Order Code RL32961
CRS Report for Congress
Received through the CRS Web
Veterans’ Health Care Issues
in the 109th Congress
June 28, 2005
Sidath Viranga Panangala
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress
Veterans’ Health Care Issues in the 109th Congress
Summary
The Department of Veterans Affairs (VA) provides services and benefits to
veterans who meet certain eligibility criteria. VA carries out its programs nationwide
through three administrations and the Board of Veterans Appeals (BVA). The
Veterans Health Administration (VHA) is responsible for veterans health care
programs. The Veterans Benefits Administration (VBA) is responsible for providing
compensation, pensions, and education assistance among other things. The National
Cemetery Administration’s (NCA) responsibilities include maintaining national
veterans cemeteries.
VHA operates the nation’s largest integrated health care system. Unlike other
federal health programs, VHA is a direct service provider rather than a health insurer
or payer for health care. VA health care services are generally available to all
honorably discharged veterans of the U.S. Armed Forces who are enrolled in VA’s
health care system. VA has a priority enrollment system that places veterans in
priority groups based on various criteria. Under the priority system VA decides each
year whether its appropriations are adequate to serve all enrolled veterans. If not, VA
could stop enrolling those in the lowest-priority groups.
During the 109th Congress, policymakers will likely grapple with a number of
issues facing current and new veterans returning from Operation Enduring Freedom
(OEF) and Operation Iraqi Freedom (OIF). Among other things, Congress may focus
on trying to ensure a seamless transition process for veterans moving from active
duty into the VA health care system, and improving mental health care services such
as Post-traumatic Stress Disorder (PTSD) treatment programs for returning veterans.
Furthermore, to meet the growing demand for VA health care services, and to address
the uncertain funding amounts inherent in the yearly appropriations process,
legislative proposals have been introduced to change the structure of VA health care
funding from discretionary funding to mandatory funding. Although discussed in
previous Congresses, legislative proposals to obtain Medicare funding for VA
(Medicare subvention) have not yet been introduced.
In recent years VA has made an effort to realign its capital assets, primarily
buildings, to better serve veterans’ needs. VA established the Capital Asset
Realignment for Enhanced Services (CARES) initiative to identify how well the
geographic distribution of VA health care resources matches the projected needs of
veterans. Given the tremendous interest in the implementation of the CARES
initiative in the previous Congress, the 109th Congress is likely to monitor the
CARES implementation.
Congress has also shown a keen interest in using VA to inform changes in
certain aspects of the private and public health care delivery systems. VA’s ability
to negotiate prices for prescription drugs is often held out as a sharp contrast to
Medicare’s current method for establishing prices for its soon-to-be implemented
prescription drug benefit. Several measures modeled on VA’s pharmaceutical
acquisition mechanisms have been introduced in this Congress to provide lower drug
prices for Medicare beneficiaries. This report will be updated as events warrant.
Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Veterans Health Administration (VHA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Transformation of VHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Evolution of Veterans’ Eligibility for VA Health Care . . . . . . . . . . . . . . . . 5
Eligibility Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Health Care Issues in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Seamless Transition of Returning Service Members . . . . . . . . . . . . . . 13
Mental Health and Post-Traumatic Stress Disorder (PTSD) . . . . . . . . 15
Setting Funding for VA Medical Care . . . . . . . . . . . . . . . . . . . . . . . . . 18
Continued Suspension of Priority Group 8 Veterans . . . . . . . . . . . . . . 19
Effect of the Enrollment Freeze . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
VA’s Cost Recoveries from Medicare . . . . . . . . . . . . . . . . . . . . . . . . . 20
Filling of Privately Written Prescriptions at VA . . . . . . . . . . . . . . . . . 21
Capital Asset Realignment for Enhanced Services (CARES) . . . . . . . 23
VA as a Model for Other Health Care Systems . . . . . . . . . . . . . . . . . . 25
Appendix 1. Map of All 21 Veterans’ Integrated Services Networks . . . . . . . . 29
Appendix 2. Priority Groups and Their Eligibility Criteria . . . . . . . . . . . . . . . . 30
Appendix 3. How an Injured Servicemember Enters the VA Health
Care System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
List of Figures
Figure 1. Eligibility Criteria for Outpatient Care Prior to Eligibility Reform
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figure 2. Total Number of Veteran Enrollees and Number of Veterans
Receiving Medical Care, FY1999-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . 12
List of Tables
Table 1. Access to VA Health Care Services Prior to the 1996 Eligibility
Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Veterans’ Health Care Issues
in the 109th Congress
Background
The history of the present-day Department of Veterans Affairs (VA) can be
traced back to July 21, 1930, when President Hoover issued an executive order
creating an independent federal agency known as the Veterans Administration by
consolidating many separate veterans’ programs.1 On October 25, 1988, President
Reagan signed legislation (P.L. 100-527) creating a new federal cabinet-level
Department of Veterans Affairs to replace the Veterans Administration, effective
March 15, 1989. VA carries out its veterans’ programs nationwide through three
administrations and the Board of Veterans Appeals (BVA). The Veterans Health
Administration (VHA) is responsible for veterans’ health care programs. The
Veterans Benefits Administration (VBA) is responsible for compensation, pension,
vocational rehabilitation, education assistance, home loan guaranty and insurance
among other things. The National Cemetery Administration’s (NCA) responsibilities
include maintaining 120 national cemeteries in 39 states and Puerto Rico. The Board
of Veterans Appeals renders final decisions on appeals on veteran benefits claims.
