Veterans’ Medical Care: FY2008 Appropriations
Congressional research reportJan 22, 2008
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Prepared for Members and Committees of Congress
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The Department of Veterans Affairs (VA) provides benefits to veterans who meet certain
eligibility rules. Benefits to veterans range from disability compensation and pensions to hospital
and medical care. The VA provides these benefits through three major operating units: the
Veterans Health Administration (VHA), the Veterans Benefits Administration (VBA), and the
National Cemetery Administration (NCA). The VHA is primarily a direct service provider of
primary care, specialized care, and related medical and social support services to veterans through
the nation’s largest integrated health-care system.
On February 5, 2007, the President submitted his FY2008 budget proposal to Congress. The total
amount requested by the Administration for the VHA for FY2008 was $34.6 billion, a 1.93%
increase in funding compared with the FY2007 enacted amount. For FY2008, the Administration
was requesting $27.2 billion for medical services, $3.4 billion for medical administration, $3.6
billion for medical facilities, and $411 million for medical and prosthetic research.
On June 15, 2007, the House passed its version of the Military Construction and Veterans Affairs
Appropriations bill (MILCON-VA appropriations bill) for FY2008 (H.R. 2642, H.Rept. 110-186).
H.R. 2642 provided $37.1 billion for the VHA for FY2008. This amount included $29.0 billion
for medical services, a $1.9 billion (6.9%) increase above the President’s request. H.R. 2642 also
included $3.5 billion for medical administration, $69 million above the Administration’s request
of $3.4 billion; $4.1 billion for medical facilities, a 14% increase over the President’s request; and
$480 million for medical and prosthetic research, a 17% increase over the President’s request of
$411 million. H.R. 2642 did not include any bill language authorizing fee increases as requested
by the Administration’s budget proposal for the VHA for FY2008.
On September 6, 2007, the Senate passed MILCON-VA appropriations bill for FY2008 (H.R.
2642, S.Rept. 110-85) with an amendment. H.R. 2642, as passed by the Senate, provided a total
of $37.2 billion for the VHA. This amount included $29.1 billion for medical services—a $3.2
billion (12.3%) increase over the FY2007 enacted amount and $1.9 billion over the FY2008
budget request—and $3.5 billion for medical administration, $75 million above the FY2008
Administration’s request. Furthermore, H.R. 2642, as passed by the Senate, provided $4.1 billion
for medical facilities, and $500 million for medical and prosthetic research. The Senate-passed
bill also did not include any bill language authorizing fee increases as requested by the President.
The Consolidated Appropriations Act, 2008 (H.R. 2764) was signed into law (P.L. 110-161) on
December 26, 2007, and included the MILCON-VA Appropriations Act for FY2008. Under P.L.
110-161, the total amount of funding for the VHA is $37.2 billion.
This report will not be updated.
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Most Recent Developments............................................................................................................. 1
Background ..................................................................................................................................... 1
Eligibility for Veterans’ Health Care ............................................................................................... 4
“Promise of Free Health Care”.................................................................................................. 4
VHA Health-Care Enrollment................................................................................................... 5
Veteran’s Status................................................................................................................... 6
Priority Groups and Scheduling Appointments .................................................................. 7
Funding for the VHA....................................................................................................................... 8
Medical Services ....................................................................................................................... 8
Medical Administration............................................................................................................. 8
Medical Facilities ...................................................................................................................... 9
Medical and Prosthetic Research .............................................................................................. 9
Medical Care Collections Fund (MCCF) ................................................................................ 10
FY2007 Budget Summary............................................................................................................. 12
House Action........................................................................................................................... 12
Senate Action .......................................................................................................................... 12
Continuing Appropriations Resolution.................................................................................... 13
FY2007 Supplemental Appropriations.................................................................................... 13
FY2008 VHA Budget .................................................................................................................... 14
FY2008 Congressional Budget Resolution ............................................................................. 14
House Action........................................................................................................................... 14
Construction Projects ........................................................................................................ 15
Senate Action .......................................................................................................................... 15
Construction Projects ........................................................................................................ 16
Consolidated Appropriations Act for FY2008 ........................................................................ 16
Construction Projects ........................................................................................................ 17
Explanatory Statement ............................................................................................................ 17
Joint Efforts Between DOD and VA ................................................................................. 17
Traumatic Brain Injury (TBI) ........................................................................................... 17
Mental Health and Substance Abuse................................................................................. 17
Access to Medical Care in Remote Rural Areas ............................................................... 18
Electronic Medical Record ............................................................................................... 18
Key Budget Issues ......................................................................................................................... 22
Assess an Annual Enrollment Fee........................................................................................... 23
Increase Pharmacy Co-payments ............................................................................................ 23
Impact of Fee Proposals.................................................................................................... 24
Third-Party Offset of First-Party Debt .................................................................................... 24
Future Cost of Veterans’ Health Care...................................................................................... 27
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Figure 1. VHA Funding, FY2006-FY2008 ..................................................................................... 9
Figure 2. Present Co-payment Process.......................................................................................... 26
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Table 1. VA and VHA Appropriations, FY2006-FY2008................................................................ 1
Table 2. Number of Veterans Enrolled in the VA Health-Care System ........................................... 3
Table 3. Number of Patients Receiving Care from the VA.............................................................. 4
Table 4. Medical Care Collections, FY2003-FY2006 ....................................................................11
Table 5. VHA Appropriations by Account, FY2006-FY2008 ....................................................... 19
Table 6. Appropriations for VA Construction Projects, FY2006-FY2008..................................... 21
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Appendix A. Priority Groups and Their Eligibility Criteria .......................................................... 28
Appendix B. Veterans’ Payments for Health-Care Services, by Priority Group ........................... 30
Appendix C. Financial Income Thresholds for VA Health-Care Benefits..................................... 32
Appendix D. VHA Appropriations for FY2005 and FY2006........................................................ 33
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Author Contact Information .......................................................................................................... 35
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The Consolidated Appropriations Act, 2008 (H.R. 2764), was passed by the House on December
17, 2007, and the Senate passed a measure the next day, December 18, with an amendment
(McConnell Amendment—adding funding for the Iraq war). The House agreed to the McConnell
Amendment on December 19. The bill was signed into law (P.L. 110-161) on December 26. The
Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2008
(MILCON-VA Appropriations Act), was included as Division I of P.L. 110-161. Under P.L. 110161, the total amount of funding for the Veterans Health Administration (VHA) is $37.2 billion;
of this amount, $2.6 billion was designated as contingent emergency funding and was available
for obligation only after the President submitted a budget request to Congress. On January 17,
2008, the President transmitted a request to Congress designating $2.6 billion as an emergency
requirement in accordance with the provisions of P.L. 110-161.1 Table 1 provides funding levels
for VA and VHA as included in the Consolidated Appropriations Act, 2008.2
.VA and VHA Appropriations, FY2006-FY2008
Table 1
($ in thousands)
Total Department of
Veterans Affairs (VA)
Total Veterans Health
Administration (VHA)
Source:
FY2006
enacted
FY2007
enacted
FY2008
request
FY2008 House FY2008 Senate
(H.R. 2642)
(H.R. 2642)
$71,457,832
$79,550,522
$83,903,751
$87,696,839
$87,501,280
$87,595,142
$29,340,517
$34,024,013
$34,612,671
$37,122,000
$37,213,220
$37,201,220
S.Rept. 109-286, H.Rept. 109-464, H.Rept. 110-186, S.Rept. 110-85, Congressional Record
(December 17, 2007), pp. H16249-H16431.
FY2008
enacted
, vol. 153
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The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans
who meet certain eligibility rules, including disability compensation and pensions, education,
training and rehabilitation services, hospital and medical care, assistance to homeless veterans,3
home loan guarantees, and death benefits that cover burial expenses.4 The VA carries out its
programs nationwide through three administrations and the board of veterans appeals (BVA). The
Veterans Health Administration (VHA) is responsible for health-care services and medical
research programs.5 The Veterans Benefits Administration (VBA) is responsible, among other
1
See http://www.whitehouse.gov/omb/budget/amendments/supplemental_1_17_08.pdf, last accessed on January 18,
2008.
2
For detailed information on funding for the Veterans Benefits Administration (VBA) and the National Cemetery
Administration (NCA), see CRS Report RL34038, Military Construction, Veterans Affairs, and Related Agencies:
FY2008 Appropriations, by (name redacted), (name redacted), and (name redacted).
3
For detailed information on homeless veterans programs, see CRS Report RL34024, Veterans and Homelessness, by
(name redacted).
4
For a detailed description on eligibility for veterans disability benefits programs, see CRS Report RL33113, Veterans
Affairs: Basic Eligibility for Disability Benefit Programs, by (name redacted).
5
For a detailed description of veterans’ health-care issues, see CRS Report RL33993, Veterans’ Health Care Issues, by
(continued...)
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things, for providing compensations, pensions, and education assistance.6 The National Cemetery
Administration (NCA)7 is responsible for maintaining national veterans cemeteries; providing
grants to states for establishing, expanding, or improving state veterans cemeteries; and providing
headstones and markers for the graves of eligible persons, among other things.
The VA’s budget includes both mandatory and discretionary spending accounts. Mandatory
funding supports disability compensation, pension benefits, vocational rehabilitation, and life
insurance, among other benefits and services. Discretionary funding supports a broad array of
benefits and services, including medical care. In FY2007, discretionary budget authority
accounted for about 48.1% of the total VA budget authority of approximately $80 billion, with
about 90% of this discretionary funding going toward supporting VA health-care programs.
The VHA operates the nation’s largest integrated direct health-care delivery system.8 The VA’s
health-care system is organized into 21 geographically defined Veterans Integrated Service
Networks (VISNs). Although policies and guidelines are developed at VA headquarters to be
applied throughout the VA health-care system, management authority for basic decision making
and budgetary responsibilities are delegated to the VISNs.9 Congressionally appropriated medical
care funds are allocated to the VISNs based on the Veterans Equitable Resource Allocation
(VERA) system, which generally bases funding on patient workload.10 Prior to the
implementation of the VERA system, resources were allocated to facilities primarily on the basis
of their historical expenditures. Unlike other federally funded health insurance programs, such as
Medicare and Medicaid, which finance medical care provided through the private sector, the
VHA provides care directly to veterans.
In FY2007, the VHA operated 155 medical centers, 135 nursing homes,11 717 ambulatory care
and community-based outpatient clinics (CBOCs),12 and 209 Readjustment Counseling Centers
(Vet Centers).13 The VHA also pays for care provided to veterans by private-sector providers on a
(...continued)
(name redacted).
