plan for their health and health care. As part of 
this initiative, we are acquiring and adapting for the Veteran 
population a web-based Health Risk Assessment tool that patients will 
complete. Teams will be able to use those results to help patients 
develop a personalized health plan. We have hired Health Promotion and 
Disease Prevention Coordinators and Behavioral Health Coaches at every 
medical center. A significant part of their job is to provide training 
and support to PACT teams to help them gain the skills to be able to 
actively partner with patients, families or caregivers to improve 
health outcomes. Enhancements to MyHealtheVet, the deployment of secure 
messaging, and through our mobile application development will allow 
patients greater access to health information and to their caregivers.

    c. You also state in your budget request that every one of our 
transformation efforts embody some component of patient- centered care. 
Please explain that statement and how it relates to the EVEAH.

    Response: All of our Major Initiative efforts are aimed at 
improving the experience patients have when accessing VHA health care 
services. If we improve the access to care, coordination of services, 
and find meaningful and effective ways of personalizing health services 
to better engage patients and their families in their health and health 
care, we expect to be able to improve health outcomes. Our EVEAH Major 
Initiative contains our plans to develop a broad patient centered 
culture - redesigning all our clinical and business activities around 
specific patient centered principles. For example, we have worked over 
the last several years to revise facility design guides to incorporate 
patient centered design elements that will be used to remodel or build 
new space. EVEAH also contains our System Redesign sub-initiative that 
is working with both outpatient and inpatient teams to reengineer 
clinical and business processes.

    d. How many transformation efforts are currently underway and what 
are they?

    Response: There are 16 Major Initiatives in VA's Strategic Plan 
Refresh for FY 2011-2015. These cross-cutting and high-impact priority 
efforts were designed to address the most visible and urgent issues in 
VA. These initiatives are on track for completion by 2015; many of them 
are now transitioning toward sustainment. They will strengthen VA's 
ability to meet the evolving needs of Veterans and their families. 
VHA's efforts are focused on transforming our care to be more Veteran 
centered, more coordinated, more accessible, and more efficient.
    For each of the six transformation initiative related to health 
care, VHA has created operating plans, which outline the goals, means, 
milestones, and resources required to achieve the initiatives outlined 
in the VA Strategic Plan. These are the VHA FY 2011-2013 Operating 
Plans. Collectively, these efforts transform VA healthcare to be the 
patient-centered, integrated system that this plan envisions. 
Leadership, creativity, prudent risk taking, and a disciplined effort 
to learn from our effort will be required to successfully make this 
journey. When we do this well, we not only will transform our system of 
care, but the lives of those who nobly served this Nation.


----------------------------------------------------------------------------------------------------------------
         Major Initiative                                        Brief Description
----------------------------------------------------------------------------------------------------------------
New Models of Health Care (NMOC)    Design a Veteran-centric health care model to help Veterans navigate
                                              the health care delivery system and receive coordinated care.
                                    NMOC is a portfolio of initiatives created to fundamentally improve
                                   the experience for America's Veterans when accessing VA healthcare services.
                                   This initiative is aimed at transforming our Primary Care services into a
                                   medical home model (our Patient Aligned Care Teams or PACT), aligning our
                                   specialty care services to better support PACT teams and their patients, and
                                                 improving access by adopting various eHealth technologies.


Enhancing the Veteran Experience                                             The EVEAH Initiative includes:
    and Access to Health Care
                      (EVEAH)

Eliminate Veteran Homelessness      VA has developed a Plan to End Homelessness that will assist every
                                   eligible homeless Veteran willing to accept services. VA will help Veterans
                                   acquire safe housing; needed treatment services; opportunities to return to
                                                                       employment; and benefits assistance.
Improve Veterans' Mental Health     VHA must provide Veterans with meaningful choices among effective
                                    treatments, balancing biological and biomedical approaches to care with
                                   psychological and psychosocial strategies. Knowing that mental health is not
                                    only a function of medical care, VHA must work to connect Veterans with
                                   support services through technology and in their communities. VHA must also
                                   partner with the Department of Defense (DoD) to identify and develop the most
                                    effective practices for addressing mental health issues associated with
                                       military service, and provide the appropriate mental health services
                                                         throughout the full continuum of service delivery.
Perform research and development    Two long-term transformative programs that the Office of Research
 to enhance the long-term health      and Development is undertaking are genomic medicine and point of care
   and well-being of Veterans      research. Genomic medicine, also referred to as personalized medicine, uses
                                   information on a patient's genetic make-up to tailor prevention and treatment
                                   for that individual. Point of care (POC) research is an intermediate strategy
                                         between randomized clinical trial (RCT) and observational studies.
Health Care Efficiency: Improve     Through this initiative VHA will begin to reduce operational costs
 the quality of health care while  and create more streamlined deployment of targeted program areas to enhance
                reducing cost                                                program efficiency across VHA.
Transform health care delivery          These new initiatives will shape the future of VHA clinical
   through health informatics           information systems through deliberate application of health IT and
                                    informatics to deliver solutions that transform health care delivery to
                                   Veterans, and directly improve quality and accessibility, while optimizing
                                                                                                     value.
----------------------------------------------------------------------------------------------------------------

    Question 6: Is the Patient Centered Community Care (PC3) part of 
the Patient-Centered Care (PCC) initiative mentioned in the budget 
request?

    a. If it is not part of the PCC, please explain the difference 
between the two initiatives.

    Response: The Patient-Centered Care initiative is how VA intends to 
change the care VA delivers. Patient-Centered Community Care (PC3) is a 
new vehicle that will be used to purchase care if/when required. The 
Patient-Centered Care initiative is working to evaluate and redesign 
its primary care delivery system to a patient-centered model of care 
focused on shared decision-making processes, patient-guided treatment, 
and population management.
    PC3 is an effort to improve the management and oversight of the 
health care purchased for Veterans when VA facilities are not 
geographically accessible, services are not available at a particular 
facility, or when care cannot be provided in a timely manner. PC3 is 
intended to standardize the overall processes, performance metrics and 
outcomes for these services. It is not intended to replace VA health 
care (managed within our Patient-Centered Care initiative). VA is in 
the process of leveraging lessons learned from Project HERO and other 
Purchased Care pilot programs to develop contracts that will ensure 
Veterans receive coordinated, evidence-based care from non-VA 
providers. We intend to apply the patient-centered focus of the 
initiative to the care we purchase through the PC3 contract.

    Question 7: Please explain the intent and rationale for the Non-VA 
Care Coordination (NVCC) pilot program. Is VA coordinating the 
implementation of NVCC with PC3? For example, has NVCC influenced the 
development of the PC3 program?

    Response: Non-VA Care Coordination (NVCC) is now in the 
implementation phase. As identified during program improvement reviews 
of the NVCC Program, VA determined that a more streamlined and 
standardized process would assure better patient outcomes for Veterans. 
NVCC was developed to meet that need. VA considers the NVCC standard 
operating procedures (SOPs) integral to purchasing any community health 
care services and will utilize these standardized processes in any 
effort, including PC3. PC3 will not develop new procedures, but will 
utilize the NVCC SOPs to assure that purchased care is appropriately 
utilized, that VA care is considered prior to use of non-VA care and 
that appropriate controls are in place to continually monitor and 
oversee these services.