This report provides an overview of major issues facing veterans’ health care
during the 109th Congress. The report’s primary focus is on veterans and not military
retirees. While any person who has served in the armed forces of the United States
is regarded as a veteran, a military retiree is someone who has completed a full active
duty military career (almost always at least 20 years of service), or who is disabled
in the line of military duty and meets certain length of service and extent of disability
criteria, and who is eligible for retired pay and a broad range of nonmonetary benefits
from the Department of Defense (DOD) after retirement. A veteran is someone who
has served in the armed forces (in most, but not all, cases for a few years in early
adulthood), but may not have either sufficient service or disability to be entitled to
post-service retired pay and nonmonetary benefits from DOD. Generally, all military
retirees are veterans, but all veterans are not military retirees.
Currently, VA health care services are generally available to all honorably
discharged veterans of the U.S. Armed Forces who are enrolled in VA’s health care
system. In general, veterans have to enroll in the VA’s health care system to receive
care from VA. Typically veterans are enrolled in priority enrollment groups based on
service-connectedness and income (described later in this report). Persons enlisting
1 In the 1920s three federal agencies, the Veterans Bureau, the Bureau of Pension in the
Department of the Interior, and the National Home for Disabled Volunteer Soldiers,
administered various benefits for the nation’s veterans.
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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 benefits. Veterans discharged at any
time because of service-connected disabilities are not held to this requirement.2 Also
eligible on a more limited basis are members of the armed forces reserve components
called to active duty and who serve the length of time for which they were activated,
and National Guard personnel who are called to active duty by a federal declaration
and serve the full period for which they were called. These servicemembers can
receive care from VA for an initial two-year period for conditions presumably related
to military service and for proven service-connected conditions thereafter.3
To provide some context to veterans’ health care issues, this report will first
provide a brief history of the Veterans Health Administration (VHA).4 Second, it
will provide a brief overview of the evolution of eligibility for VA health care.
Third, it will discuss major issues facing veterans’ health care programs during the
109th Congress.
Veterans Health Administration (VHA)
History. VA’s largest and most visible operating unit is the Veterans Health
Administration (VHA). Established in 1946 as the Department of Medicine and
Surgery, it was succeeded in 1989 by the Veterans Health Services and Research
Administration, and renamed the Veterans Health Administration (VHA) in 1991.5
The veterans’ medical system was first developed to provide needed care to veterans
injured or sick as a result of service during wartime. When there was excess capacity
in VA hospitals, Congress gave wartime veterans without service-connected
conditions access to VA hospitals, provided space was available and the veterans
2A service-connected disability is one that results from an injury or disease or physical or
mental impairment incurred or aggravated during military service. VA determines if
veterans have service-connected disabilities and, for those with such disabilities, assigns
ratings from 0% to 100% based on the severity of the disability.