6
For a detailed description of veterans’ benefits issues, see CRS Report RL33985, Veterans’ Benefits: Issues in the
110th Congress, coordinated by (name redacted).
7
Established by the National Cemeteries Act of 1973 (P.L. 93-43).
8
Established on January 3, 1946, as the Department of Medicine and Surgery by P.L. 79-293, succeeded in 1989 by the
Veterans Health Services and Research Administration, renamed the Veterans Health Administration in 1991.
9
Jian Gao, Ying Wang and Joseph Engelhardt, “Logistic Analysis of Veterans’ Eligibility-Status Change,” Health
Services Management Research, vol. 18, (August 2005), p. 175.
10
About 90% of the VHA appropriation is allocated through VERA. Networks also receive appropriated funds not
allocated through VERA for such things as prosthetics, homeless programs, readjustment counseling, and clinical
training programs. VA facilities could also retain collections from insurance reimbursements and copayments, and use
these funds for the care of veterans.
11
Data on the number of hospitals and nursing homes include facilities damaged by Hurricane Katrina. The data are
current as of December 1, 2006.
12
Data on the number of CBOCs differ from source to source. Some count clinics located at VA hospitals, whereas
others count only freestanding CBOCs. The number represented in this report excludes clinics located in VA hospitals.
The VA plans to activate 38 new CBOCs in FY2007 and FY2008.
13
On February 7, 2007, the Department announced that it will be establishing 23 new Vet Centers in communities
across the nation during 2007 and 2008. New Vet Centers will be located in Montgomery, Alabama; Fayetteville,
Arkansas; Modesto, California; Grand Junction, Colorado; Orlando, Fort Myers, and Gainesville, Florida; Macon,
Georgia; Manhattan, Kansas; Baton Rouge, Louisiana; Cape Cod, Massachusetts; Saginaw and Iron Mountain,
Michigan; Berlin, New Hampshire; Las Cruces, New Mexico; Binghamton, Middletown, Nassau County, and
(continued...)
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fee basis under certain circumstances. Inpatient and outpatient care is also provided in the private
sector to eligible dependents of veterans under the Civilian Health and Medical Program of the
Department of Veterans Affairs (CHAMPVA).14 In addition, the VHA provides grants for
construction of state-owned nursing homes and domiciliary facilities, and collaborates with the
Department of Defense (DOD) in sharing health-care resources and services.
During FY2007, the VHA had an estimated total enrolled veteran population of 7.9 million and
provided medical care to about 5.2 million unique veteran patients (see Tables 2 and 3).
According to VHA estimates, the number of unique veteran patients is estimated to increase by
approximately 110,000, from 5.2 million in FY2007 to 5.3 million in FY2008. As shown in Table
3, there would be a 2.4% increase in the total number of unique patients (both veterans and nonveterans), from 5.7 million in FY2007 to 5.8 million in FY2008.
Table 2. Number of Veterans Enrolled in the VA Health-Care System
Priority Groups
FY2006
Actual
FY2007
Estimate
FY2008
Estimate
1
912,787
915,068
917,349
2
522,829
524,135
525,442
3
996,063
998,552
1,001,041
4
241,716
242,320
242,924
5
2,538,228
2,544,571
2,550,913
6
265,253
265,916
266,579
5,476,876
5,490,562
5,504,248
7
218,248
218,793
219,339
8
2,177,314
2,182,755
2,188,194
Subtotal Priority Groups 7-8
2,395,562
2,401,548
2,407,533
Total Enrollees
7,872,438
7,892,110
7,911,781
Subtotal Priority Groups 1-6
Source:
Department of Veterans Affairs.
The total number of outpatient visits, including visits to Vet Centers, reached 60.2 million during
FY2006 and is projected to increase to 64.4 million in FY2007 and 67.4 million in FY2008.15 In
FY2007, the VHA estimates that it will spend approximately 64.8% of its medical services
obligations on outpatient care.16
(...continued)
Watertown, New York; Toledo, Ohio; Du Bois, Pennsylvania; Killeen, Texas; and Everett, Washington. During 2007,
the VA plans to open facilities in Grand Junction, Orlando, Cape Cod, Iron Mountain, Berlin, and Watertown. The
other new Vet Centers are scheduled to open in 2008.
14
For further information on CHAMPVA, see CRS Report RS22483, Health Care for Dependents and Survivors of
Veterans, by (name redacted) and Susan Janeczko.
15
This number excludes outpatient care provided on a contract basis and outpatient visits to readjustment counseling
centers. U.S. Department of Veterans Affairs, FY2008 Congressional Budget Submissions, Medical Programs, vol. 1 of
4, pp. 3-12.
16
Ibid., pp. 3-15.
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. Number of Patients Receiving Care from the VA
Table 3
Priority Groups
FY2006
Actual
FY2007
Estimate
FY2008
Estimate
1
768,537
718,452
717,262
2
342,023
349,751
356,566
3
568,740
600,337
618,513
4
177,563
198,922
207,535
5
1,645,781
1,850,707
1,933,212
6
134,425
121,664
131,785
Subtotal Priority Groups 1-6
3,637,069
3,839,833
3,964,873
7
197,901
339,021
345,561
8
1,195,612
1,003,223
981,327
Subtotal Priority Groups 7-8
1,393,513
1,342,244
1,326,888
Subtotal Unique Veteran Patientsa
5,030,582
5,182,077
5,291,761
Non-veteransb
435,488
503,069
527,415
5,466,070
5,685,146
5,819,176
Total Unique Patients
Department of Veterans Affairs.
a. Unique veteran patients include Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF)
veterans. These patients number 155,272 in FY2006; estimated to be 209,308 in FY2007 and 263,345 in
FY2008.
b. Non-veterans include CHAMPVA patients, reimbursable patients with VA-affiliated hospitals and clinics,
care provided on a humanitarian basis, and employees receiving preventive occupational immunizations.
Source:
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To understand some of the issues discussed later in this report, it is important to understand
eligibility for VA health care, the VA’s enrollment process, and its enrollment priority groups.
Unlike Medicare or Medicaid, VA health care is not an entitlement program. Contrary to
numerous claims made concerning “promises” to military personnel and veterans with regard to
“free health care for life,” not every veteran is automatically entitled to medical care from the
VA.17 Prior to eligibility reform in 1996, provisions of law governing eligibility for VA care were
complex and not uniform across all levels of care. All veterans were technically “eligible” for
hospital care and nursing home care, but eligibility did not by itself ensure access to care.
The Veterans’ Health Care Eligibility Reform Act of 1996, P.L. 104-262, established two
eligibility categories and required the VHA to manage the provision of hospital care and medical
17
For a detailed discussion of “promised benefits,” see CRS Report 98-1006, Military Health Care: The Issue of
“Promised” Benefits, by (name redacted).
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services through an enrollment system based on a system of priorities.18 P.L. 104-262 authorized
the VA to provide all needed hospital care and medical services to veterans with serviceconnected disabilities, former prisoners of war, veterans exposed to toxic substances and
environmental hazards such as Agent Orange, veterans whose attributable income and net worth
are not greater than an established “means test,” and veterans of World War I. These veterans are
generally known as “higher priority” or “core” veterans (see Appendix A, discussed in more
detail below).19 The other category of veterans are those with no service-connected disabilities
and with attributable incomes above an established means test (see Appendix C).
P.L. 104-262 also authorized the VA to establish a patient enrollment system to manage access to
VA health care. As stated in the report language accompanying P.L. 104-262, “the Act would
direct the Secretary, in providing for the care of ‘core’ veterans, to establish and operate a system
of annual patient enrollment and require that veterans be enrolled in a manner giving relative
degrees of preference in accordance with specified priorities. At the same time, it would vest
discretion in the Secretary to determine the manner in which such enrollment system would
operate.”20
Furthermore, P.L. 104-262 was clear in its intent that the provision of health care to veterans was
dependent upon the available resources. The committee report accompanying P.L. 104-262 states
that the provision of hospital care and medical services would be provided to “the extent and in
the amount provided in advance in appropriations Acts for these purposes. Such language is
intended to clarify that these services would continue to depend upon discretionary
appropriations.”21
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As stated previously, P.L. 104-262 required the establishment of a national enrollment system to
manage the delivery of inpatient and outpatient medical care. The new eligibility standard was
created by Congress to “ensure that medical judgment rather than legal criteria will determine
when care will be provided and the level at which care will be furnished.”22
For most veterans, entry into the veterans’ health-care system begins by completing the
application for enrollment. Some veterans are exempt from the enrollment requirement if they
meet special eligibility requirements.23 A veteran may apply for enrollment by completing the
Application for Health Benefits (VA Form 10-10EZ) at any time during the year and submitting
18
U.S. Congress, House Committee on Veterans Affairs, Veterans’ Health Care Eligibility Reform Act of 1996, report
to accompany H.R. 3118, 104th Cong. 2nd sess., H.Rept. 104-690 p. 2.
19
Ibid., p.5.
20
Ibid., p.6.
21
Ibid., p.5.
22
Ibid., p.4.
23
Veterans do not need to apply for enrollment in the VA’s health-care system if they fall into one of the following
categories: veterans with a service-connected disability rated 50% or more (percentage ratings represent the average
impairment in earning capacity resulting from diseases and injuries encountered as a result of or incident to military
service; those with a rating of 50% or more are placed in Priority Group 1); less than one year has passed since the
veteran was discharged from military service for a disability that the military determined was incurred or aggravated in
the line of duty, but the VA has not yet rated; or the veteran is seeking care from the VA only for a service-connected
disability (even if the rating is only 10%).
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the form online or in person at any VA medical center or clinic, or mailing or faxing the
completed form to the medical center or clinic of the veteran’s choosing.24 Once a veteran is
enrolled in the VA health-care system, the veteran remains in the system and does not have to
reapply for enrollment annually. However, those veterans who have been enrolled in Priority
Group 5 (see Appendix A, discussed in more detail below) based on income must submit a new
VA Form 10-10EZ annually with updated financial information demonstrating inability to defray
the expenses of necessary care.25
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Eligibility for VA health care is based primarily on “veteran’s status” resulting from military
service. Veteran’s status is established by active-duty status in the military, naval, or air service
and an honorable discharge or release from active military service. Generally, persons enlisting in
one of the armed forces after September 7, 1980, and officers commissioned after October 16,
1981, must have completed two years of active duty or the full period of their initial service
obligation to be eligible for VA health-care benefits. Servicemembers discharged at any time
because of service-connected disabilities are not held to this requirement. Also, reservists that
were called to active duty and who completed the term for which they were called, and who were
granted an other than dishonorable discharge, are exempt from the 24 continuous months of
active duty requirement. National Guard members who were called to active duty by federal
executive order are also exempt from this two-year requirement if they (1) completed the term for
which they were called and (2) were granted an other than dishonorable discharge.
