VA secretary testifies on department's 2019 budget request

The House Veterans’ Affairs Committee held an oversight hearing on Feb. 15 to consider testimonies from Department of Veterans Affairs (VA) Secretary David Shulkin, along with other head VA officials, about the VA’s 2019 budget request and Advance Appropriation proposal for 2020.

“This fiscal year’s budget request totals $198.6 billion in VA funding – an increase of nearly $12 billion over (the) last fiscal year,” said Committee Chairman Rep. Phil Roe, R-Tenn. “That’s a huge number but it’s even more striking when you compare the growth in VA’s budget to overall federal spending and the economy.”

Since 2006, the VA’s budget increased by about 175 percent while overall federal spending went up more than 50 percent. Given the aggressive expansion of VA resources, Roe said the department must stay focused on its core mission to ensure resources are appropriately utilized and that priority is given to veterans’ care and benefits. 

“VA will take action on many important items in fiscal year 2019. Some examples include implementation of the Forever GI Bill and appeals modernization, and the start of what will undoubtedly be a costly and lengthy replacement of VA’s Electronic Health Record,” Roe said.

Veterans benefits

According to a VA press release, the department’s budget request for 2019 has increased by $6.8 billion compared to last year. The $198.6 billion in total funding prioritizes the VA’s most important needs and combines internal offsets, modernization reforms and efficiencies to produce the best results for veterans. 

Shulkin said more than $88 billion is comprised of discretionary funding, of which $76.5 billion is proposed for medical care including collections. In addition, an annual appropriation adjustment of $500 million is requested for community care and $1.9 billion for the Veterans Choice Fund. 

Mandatory AA funding for programs such as disability compensation, pensions, readjustment benefits and Veterans Insurance and Indemnities benefits is also included in the new budget, totaling about $121.3 billion, according to Shulkin’s written statement.

“This budget reflects our efforts to reform business practices intending to do what’s right for our veterans,” Shulkin said. “Our responsibility does not end with simply asking for more money to support veterans.”

Shulkin said his job is to build a modern, adaptable and sustainable department for a changing world. More importantly, he is working to ensure that the VA maintains its commitment to veterans by executing its top five priorities which include focusing resources based on needs, modernizing systems and services, improving timeliness, preventing suicide, and providing greater choice for veterans.

“We have critically assessed and prioritized our needs and aggressively pursued internal offsets, modernization reforms and other efficiencies to provide veterans the quality care they have earned,” he said.

Health care

While the focus on foundational services will be a significant change to the way health care is provided, Shulkin said the VA will continue to ensure that a full array of health care services is available for all enrolled veterans. The department will also continue to offer services that are essential components of care and assistance.

“The big question we have is striking that balance between the care and the research in the VA versus the community care,” said Rep. Tim Walz, D-Minn., committee ranking member. 

When Walz asked if the VA has enough money to keep the Choice Program running, Shulkin said there is enough to make it last until the end of May 2018. 

“We are tracking this on a weekly basis. We’re on a spending rate in the Choice Program between $350 million to $400 million,” Shulkin said. “You authorized $2.1 billion back in December, so when we do the math and tracking it, we’re OK until the end of May. We’re putting the veterans’ needs first and the money follows.”

To reassure veterans and taxpayers that every dollar is being used wisely, Shulkin said the 2019 budget proposes certain changes to the way in which the department spends on resources. One of those changes includes a request to merge the medical community care appropriation with the medical services appropriation.   

Shulkin said this change will maximize the VA’s ability to focus even more resources on the services that veterans need the most.

“I still have deep concerns that this budget is going to that trend (of privatizing the VA) without the input (and) without the knowledge,” Walz said. “I think that’s the wrong approach because veterans themselves have made it very clear (that) they wanted that fully funded VA.”

Electronic Health Record (EHR) modernization

Last June, Shulkin announced his decision to adopt the same EHR system as the Department of Defense (DoD). He said this transformation is about improving the VA’s services while significantly enhancing the coordination of care for veterans who receive medical care from the department, DoD and other community partners.