    Question 8: When VA authorizes Fee care for veterans, it is 
critical that VA does not lose track of these veterans and is able to 
monitor them continuously as they receive care from both VA and non-VA 
providers.

    a. How will this be accomplished with the seemingly stove-piped 
NVCC and PC3 initiatives?

    Response: The NVCC program and PC3, both sponsored by VHA's Chief 
Business Office (CBO), are efforts focused on ensuring Veterans receive 
high quality and well-coordinated care from non-VA providers.
    NVCC is intended to improve the efficiency and standardize the 
processes for purchasing Fee care whether provided through a formal 
contract or through traditional methods of utilizing an authorization 
as the contract/negotiated agreement. PC3 is one vehicle we intend to 
utilize to provide that care, approved, managed and monitored via the 
processes implemented under the NVCC initiative. PC3 is an effort to 
bring centrally supported contracts throughout VHA so that when the 
decision is made to purchase care from the community, purchasing 
vehicles are in place that include the quality, timeliness, and 
services we need to support our Veterans. The two programs will work 
hand in hand. NVCC front end processes will be in place for care 
coordination, fee program standardization and improved efficiency 
within VHA, and when it is determined the care must be purchased, PC3 
contracts will be in place for obtaining the services. Both include 
elements to ensure Veterans' care is well-coordinated and patient 
centered.
    To ensure proper care coordination, NVCC and PC3 utilize processes 
that include a referral from a VA provider documenting the specific 
care requested. The appointment process includes NVCC team coordination 
with the Veteran and non VA provider, whether that is with a contracted 
network (such as PC3) or directly with a community provider. The 
appointment is tracked, monitored and managed by VA staff with 
appropriate follow up procedures. Once the care is provided, the non-VA 
provider will return supporting medical documentation to VA, so that it 
can be scanned into the patient's electronic medical record (EMR) and 
reviewed by the ordering VA provider. Any additional treatment requests 
will be approved and coordinated by VA before the treatment is 
provided.

    a. What is VA's overall vision and intended outcome for NVCC and 
PC3?

    Response: NVCC and PC3 are efforts focused on ensuring Veterans 
receive high-quality, well coordinated care from non-VA providers, when 
VA cannot otherwise provide that care. The intended goals are:

    - NVCC - to optimize and standardize non-VA care coordination 
processes and tools across VHA's service networks, supporting program 
consistency and equitable delivery of non VA care services.
    - PC3 - to provide enterprise-wide contracts to purchase community-
based care that meets VA standards.

    b. What assurance can you provide that this vision and strategy 
will help VA achieve the intended outcomes?

    Response: NVCC was piloted at four VAMCs, ensuring the model was 
tested and obtains the intended results. Lessons learned and feedback 
from the pilot sites, metric data, and patient satisfaction serve as 
the foundation for development of the enterprise deployment plan. Based 
on the success of the pilot, it is currently being rolled out 
nationwide.
    The PC3 contracts are being developed based on lessons learned from 
the Congressionally-mandated Project HERO and other purchased care 
pilot programs. VA has purchased care through the Project HERO 
contracts since 2008, providing years of data and experience to 
understand what works well and what does not work well in contracting 
for care.

    Question 9: Your operational improvements are vague and it is 
unclear how these changes will generate savings. For example, Fee Care 
savings are expected to be $200 million dollars by using an electronic 
re-pricing tool, using contract and blanket ordering agreements, 
decreasing contract hospital average daily census, decreasing duplicate 
payments, decreasing interest penalty payments, and increasing revenue 
generation through the use of automated tools.

    a. Please explain the re-pricing tool that you are going to use. Is 
it currently in place or is this a tool that is still being developed 
or deployed and therefore not in use system wide?

    Response: Claims repricing provides the VA Non-VA Care (Fee) 
Program with access to economical community-based vendor contracts that 
complement the VHA system of care. Since the program's inception, the 
claims repricing program has reduced VA Fee Program expenditures by 
millions of dollars, allowing VAMCs to achieve greater value from their 
health care dollars. In FY 2011, this process was automated and is 
currently in use system-wide. The automation resulted in an increased 
number of claims submitted for repricing. From FY 2010 to FY 2011, the 
number of submitted claims tripled.

    b. How do you plan on decreasing contract hospital average daily 
census? Do you have a timeline to do that? Is there guidance out in the 
field to reduce the ADC in the contract hospitals? How will you track 
these savings?

    Response: VA identified the contract hospital ``bed days of care'' 
as an initiative intended to assess opportunities to reduce, when 
appropriate, non-VA hospital stays. This initiative is not intended to 
apply to all VA locations as some utilization of non-VA inpatient 
services is required to provide timely and accessible care to Veterans. 
This includes urgent services not readily available at a VA (such as a 
CBOC referral to a local community hospital). VISNs are given broad 
authority to determine when it is clinically appropriate to reduce bed 
days of care, assuring that Veterans health care is not negatively 
impacted. VA tracks these data by reviewing prior-year bed days of care 
and comparing with current-year bed days of care. There is not a 
reduction target but an effort to assuring stringent monitoring and 
oversight of these services.

    c. Please explain what automated tools you will be using to 
increase revenue generation. Revenue from where and how will you be 
tracking this?

    Response: The VHA's CBO utilizes a number of automated tools to 
improve revenue generation. These tools include insurance card scanners 
for enhancing the accuracy of Insurance Capture; a workflow management 
tool used to optimize revenue cycle activities conducted by VA's 
Consolidated Patient Account Centers in areas such as billings, 
accounts management follow-up, and cash posting; an Enterprise Wide 
Denials Management system used to minimize Third Party Payer denials; a 
coding software system that supports billing activity; and Fee Basis 
Claims System Software used to identify 3rd party collection 
opportunities when patients are referred to the private sector for 
health care.
    VHA's CBO also operates several business intelligence tools to 
track, analyze and improve revenue cycle performance. These tools allow 
VHA to develop automated data queries and analytical reports that 
present performance metrics in a context that enables meaningful 
analysis and performance-driven decision making. Increases in revenue 
generation occur when problems and issues are discovered, analyzed and 
resolved through the business intelligence process.

    Question 10: I understand that the provision of dialysis services 
is one of the biggest costs to the VA system. According to estimates 
provided by the VA, over 27,000 veterans have End Stage Renal Disease 
and approximately 16,500 of those veterans receive dialysis from the VA 
either on contract with a provider or on an outpatient basis from a VA 
facility. Many studies demonstrate that home-based dialysis therapies, 
including peritoneal dialysis and home hemodialysis, are less costly 
than in center hemodialysis, while providing equal, if not better, 
patient outcomes. One analysis looking at the cost of dialysis to the 
Medicare program found that a 5 percent increase in peritoneal dialysis 
would generate savings to the Medicare program of up to $295 million a 
year. It is my understanding that the utilization of home dialysis in 
the VA is fairly low, even lower than the national average. What is the 
VA doing to increase the use of home dialysis by veterans in the VA 
system?

    Response: Since 2001, VA has engaged in the following activities 
related to home dialysis:

      Completed a VA home dialysis capacity and needs 
assessment of nephrology field;
      VA home dialysis benefits guidance issued to field and 
executive leadership;
      Clarified VA home dialysis program to ensure compliance 
with Joint Commission review standards;
      Developing novel VAi2 sponsored chronic kidney disease 
patient education tool, enriched for home dialysis as the preferred 
modality of dialysis;
      Assembled home dialysis task force and drafted charter;
      Developing a Make-Buy model for VA home dialysis 
programs;
      Policy reviews planned for: Caregiver support, Logistics, 
Telehealth Guidance; and
      Veteran and care partner Focus Groups to be conducted to 
identify patient perceived barriers and mitigation strategies.

    a. How many VA facilities offer home dialysis as a outpatient 
service?