3 The Veterans Programs Enhancement Act of 1998 (P.L. 108-368) authorized VA to
provide health care for an initial two-year period after discharge from service for veterans
(including National Guard and reserve components) in combat during any period of war
after the first Gulf War or during any other future period of hostilities after Nov. 11, 1998
even if there is insufficient medical evidence to conclude that such illnesses are attributable
to such service. After the initial two-year period, the veteran may enroll in VA’s health care
system and receive care for service-connected conditions based on the priority enrollment
group they are assigned to.
4This report will use VA and VHA interchangeably to describe the Veterans Health
Administration.
5Prior to the establishment of VHA, Public Health Service (PHS) hospitals treated veterans.
In 1921 these PHS hospitals treating veterans were transferred to the newly established
Veterans Bureau.
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signed an oath indicating they were unable to pay for their care.6 At the end of World
War II, the federal government undertook the task of increasing the number of VA
medical facilities to meet the expected demand for health care for veterans returning
with injuries or illnesses sustained during hostilities. The primary focus of the
expansion was to immediately tend to the medical needs of returning combatants for
acute care and then to address the long-term rehabilitation needs of more seriously
injured veterans. Within a few years after the cessation of hostilities, the initial
demand for acute care services for service-connected conditions diminished and VA
initiated what was later to become its specialized services mission, in part because
services such as spinal cord injury care, blind rehabilitation, and prosthetics were
almost non-existent in the private medical market during the late 1940s.
The VA system has evolved and expanded since World War II. Congress has
enlarged the scope of the VA’s health care mission and has enacted legislation
requiring the establishment of new programs and services. Through numerous laws,
some narrowly focused, others more comprehensive, Congress has also extended to
additional categories of veterans’ eligibility for the many levels of care the VA now
provides. No longer a health care system focused only on service-connected
veterans, the VA has also become a “safety net” for the many lower-income veterans
who have come to depend upon it.
Transformation of VHA. Over the past decade, VA has transformed its
health care system through structural and organizational changes. In the early 1990s
VA recognized that its system might want to respond to certain changes taking place
in the private health care market and began a process of restructuring and
rationalizing services. VA established regional networks and decentralized certain
budgetary authority to these networks. Furthermore, advances in medical technology,
such as laser and other minimally invasive surgical techniques, allowed care
previously provided in hospitals to be provided on an outpatient basis. Similarly,
development of psychotherapeutic drugs to treat mental illness have led to fewer and
shorter hospital admissions for psychiatric patients, as well as the
deinstitutionalization of many long-term psychiatric patients. With the passage of
eligibility reform legislation in 1996 (P.L. 104-262) and in response to changing
trends in medical practice, VA began to shift its focus from primarily inpatient
hospital care to outpatient care in order to provide more accessible and efficient
delivery of health care to veterans.
Today, VA operates the nation’s largest integrated health care system. VHA is
divided into 21 Veterans Integrated Service Networks (VISNs, see Appendix 1 for
a map of VISNs). Each network includes a management office responsible for
making basic budgetary, planning and operating decisions. Each office oversees
between 5 and 11 hospitals as well as community- based outpatient clinics (CBOCs),
nursing homes and readjustment counseling centers (Vet Centers) located within each
6World War Veterans Act of 1924 (P.L. 68-242).
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VISN. In FY2004, VA operated 157 hospitals, 696 CBOCs, 134 nursing homes and
42 domiciliary care facilities.7,8
Unlike other federal health programs (such as Medicaid and Medicare), the VA
is a direct service provider rather than a health insurer or payer for health care
services. VHA offers a standardized medical benefits package that includes a full
range of outpatient and inpatient services with an emphasis on preventive and
primary care. As defined in regulations, VA medical benefits include among other
things, preventive services, including immunizations, screening tests, and health
education and training classes, primary health care diagnosis and treatment,
prescription drugs, comprehensive rehabilitative services, mental health services
including professional counseling, home health care, respite (inpatient), hospice, and
palliative care, and emergency care.9 Some veterans are also eligible to receive long-
term care including nursing home care, domiciliary care, adult day care, and limited
dental care.
In FY2004 there were 7.4 million enrolled veterans, and 4.7 million unique
veteran patients received care from VA.10 That same fiscal year VA treated 760,519
inpatients, 93,271 veterans in nursing home care units or in community nursing home
facilities, and 25,523 veterans in home-and community-based facilities. The VHA’s
outpatient clinics registered over 49 million visits by veterans in FY2004.11
In addition to providing direct health care to veterans, since 1946 VA has been
authorized to enter into agreements with medical schools and their teaching hospitals.