The 2019 budget includes a $1.2 billion request to modernize EHR. Given the magnitude of this transformation, long-term costs and complex contracting needs, Shulkin said the VA is requesting a single separate account. 

“This is a huge decision. No one’s ever implemented an (EHR) change this big so we’re taking it very seriously,” Shulkin said. “Everyone thinks VA has an Electronic Health Record today (but) we don’t. We have 130 electronic health records – 130 different parts of (the Veterans Information Systems and Technology Architecture) VistA. This (modernization effort will allow us to have) a single electronic health record within VA.”

According to Shulkin, the proposed new EHR system will enable the VA to keep pace with the improvements in health information technology and cyber security which VistA is unable to do. He said it will also "enable seamless care" between both departments, resulting in better service to veterans as transitioning servicemembers will have their medical records at the VA. 

“Since this is proposed to be the same system that DoD uses, we will for the first time have an interoperable system with DoD,” Shulkin said. “That’s a challenge that, frankly, the American health-care system hasn’t figured out yet. We think VA could help lead this for the whole country – by making this interoperable.”

Infrastructure improvements and streamlining

Shulkin said the VA is requesting $1.1 billion in major construction funding, plus an additional $706.9 million in minor construction, for infrastructure improvement projects. This funding will support several projects, including medical facility renovations, cemetery expansions and enhanced medical services, in Missouri, New York, Texas, Ohio, Florida and Michigan.

In addition, Shulkin said the VA is requesting more than $960 million to help fund about 2,100 medical leases, and $672.1 million to activate new medical facilities. The department is also requesting $400 million for a new seismic program that would address medical facilities in need of critical repairs and upgrades, according to his written testimony. 

“We gave $4 billion for infrastructure. It appears that that money is not going to be used for infrastructure (but instead) for community care,” Walz said. 

“We’re asking for the money where it’s most needed,” said Jon Rychalski, VA’s chief financial officer and assistant secretary for management. “I’m not discounting the aging facilities. (But) based on the funds available, we could better use that funding (for) community care.”

According to Shulkin, the VA is a participant in the White House Infrastructure Initiative. He said part of that initiative is to explore additional ways to modernize the department’s real property assets and support its continued delivery of quality care and services.

“The last four hospitals that the VA managed were each at least hundreds of millions of dollars over budget,” said Rep. Mike Coffman, R-Colo. “One of the efforts that I led in Congress was to strip the VA of their construction management authority. The same people that had their fingerprints on these four construction projects that were years behind schedule and (over budget) are the same people that are in charge of construction management today in the Department of Veterans Affairs. It is unchanged.

“You need to shift that responsibility to some third party outside the VA. The waste and abuse is just incredible.”

To combat fraud, waste and abuse (FWA), Shulkin said the VA has implemented an initiative called STOP FWA and established a Prevention of Fraud, Waste and Abuse Advisory Committee to provide department officials with best practices that are used in the private and public sector. 

The department is also working with the Department of the Treasury to move VA’s Community Care program closer to industry best practices. Moreover, VA officials are partnering with Centers for Medicare and Medicaid Services to replicate their investigation process and utilize their data in identifying medical providers with performance issues.

“There is no excuse for these past projects and we cannot continue to do business as usual,” Shulkin said. “I think (the) way of the future is (to have) our public-private partnerships where the private sector helps us build.” 

Shulkin said the VA is committed to reorganizing its entire internal approach regarding construction of facilities and logistics. Department officials will begin recruiting outside industry professionals who have the expertise and technical know-how.

“We’re excited about this project in Omaha, Neb., where we’re going to do a groundbreaking on a different model of constructing VA facilities,” he said. “We’re going to look for people with outside expertise. We think you’re pushing us in the right direction.”

Click here to watch the full hearing and hear other concerns from committee members.