When not activated to full-time federal service, members of the reserve components and National
Guard have limited eligibility for VA health-care services. Members of the reserve components
may be granted service-connection for any injury they incurred or aggravated in the line of duty
while attending inactive duty training assemblies, annual training, active duty for training, or
while going directly to or returning directly from such duty. In addition, reserve component
service members may be granted service-connection for a heart attack or stoke if such an event
occurs during these same periods. The granting of service-connection makes them eligible to
receive care from the VA for those conditions. National Guard members are not granted serviceconnection for any injury, heart attack, or stroke that occurs while performing duty ordered by a
governor for state emergencies or activities.26
After veteran’s status has been established, the VA next places applicants into one of two
categories. The first group is composed of veterans with service-connected disabilities or with
incomes below an established means test. These veterans are regarded by the VA as “high
priority” veterans, and they are enrolled in Priority Groups 1-6 (see Appendix A). Veterans
enrolled in Priority Groups 1-6 include
•
veterans in need of care for a service-connected disability;27
24
VA Form 10-10EZ is available at https://www.1010ez.med.va.gov/sec/vha/1010ez/#Process.
38 C.F.R. §17.36 (d)(3)(iv) (2005).
26
38.U.S.C. §101(24); 38 C.F.R. §3.6(c).
27
The term “service-connected” means, with respect to disability, that such disability was incurred or aggravated in
line of duty in the active military, naval, or air service. The VA determines whether veterans have service-connected
disabilities and, for those with such disabilities, assigns ratings from 0 to 100% based on the severity of the disability.
Percentages are assigned in increments of 10%.
25
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•
veterans who have a compensable service-connected condition;
•
veterans whose discharge or release from active military, naval, or air service was
for a compensable disability that was incurred or aggravated in the line of duty;
•
veterans who are former prisoners of war (POWs);
•
veterans awarded the Purple Heart;
•
veterans who have been determined by VA to be catastrophically disabled;
•
veterans of World War I;
•
veterans who were exposed to hazardous agents (such as Agent Orange in
Vietnam) while on active duty; and
•
veterans who have an annual income and net worth below a VA-established
means test threshold.
The VA looks at applicants’ income and net worth to determine their specific priority category
and whether they have to pay co-payments for nonservice-connected care. In addition, veterans
are asked to provide the VA with information on any health insurance coverage they have,
including coverage through employment or through a spouse. The VA may bill these payers for
treatment of conditions that are not a result of injuries or illnesses incurred or aggravated during
military service. Appendix B provides information on what categories of veterans pay for which
services.
The second group of veterans is composed of those who do not fall into one of the first six
priority groups—primarily veterans with nonservice-connected medical conditions and with
incomes and net worth above the VA-established means test threshold. These veterans are
enrolled in Priority Group 7 or 8.28 Appendix C provides information on income thresholds for
VA health-care benefits.
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The VHA is mandated to provide priority care for non-emergency outpatient medical care for any
condition of a service-connected veteran rated 50% or more, or for a veteran’s service-connected
condition.29 According to VHA policies, patients with emergency or urgent medical needs must be
provided care, or must be scheduled to receive care as soon as practicable, independent of
service-connected status and whether care is purchased or provided directly by the VA. Veterans
who are service-connected 50% or more need to be scheduled to be seen within 30 days of the
desired date for any condition.
Veterans who are rated less than 50% service-connected disabled, and who require care for a
service-connected condition, need to be scheduled to be seen within 30 days of the desired date.
When VHA staff are in doubt as to whether the request for care is for a service-connected
28
The VA considers a veteran’s previous year’s total household income (both earned and unearned income, as well as
his/her spouse’s and dependent children’s income). Earned income is usually wages received from working. Unearned
income includes interest earned, dividends received, money from retirement funds, Social Security payments, annuities,
and earnings from other assets. The number of persons in the veterans family will be factored into the calculation to
determine the applicable income threshold. 38 C.F.R. § 17.36(b)(7) (2006).
29
VHA Directive 2006-055, October 11, 2006.
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condition, they are required to assume, on behalf of the veteran, that the veteran is entitled to
priority access and schedule within 30 days of the desired date.30
Veterans in other priority groups are to be scheduled to be seen within 120 days of the desired
date. According to VHA policies, all outpatient appointment requests must be acted on as soon as
possible, but no later than seven calendar days from the date of the request. The VHA also
requires that priority scheduling of any veteran must not affect the medical care of any other
previously scheduled veteran. Furthermore, VHA guidelines state that veterans with serviceconnected conditions cannot be prioritized over other veterans with more acute health-care
needs.31
ȱȱȱ ȱ
The VHA is funded through multiple appropriations accounts that are supplemented by other
sources of revenue. Although the appropriations account structure has been subject to change
from year to year, the appropriation accounts used to support the VHA traditionally include
medical care, medical and prosthetic research, and medical administration. In addition, Congress
also appropriates funds for construction of medical facilities through a larger appropriations
account for construction for all VA facilities. In FY2004, “to provide better oversight and [to]
receive a more accurate accounting of funds,” Congress changed the VHA’s appropriations
structure.32 The Department of Veterans Affairs and Housing and Urban Development and
Independent Agencies Appropriations Act, 2004 (P.L. 108-199, H.Rept. 108-401), funded VHA
through four accounts: (1) medical services, (2) medical administration, (3) medical facilities, and
(4) medical and prosthetic research. Provided below are brief descriptions of these accounts.
ȱȱ
The medical services account covers expenses for furnishing inpatient and outpatient care and
treatment of veterans and certain dependents, including care and treatment in non-VA facilities;
outpatient care on a fee basis; medical supplies and equipment; salaries and expenses of
employees hired under Title 38, United States Code; and aid to state veterans homes. In its
FY2008 budget request to Congress, the VA requested the transfer of food service operations
costs from the medical facilities appropriations to the medical services appropriations. The House
and Senate Appropriations Committees have concurred with this request.33
ȱȱ
The medical administration account provides funds for the expenses in the administration of
hospitals, nursing homes, and domiciliaries; billing and coding activities; quality of care
oversight; legal services; and procurement.
30
Ibid.
Ibid.
32
U.S. Congress, Conference Committees, Consolidated Appropriations Act, 2004, conference report to accompany
H.R. 2673, 108th Cong., 1st sess., H.Rept. 108-401, p. 1036.
33
The cost of food service operations support hospital food service workers, provisions, and supplies related to the
direct care of patients.
31
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The medical facilities account covers, among other things, expenses for the maintenance and
operation of VHA facilities; administrative expenses related to planning, design, project
management, real property acquisition and deposition, construction, and renovation of any VHA
facility; leases of facilities; and laundry services.
ȱȱȱȱ
This account provides funding for VA researchers to investigate a broad array of veteran-centric
health topics, such as treatment of mental health conditions, rehabilitation of veterans with limb
loss, traumatic brain injury and spinal cord injury, organ transplantation, and the organization of
the health-care delivery system. VA researchers receive funding not only through this account but
also from the DOD, the National Institutes of Health (NIH), and private sources.
As seen in Figure 1, the total level of funding for VHA increased between FY2006 and FY2008,
and most of this increase has been due to the increase in spending on medical services. As a
percentage of total VHA funding, spending on medical facilities, medical administration, and
medical and prosthetic research has been fairly stable.
Figure 1.VHA Funding, FY2006-FY2008
Chart prepared by CRS based on H.Rept. 109-95; S.Rept. 109-105; H.Rept. 109-305; H.Rept. 109-359;
H.Rept. 109-464; H.Rept. 109-494; S.Rept. 109-286; P.L. 110-5; H.Rept. 110-64; S.Rept. 110-37; H.Rept. 110-60;
Congressional Record, vol. 153, May 24, 2007, H5786-H5787; H.Rept. 110-186; S.Rept. 110-85; Congressional
Record, vol. 153, (September 7, 2007), S11271-S11278; and Congressional Record, vol. 153 (December 17, 2007),
pp. H16249-H16431.
Source:
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In addition to direct appropriations for the above accounts, the Committees on Appropriations
include medical care cost recovery collections when considering the amount of resources needed
to provide funding for the VHA. The Consolidated Omnibus Budget Reconciliation Act of 1985
(P.L. 99-272), enacted into law in 1986, gave the VHA the authority to bill some veterans and
most health-care insurers for nonservice-connected care provided to veterans enrolled in the VA
health-care system, to help defray the cost of delivering medical services to veterans.34
The Balanced Budget Act of 1997 (P.L. 105-33) gave the VHA the authority to retain these funds
in the Medical Care Collections Fund (MCCF). Instead of returning the funds to the Treasury, the
VA can use them for medical services for veterans without fiscal year limitations.35 To increase
the VA’s third-party collections, P.L. 105-33 also gave the VA the authority to change its basis of
billing insurers from “reasonable costs” to “reasonable charges.”36 This change in billing was
intended to enhance VA collections to the extent that reasonable charges result in higher payments
than reasonable costs.37 In FY2004, the Administration’s budget requested consolidating several
medical existing collections accounts into one MCCF. The conferees of the Consolidated
Appropriations Act of 2004 (H.Rept. 108-401) recommended that collections that would
otherwise be deposited in the Health Services Improvement Fund (former name), Veterans
Extended Care Revolving Fund (former name), Special Therapeutic and Rehabilitation Activities
Fund (former name), Medical Facilities Revolving Fund (former name), and the Parking
Revolving Fund (former name) should be deposited in MCCF.38 The Consolidated Appropriations
Act of 2005, (P.L. 108-447, H.Rept. 108-792) provided the VA with permanent authority to
deposit funds from these five accounts into the MCCF. The funds deposited into the MCCF
would be available for medical services for veterans. These collected funds do not have to be
spent in any particular fiscal year and are available until expended.
The conferees of the FY2006 Military Construction, Military Quality of Life and Veterans Affairs
Appropriations Act (P.L. 109-114, H.Rept. 109-305), required the VA to establish a revenue
improvement demonstration project. The purpose of this pilot project is to provide a
“comprehensive restructuring of the complete revenue cycle including cash-flow management
and accounts receivable.”39 The conferees included this provision because the Appropriation
Committees were concerned that the VHA was collecting only 41% percent of the billed amounts
from third-party insurance companies. Currently, the VHA has established a pilot Consolidated
Patient Account Center in VISN 6.