Under these agreements, VA hospitals provide training for medical residents and
students and appoint medical school faculty as VA staff physicians to supervise
resident education and patient care. Across the nation, VA is currently affiliated with
107 medical schools, 54 dental schools, and over 1,000 other schools offering
students allied and associated education degrees or certificates in 40 health profession
disciplines. More than one-half of all practicing physicians in the U.S. received at
least part of their clinical educational experiences in the VA health care system. In
7A domiciliary is a facility that provides rehabilitative and long-term health care for veterans
who require minimal medical care. VA now refers to these as Residential Rehabilitation
Treatment Facilities.
8Department of Veterans Affairs, FY2006 Budget Submission, Medical Programs, vol. 2 of
4, pp. 4-21. (Hereafter cited as VA, FY2006 Budget Submission.)
938 C.F.R. § 17.38.
10Under current law, most veterans have to enroll to receive health care from VHA.
However, in any given year, some enrollees do not seek any medical care, either because
they do not become ill or because they rely on other sources of care. In some cases, VHA
provides care to non-enrolled veterans in the following classes: veterans who need
treatment for a VA rated service-connected disability; veterans who are VA rated as 50%
or more service-connected disabled; and veterans who were released from active duty within
the previous 12 months for a disability incurred or aggravated in the line of duty. In
addition, VA provides care to certain eligible dependents of veterans through a program
called the Civilian Health and Medical Program of the Department of Veterans Affairs
(CHAMPVA) and to VA employees. These users of VA do not enroll for VA care.
11 VA, FY2006 Budget Submission.
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FY2004, over 84,000 health care professionals received training in VA medical
centers. VA is also the largest employer of registered nurses in the U.S. with 32,164
nurses on its payroll in FY2004.12
Evolution of Veterans’ Eligibility for VA Health Care
To understand some of the issues facing veterans’ health care programs
discussed later in this report, it is important to get a sense of how veterans’ eligibility
for health care has evolved over time. While a full description of this evolution is
beyond the scope of this report, this report will provide a brief overview. Generally,
veterans’ eligibility for VA health care services has evolved from treating veterans
with service-connected conditions or veterans with low incomes to veterans with
nonservice-connected conditions and higher incomes. Moreover, VA’s health care
coverage has changed from not having a well-defined medical benefits package to a
standardized benefits package.
Eligibility criteria used to determine which veterans must be served by VA and
what type of medical care that they can be provided has undergone many changes
since the establishment of VA. Congress has made several major changes throughout
the years concerning the provision of hospital care, outpatient care and nursing home
care. Initially veterans could receive care only for treatment of service-connected
conditions that were incurred or aggravated during wartime service. In 1924,
Congress gave access to hospital care to World War I veterans with nonservice-
connected conditions on a space available basis who signed an oath of poverty. In
1943, hospital care was extended to World War II veterans with nonservice-
connected conditions and outpatient care was limited to those with service-connected
conditions. However, with the passage of P.L. 86-639 in 1960, Congress authorized
VA to provide outpatient treatment for nonservice-connected conditions in
preparation for or to complete treatment of hospital care. In 1973, with the passage
of the Veterans Health Care Expansion Act (P.L. 93-82), Congress further extended
outpatient treatment for nonservice-connected veterans to “obviate the need of
hospital admission.”13
By 1985, VA was authorized to provide most categories of veterans with
hospital, nursing home, and domiciliary care. However, VA was not required or
obligated to do so. This is evidenced by the use of the phrase “may provide” in the
statutes. In 1986, with passage of P.L. 99-272, Congress established three categories
of eligibility for VA health care. The law provided that hospital care shall be
provided, free of direct charge, to veterans within Category A. The term “shall” was
interpreted by many as meaning “entitled” to hospital care. These Category A
veterans were defined to include those with service-connected disabilities,
low-income veterans without such disabilities, and certain “exempt” veterans,
including (for example) former prisoners of war, those exposed to Agent Orange,
recipients of VA pensions, and those eligible for Medicaid. Moreover, P.L. 99-272
provided that Category A veterans may be provided outpatient and nursing home
12Ibid.