    Response: Currently, 37 VA medical centers directly offer home 
dialysis services. All VAMCs can offer home dialysis indirectly though 
fee basis.

    b. Please provide a financial impact analysis to the committee of 
every 1% increase in the utilization of home dialysis in the VA.

    Response: VHA has tasked a working group to conduct a financial 
impact analysis of every 1 percent increase in the utilization of home 
dialysis in VA. At this time, the estimated completion date is early FY 
2013.

    Question 11: Do you have a plan in place and implemented to realign 
clinical staff and resources that you say will save you $151 million?

    Response: The objective is to have clinical staff working at the 
``top of their license''. That is, duties that require a registered 
nurse or a license practical nurse should not be performed by a 
physician and duties that require a license practical nurse should not 
be performed by either a physician or a registered nurse. To achieve 
this long term objective will require an assessment of clinical staff 
positions as they become vacant to ensure that they are filled with the 
appropriate clinical personnel. At the current time VA does not have a 
process for tracking the actual savings and this was addressed by the 
GAO in their report (GAO-12-305, February 2012). In response to the GAO 
report, a method for tracking these savings should be completed by the 
end of May 2012.

    a. Is this part of the patient centered care initiative?

    Response: Yes. Proper alignment of clinical staff to perform at the 
``top of their license'' is one of the desire components of this 
initiative.

    b. If you do have a plan, what is the timeline to realign these 
resources and how are you tracking the effectiveness and efficiency of 
this realignment?

    Response: At the current time, VA does not have a process for 
tracking the actual savings in the area of realigning clinical staff 
and resources; this was addressed by the GAO in their report (GAO-12-
305, February 2012). In response to the GAO report, a method for 
tracking these savings should be completed by the end of May 2012.

    Question 12: Please explain how you will provide oversight and 
account for the medical and administrative support savings in your 
budget of $150 million by ``employing the resources in various medical 
care, administrative, and support activities at each medical center and 
in VISN and central office operations.''

    Response: The objective of this initiative is to reduce the 
controllable indirect cost for all VHA operations. Initially it was 
designed to measure the difference between the actual and expected 
percent of controllable indirect cost to total cost nationally and at 
each facility. The recent GAO report (GAO-12-305, February 2012) 
indicated that this approach may overstate such savings. VA is 
currently revising the methodology used for this initiative and that 
work is expected to be complete by the end of May 2012.

    a. Do you have a plan in place?

    Response: In response to the GAO report (GAO-12-305, February 2012) 
a method for tracking these savings is being developed and should be 
completed by the end of May 2012.

    b. How are you tracking the savings?

    Response: On a monthly basis using the method described in # 12 
above, which is currently being revised.

    Question 13: Acquisition improvements are projected to save $355 
million dollars in 2013 and 2014. The eight bulleted statements in the 
budget justification are vague regarding how you are implementing and 
tracking these changes that should have associated savings attached to 
them. In light of the recent Full Committee Hearing on the Pharmacy 
Prime Vendor program and the subsequent numerous violations of the 
Federal Acquisition Regulation (FAR) and the Veterans Affairs 
Acquisition Regulation (VAAR) that were admitted to in the hearing:

    a. What is the status of the 8 initiatives that you cite in the 
budget justification and how are you tracking them? Who is responsible 
for ensuring that these get done? The eight are:

       i. Consolidated Contracting
       ii. Increasing Competition
       iii. Bring Back Contracting In House
       iv. Reverse Auction Utilities
       v. MED PDB/EZ Save
       vi. Reduce Contracts
       vii. Property Re-utilization
       viii. Prime Vendor

    Response: In its FY12 budget submission, VA identified $1.2B in 
operational improvements, of which $355M was identified as savings 
resulting from acquisition improvements. Initial FY12 roll-out included 
initiatives carried over from the OMB-mandated FY10-11 Acquisition 
Savings program (OMB Memorandum M-09-25, Improving Government 
Acquisition, July 29, 2009). These included:

       i. Consolidated Contracting
       ii. Increasing Competition
       iii. Bring Back Contracting In House
       iv. Reverse Auction Utilities
       v. MED PDB/EZ Save
       vi. Reduce Contracts
       vii. Property Re-utilization
    viii. Prime Vendor

    VHA convened an interdisciplinary Tiger Team in late Q1 of FY12 to 
review and revise the VHA-specific acquisition savings initiatives 
based, in part, on input received from GAO and OIG. That group was 
chartered with providing recommendations to improve the program. 
Specifically, the group was charged with proactively addressing 
anticipated issues from the OIG report; providing more rigorous 
definitions, methodology, documentation, review/internal auditing for 
the program; identifying new initiatives; identifying other savings/
avoidance areas not previously captured; removing any carry-over 
initiatives that risk double counting with other operation improvement 
initiatives; and consolidating initiatives as necessary to ensure more 
rigorous methodology. The revised and new initiatives recommended by 
the team are identified below along with their definitions and 
methodologies.


----------------------------------------------------------------------------------------------------------------
        Initiative                         Definition                                Calculation(s)
----------------------------------------------------------------------------------------------------------------
                 FedBid*    Dollar Value of savings realized through                           IGCE-award price
                                               utilization of FedBid
                      NAC CoDollar value of savings realized through   Calc 1: (Benchmark Quote from Facility -
                            the consolidation of high-tech equipment               Award Price) - NAC surcharge
                            at the National Acquisition Center (NAC)   Calc 2 (additional savings): Orig Quote -
                                                                                                Benchmark Quote
  Medical Sharing Office      Dollar value of savings related to the   Proposal Price - Final Award Amount (for
                            negotiation with affiliated institutions                           current FY only)
 Strategic Sourcing/FSSI    Savings realized through the use of FSSI        OEM less Remand price multiplied by
                                        Vendors for toner cartridges                                utilization
                        ConSavings resulting from the use of VISN and    (Previous Price - Price of Contractual
                            Regional contractual vehicles (including                         Vehicle) x # Units
                               vehicles such as contracts, BPAs, and
                           basic ordering agreements). Do not include
                                            facility only contracts.
              Increased CompetDollar value that can be attributed to           (Previous Price - Current Price)
                           increased competition from contracts that                      X units if applicable
                            had been previously awarded sole source.
                               Ex: Construction or service contracts
                                             previously sole sourced
         Reverse Auction   Dollar savings attributable to the reverse   (Price of Utility unit before auction -
              (Utilities)       auction of utility contracts by GSA.     Price of Utility unit after auction) x
                                                                                                          usage
                        ContraDollar Value of savings related to the      In-sourced contract cost - A-76 Total
                                 cancellation of contracts. Includes
                           contracts that are no longer required due
                            to some administrative action such as in
                                                           sourcing.
                                  Includes clinical contacts (Scarce
                           Medical; Nursing); Must offset savings by
                                       any increased in-house costs.
  Property Reutilization   Dollar value of cost savings that results         Depreciated Value - Shipping Costs
                              from the need to no longer procure new
                                    supplies or equipment due to the
                                          reutilization of property.
             Negotiation    Dollar value of savings realized through             (Previous Price - New Price) x
                                           negotiation with vendors.                                utilization
                        ContracDollar Value of reimbursement of fees    Value of Fees Reimbursed by contractors
                         Check associated with contractor background   less any administrative costs associated
                                                             checks.                 with obtaining those fees.
----------------------------------------------------------------------------------------------------------------
* Reverse Auctions Other than Utilities (current vendor is FedBid)