34
Veterans’ Health-Care and Compensation Rate Amendments of 1985, 100 Stat. 372, 373, 383.
For a detailed history of funding for VHA from FY1995 to FY2004, see CRS Report RL32732, Veterans’ Medical
Care Funding: FY1995-FY2004, by (name redacted).
36
Under “reasonable costs,” the VA billed insurers based on its average cost to provide a particular episode of care.
Under “reasonable charges,” the VA bills insurers based on market pricing for health-care services.
37
U.S. Government Accountability Office (GAO), VA Health Care: Third-Party Charges Based on Sound
Methodology; Implementation Challenges Remain, GAO/HEHS-99-124, June 1999.
38
For a detailed description of these former accounts, see CRS Report RL32548, Veterans’ Medical Care
Appropriations and Funding Process, by (name redacted).
39
U.S. Congress, Conference Committees, Military Construction, Military Quality of Life and Veterans Affairs
Appropriations Act, 2006, conference report to accompany H.R. 2528, 109th Congress, 1st session, H.Rept. 109-305, p.
43.
35
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As shown in Table 4, MCCF collections increased by 31%, from $1.5 billion in FY2003 to $2.0
billion in FY2006. During this same period, first-party collections increased by 26%, from $685
million to $863 million. In FY2006, first-party collections represented approximately 43% of
total MCCF collections.
Table 4. Medical Care Collections, FY2003-FY2006
($ in thousands)
FY2003
Actual
First-party pharmacy co-paymentsa
First-party co-payments for inpatient and
outpatient care
First-party long-term care co-paymentsb
Third-party insurance collections
Enhanced use leasing revenuec
Compensated work therapy collectionsd
Parking feese
Compensation and pension living expensesf
MCCF Total
FY2004
Actual
FY2005
Actual
FY2006
Actual
$576,554
$623,215
$648,204
$723,027
104,994
3,461
804,141
234
38,834
3,296
376
113,878
5,077
960,176
459
40,488
3,349
634
118,626
5,411
1,055,597
26,861
36,516
3,443
2,431
135,575
4,347
1,095,810
3,379
40,081
3,083
2,075
$1,531,890
$1,747,276
$1,897,089
$2,007,377
Table prepared by CRS based on data provided by the Department of Veterans Affairs, and U.S.
Department of Veterans Affairs, FY2008 Congressional Budget Submissions, Medical Programs, vol. 1 of 4, pp. 3-8.
Notes: The following accounts were not consolidated into the MCCF until FY2004: enhanced use leasing
revenue, compensated work therapy collections, parking fees, and compensation and pension living expenses.
Collection figures for these accounts for FY2003 are provided for comparison purposes.
a. In FY2002, Congress created the Health Services Improvement Fund (HSIF) to collect increases in
pharmacy co-payments (from $2 to $7 for a 30-day supply of outpatient medication) that went into effect
on February 4, 2002. The Consolidated Appropriations Resolution, 2003 (P.L. 108-7) granted the VA the
authority to consolidate the HSIF with the MCCF and granted permanent authority to recover co-payments
for outpatient medications.
b. Authority to collect long-term care co-payments was established by the Millennium Health Care and
Benefits Act (P.L. 106-117). Certain veteran patients receiving extended care services from VA providers or
outside contractors are charged co-payments.
c. Under the enhanced-use lease authority, the VA may lease land or buildings to the private sector for up to
75 years. In return the VA receives fair consideration in cash and/or in-kind. Funds received as monetary
considerations may be used to provide care for veterans.
d. The compensated work therapy program is a comprehensive rehabilitation program that prepares veterans
for competitive employment and independent living. As part of their work therapy, veterans produce items
for sale or undertake subcontracts to provide certain products and/or services, such as providing
temporary staffing to a private firm. Funds collected from the sale of these products and/or services are
deposited into the MCCF.
e. The Parking program provides funds for construction and acquisition of parking garages at VA medical
facilities. The VA collects fees for use of these parking facilities.
f. Under the compensation and pension living expenses program, veterans who do not have either a spouse
or child would have their monthly pension reduced to $90 after the third month a veteran is admitted for
nursing home care. The difference between the veteran’s pension and the $90 is used for the operation of
the VA medical facility.
Sources:
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On February 6, 2006, the President submitted his FY2007 budget proposal to Congress. The
Administration requested $32.7 billion for the VHA, an 11.3% increase over the FY2006 enacted
amount of $29.3 billion and a 10% increase over FY2005 enacted amount of $29.7 billion (see
Table 5 and Appendix D). The FY2007 request included $25.5 billion for medical services, a
12% increase over the FY2006 enacted amount; $3.2 billion for medical administration, an 11.2%
increase over FY2006; $3.6 billion for medical facilities, an 8.2% increase over FY2006; and
$399 million for medical and prosthetic research, a 3.2% decrease from the FY2006 enacted
amount. (For a detailed breakdown of funding levels for the VHA for FY2005 and FY2006, see
Appendix D).
ȱȱ
On May 19, 2006, the House passed its version of the Military Construction, Military Quality of
Life, and Veterans Affairs Appropriations bill (MIL-CON-QUAL-appropriations bill) for FY2007
(H.R. 5385, H.Rept. 109-464). H.R. 5385 provided $32.7 billion for the VHA, a $3.4 billion
(11.4%) increase over the FY2006 enacted amount of $29.3 billion and about the same as the
President’s request. This amount included $25.4 billion for medical services, $100 million less
than the President’s request and $2.6 billion (11.6%) over the FY2006 enacted amount of $22.8
billion. The MIL-CON-QUAL-appropriations bill for FY2007 also provided $3.3 billion for
medical administration, $100 million above the Administration’s request of $3.2 billion, and $3.6
billion for medical facilities, $25 million above the budget request. H.R. 5385 also provided $412
million for medical and prosthetic research, a 3.2% increase over the President’s request of $399
million (see Table 5).
ȱȱ
On November 14, 2006, the Senate passed by voice vote its version of the Military Construction
and Veterans Affairs, and Related Agencies Appropriations bill (MIL-CON-VA-appropriations
bill) for FY2007 (H.R. 5385, S.Rept. 109-286). H.R. 5385, as amended by the Senate, provided
$32.7 billion for the Veterans Health Administration (VHA) for FY2007, about the same as the
House-passed amount and the President’s request. This amount included $28.7 billion for medical
services, a 26.0% increase over the FY2006 enacted amount, a 12.5% increase over the
President’s request, and a 13.0% increase over the House-passed amount. The Senate-passed
version of H.R. 5385 also provided $3.6 billion for medical facilities, which was the same as the
Administration’s request and $25.0 million less than the House-passed amount, and $412 million
for medical and prosthetic research. This amount was the same as the House-passed amount and
$13.0 million above the President’s request (see Table 5).
40
For a detailed description of VA Medical Care Appropriations for FY2007, see CRS Report RL33409, Veterans’
Medical Care: FY2007 Appropriations, by (name redacted).
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At the end of the 109th Congress, Congress did not pass the MIL-CON-VA-appropriations bill for
FY2007, and funded most government agencies, including the VA, through a series of Continuing
Appropriations Resolutions (P.L. 109-289, division B, as amended by P.L. 109-369 and P.L. 109383). On January 31, 2007, the House passed the Revised Continuing Appropriations Resolution,
2007 (H.J.Res. 20), and the Senate passed it without amendment on February 14.41 On February
15, 2007, the President signed into law the Revised Continuing Appropriations Resolution, 2007
(H.J.Res. 20, P.L. 110-5). It provided $32.7 billion for the VHA for FY2007, a $14.7 million
increase over the President’s request and $3.3 billion above the FY2006 enacted amount. This
amount included $25.5 billion for medical services, $3.2 billion for medical administration, $3.6
billion for medical facilities, and $414 million for medical and prosthetic research. These
amounts were the same as the President’s request, except for the medical and prosthetic research
account, which was $15 million above the President’s request. The Revised Continuing
Appropriations Resolution did not include any provisions that would have given the VA the
authority to implement fee increases as requested by the Administration’s budget proposal for the
VHA for FY2007.
ŘŖŖŝȱȱȱ
On May 24, 2007, the House and Senate approved the U.S. Troop Readiness, Veterans’ Care,
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (H.R. 2206). The bill was
signed into law on May 25 (P.L. 110-28). Among other things, P.L. 110-28 provided a total of
$1.34 billion for the VHA for FY2007. This amount was in addition to the amount appropriated
under P.L. 110-5. This amount included $400 million for medical services:42 (1) $9.4 million for
polytrauma residential transition rehabilitation programs; (2) $10 million for additional transition
caseworkers; (3) $20 million for substance abuse treatment programs; (4) $20 million for
readjustment counseling (Vet Centers); (5) $10 million for blind rehabilitation services; (6) $100
million for enhancement of mental health services; (7) $8 million for polytrauma support clinic
teams; (8) $5.4 million for additional polytrauma points of contact; (9) $193 million for treatment
of Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) veterans; and (10) $25
million for prosthetics.
P.L. 110-28 also provided $326 million for the Construction, Minor Projects account, with
specific funding of $36.0 million for construction costs related to establishing polytrauma
residential transitional rehabilitation programs.43 It also provided $250 million for medical
administration and $595 million for medical facilities, including specific funding of (1) $45.0
million for facility and equipment upgrades at polytrauma centers and (2) $550 million for nonrecurring maintenance to address structural deficiencies in VA medical facilities.44
41
To calculate the total funding level remaining for the VA in FY2007, the Department would subtract the funding
provided in the previously enacted FY2007 Continuing Resolutions from the amount provided in P.L. 110-5.
42
The initial amount enacted was $466.7 million. P.L. 110-161 (H.R. 2764) transferred $66 million from the FY2007
medical services account to the construction, major projects account for FY2007 to fund a new Level I polytrauma
center to be located in San Antonio, Texas.
43
Conference Report published in Congressional Record, vol. 153, part II (May 24, 2007), pp. H5776-H5910.
44
A list of structural deficiencies identified by the VA can be found at http://www1.va.gov/opa/pressrel/docs/
Environment_of_Care_Roll-up.pdf.