13 U.S. General Accounting Office, VA Health Care: Issues Affecting Eligibility Reform,
GAO/T-HEHS-95-213, p. 6.
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care. The term “may” was interpreted by many as meaning “eligible” for outpatient
and nursing home care. Veterans not in Category A were assigned to either Category
B or Category C on the basis of current income and net worth; VA could furnish care
to these veterans on a resources-available basis. Veterans not eligible for Category
B on the basis of either income or net worth were placed in Category C.14 Veterans
in Categories B and C were eligible to receive care but were not entitled to care.
It should be noted that the terms eligibility and entitlement had different
meanings under the VA health care system than under other public health care
programs such as Medicare. For instance, all beneficiaries who meet the basic
eligibility requirements for Medicare are entitled to all medically necessary care
under the Medicare benefits package. Under the VA health care system, the term
“eligible” meant that VA “may” provide care, and the term “entitled” meant that VA
was required or “must” provide care.15 However, neither being eligible for nor being
entitled to health care services guaranteed the availability of health services. Since
funding for VA health care was, and still is, based on fixed annual appropriations,
once the funds were expended VA could no longer provide care, even to veterans
who were entitled to care. Being entitled to care essentially gave veterans a higher
priority for care than being eligible for VA health care.
Eligibility Reform. Although from time to time Congress expanded access
to VA health care, certain criteria that accompanied these expansions were an
apparent source of frustration not only for veterans, but also for VA physicians and
VA administrative staff who applied and enforced these provisions. As mentioned
earlier, some veterans were entitled to outpatient care only if it was for pre- and post-
hospitalization and to obviate the need for hospital care. As illustrated in Figure 1,
for most categories of veterans, eligibility for outpatient care was subject to the
obviate the need for hospitalization criterion. Only two categories of veterans were
not subject to this criterion: they were veterans with a service-connected disability
rated 50% or more who were entitled to care, and nonservice-connected veterans with
special status, such as former prisoners of war, who were only eligible for care.
However, the obviate the need statutory authority was interpreted by VA
medical centers in several different ways. Some medical centers interpreted it as care
for any medical condition, whereas other medical centers interpreted this statutory
authority as care for only certain medical conditions.16 Similarly, since there was no
defined health benefits package prior to eligibility reform, veterans were often
uncertain about whether they were entitled to certain services or were merely eligible
to receive some services. Likewise, VA health care providers complained that when
treating certain veterans, they could only treat the service-connected conditions and
14 For a comprehensive history of eligibility for VA health care, see U.S. General
Accounting Office, VA Health Care: Issues Affecting Eligibility Reform Efforts,
GAO/HEHS-96-160. Much of the history described in this section was drawn from this
GAO report.
15 This is evidenced by the use of words “shall” and “may” throughout 38 U.S.C.§1710.
16U.S. General Accounting Office, VA Health Care: Issues Affecting Eligibility Reform
Efforts, GAO/HEHS-96-160, p. 44.
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not the entire patient, although the nonservice-connected condition could affect the
veteran’s overall health.
These limitations were addressed by Congress with the passage of the Veterans
Health Care Eligibility Reform Act of 1996 (P.L. 104-262). This act required VA to
establish priority categories and operate a patient enrollment system to manage access
to VA health care if sufficient resources were not available to serve all veterans
seeking care. It also substantially revised statutes governing care for veterans,
putting inpatient and outpatient care on the same statutory footing so that VA can
provide care the patient needs in the most medically appropriate setting.17 The intent
of these changes was to expand the services VHA could provide to veterans while
eliminating statutory barriers to providing care in the most economical manner, and
to lower the expenses associated with providing care to veterans.18
VHA began enrolling veterans beginning October 1, 1998.19 A detailed list of
priority enrollment groups is provided in Appendix 2.20,21 Table 1 provides details
on eligibility for VA health care prior to the enactment of P.L. 104-262, as it relates
to the current priority enrollment groups. For example, as illustrated in Table 1,
veterans with service-connected conditions rated 50%-100% currently are correlated
to Priority Group1 veterans. Veterans with service-connected conditions rated 0%-
40% may either be Priority Group 2 or Priority Group 3 depending upon their
disability rating. These veterans along with other veterans discharged for disability
would have had the clearest entitlement to VA services prior to eligibility reform.