    The team's recommendations were then provided to senior leadership 
in March 2012, and subsequently communicated and rolled out to front-
line staff for execution in FY12 and into FY13-FY14. Six (6) training 
sessions were provided to frontline staff on the new methodologies 
between March 26 and April 9, 2012 with over 300 employees attending. 
As of April 10, 2012, VHA has reported preliminary savings of $47M. 
Frontline staff has been directed to review previous savings reports to 
ensure that previous reports comply with the revised methodologies and 
to identify any previously unreported savings from new initiatives.
    Responsibility for capturing data, calculating savings, and 
reporting are shared between Network Contracting Organizations, 
Networks, and VHA Procurement & Logistics Office (P&LO). Monthly 
savings reports are consolidated by P&LO and provided to the Office of 
Acquisition and Logistics (OAL) for high level review and to the Office 
of the VHA Chief Financial Officer for consolidation in the Monthly 
Performance Report.

    Question 14: The military has opened up and expanded some ``combat 
roles'' to women. While VA has made great strides in their efforts to 
embrace women veterans of all eras into the system, it took several 
years to actually make that change - some of it due to lack of 
recognition and failure to strategically plan for such a shift.

    a. To what extent is VA preparing to anticipate and then address 
the possible different health effects and exposures that may come with 
this change?

    Response: Women serving in Iraq and Afghanistan face combat 
activity similar to their male counterparts. Therefore, women will 
incur manyof the same service-related physical and mental disabilities. 
VA is prepared to address the increase in combat related service-
connected disabilities for women Veterans through increased nationwide 
outreach efforts. For example, VA has a Women Veterans Coordinator 
(WVC) at each VBA regional office. WVCs advocates on behalf of women 
Veterans concerning gender-specific issues. Additionally, WVCs 
collaborate with Women Veterans Program Managers (WVPM) at local 
Veterans Health Administration facilities to assist women Veterans 
access VA benefits and healthcare services. VBA further maintains a 
public website devoted to the unique issues associated with women 
Veterans. As the role of women in the military continues to change, VBA 
remains dedicated to keeping pace with the changing needs of women 
Veterans and is prepared to ensure women Veterans' needs are met.
    In recognition of the needs of the growing numbers of women 
Veterans, Secretary Shinseki called for a Women Veterans Task Force to 
develop a comprehensive VA plan that will focus on key issues facing 
women Veterans and the specific actions needed to resolve them. In 
developing this action plan, the Task Force examined a broad set of 
issues affecting women Veterans and VA's current efforts to close these 
gaps.
    In 2009, VA started The Long Term Health Outcomes of Women's 
Service During the Vietnam Era study. This comprehensive study of the 
mental and physical health of women Vietnam Veterans was initiated to 
shape future research to plan for appropriate services for women 
Veterans. VA has recognized the potential for increased exposures and 
has added specific questions to several scientific studies of Veterans. 
For example, The National Health Study for a New Generation of U.S. 
Veterans has oversampled female Veterans and has posed specific 
questions concerning female health and reproductive issues. These 
questions include any history of sexual trauma, birth and miscarriage 
information, and changes in gynecological health such as cessation of 
menstruation. Other studies of traumatic brain injuries specifically 
investigate any additional adverse health outcomes in female Veterans. 
These and other studies will allow VA to fully understand the impact of 
combat deployments, to include the potential for adverse health effects 
related to environmental exposures, on female Veterans.
    The number of women Veterans using VA health care services has 
doubled since 2000, from almost 160,000 to more than 337,000 in FY 
2011. While the overall Veteran population is declining, the number of 
women Veterans is on the rise. Among women Veterans of Operation Iraqi 
Freedom, Operation Enduring Freedom and Operation New Dawn, 55.5 
percent have enrolled for VA care; of this group, 89.2 percent have 
used VA regularly.
    Since FY 2010, VA has trained over 1,200 providers in women's 
health, and now has designated women's health providers at every 
medical center and at 60 percent of community based outpatient clinics 
(CBOCs). In addition, VA has staffed 144 full-time WVPMs at VA 
facilities nationwide.
    Finally, VA has made significant strides in strategically planning 
for health care delivery for women Veterans of all eras. The Women 
Veterans Health Strategic Health Group (WVHSHG) has strategically 
addressed health care improvements by focusing on policy, education and 
training, outreach to women Veterans and internal culture change.

    Question 15: This budget proposal requests an additional $312 
million for mental health care, bringing the total to $6.2 billion. The 
Secretary said during questioning that if the VA's budget for mental 
health care from 2009 to 2013 was examined, there was actually a 39 
percent increase in funding, which provided the ``firepower to go out 
and hire'' mental health professionals.

    a. For the period of 2009-2013 please provide the Committee with 
amount, per year, spent specifically for hiring mental health 
professionals.

    b. Of the monies not spent for hiring mental health professionals, 
please provide, for the period 2009-2013, a detailed breakdown of 
expenditures by activities.

    Response: For questions 15a and b please see below table.

                                 Mental Health Obligations by Categories ($000s)
----------------------------------------------------------------------------------------------------------------
                               FY09  Actual     FY10  Actual     FY11  Actual   FY12  Estimated  FY13  Estimated
----------------------------------------------------------------------------------------------------------------
                     FTEE           35,197           36,756           38,282           39,886           41,460
              Salary Cost       $3,226,914       $3,525,036       $3,721,335       $3,954,822       $4,191,429
----------------------------------------------------------------------------------------------------------------
                    Other
----------------------------------------------------------------------------------------------------------------
          Travel (BOC 21)         $106,529         $152,165         $163,595         $188,506         $195,676
Utilities et. al. (BOC 22-        $146,841         $187,154         $196,471         $222,119         $227,475
                   BOC 24)
       Contracts (BOC 25)         $349,613         $428,509         $464,495         $538,641         $561,605
        Supplies (BOC 26)         $180,071         $228,116         $235,011         $261,577         $264,846
          Grants (BOC 41)          $92,122         $132,677         $151,218         $183,764         $200,672
Capital and Equipment (BOC        $344,120         $507,022         $502,217         $522,306         $542,394
                31 and 32)
----------------------------------------------------------------------------------------------------------------
                    Total       $4,446,211       $5,160,678       $5,434,343       $5,871,735       $6,184,097
----------------------------------------------------------------------------------------------------------------

    Question 16: During the hearing, Dr. Robert A. Petzel, the Under 
Secretary for Health, stated that the VA had hired ``20,500 clinical 
professionals'' to meet the needs of veterans' mental health.

    a. Please provide a complete and detailed break-down of that 
population of 20,500 individuals, by specialty and by years of 
experience.

    b. How many are psychiatrists?

    c. How many are psychologists?

    d. How many are licensed professional counselors?

    e. How many are marriage and family therapists?

    f. Of those 20,500, how many of these hires have more than 3 years 
of clinical experience as a licensed mental health professional?