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On February 5, 2007, the President submitted his FY2008 budget proposal to Congress. The total
amount requested by the Administration for the VHA for FY2008 was $34.6 billion, a 1.93%
increase in funding compared with the FY2007 enacted amount. The total amount of funding that
would have been available for the VHA under the President’s budget proposal for FY2008,
including collections, was approximately $37.0 billion (see Table 5). For FY2008, the
Administration requested $27.2 billion for medical services, a $1.2 billion, or 4.8%, increase in
funding over the FY2007 enacted amount. The Administration’s budget proposal also requested
$3.4 billion for medical administration, $3.6 billion for medical facilities, and $411 million for
medical and prosthetic research (see Table 5). As in FY2003, FY2004, FY2005, FY2006, and
FY2007, the Administration included several cost-sharing proposals. These legislative proposals
are discussed in detail in the “Key Budget Issues” section at the end of this report.
ŘŖŖŞȱȱȱȱ
On May 17, 2007, the House and Senate adopted the Conference Report (H.Rept. 110-153) to
accompany the Concurrent Resolution on the Budget for FY2008 (S.Con.Res. 21). The
conference agreement provided a total of $85.3 billion in budget authority for all veterans
benefits and services for FY2008, and a total of $452.8 billion in budget authority for FY2008FY2012. Of the amount allocated for FY2008, the conference agreement provided $43.1 billion
for discretionary veterans’ programs, which consists mainly of VA medical care. Furthermore, the
conference agreement rejected the veterans’ health-care enrollment fees and co-payment increases
that were proposed by the President’s budget request.
ȱȱ
On May 22, 2007, the House Appropriations Committee, Subcommittee on Military Construction,
Veterans Affairs, and Related Agencies, approved by voice vote a draft measure recommending
funding levels for FY2008 for military construction programs, the VA, and related agencies. On
June 6, the full House Appropriations Committee recommended $37.1 billion for the VHA for
FY2008, a 9.3% increase over the FY2007 enacted amount of $34.0 billion and 7.3% above the
President’s request. This amount included $28.9 billion for medical services, $1.9 billion (6.9%)
above than the President’s request and $2.9 billion (12.0%) over the FY2007 enacted amount of
$26.0 billion. Of the amount recommended for the medical services account, the committee
included bill language stipulating $2.9 billion for speciality mental health care, $130 million for
the homeless veterans grant and per diem program, $429 million for the substance abuse program,
and $100 million for blind rehabilitation services.
The committee recommendation also included $3.6 billion for medical administration, $193
million above the Administration’s request of $3.4 billion; $4.1 billion for medical facilities, a
14% increase over the President’s request; and $480 million for medical and prosthetic research, a
17% increase over the President’s request of $411 million (see Table 5). The committee did not
recommend any fee increases as requested by the Administration’s budget proposal for the VHA
for FY2008. The Military Construction and Veterans Affairs appropriations bill for FY2008 (H.R.
2642, H.Rept. 110-186) was reported out of committee on June 11.
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On June 15, 2007, the House passed H.R. 2642. As amended, H.R. 2642 provided $29.0 billion
for medical services. This included the transfer of $125 million from the medical administration
account to the medical services account. The reason for this transfer was because during House
floor debate, Representative Shelley Moore Capito offered an amendment to transfer $5 million
to the medical services account for the establishment of an Office of Rural Health within the
Office of the Under Secretary for Health, as directed by P.L. 109-461. Representative Jerry Moran
also offered an amendment to transfer $120 million to the medical services account to increase
funding for the Veterans Beneficiary Travel Program.
The MILCON-VA appropriations bill, as amended, also provided $3.5 billion for the medical
administration account, $68.6 million above the FY2008 request and $82.6 million above the
FY2007 enacted amount. All other amounts for the VHA were equal to the committeerecommended funding levels.
ȱȱ
H.R. 2642 has provided approximately $2.2 billion for VA construction projects (excluding grants
for construction of state veterans cemeteries), including funding for Capital Asset Realignment
for Enhanced Services (CARES) projects (see Table 6).45 A large portion of this amount was for
construction and building improvements of VA medical facilities. The House Appropriations
Committee did not recommended any funding amounts for various construction and projects
submitted by Members of Congress or by the Administration. According to H.Rept. 110-186,
“individual project allocations will be considered comprehensively after the Committee has
properly analyzed all relevant information.”46
ȱȱ
On June 13, 2007, the Senate Appropriations Committee, Subcommittee on Military
Construction, Veterans Affairs, and Related Agencies, approved a draft version of the MILCONVA appropriations bill. On June 14, the full Senate Appropriations Committee approved the
measure. The bill was reported to the Senate on June 18 (S. 1645, S.Rept. 110-85). S. 1645, as
reported, provided a total of $37.2 billion for the VHA. This amount includes $29.0 billion for
medical services, a $3 billion (11.5%) increase over the FY2007 enacted amount and $1.8 billion
over the FY2008 budget request, and $3.6 billion for medical administration, $214 million (6.2%)
above the FY2007 enacted amount and $200 million above the FY2008 Administration’s request.
Furthermore, the Senate version of the MILCON-VA appropriations bill, as reported, provided
$4.1 billion for medical facilities—a 14.0% increase over the FY2008 request and 1.7% less than
the FY2007 enacted amount—and $500 million for medical and prosthetic research—a 12%
increase over the FY2007 enacted amount, a 22.0% increase over the FY2008 request, and 4.2%
above the House-passed amount. The committee did not recommend any fee increases as
requested by the Administration’s budget proposal for the VHA for FY2008.
45
For a detailed description of the Capital Asset Realignment for Enhanced Services (CARES) program, see CRS
Report RL33993, Veterans’ Health Care Issues, by (name redacted).
46
U.S. Congress, House Committee on Appropriations, Military Construction, Veterans Affairs, and Related Agencies
Appropriations Bill, 2008, report to accompany H.R. 2642, 110th Congress, 1st session, H.Rept. 110-186, p. 51.
ȱȱȱ
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ȱ
On September 6, 2007, the Senate passed H.R. 2642 with an amendment to reflect the Senate
Appropriations Committee-approved measure (S. 1645, S.Rept. 110-85). During Senate floor
debate, an amendment offered by Senator Jon Tester was approved to transfer $125 million from
the medical administration account to the medical services account. This additional amount of
funding would have been available for the Veterans Beneficiary Travel Program. With this
transfer of funds, $29.1 billion would have been available for medical services—a $3.2 billion
(12.3%) increase over the FY2007 enacted amount and $1.9 billion over the FY2008 budget
request—and $3.5 billion would have been available for medical administration, $75 million
above the FY2008 Administration’s request (Table 5). All other amounts for the VHA were equal
to the committee-recommended funding levels.
ȱȱ
H.R. 2642, as amended by the Senate, provided a total of $1.7 billion for VA construction projects
(Table 6).47 Unlike the House Appropriations Committee, the Senate Appropriations Committee
provided funding for specific construction projects requested by the President. However, the
committee continued the practice of not earmarking major construction projects that are not
requested in the President’s budget proposal.
ȱȱȱȱŘŖŖŞȱ
At the end of 2007, Congress passed the Consolidated Appropriations Act for FY2008 (H.R.
2764), an omnibus measure that combined the 11 outstanding appropriations bills for FY2008.48
H.R. 2764 was passed by the House on December 17, 2007; the Senate passed the measure the
next day, December 18, with an amendment (McConnell Amendment—adding funding for the
Iraq war). The House agreed to the McConnell Amendment on December 19. The bill was signed
into law (P.L. 110-161) on December 26. Division I of H.R. 2764 included the Military
Construction and Veterans Affairs and Related Agencies Appropriations Act, 2008 (MILCON-VA
Appropriations Act).
The MILCON-VA Appropriation Act provided $37.2 billion for VHA for FY2008, which is $2.6
billion above the Administration’s request for FY2008 (see Table 5). Of this amount, $2.6 billion
(the amount above the Administration’s request) was designated as contingent emergency funding
and was to be available for obligation only after the President submitted a budget request to
Congress. On January 17, 2008, the President submitted a budget request to Congress, requesting
this additional amount and designating it as an emergency requirement. Of the total amount
appropriated for VHA, $29.1 billion has been allocated to the medical services account, which is
almost $2 billion above the President’s FY2008 request. The amount appropriated for medical
services includes
•
an additional $125 million to increase the beneficiary travel reimbursement
mileage rate to 28.5 cents per mile,
•
an additional $70 million for substance abuse services,
47
This amounts excludes grants for construction of state veterans cemeteries, which are funded under a separate
account.
48
The only appropriations bill that passed as a stand alone measure was the Department of Defense Appropriations
Act, 2008 (H.Rept. 110-434), which was signed into law on November 13 (P.L. 110-116).
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•
an additional $12.5 million for expanded outpatient services for the blind, and
•
an additional $15 million for Vet Centers.49
The explanatory statement (discussed below) also stipulates that of the total amount appropriated
for medical services, not less than $2.9 billion shall be expended for specialty mental health care,
and not less than $130 million shall be expended for the homeless grants and per diem program.
ȱȱ
P.L. 110-161 has appropriated approximately $1.9 billion for VA construction projects, an $818
million increase over the Administration’s request. This increase in funding was provided to
address insufficient funding levels in the advanced planning fund and to compensate for cost
adjustments to previously appropriated major construction projects. The Consolidated
Appropriations Act for FY2008 provided funding for specific VA construction projects as
requested by the Administration.
¡¢ȱȱ
The explanatory statement accompanying the Consolidated Appropriations Act (H.R. 2764, P.L.
110-161) included several major areas of interest to the Appropriations Committees, and
incorporated some report language from H.Rept. 110-186, and S.Rept. 110-85.
ȱȱ ȱȱȱȱ
The Appropriation Committees have urged both DOD and VA to seek every opportunity to
partner to improve the continuity of care for veterans through: joint clinics; joint Centers of
Excellence for Post Traumatic Stress Disorder (PTSD) and Traumatic Brain Injury (TBI); joint
research and/or treatment; and the development of joint clinical practice guidelines for
polytrauma injury, TBI, burns, and amputee care, among other things.
ȱȱ ¢ȱǻ Ǽȱ
Currently, there is no medical diagnostic code specific to TBI, therefore, it is a challenge to
quantify the number of TBI cases. Presently, both DOD and VA are working with the National
Center for Health Statistics to refine current International Classification of Diseases-9th Revision
(ICD—9) codes to better reflect the TBI patient population within both DOD and VA. Beginning
with FY2009, the appropriators are directing the Administration to include TBI as a select
program within the medical services account in order that committees might better account for
special needs of these patients.
ȱ ȱȱȱȱ
The Appropriation Committees expressed concern about insufficient funding levels for mental
health and substance abuse services in the FY2008 budget request. The Administration’s budget
49
Congressional Record, vol. 153 (December 17, 2007), pp. H16386.