Although the prior eligibility criteria have no direct correlation to today’s enrollment
priority groups, in general, Category A correlated with Priority Groups 1 through 6,
and Category C correlated with Priority Groups 7 and 8. Category B (not shown in
17Kenneth W. Kizer et al., “Reinventing VA Health Care, Systematizing Quality
Improvement and Quality Innovation,” Medical Care, vol. 28, no. 6, pp. 1-8.
18U.S. Congress, House Committee on Veterans’ Affairs, Veterans Eligibility Reform Act
of 1996, report to accompany H.R. 3118, 104th Cong., 2nd sess., H.Rept. 104-690, pp. 5, 8,
25.
19VA has eight priority enrollment groups, with Priority 1 veterans — those with service
connected disabilities rated 50% or more — having the highest priority for enrollment. By
contrast, Priority 8 veterans are primarily veterans with no service-connected disabilities and
higher incomes.
20 For a detailed description of the current VA enrollment process, see CRS Report
RL32548, Veterans’ Medical Care Appropriations and Funding Process, by Sidath Viranga
Panangala.
21Under current law, most veterans have to enroll to receive health care from VHA.
However, in any given year, some enrollees do not seek any medical care, either because
they do not become ill or because they rely on other sources of care. In some cases, VHA
provides care to non-enrolled veterans in the following classes: veterans who need
treatment for a VA rated service-connected disability; veterans who are VA rated as 50%
or more service-connected disabled; and veterans who were released from active duty within
the previous 12 months for a disability incurred or aggravated in the line of duty. In
addition, VA provides care to certain eligible dependents of veterans through a program
called the Civilian Health and Medical Program of the Department of Veterans Affairs
(CHAMPVA) and to VA employees. These users of VA do not enroll for VA care.
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Table 1) included veterans with nonservice-connected disabilities who may have
received hospital and nursing home care if they were unable to defray the cost of the
said care based on a defined income threshold. Category B most closely correlated
with veterans in Priority Group 4 and certain veterans classified in Priority Group 5.
Former Category B veterans cannot be isolated in Table 1 because it is spread among
multiple priority groups.
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Figure 1. Eligibility Criteria for Outpatient Care Prior to Eligibility Reform
Source: Chart prepared by CRS based on U.S. General Accounting Office, Variabilities in VA Outpatient Care, GAO-HRD-93-106, p. 27.
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Table 1. Access to VA Health Care Services Prior to the 1996
Eligibility Reform
Veteran
New enrollment
category
Inpatient
Outpatient
Nursing
priority groups after
prior to
hospital care
care
home care
eligibility reform
eligibility reform
Category A
Service-
Priority Group 1
connected rated
50%-100%
Entitled
obtaining care for
any condition
Service-
Priority Group 2
connected rated
Priority Group 3
Entitled
Entitled,
Eligible
0%-40%
limited to pre-
obtaining care for
and post-
service-connected
hospitalization
conditions only
and to obviate
the need for
Veterans
Priority Group 3
hospital care
discharged for
disability
Service-
Priority Group 2
connected rated
30%-40%
obtaining care for
a nonservice-
connected
Entitled,
condition
limited to pre-
and post-
Veterans
Priority Group 5
Entitled
hospitalization
Eligible
receiving VA
and to obviate
pension benefits
the need for
or income under
hospital care
VA means test
threshold
Disabled due to
Priority Group 3
treatment by VA
Prisoner of War
Priority Group 3
(POW)
World War I and
Priority Group 6
Mexican Border
War veterans
Entitled
Eligible
Eligible
Veterans
Priority Group 4
receiving a
pension with aid
and attendance
payments
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Veteran
New enrollment
category
Inpatient
Outpatient
Nursing
priority groups after
prior to
hospital care
care
home care
eligibility reform
eligibility reform
Service-
Priority Group 3
connected rated
0-20% obtaining
care for a
nonservice-
connected
condition
Eligible,
limited to pre-
Nonservice-
Priority Group 5
and post-
connected with an
Entitled
hospitalization
Eligible
income below VA
and to obviate
means test
the need for
threshold (no
hospital care
dependents)
Veterans exposed
Priority Group 5
to agent orange,
Priority Group 6
radiation or
Medicaid eligible
Category C
Nonservice-
Priority Group 7
Eligible with
Eligible with
Eligible
connected with
Priority Group 8
copayments
copayments,
with
income above
limited to pre-
copayments
VA means test
and post-
threshold (no
hospitalization
dependents)
and to obviate
the need for
hospital care
Source: Table prepared by CRS based on U.S. General Accounting Office, VA Health Care, Issues
Affecting Eligibility Reform, GAO/T-HEHS-95-213, p. 8.