    Response: Please see below for a detailed table which provides the 
number of mental health staff by discipline as of December 31, 2011. 
Please note that the table does not denote individuals; it reflects the 
total of full time equivalent (FTE) employees that is dedicated to 
providing direct clinical care. The current staff is only able to be 
broken down into the following categories: nurses, physician extenders, 
physicians, psychologists, social workers, and therapists. There are 
not categories for licensed professional counselors and marriage and 
family therapists in our current datasets, these positions are 
reflected under Therapist. We are not able to provide years of 
experience as that information is stored in local personnel files.


------------------------------------------------------------------------
      Mental Health Discipline              FY2012, Quarter 1 FTEE
------------------------------------------------------------------------
                             Nurse                             8,122.53
------------------------------------------------------------------------
                Physician Extender                             1,375.43
------------------------------------------------------------------------
                         Physician                             2,516.74
------------------------------------------------------------------------
                      Psychologist                             3,009.62
------------------------------------------------------------------------
                     Social Worker                             3,723.97
------------------------------------------------------------------------
                         Therapist                             1,842.18
------------------------------------------------------------------------
                       Grand Total                            20,590.47
------------------------------------------------------------------------
* Physician Extender is a term used to describe a health care provider
  that is not a physician but performs medical activities that is
  typically performed by a physician; including, Clinical Nurse
  Specialist, Nurse Practitioner Psychiatric and Physician Assistant.

    Question 17: With the VA expending more resources on publicizing 
the importance of accessing mental health services to veterans through 
your ``Make the Connection'' campaign and the ``PTSD Family coach,'' 
what is the VA doing to ensure that it has enough staff to take care of 
the influx of veterans who are seeking mental health treatment?

    Response: VA has increased its mental health staff that provides 
direct clinical care by 52 percent since 2005 from 13,567 to 20,590. 
During this same period, Veterans using mental health services have 
increased by 49 percent (from 897,643 to 1,338,482). VA has provided 
$12M in funding to facilities and VISNs in fiscal year 2012 to hire 
staff to expand the use of telemental health for the treatment of Post 
Traumatic Stress Disorder (PTSD).
    On April 19, 2012, VA announced the department would add 
approximately 1,600 mental health clinicians - to include nurses, 
psychiatrists, psychologists, and social workers as well as nearly 300 
support staff to its existing workforce of 20,590 mental health staff 
as part of an ongoing review of mental health operations. VA's ongoing 
comprehensive review of mental health operations has indicated that 
some VA facilities require more mental health staff to serve the 
growing needs of Veterans. VA is moving quickly to address this top 
priority. Based on this model for team delivery of outpatient mental 
health services, plus growth needs for the Veterans Crisis Line and 
anticipated increase in Compensation and Pension/Integrated Disability 
Evaluation System exams, VA projected the additional need for 1,900 
clinical and clerical mental health staff at this time. As these 
increases are implemented, VA will continue to assess staffing levels.
    On April 24, 2012, VA announced that it has expanded its mental 
health services to include professionals from two additional health 
care fields: marriage and family therapists (MFT) and licensed 
professional mental health counselors (LPMHC).
    The two fields will be included in the hiring of an additional 
1,900 mental health staff nationwide mentioned above. Recruitment and 
hiring will be done at the local level. The new professionals will 
provide mental health diagnostic and psychosocial treatment services 
for Veterans and their families in coordination with existing mental 
health professionals at VA's medical centers, community-based 
outpatient clinics, and Vet Centers.
    VA has developed qualification standards for employment as LPMHCs 
and MFTs and has announced the appointments of mental health and health 
science professionals to serve on professional standards boards. The 
boards will review applicants for LPMHC and MFT positions in the 
Veterans Health Administration (VHA) to determine eligibility for 
employment and the government grade level appropriate for the 
individual in the selected position. The boards will also review 
promotions in these positions.

    Question 18. The Independent Budget recommends that VA add 40 FTEs 
to the Board of Veterans Appeals. As you know, the BVA has its own 
backlog, with appeals averaging 883 days (over two years). Yet, VA's 
budget flat funds the General Administration account under which BVA 
receives its funding.

    a. In light of the CAVC's recent Freeman v. Shinseki decision, 
which allows a beneficiary to appeal to the BVA the appointment of the 
fiduciary selected by VA (resulting in even more potential appeals), 
what is VA doing to address the backlog of appeals at the Board of 
Veterans' Appeals in its budget.

    Response: VA acknowledges the fiscal constraints facing all 
agencies in 2013 and appreciates Congress' approval of an increase in 
2012 funds to address the appeals claims workload. BVA historically 
receives an average of 5 percent of all compensation claims that VBA 
receives. In FY 2011, BVA issued approximately 90 decisions per FTE, 
which includes Veterans Law Judges (VLJ), attorneys, and administrative 
support staff, for a total of 48,588 decisions. In FY 2012, BVA 
projects issuing 47,600 decisions based on the current level of FTE 
supported. While additional FTE would result in additional decisions, 
VA must allocate its resources with consideration of needs across the 
entire Department.
    To meet the challenge of the growing appeals workload, BVA has 
implemented efficiencies in two key areas: hearings and remands. The 
Department also submitted several legislative proposals to improve the 
appeals process. These initiatives are discussed more fully below.
    With respect to hearings, approximately 25 percent of appellants 
before BVA request a hearing before a VLJ. The majority of appellants 
request an in-person hearing (e.g., 66 percent in FY 2011). An average 
of 75 percent of scheduled in-person hearings in FY 2011 took place, 
meaning that 25 percent of those Veterans scheduled for hearings did 
not appear for the hearing. Data confirms that over the past five 
years, the national average show rate for field hearings is 73 percent. 
This leaves the VLJ who traveled to the field station with substantial 
blocks of time without scheduled activity, and thus, a loss of 
productive time to decide appeals.
    The annual hearing schedule depends on demand, and slots are 
allocated to field stations well in advance of the beginning of each 
fiscal year. In planning for the FY 2012 hearing schedule, BVA 
decreased the number of available field hearings offered by 25 percent 
in favor of increasing video teleconference (VTC) hearings, which take 
place between the VLJ in Washington, DC and the Veteran at his or her 
local Regional Office (RO). This results in both monetary and time 
savings for VA. VLJs will gain time in the office, with an anticipated 
increase in decisional output (ranging from 2 percent to 5 percent) 
over the next few years. Additionally, VA will save an estimated 
$864,000 in travel costs through 2015.
    Remands generate a substantial amount of rework for both VBA and 
BVA, which increases workload, while also greatly increasing the delay 
for Veterans. In FY 2011, BVA remanded 44 percent of appeals before the 
Board (21,464) to the Agency of Original Jurisdiction (AOJ), generally 
VBA. Historically, approximately 75 percent of all remands return to 
the Board. VLJs determined that 40 percent of FY 2011's remands (8,585) 
could have been avoided if the RO properly processed and reviewed the 
case in accordance with existing laws and regulations.
    BVA has analyzed the data from its Remand Reasons Database 
(collecting reasons for remands since 2004) and determined that the top 
reason for remand is inadequate medical examinations and opinions. To 
reduce the number of remands that are returned to the Board, BVA has 
partnered with the VHA to develop training tools and provide direct 
training to VA clinicians to improve VA compensation and pension 
examinations. Additionally, BVA and VBA have agreed to a mandatory 
joint training program to aid in standardizing adjudication across the 
system, driven by the most common reasons for remand. BVA has 
established an interactive training relationship with VBA's key 
organizations involved in the appellate process, i.e., the Systemic 
Technical Accuracy Review (STAR) staff, Decision Review Officers, and 
the Appeals Management Center staff. The goal of these efforts is to 
reduce the number of avoidable remands in the system.
    VA has submitted legislative proposals to Congress that would 
streamline the appellate process. Specifically, VA has proposed a 
provision that would allow BVA to determine the most expeditious type 
of hearing for those appellants who request a hearing before a VLJ. The 
proposal includes a ``good cause'' exception for those appellants who 
do not desire a video conference hearing. VA has also proposed an 
automatic waiver provision, establishing a presumption that an 
appellant, or his or her representative, has waived RO consideration of 
any evidence he or she files after filing the Substantive Appeal to the 
Board. This would eliminate readjudication of the appeal by the RO in 
some cases, in favor of the Board directly addressing the evidence. 
Additionally, VA has proposed reducing the time period to file a Notice 
of Disagreement (NOD) from 365 days to 180 days, to ensure timely 
processing of appeals and less rework due to stale evidence.