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request had included a reduction in the number of inpatient beds for psychiatric care and an
anticipated increase of less than one percent for substance abuse services. The Consolidated
Appropriations Act (H.R. 2764, P.L. 110-161) includes increased funding within the medical
services account in order to increase access to substance abuse services, and ensure that adequate
inpatient psychiatric care is maintained. The appropriators also directed the VA to reexamine the
policy for a reduction in psychiatric inpatient care, taking into account the needs of returning OIF
and OEF veterans. Furthermore, the explanatory statement directs the VA not to reduce the
number of inpatient psychiatric beds at any facility that currently has a waiting list.
ȱȱȱȱȱȱȱȱ
Veterans access to VA care in remote rural areas has been a long standing issue. To address this
issue the appropriators have directed the VA to provide a report to the committees that includes a
description of the unique challenges and costs faced by veterans in remote rural areas when
obtaining medical services from the VA, and the need to improve access to locally administered
care for veterans who reside in remote rural areas. The report should also identify the need to
fund alternative sources of medical services in areas where VA medical facilities are not
accessible to veterans without them leaving such areas. Moreover, the report should also contain
an assessment of the potential for increasing local access to medical services for veterans in
remote rural areas through strategic partnerships with other government and local private health
care providers.
ȱȱȱ
The explanatory statement accompanying the Consolidated Appropriations Act (H.R. 2764, P.L.
110-161) directs the DOD and VA to provide a joint report to the Committees on Appropriations
detailing the actions being taken by each Department to achieve an interoperable electronic
medical record (EMR) system. Furthermore, the report must identify all ongoing and planned
projects and programs within both DOD and VA addressing interoperability. Similar language has
been included in the Defense Appropriations conference report (H.Rept. 110-434).
ȱȱȱ
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.VHA Appropriations by Account, FY2006-FY2008
Table 5
($ in thousands)
Program
Medical services
Emergency
appropriations
Emergency
appropriations—
Defense, the Global
War on Terror, and
Hurricane Recovery
(P.L. 109-234)
Emergency
appropriations—Avian
Flu Pandemic (P.L. 109148)
Emergency
appropriations—U.S.
Troop Readiness,
Veterans’ Care, Katrina
Recovery, and Iraq
Accountability (P.L. 11028)
Contingent emergency
(P.L. 110-161)
Subtotal medical services
Medical administration
Emergency
appropriations (P.L. 11028)
Ȭŗşȱ
FY2006
enacted
FY2007
request
FY2007
House
FY2007
Senate
FY2007
enacted
FY2008
request
FY2008
FY2008
House
Senate
(H.R. 2642) (H.R. 2642)
FY2008
enacted
$21,322,141
$25,512,000
$25,412,000
$28,689,000
$25,518,254
$27,167,671
$29,031,400
$29,104,220
$27,167,671
1,225,000
—
—
—
—
—
—
—
—
198,265
—
—
—
—
—
—
—
—
27,000
—
—
—
—
—
—
—
—
—
—
414,982
454,131
400,778a
—
—
—
—
—
22,772,406
2,858,442
—
25,512,000
3,177,000
—
25,826,982
3,277,000
—
29,143,131
—
—
25,919,032
3,177,968
—
27,167,671
3,442,000
—
29,031,400
3,510,600
—
29,104,220
3,517,000
1,936,549
29,104,220
3,442,000
—
—
256,300
250,000
250,000
—
—
—
—
ȱ
Program
Contingent emergency
(P.L. 110-161)
Subtotal medical
administration
Medical facilities
Emergency
appropriations (P.L. 11028)
Contingent emergency
(P.L. 110-161)
Subtotal medical facilities
Medical and prosthetic
research
Emergency
appropriations (P.L. 11028)
Contingent emergency
(P.L. 110-161)
Subtotal medical and
prosthetic research
Total VHA
appropriations
(without collections)
FY2006
enacted
FY2007
request
FY2007
House
FY2007
Senate
FY2007
enacted
FY2008
FY2008
House
Senate
(H.R. 2642) (H.R. 2642)
FY2008
request
FY2008
enacted
75,000
2,858,442
3,297,669
3,177,000
3,569,000
3,533,300
3,594,000
250,000
3,569,000
3,427,968
3,569,533
3,442,000
3,592,000
3,510,600
4,100,000
3,517,000
4,092,000
3,517,000
3,592,000
—
—
595,000
595,000
595,000
—
—
—
—
—
3,297,669
—
3,569,000
—
4,189,000
—
4,164,000
—
4,164,533
—
3,592,000
—
4,100,000
—
4,092,000
508,000
4,100,000
412,000
399,000
412,000
412,000
413,980
411,000
480,000
500,000
411,000
—
—
35,000
30,000
32,500
—
—
—
—
—
—
—
—
—
—
—
—
69,000
412,000
399,000
447,000
442,000
446,480
411,000
480,000
500,000
480,000
29,340,517
32,657,000
33,996,282
33,999,131
33,958,013
34,612,671
37,122,000
37,213,220
37,201,220
2,170,000
2,329,000
2,329,000
2,329,000
2,329,000
2,414,000
2,414,000
2,414,000
2,414,000
Medical care cost
collection (MCCF)
Total: VHA
(appropriations and
collections)
$31,510,517 $34,986,000 $36,325,282 $36,328,131 $36,287,013 $37,026,671 $39,536,000 $39,627,220 $39,615,220
Sources: Table prepared by the Congressional Research Service based on H.Rept. 109-95; S.Rept. 109-105; H.Rept. 109-305; H.Rept. 109-359; H.Rept. 109-464; H.Rept.
109-494; S.Rept. 109-286; P.L. 110-5; H.Rept. 110-64; S.Rept. 110-37; H.Rept. 110-60; Congressional Record, vol. 153, May 24, 2007, H5786-H5787; H.Rept. 110-186; S.Rept.
110-85; Congressional Record, vol. 153, (September 7, 2007), S11271-S11278; and Congressional Record, vol. 153 (December 17, 2007), pp.H16249-H16431.
a. P.L. 110-161 (H.R. 2764) transferred $66 million from the FY2007 medical services account to the construction major, projects account for FY2007.
ȬŘŖȱ
ȂȱȱDZȱŘŖŖŞȱȱ
ȱ
. Appropriations for VA Construction Projects, FY2006-FY2008
Table 6
($ in thousands)
FY2008
Construction, major
projectsa
Emergency
Appropriations—Gulf
Coast Hurricanes (P.L.
109-148)
Emergency
Appropriations—
Defense, the Global
War on Terror, and
Hurricane Recovery
(P.L. 109-234)
Contingent emergency
(P.L. 110-161)
Subtotal
construction, major
projects
Construction, minor
projectsc
Emergency
Appropriations—Gulf
Coast Hurricanes (P.L.
109-148)
Emergency
appropriations—U.S.
Troop Readiness,
Veterans’ Care,
Katrina Recovery, and
Iraq Accountability
(P.L. 110-28)
Contingent emergency
(P.L. 110-161)
Subtotal
construction, minor
projects
FY2008
FY2006
FY2007
FY2008
House
Senate
FY2008
Enacted
enacted
Request
(H.R. 2642)
(H.R. 2642)
enacted
$607,100
$465,000b
$727,400
$1,410,800
$727,400
$727,400
367,500
—
—
—
—
—
585,919
—
—
—
—
—
—
—
—
—
—
341,700
1,560,519
465,000
727,400
1,410,800
727,400
1,069,100
198,937
198,937
233,396
615,000
751,398
233,396
1,800
—
—
—
—
—
—
326,000
—
—
—
—
—
—
—
—
—
397,139
200,737
524,937
233,396
615,000
751,398
630,535
85,000
85,000
85,000
165,000
250,000
85,000
Grants for
construction of state
extended care
facilitiesd
ȱȱȱ
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ȱ
ȱ
FY2008
FY2008
FY2006
FY2007
FY2008
House
Senate
FY2008
Enacted
enacted
Request
(H.R. 2642)
(H.R. 2642)
enacted
Contingent emergency
(P.L. 110-161)
—
—
—
—
—
80,000
85,000
85,000
85,000
165,000
250,000
165,000
$1,846,256
$1,074,937
$1,045,796
$2,190,800
$1,728,798
$1,864,635
Subtotal Grants for
construction of state
extended care
facilities
Total
Sources: Table prepared by CRS based on H.Rept. 109-464; H.Rept. 109-494; S.Rept. 109-286; P.L. 110-5;
, vol. 153, May 24, 2007, H5786-H5787;
H.Rept. 110-186; S.Rept. 110-85; Congressional Record, vol. 153, September 7, 2007, S11271-S11278; and
Congressional Record, vol.153 (December 17, 2007), pp. H16249-H16431.
Note: This table excludes grants for construction of state veterans cemeteries.
a. This account provides funds for constructing, altering, extending, and improving any VA facility, including
planning, assessments of needs, architectural and engineering services, CARES projects, and site acquisition,
where the estimated cost of a project is $10 million or more or where funds for a project were made
available in a previous major project appropriation. Emphasis is placed on correction of safety code
deficiencies in existing VA medical facilities.
b. The initial amount enacted for FY2007 was $399 million. P.L. 110-161 (H.R. 2764) transferred $66.0 million
from the FY2007 medical services account to the construction, major projects account for FY2007.
c. This account provides funds for constructing, altering, extending and improving any VA facility, including
planning, architectural and engineering services, CARES projects, and site acquisition, where the estimated
cost of a project is less than $10 million. VA medical center projects that need minor improvements costing
$500,000 or more are funded from this account.
d. This account provides grants to states to acquire or construct state nursing home and domiciliary facilities,
and to remodel, modify, or alter existing hospitals, nursing homes, and domiciliary facilities in state homes.
A grant may not exceed 65% of the total cost of the project. P.L. 102-585 granted permanent authority for
this program, and P.L. 104-262 added Adult Day Health Care as another level of care that may be provided
by state homes. This is a no-year account.
H.Rept. 110-64; S.Rept. 110-37; H.Rept. 110-60; Congressional Record
¢ȱȱ ȱ
In its FY2008 budget request, the Administration has put forward several legislative proposals.