Today, nine years after the passage of the Veterans Health Care Eligibility
Reform Act of 1996, when Congress dramatically restructured the VA health care
system, VA has experienced unprecedented growth in demand for medical care. The
total number of veteran enrollees has grown by 76.9% from FY1999, the first year
of enrollment, to FY2004 (Figure 2). During this same period the number of unique
veterans receiving medical care has grown by 49.2% — from 3.2 million veteran
patients in FY1999 to 4.7 million veteran patients in FY2004 (Figure 2). This
growth in demand for care, and the budgetary constraints placed on the federal
budget has once again opened the debate in Congress as to what categories of
veterans should have priority to receive care. Some in Congress are concerned about
the growing costs, question the current eligibility for VA medical care, and suggest
that it should be narrowed. They believe that VA’s primary responsibility is to care
for veterans with service-connected medical problems and that the system should not
be providing care to veterans with nonservice-connected conditions with higher
incomes. However, most of the veterans currently enrolled in VA were eligible for,
if not entitled to, certain care from VA prior to the 1996 reforms. The reform act
clarified and expanded veterans’ access to outpatient care. It also built in
CRS-12
mechanisms to limit enrollment in the event that VA funding was insufficient to meet
the demand for care. Most of the issues discussed in the next section are linked to
these fundamental concerns.
Figure 2. Total Number of Veteran Enrollees and Number of Veterans
Receiving Medical Care, FY1999-FY2004
Source: Graph prepared by CRS. Data provided by the Office of Actuary, Office of Policy, Planning,
and Preparedness, U.S. Department of Veterans Affairs (VA).
Health Care Issues in the 109th Congress
Introduction. Shortly after the terrorist attacks on the U.S. on September 11,
2001, military personnel began deploying to Afghanistan. Beginning in late 2002
and early 2003, additional military personnel were deployed to Iraq. Operation
Enduring Freedom (OEF) in Afghanistan and Operation Iraqi Freedom (OIF)
produced a new generation of war veterans. As has occurred after previous wars,
these new veterans are expected to place an increased demand on VA health care
services. During the 109th Congress, policymakers will face a number of issues
affecting these and other veterans. Among other things, Congress may focus on
attempting to ensure a “seamless transition” process for veterans moving from active
duty into the VA health care system, improving mental health care services for
veterans, funding the growing demand for veterans’ health care services, and
overseeing improvements to the effectiveness and efficiency of VA’s provision of
health care services. Moreover, in recent years, some in Congress have shown a keen
interest in using VA as a model to inform changes in certain aspects of private and
public health care delivery systems; that intent is likely to continue in this Congress
CRS-13
as well. The discussion below focuses on these major issues facing VA’s health care
programs.
Seamless Transition of Returning Service Members. As of the end of
December 2004, approximately 244,054 OEF and OIF servicemembers had been
separated from the military.22 Approximately 20% or 48,733 veterans have sought
health care from VA. About 930 of these veterans have had at least one episode of
hospitalization.23 According to VA data, Reserve components and National Guard
members make up 27,766 or 57% of those who have sought VA health care.