    Question 19. A recent NCA audit concluded in January 2012, revealed 
numerous misplaced headstones and several inaccurate burials.

    a. What is being done to correct these errors and does this budget 
allow sufficient increases to prevent these types of errors from 
occurring in the future?

    Response: All employees at the National Cemetery Administration 
(NCA) are the custodians of a sacred trust and strive to be the model 
of excellence in the delivery of burial benefits. NCA has created a 
culture of accountability in which errors are addressed immediately and 
openly. NCA regrets the grief and emotional hardship errors cause and 
seeks to correct errors in consultation with family members. Where an 
error occurred, NCA has corrected the error and contacted the affected 
families, where possible, to extend our sincerest apologies. NCA has 
also ensured VA's congressional committees and the local congressional 
offices were notified of the issues.
    To prevent these types of errors from occurring in the future, 
contracts to raise and realign headstones and markers will require 
contractors to keep headstones or markers at the gravesite during the 
renovations. Such control measures will reduce the likelihood of 
inaccurate replacement of headstones and markers upon project 
completion. Also, NCA will hire certified contracting officer 
representatives at each of its Memorial Service Network offices to 
oversee future gravesite renovation projects. If employees or 
contractors need to move a headstone or marker for any reason, NCA will 
adopt a new process to track temporary movement or replacement of any 
headstone or marker within a national cemetery. NCA can accomplish 
these actions within the 2013 budget request.

    Question 20: Even with the NCA's efforts in this budget to try to 
ensure that rural and urban veterans are better served with burial 
options the uptick in those served by a government national cemetery 
falls short of the target goal of 94 percent of veterans served with a 
VA cemetery option.

    b. When will this long-standing target be achieved? (note, no part 
``a'' to the question was provided)

    Response: NCA's Strategic Target is to ensure that 94 percent of 
Veterans have reasonable access to a burial option in a national or 
state cemetery. (Reasonable access defined as a first interment option 
within 75 miles of their residence.) The addition of five new national 
cemeteries, the establishment of new state cemeteries through the 
cemetery grant program, and the implementation of the Rural Veterans 
Burial Initiative will result in reasonable access to 95 percent of our 
Nation's Veterans. Under the Rural Veterans Burial Initiative, NCA will 
seek to serve rural Veterans by establishing relatively small (3-5 
acres) NCA-managed Veterans sections (i.e., National Veterans Burial 
Grounds) within existing public or private cemeteries in rural areas 
where Veterans have no national or state Veterans cemetery option 
within 75-miles of their residence. Construction funding in future 
budget requests will allow achievement of this target.

    Question 21: Will VA continue to use the Fast Track system for 
Agent Orange claims?

    a. If so, how much will it cost during this budget cycle?

    Response: Yes, VBA will continue to use the Fast Track system for 
Agent Orange claims. The budget request is $1.8 million annually for 
operations and maintenance.

    Question 22: Please elaborate on the claims processing initiatives 
involving the use of private contractors.

    a. What are the costs associated with these initiatives, 
particularly the contract with ACS for claims development?

    Response: The Veterans Benefits Management Assistance Program 
(VBMAP) contract is for $18.6 million for claims development, eBenefits 
enrollment, and training to VBA employees on change management and Lean 
Six Sigma. $16.4 million is focused on the claims development task.
    VBMAP is a one-year professional services contract to perform 
disability claims development. This effort was developed and awarded on 
a firm-fixed price basis that pays the contractor only for claims 
returned at a 100 percent accuracy rate. The contractor is not paid for 
claims not meeting acceptance criteria, and the work is returned to 
normal VBA channels for correction or additional follow-up as 
necessary. The VBMAP contract also focuses on process automation, 
expedition, and transition/maintenance in the electronic (vice paper) 
environment.
    The VBMAP contract was issued as a means to address the current 
backlog in VBA claims development workload. Secondary purposes included 
increasing enrollment in eBenefits, and providing training to VBA 
employees on change management and Lean Six Sigma.

    b. How many claims will ACS develop or process?

    Response: The maximum volume of claims will be 357,600.

    c. What will happen to current FTEs under the applicable C&P 
accounts?

    Response: There will be no changes to FTE as a result of the VBMAP 
contract.

    Question 23: What is the status of the Expedited Claims processing 
initiative mandated in P.L. 110-389?

    Response: The Fully Developed Claim (FDC) program was piloted in 
2009 at ten regional offices. Because of the pilot's favorable results, 
the FDC program was implemented nationwide beginning in May 2010. VA 
received 2,883 and 19,241 claims in the FDC program in FY 2010 and FY 
2011, respectively. VA estimates that we will receive 29,400 and 48,529 
claims in the FDC program in FY 2012 and FY 2013, respectively. Please 
note that a claim submitted under the FDC program may be removed from 
the program for various reasons during subsequent processing. Examples 
of reasons for removal from the FDC program include receipt of evidence 
from the claimant that requires further development and a claimant's 
failure to report for a VA examination. VA is increasing awareness of 
the FDC program requirements to better educate claimants. Information 
and fact sheets on the FDC program can be found online at http://
benefits.va.gov/transformation/fastclaims.

    a. Will it require any additional funding?

    Response: VA does not anticipate the need for additional funding to 
continue the FDC program.

    Question 24: How much funding is VBMS expected to receive this 
budget cycle?

    Response: VBMS' funding request is $128 million for FY 2013.

    a. When is national roll-out slated and completed roll-out expected 
to conclude?

    Response: National deployment is scheduled to begin in July 2012 
and will be completed by the end of calendar year 2013.

    b. Have all of VA's claims processing legacy systems been properly 
interfaced?

    Response: VBMS currently interfaces with the Corporate Database and 
VA's legacy claims processing system, the VETSNET suite of 
applications. VA will evaluate interfaces with systems for other VBA 
benefits as systems development and requirements-gathering continue.

    c. How will VBMS interface with the Fiduciary Program's case 
management system?

    Response: VBMS is initially focused on the establishment, 
development, and rating sections of the claims process. We will 
evaluate interfaces with Fiduciary and other programs as systems 
development and requirements gathering continue.

    d. Why would the VA reduce the funding by $59 million?

    Response: Funding for most of the IT systems development for VBMS 
was requested in FY 2011 and FY 2012. The development is being 
accomplished through an inter-agency agreement (IAA) with the Space and 
Naval Warfare Systems Command through March 2013. Although a majority 
of systems development work will be performed through the IAA and 
completed prior to FY 2013, VA will continue to develop additional 
features throughout FY 2013. The reduced funding request reflects this 
reduction in IT systems development.