These proposals are similar to previous ones included in the Administration’s budget requests for
FY2003, FY2004, FY2005, FY2006, and FY2007 and rejected by Congress each year.50
However, unlike previous budget proposals, revenue from the proposals in the FY2008 budget
request would not be deposited in the Medical Care Collections Fund (MCCF), but would be
classified as mandatory receipts to the Treasury. Aside from the Administration’s budget
proposals, the House and Senate Appropriations Committees have expressed concern on the long-
50
In FY2003, the VA proposed a $1,500 deductible for all Priority Group 7 veterans for nonservice-connected
disabilities. For proposals included in FY2004, FY2005, FY2006, and FY2007, see CRS Report RL32548, Veterans’
Medical Care Appropriations and Funding Process, by (name redacted); CRS Report RL32975,
Veterans’
Medical Care: FY2006 Appropriations, by (name redacted); and CRS Report RL33409,
Veterans’ Medical
Care: FY2007 Appropriations, by (name redacted).
ȱȱȱ
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term cost of providing health care for veterans and the Administration’s inability to accurately
estimate the future cost of providing those services.51
The President’s FY2008 budget request includes three major policy proposals:
•
Assess a tiered annual enrollment fee for all Priority 7 and 8 veterans based on
the family income of the veteran.
•
Increase pharmaceutical co-payments from $8 to $15 (for each 30-day
prescription) for all enrolled veterans in Priority Groups 7 and 8.
•
Bill veterans receiving treatment for nonservice-connected conditions for the
entire co-payment amount.
A detailed description of these budget proposals follows.
ȱȱȱȱȱ
The Administration is proposing a tiered annual enrollment fee, which is structured to charge
$250 for Priority 7 and 8 veterans with family incomes from $50,000 to $74,999; $500 for those
with family incomes from $75,000 to $99,999; and $750 for those with family incomes equal to
or greater than $100,000. The VA has estimated that this proposal would contribute more than
$138 million to the Treasury annually, beginning in FY2009, and will increase revenue by $526
million over five years.
The MILCON-VA Appropriation Act (P.L. 110-161) does not include any bill language that
would give the VA the authority to impose enrollment fees.
ȱ¢ȱȬ¢ȱ
The Administration proposes increasing the pharmacy co-payments from $8 to $15 for all
enrolled Priority Group 7 and Priority Group 8 veterans whenever they obtain medication from
the VA on an outpatient basis for the treatment of a nonservice-connected condition. The
Administration put forward this proposal in its FY2004, FY2005, FY2006, and FY2007 budget
requests as well, but did not receive any approval from Congress. At present, veterans in Priority
Groups 2-8 pay $8 for a 30-day supply of medication, including over-the-counter medications.52
The Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) authorized the VA to charge most
veterans $2 for each 30-day supply of medication furnished on an outpatient basis for treatment
of a nonservice-connected condition. The Veterans Millennium Health Care and Benefits Act of
1999 (P.L. 106-117) authorized the VA to increase the medication co-payment amount and
establish annual caps on the total amount paid, to eliminate financial hardship for veterans
51
U.S. Congress, House Committee on Appropriations, Military Construction, Veterans Affairs, and Related Agencies
Appropriations Bill, 2008, report to accompany H.R. 2642, 110th Congress, 1st session, H.Rept. 110-186, p.14.
52
The following veterans are exempt from paying copayments: veterans receiving a pension for a nonserviceconnected disability from the VA; veterans with incomes below $10,929 (if no dependents) and $14,313 (with one
dependent plus $1,866 for each additional dependent); veterans receiving care for conditions such as Agent Orange or
Military Sexual Trauma, and combat veterans within two years of discharge; and veterans who are former POWs.
ȱȱȱ
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ȱ
enrolled in Priority Groups 2-6.53 When veterans reach the annual cap, they continue to receive
medications without making a co-payment.
On November 15, 2005, the VHA issued a directive stating that effective January 1, 2006, the
medication co-payment will be increased to $8 for each 30-day supply of medication furnished on
an outpatient basis for treatment of a nonservice-connected condition, and that the annual cap for
veterans enrolled in Priority Groups 2-6 will be $960.54 There is no cap for veterans in Priority
Groups 7 and 8 (see Appendixes B and C). The VA estimates that if the current proposal to raise
the co-payment were enacted, it would contribute $311 million to the Treasury in FY2008 and
will increase revenue by $1.6 billion over five years. The MILCON-VA Appropriation Act (P.L.
110-161) does not include any bill language that would give the VA the authority to increase copayments.
ȱȱȱȱ
According to VA estimates, of the 5.8 million unique patients that it expects to see in 2008,
111,000 may choose not to use the system if an enrollment fee is imposed and the pharmacy
copays are increased.
Ȭ¢ȱȱȱȬ¢ȱȱ
The Administration is requesting that Congress amend the VA’s statutory authority by eliminating
the practice of reducing first-party co-payment debts with third-party health-insurance
collections. The VA asserts that this proposal would align the VA with the DOD health-care
system for military retirees and with the private sector.
With the enactment of P.L. 99-272 in 1986, Congress authorized the VA to collect payments from
third-party health insurers for the treatment of veterans with nonservice-connected disabilities; it
also established co-payments from veterans for this care.55 Under current law, the VA is
authorized to collect from third-party health insurers to offset the cost of medical care furnished
to a veteran for the treatment of a nonservice-connected condition.56 If the VA treats an insured
veteran for a nonservice-connected disability, and the veteran is also determined by the VA to
have co-payment responsibilities, the VA will apply the payment collected from the insurer to
satisfy the veteran’s co-payment debt related to that treatment.
Under the current co-payment billing process, in cases where the cost of a veteran’s medical care
for a nonservice-connected condition appears to qualify for billing under reimbursable insurance
and co-payment, the VA medical facilities sends the bill to the insurance provider. The veteran’s
co-payment obligation is placed on hold for 90 days pending payment from the third-party payer.
53
This law allowed the VA to increase the copayment amount for each 30-day or less supply of medication provided on
an outpatient basis (other than medication administered during treatment) for treatment of a nonservice-connected
condition. Accordingly, the VA increased the co-payment amount from $2 to $7. The medication co-payment charge
for each subsequent calendar year after 2002 is established by using the prescription drug component of the Medical
Consumer Price Index. When an increase occurs, the co-payment increases in whole dollar amounts. The amount of the
annual cap increases $120 for each $1 increase in the co-payment amount.
54
VHA Directive 2005-052, Implementation of Medication Copayment Changes, November 15, 2005.
55
Consolidated Omnibus Budget Reconciliation Act of 1985, 100 Stat. 372, 373, 383.
56
38 U.S.C. §1729; 38 U.S.C. §1710; and 38 U.S.C. 1722A.
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ȂȱȱDZȱŘŖŖŞȱȱ
If no payment is received from the third-party payer within 90 days, a bill is sent to the veteran
for the full co-payment amount. However, when insurers reimburse the VA after the 90-day
period, the VA must absorb the cost of additional staff time for processing a refund if the veteran
has already paid the bill. On all insurance policies, the entire amount of the claim payment is
applied first to the co-payment. The veteran is then billed only for the portion of the co-payment
not covered by the insurance reimbursement and the portion of the co-payment for services not
covered by the veteran’s insurance plan (see Figure 2).
ȱȱȱ
Řśȱ
ȱ
Figure 2. Present Co-payment Process
Source:
ȬŘŜȱ
Department of Veterans Affairs.
ȱ
ȂȱȱDZȱŘŖŖŞȱȱ
Under the Administration’s proposal, veterans receiving medical care services for treatment of
non-service-connected disabilities will receive a bill for their entire co-payment, and the copayment will not be reduced by collection recoveries from third-party health plans. This proposal
would apply to all veterans who make co-payments.
According to VA estimates, this proposal will increase revenue by $44 million in FY2008 and
$217 million over five years. The House and Senate Appropriations Committees have not
addressed this issue because it is an issue in the purview of the authorizing committees.
ȱȱȱȂȱ ȱȱ
On February 15, 2007, the Congressional Budget Office (CBO) testified that “assuming no major
changes in policy and no major changes in enrollment trends ... that [VHA] medical spending
would increase from $35 billion in 2007 to $66 billion in 2025, or 88 percent cumulative real
growth. That increase implies annual real growth that averages 3.6 percent over the period.”57 The
House and Senate Appropriations Committees have expressed concern that the President’s budget
has not accurately projected the future cost of health care for veterans from FY2008-FY2012.
Furthermore, the House Appropriations Committee expressed doubt in the actuarial model
currently used to project health-care demand for Operation Enduring Freedom (OEF) and
Operation Iraqi Freedom (OIF) veterans. The House Appropriations Committee has included a
general provision in H.R. 2642 directing the CBO to submit a report projecting the annual
funding level necessary for the VHA to continue providing health care for veterans from FY2009
through FY2012.
57
Statement of Allison Percy, Principal Analyst, on the Future Medical Spending by the Department of Veterans
Affairs, before the House Committee on Appropriations, Subcommittee on Military Construction, Veterans Affairs, and
Related Agencies, February 15, 2007.
ȱȱȱ
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ȂȱȱDZȱŘŖŖŞȱȱ
¡ȱǯ ¢ȱ ȱȱȱ¢ȱ
ȱ
Priority Group 1
Veterans with service-connected disabilities rated 50% or more disabling
Priority Group 2
Veterans with service-connected disabilities rated 30% or 40% disabling
Priority Group 3
Veterans who are former POWs
Veterans awarded the Purple Heart
Veterans whose discharge was for a disability that was incurred or aggravated in the line of duty
Veterans with service-connected disabilities rated 10% or 20% disabling
Veterans awarded special eligibility classification under Title 38, U.S. C., Section 1151, “benefits for individuals disabled
by treatment or vocational rehabilitation”
Priority Group 4
Veterans who are receiving aid and attendance or housebound benefits
Veterans who have been determined by the VA to be catastrophically disabled
Priority Group 5
Nonservice-connected disabled veterans and noncompensable service-connected veterans rated 0% disabled whose
annual income and net worth are below the established VA Means Test thresholds
Veterans receiving VA pension benefits
Veterans eligible for Medicaid benefits
Priority Group 6
Compensable 0% service-connected disabled veterans
World War I veterans
Mexican Border War veterans
Veterans solely seeking care for disorders associated with
—exposure to herbicides while serving in Vietnam; or
—ionizing radiation during atmospheric testing or during the occupation of Hiroshima and Nagasaki; or
—for disorders associated with service in the Gulf War; or
—for any illness associated with service in combat in a war after the Gulf War or during a period of hostility after
November 11, 1998.
Priority Group 7
Veterans who agree to pay specified co-payments who have income and/or net worth above the VA Means Test
threshold and income below the HUD geographic index
—Subpriority a: Noncompensable 0% service-connected disabled veterans who were enrolled in the VA Health Care
System on a specified date and who have remained enrolled since that date
—Subpriority c: Nonservice-connected disabled veterans who were enrolled in the VA Health Care System on a
specified date and who have remained enrolled since that date.
ȱȱȱ
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ȂȱȱDZȱŘŖŖŞȱȱ
ȱ
—Subpriority e: Noncompensable 0% service-connected disabled veterans not included in Subpriority a above
—Subpriority g: Nonservice-connected disabled veterans not included in Subpriority c above
Priority Group 8
Veterans who agree to pay specified co-payments with income and/or net worth above the VA Means Test threshold
and the HUD geographic index
—Subpriority a: Noncompensable 0% service-connected disabled veterans enrolled as of January 16, 2003 and who
have remained enrolled since that date
—Subpriority c: Nonservice-connected disabled veterans enrolled as of January 16, 2003 and who have remained
enrolled since that date
—Subpriority e: Noncompensable 0% service-connected disabled veterans applying for enrollment after January 16,
2003
Department of Veterans Affairs.
Note: Service-connected disability means with respect to disability, that such disability was incurred or
aggravated in the line of duty in the active military, naval, or air service.
Source:
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Copayments
Inpatient
Geographic
VA
Means Test Means OutCopayment
Test patient
Priority Group 1
Priority Groups 2,
3,b 4c
No
No
No
No
Medicationa
Insurance
Billing
Humanitarian
Emergency
Billing
No
No
Yes, but only if
care was for
nonserviceconnected
condition
No
No
Yes, but only for veterans
with less than 50% service
connected disability and
medication is for nonserviceconnected condition. Former
POWs are exempt from all
medications co-payments
Yes, but only if
care was for
nonserviceconnected
condition
No
Priority Group 5
No
No
No
Yes
Priority Group 6
(WWI, and 0%
service-connected
compensable)
No
No
No
Yes
Priority Group 6
(Veterans receiving
care for exposure
or experience)d
No
Nod
Nod
Nod
Priority Group 7a
Yes
No
Yes
Yes, but only if care was for
nonservice-connected
condition
Priority Group 7c
Yes
No
Yes
Yes, but only if care was for
nonservice-connected
condition
ȱȱȱ
Yes, but only if
care was for
nonserviceconnected
condition
Yes, but only if
care was for
nonserviceconnected
condition
Yes, but only if
care was for
nonserviceconnected
condition
Yes, but only if
care was for
nonserviceconnected
condition
Yes, but only if
care was for
nonserviceconnected
condition
No
No
No
No
No
řŖȱ
ȂȱȱDZȱŘŖŖŞȱȱ
ȱ
Copayments
Inpatient
Geographic
VA
Means Test Means OutCopayment
Test patient
Medicationa
Priority Group 8a
No
Yes
Yes
Yes, but only if care was for
nonservice-connected
condition
Priority Group 8c
No
Yes
Yes
Yes, but only if care was for
nonservice-connected
condition
Insurance
Billing
Humanitarian
Emergency
Billing
Yes, but only if
care was for
nonserviceconnected
condition
Yes, but only if
care was for
nonserviceconnected
condition
No
No
Table prepared by CRS based on information from the Department of Veterans Affairs.
Notes: Priority Group 7a and 7c veterans have income above the VA Means Test threshold but below the
Geographic Means Test threshold and are responsible for 20% of the inpatient co-payment and 20% of the
inpatient per diem co-payment. The geographic means test co-payment reduction does not apply to outpatient
and medication co-payment, and veterans will be assessed the full applicable co-payment charges. Note that
reduced inpatient co-payments can apply to veterans in Priority Groups 4 and 6 based on the income of the
veteran.
Priority Group 8a and 8c veterans have income above the VA Means Test threshold and above the Geographic
Means Test threshold. Veterans enrolled in this priority group are responsible for the full inpatient co-payment
and the inpatient per diem co-payment for care of their nonservice-connected conditions. Veterans in this
priority group are also responsible for outpatient and medication co-payments for care of their nonserviceconnected conditions.
a. An annual medication co-payment cap has been established for veterans enrolled in Priority Groups 2-6.
Medication will continue to be dispensed after co-payment cap is met. An annual co-payment cap has not
been established for veterans enrolled in Priority Groups 7 or 8.
b. Veterans in receipt of a Purple Heart are in Priority Group 3. This change occurred with the enactment of
the Veterans Millennium Health Care and Benefits Act (P.L. 106-117) on Nov. 30, 1999.
c. Priority Group 7 veterans who are determined to be catastrophically disabled and who are placed in
Priority Group 4 for treatment are still subject to the co-payment requirements as a Priority Group 7
veteran.
d. Priority Group 6—veterans claiming exposure to Agent Orange; veterans claiming exposure to
environmental contaminants; veterans exposed to Ionizing Radiation; combat veterans within two years of
discharge from the military; veterans who participated in Project 112/SHAD; veterans claiming military
sexual trauma; and veterans with head and neck cancer who received nasopharyngeal radium treatment
while in the military are subject to co-payments when their treatment or medication is not related to their
exposure or experience. The initial registry examination and follow-up visits to receive results of the
examination are not billed to the health insurance carrier and are not subject to co-payments. However,
care provided that is not related to exposure, if it is nonservice-connected, will be billed to the insurance
carrier and co-payments can apply.
Source:
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Veterans with—
Free VA prescriptions and travel
benefits for veterans with incomes of—
Free VA inpatient and outpatient
care for veterans with incomes of—
$10,929 or less
$14,313 or less
$16,179 or less
$18,045 or less
$19,911 or less
$27,790 or less
$33,350 or less
$35,216 or less
$37,082 or less
$38,948 or less
$1,866
$1,866
No dependents
1 dependent
2 dependents
3 dependents
4 dependents
For each additional
dependent, add:
Source: Department of Veterans Affairs.
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( $ in thousands)
Program
Medical services
Supplemental appropriations (P.L.
108-324)
Supplemental appropriations
Emergency appropriations
Emergency appropriations-Gulf
Coast Hurricanes (P.L. 109-148)
Emergency appropriations-Avian
Flu Pandemic (P.L. 109-148)
Subtotal medical services
FY2005
request
FY2005
House
FY2005
Senate
FY2005
enacted
FY2006
request
FY2006
House
FY2006
Senate
FY2006
enacted
—
$19,498,600
$19,498,600a
$19,316,995
$19,995,141
$20,995,141
$21,331,011
$21,322,141
$38,283
975,000b
—
—
975,000c
—
—
1,500,000d
—
38,283
1,500,000e
—
—
—
1,977,000f
—
—
—
—
—
1,977,000g
—
—
1,225,000h
—
—
—
—
198,265
—
—
198,265
—
—
—
—
27,000
—
—
27,000
1,013,283
20,473,600
20,998,600
20,855,278
22,197,406
20,995,141
23,308,011
22,772,406
Medical administration
Supplemental appropriations (P.L.
108-324)
—
4,705,000
4,705,000
4,667,360
4,517,874
4,134,874
2,858,442
2,858,442
1,940
—
—
1,940
—
—
—
—
Subtotal medical
administration
1,940
4,705,000
4,705,000
4,669,300
4,517,874
4,134,874
2,858,442
2,858,442
Medical facilities
Supplemental appropriations (P.L.
108-324)
—
3,745,000
3,745,000
3,715,040
3,297,669
3,297,669
3,297,669
3,297,669
46,909
—
—
46,909
—
—
—
—
Subtotal medical facilities
46,909
3,745,000
3,745,000
3,761,949
3,297,669
3,297,669
3,297,669
3,297,669
Medical and prosthetic research
Information technology
Medical care
384,770
—
26,748,600
384,770
—
—
405,593
—
—
402,348
—
—
393,000
—
—
393,000
—
—
412,000
1,456,821
—
412,000
—
—
28,195,502
28,308,370
28,854,193
29,688,875
30,405,949
28,820,684
31,332,943
29,340,517
i
Total VHA appropriations
(without collections)
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Program
FY2005
request
FY2005
House
FY2005
Senate
FY2005
enacted
FY2006
request
FY2006
House
FY2006
Senate
FY2006
enacted
Medical care cost collection
(MCCF)j
2,002,000
2,002,000
2,002,000
1,985,984
2,170,000
2,170,000
2,170,000
2,170,000
Total: VHA (appropriations
and collections)
$30,197,502 $31,310,370 $30,856,193 $31,674,859 $32,575,949 $30,990,684 $33,502,943 $31,510,517
Source: Table prepared by the Congressional Research Service based on H.Rept. 108-674; S.Rept. 108-353; H.Rept. 109-95; S.Rept. 109-105; H.Rept. 109-305; H.Rept.
109-359; and House Appropriations Committee data.
Notes: Appropriation amounts for FY2005 adjusted to account for the 0.8% across-the-board reduction in most discretionary accounts as called for in Division J, Section
122 (a)(1) of P.L. 108-447. Supplemental appropriations for FY2005 are not subject to the 0.8% across-the-board reductions. Appropriation amounts for FY2006 are not
subject to any cross-the-board reductions as stipulated in Division B, Title III, Section 3801(c)(2) of P.L. 109-148.
a. This amount includes $1.2 billion designated as an emergency requirement.
b. On June 30, 2005, the Administration requested an additional $975 million for medical services for FY2005.
c. On June 30, 2005, the House passed H.R. 3130.
d. On June 29, 2005, the Senate passed an amendment to H.R. 2361, the Department of the Interior, Environment, and Related Agencies Appropriations bill, 2006 to add
$1.5 billion in emergency funds for medical services.
e. On August 2, 2005, the FY2006 Department of the Interior, Environment, and Related Agencies appropriations bill (H.R. 2361, P.L. 109-54) was signed into law.
f. On July 14, 2005, the Administration requested an additional $1.977 billion for medical services for FY2006.
g. On July 21, 2005, the Senate Committee on Appropriations reported H.R. 2528 favorably out of committee (S.Rept. 109-105) and designated this amount as an
emergency appropriation.
h. On November 18, 2005, the House and Senate adopted the conference report (H.Rept. 109-305) to accompany H.R. 2528 and designated this amount as an
emergency appropriation.
i. This amount includes funding for medical services, medical administration, and medical facilities.
j. Medical Care Cost Collection Fund (MCCF) receipts are restored to the VHA as an indefinite budget authority equal to the revenue collected, estimated to be $1.985
billion in FY2005, $2.17 billion in FY2006, and $2.33 billion in FY2007.
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(name redacted)
Analyst in Veterans Policy
[redacted]@crs.loc.gov, 7-....
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