    Question 25: If the purpose of the VBMS Phase 2 is to validate and 
refine the technology solution from Phase 1 will a decrease in funding 
affect the deployment of Phase 2? What about Phase 3?

    Response: Phase 2 was completed in November 2011. Phase 3 is 
scheduled for completion prior to national deployment in July 2012. Any 
decrease in the FY 2013 funding request will affect national deployment 
and the ability to deploy VBMS to all regional offices.

    a. What happens if the deployment of VBMS is unsuccessful? Will a 
decrease in funding affect any needed fix?

    Response: VBMS is following a prescribed deployment schedule, which 
aligns with VA's transformation efforts. To ensure successful 
deployment, lessons learned and best practices have been captured from 
VBMS stations and will be implemented prior to deploying VBMS at 
subsequent stations. In addition, VA continues to engage its Veteran 
Service Organizations' partners through requirement gathering sessions. 
VBA continues to evaluate people, process, and technology solutions to 
improve timeliness and quality for claims processing. A decrease in the 
FY 2013 funding request for VBMS ($128 million) would have significant 
impact on our ability to deploy VBMS to regional offices on schedule, 
scan claims for electronic processing, enhance the system, and repair 
defects.

    Question 26: At a recent hearing, many stakeholders complained 
about the inadequacies of VA's Fiduciary Program, including questioning 
the effectiveness of Western Hub centralization effort and the efficacy 
of VA's audit process.

    a. What is the funding level for VA's Fiduciary Program?

    Response: The fiduciary program is part of the compensation and 
pension programs. In 2013, approximately $76 million will support 693 
fiduciary program FTE.

    b. Is this figure broken out like compensation and pension, and if 
not should it be?

    Response: The fiduciary program is part of the compensation and 
pension programs; however, pension and fiduciary policy and oversight 
functions were separated from the compensation service in April 2011, 
as part of a VBA reorganization, to address the critical need for 
greater oversight of pension and fiduciary program administration. This 
headquarters operational realignment also allows VBA to give greater 
focus to the complex and challenging workload and policy issues in our 
compensation program while giving greater attention to our most 
vulnerable Veterans in our fiduciary program. Fiduciary 
responsibilities and workload distributions encompass both compensation 
and pension beneficiaries.

    c. What are the performance measures for the VA Fiduciary Program?

    Response: Key performance indicators and outcomes for FY 2011 for 
the fiduciary program are listed in the following table along with 
targets for FY 2012 and FY 2013.


----------------------------------------------------------------------------------------------------------------
                 Measure                   FY 2011 Target    FY 2011 Actual    FY 2012 Target    FY 2013 Target
----------------------------------------------------------------------------------------------------------------
                             Accuracy               90%               88%               92%               94%
----------------------------------------------------------------------------------------------------------------
Follow-up appointments pending <= 120               90%               62%               90%               90%
                                  days
----------------------------------------------------------------------------------------------------------------
Follow-up appointments processed <= 120             92%               83%               92%               92%
                                  days
----------------------------------------------------------------------------------------------------------------
Initial appointments pending <= 45 days             90%               64%               90%               90%
----------------------------------------------------------------------------------------------------------------
 Initial appointments processed <= 45               92%               78%               92%               92%
                                  days
----------------------------------------------------------------------------------------------------------------
% accountings reviewed within 14 days               94%               93%               94%               94%
----------------------------------------------------------------------------------------------------------------
% accountings not seriously delinquent              95%               96%               95%               95%
----------------------------------------------------------------------------------------------------------------

    Question 27: VA requested funding for additional IDES employees for 
FY 2013.

    a. Is this request level adequate given the amount of resources you 
disclose this process requires?

    Response: VA is staffed to support the current level of 
separations, which is now estimated to be over 27,000 claims per year. 
VA and DoD continue to assess the impact of troop movement and drawdown 
of forces to the IDES program. We will monitor resource needs as part 
of our overall evaluation of the program, and address shortfalls as 
appropriate.

    b. Is it adequate given the expected influx of new veterans 
returning from war and expected to file claims?

    Response: VA's estimate of claims receipts is based on available 
information. VA and the DoD will continue to assess the impact of the 
drawdown of forces, as well as the impact of the recent VOW to Hire 
Heroes Act of 2011.

    Question 28: What is the status of the Virtual Lifetime Electronic 
Record Initiative?

    Response: VLER enables VA and its partners to proactively provide 
the full continuum of services and benefits to Veterans through 
Veteran-centric processes made possible by effective, efficient, and 
secure standards-based information sharing. VLER is neither an IT 
program nor an information service provider. VLER is a multi-faceted 
business and technology initiative that includes a portfolio of health, 
benefits, and personnel information sharing capabilities, with four 
over-arching goals that align to VA Strategic Plans. They are:

      Empower Veterans to securely access and control the use 
and dissemination of their health, benefits, and personnel information;
      Eliminate material and non-material barriers to 
information sharing across the VA enterprise and with external 
partners;
      Exploit information sharing innovations to ensure that 
the VA proactively delivers services and benefits; and
      Ensure that Veterans, their families, and other 
stakeholders are engaged to better understand their needs and increase 
participation in the development and use of VLER-enabled services.

    To achieve its goals, VLER efforts are managed in four VLER 
Capability Areas (VCAs):

      VCA 1 - Exchange health information required to support 
clinical healthcare between VA, DoD and private providers;
      VCA 2 - Expand the exchange of health, benefits, military 
personnel and administrative data in order to support disability claims 
adjudication;
      VCA 3 - Exchange additional health, benefits, military 
personnel and administrative information required to proactively 
deliver the full spectrum of benefits and services including, but not 
limited to, compensation, housing, education, pension, insurance and 
memorials; and
      VCA 4 - Provide Service members and Veterans the ability 
to securely access and control the use and dissemination of their 
health, benefits, and personnel information via the eBenefits portal.

    a. What is the funding level requested?

    Response: VA's FY 2013 budget request for VLER is for $52.939 
million.

    b. When is roll-out and implementation expected?

    Response: Each VLER capability area includes multiple projects in 
different stages of development. Some projects are in the early stages 
of development and will be implemented in FY 2013 and FY 2014. However, 
other VLER projects are already delivering valuable benefits. The 
following is a sample of VLER projects which have already made major 
impacts for millions of Servicemembers and Veterans in numerous ways:

      More than 800,000 Servicemembers and Veterans use the 
VLER eBenefits portal (VCA-4) to manage their Servicemembers Group Life 
Insurance, obtain GI Bill Certificates of Eligibility and access more 
than 40 capabilities made available via eBenefits; new capabilities are 
being added to eBenefits on a quarterly basis.
      ``Blue Button'' has been implemented, providing online 
self-service downloads for on-demand access to personal health 
information to 750,000 active users.
      More than 1.6 million Veteran and Servicemember medical 
records have been shared via the VLER Bidirectional Health Information 
Exchange (BHIE) and Clinical Data Repository/Health Data Repository 
(CHDR) projects.
      The VLER Health program has met its milestone goal of 
obtaining 50,000 Veteran authorizations to exchange their Veteran 
Health Data with a private provider thru the Nationwide Health 
Information Network.
      VLER has impacted thousands of disabled Servicemembers, 
including our most severely wounded, ill, and injured by automating 
information management and sharing between DoD and VA in support of the 
Federal Recovery Coordinator and Integrated Disability Evaluation 
System.

    Planned VLER Deliverables:

      Making Blue Button self-service downloads of on-demand 
personal health information available via eBenefits.
      Expanding NwHIN nationwide starting in July 2012, making 
health information exchange between VA, DoD, and private sector 
available to all Veterans.
      Providing VA Compensation and Pension examiners direct 
access to existing/legacy DoD health record systems (AHLTA & TMDS).
      Incorporating career transition assistance behind 
eBenefits portal (resume building, job search, entrepreneurship and 
voc/tech training).
      Completing automation of the transfer of all required 
claims adjudication information between DoD and the VA.
      Helping reduce the backlog of disability claims, VLER is 
planning to deliver the following in the latter half of FY 2012 and FY 
2013:

    --A ``TurboTax like'' web-based forms which facilitate the 
collection of specific disability rating schedule information from DoD, 
VA and private clinicians performing compensation and pension (C&P) 
examinations;
    --Enabling and automating the electronic sharing of rating schedule 
information so that systems used by VA to determine a Servicemember's 
or Veteran's eligibility for benefits; and
    --Providing VA C&P clinicians access to the information they need 
(from DoD systems) to make it easier and less time consuming to perform 
C&P exams for initial applications from active duty and recently 
discharged Servicemembers (including mobilized national Guard and 
Reservists).

    Question 29: What is the status of the Long Term Solution for the 
Education division?
    Response: VA is currently working to deploy initial end-to-end 
automation functionality into the Long Term Solution (LTS) that will 
process some supplemental claims without human intervention. Deployment 
for LTS release 6.0 is scheduled for July 30, 2012. In addition to the 
planned release in July, LTS has been updated in FY 2012 with the 
following releases:

    1. LTS release 5.1 was deployed October 17, 2011. This installed 
the third of three releases of requirements associated with PL 111-377, 
including those necessary to address the October 1, 2011 legislative 
mandates.

    2. LTS release 5.1.1 was deployed December 31, 2011. This provided 
student debt management functionality.

    3. LTS release 5.2 was deployed February 21, 2012 and provided 
architectural foundation that will support end-to-end automation of 
supplemental claims.

    4. LTS release 5.2.1 was deployed March 24, 2012. This installed 
two additional automated letters into the system and fixed minor 
errors.

    Question 30: How much money will VA spend on IT for the Education 
division in 2013 and 2014?

    Response: VA did not initially request funding for Post-9/11 GI 
Bill system development in the FY 2013 budget. As a result of 
legislation enacted after the FY 2013 budget request was developed, VA 
had to redirect IT development funding in FY 2012 to make system 
changes to support the new legislation and defer development of some 
previously planned functionality. VA is reviewing Post-9/11 GI Bill 
development requirements that may require funding in FY 2013. Estimates 
are not yet available for FY 2014. The budget request for Education 
Operation and Maintenance funding in FY 2013 is $11,189,000.

    Question 31: What is the current ratio of veterans to counselors in 
the Vocational Rehabilitation and Employment division?

    Response: As of February 2012, the ratio of Veterans to counselors 
was 140:1.

    Question 32: When will the regulations for the Post 9-11 GI Bill be 
finalized?

    Response: VA anticipates publishing the final regulations governing 
the, Post-9/11 Improvements, Fry Scholarship, and Work-Study by the end 
of the summer, 2012.

    Question 33: According to the universities the VA's education 
system went down in January. No university was able to submit 
information to VA.

    a. What caused the problem and does it need an IT fix?

    Response: VA's Online Certification of Enrollment (VAONCE), is the 
system used by education institutions to submit enrollment 
certifications on behalf of Veterans. Beginning around January 11, 
2012, some VAONCE users began to experience significantly slow response 
times due to high volume. The high volume caused some institutions' web 
browsers to ``time out'' when trying to connect to the system; at no 
time was the system actually down. VA does not have information to 
indicate how many users were affected; however, we continued to receive 
an above average number of enrollment certifications during the period 
in question.
    On January 13, 2012, coding was completed to ``load balance'' 
VAONCE to multiple web servers; testing of this new code was completed 
the morning of January 17, 2012, and installed in production. The web 
server load balancing corrected the problem.

    b. Is the VA working on any system enhancement for TMS?

    Response: VA believes the reference to TMS is a reference to The 
Image Management System (TIMS), which is the repository for education 
electronic claims folders. Future TIMS enhancements include:

      April 2012: Addition of a drop down tool to select 
``benefit type,'' accommodating the addition of benefits available 
under the Veterans Retraining Assistance Program
      June 2012: Mass Folder Transfer capability to allow 
automation for a large number of folders to be transferred between 
stations
      August 2012: Microsoft Windows 7/Office 2010 
compatibility, which is not currently compatible with TIMS
      December 2013: Reconfiguration to a web/server format to 
increase the speed and efficiency of the TIMS software and minimize 
down-time for end-users during upgrades

    c. Is VA working on any enhancement for TMS?

    Response: Please see the response to question 33b.

    Question 34: Some students are complaining about mistakes that the 
VA or school makes.

    a. What is the VA doing to minimize all overpayments?

    Response: In FY 2011, VA maintained a payment accuracy rate of 98 
percent for Post-9/11 GI Bill benefit payments. As a result of the 
statutory requirement that VA pay all applicable tuition and fees at 
the beginning of a student's term, there is a risk of overpayments to 
any student who changes his/her enrollment after VA has issued 
payments. These overpayments differ from ``improper payments'' 
resulting from an error by VA or by a school, which are often 
identified through VA's compliance review process. Education Service 
issues ``Training Reminders'' to VA staff when a pattern of errors are 
identified. For School Certifying Officials (SCO), we provide 
information on the SCO resources page when patterns of errors are 
identified. We continue to try to identify the human errors that can be 
fixed through IT solutions, such as system validations and automation. 
Increased automation of entitlement and payment calculations within the 
LTS reduces the potential for human error by VA processors. 
Additionally, the FY 2013 President's Budget includes a legislative 
proposal that would allow VA to send Post-9/11 GI Bill tuition and fee 
payments to the student, rather than the school. While this proposal 
does not minimize all overpayments, it simplifies the payment process 
that will in turn aid in a student's ability to identify debts owed to 
VA. The proposal is described on page 3A-11of VA's 2013 Congressional 
Budget Justification and can be viewed at: http://www.va.gov/budget/
docs/summary/Fy2013--Volume--I-Summary--Volume.pdf.

    Question 35: Why is there a decrease of $117 million for the 16 
major transformational initiatives?

    Response: The 2013 Budget requests $488 million for IT resources in 
support of the VA's 16 Major Initiatives, a reduction of $117 million 
from the 2012 enacted level of $605 million. Of the total request, $377 
million is for development and $111 million is for sustainment. Annual 
funding requirements for IT systems change as the initiatives mature, 
and their status shifts from development to sustainment. For example, 
the 2013 budget includes a reduction of $60 million below the 2012 
enacted level for the VBA system that is being deployed to support the 
new paperless claims processing system, known as VBMS. Development and 
sustainment of these systems has a significant impact on the 2013 
request for the Major Initiatives.

    Question 36: VLER funding was decreased by $13 million this pilot 
program is in its infancy stage.

    a. With continuing Information Technology (IT) systems developments 
why would the funding decrease?

    Response: The FY 2013 budget request is adequate to meet the 
planned needs for the VLER initiative.