Separated active duty members have accounted for 20,967 or 43% of those who have
received treatment from VA.24
Veterans’ advocates are concerned that returning service members from OIF
and OEF do not have a smooth transition from DOD health care to VA health care;
the shift from active duty to private citizen can be particularly frustrating and
confusing for those who need health care services. At a congressional hearing held
in October 2003, some witnesses testified about a lack of an integrated medical
information system between DOD hospitals and the VA. The then VA
Undersecretary for Health testified that “too often Reservists and National Guard
personnel have not received timely information about the benefits and access to
health care they have earned.”25 The President’s Taskforce to Improve Health Care
Delivery for Our Nation’s Veterans had also discussed the importance of providing
a seamless transition from military to veteran status, including the coordination and
sharing of electronic health information between VA and DOD. In March 2005, the
Government Accountability Office (GAO) testified that VA still does not have
systematic access to DOD data about returning servicemembers who may need its
services.26
In response to these criticisms, VA has stationed its employees at major DOD
Military Treatment Facilities (MTFs) to act as VHA/DOD liaisons.27 VA has also
22Latest data available as of Mar. 17, 2005. For a detailed list of medical evacuations and
casualties from OEF and OIF, see CRS Report RS22126, U.S. Military and Iraqi Casualty
Statistics: Additional Numbers and Explanations, by Hannah Fischer.
23Statement of Jonathan B. Perlin, Acting Undersecretary, for Health, Department of
Veterans Affairs, before the Senate Committee on Veterans Affairs, Mar. 17, 2005.
24Ibid.
25Statement of Robert H. Roswell, M.D., Undersecretary for Health, Department of Veterans
Affairs, before the House Committee on Veterans’ Affairs, Subcommittee on Health on
“Handoffs or Fumbles?” Are DOD and VA Providing Seamless Health Care Coverage to
Transitioning Veterans? Oct. 16, 2003.
26U.S. Government Accountability Office, VA Disability Benefits and Health Care,
Providing Certain Services to the Seriously Injured Poses Challenges, GAO-05-444T, p.
5.
27 There are nine VA/DOD Liaisons located at Walter Reed Army Medical Center (two
VA/DOD liaisons); National Naval Medical Center; Brooke Army Medical Center;
Eisenhower Army Medical Center; Fort Hood Army Medical Center; Madigan Army
(continued...)
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identified staff members at every Veterans Administration Medical Center (VAMC)
to serve as Points of Contacts (POCs). VHA/DOD liaisons help the MTF treatment
team with a veteran’s discharge from the MTF and informs the POC that the veteran
is being transferred to the VA medical facility.28 VA has provided a vocational
rehabilitation counselor to work with hospitalized patients at Walter Reed Army
Medical Center (WRAMC), where the largest number of seriously injured service-
members has been treated. On January 3, 2005, VA established the National
Veterans Affairs Office of Seamless Transition to ensure that there is no interruption
of care as the person moves from being a DOD patient to a VA patient, that whatever
kinds of treatment are being delivered in the MTF are continued, and that treatment
plans are shared. The office also facilitates priority access to care by enrolling
patients in the VA system before they leave an MTF.
In August 2003 VA created a Seamless Transition Task Force to coordinate and
streamline VBA and VHA activities and work with DOD on long-range activities.
According to this task force, VA has been increasing its presence in MTFs and has
educated servicemembers still receiving care about VA benefits including health
care. Its annual report states that VA staff has coordinated more than 1,400 transfers
of veterans from MTFs to VHA medical facilities in FY2004.29
In November 2004, DOD and VA signed an agreement to implement
cooperative separation processes and physical examinations for the service- members
at discharge sites. Service members who file for VA disability compensation must
have two physical examinations, one provided by VA and the other by DOD, within
months of each other; neither exam fully satisfies the needs of both VA and DOD.
These redundant examinations are said to inconvenience servicemembers, delay
claims processing and access to VA healthcare, and create added costs. VA and
DOD agreed to begin exploring the technical feasibility, scheduling, and cost
requirements for the implementation of an electronic physical exam, through a single,
consistent electronic physical examination record, which will meet military service
and VA requirements. However, VA and DOD have not fully implemented a single
separation physical examination.30
To identify and monitor those whose injuries may result in a need for VA
disability and health services, VA has been working with DOD to develop a formal
agreement on what specific information to share. VA has requested personal
identifying information, medical information, and DOD’s injury classification for
27(...continued)
Medical Center (two VA/DOD liaisons); and Evans Army Medical Center.
28Statement of Harold Kudler, M.D., Co-Chair, Undersecretary for Health’s Special
Committee on PTSD, Department of Veterans Affairs, before the House Committee on
Veterans’ Affairs, Subcommittee on Health, Oct. 16, 2003.
29Department of Veterans Affairs, Seamless Transition Task Force Year End Report, Dec.
2004. This number represents the transfer of medical records from DOD to VA, and the
number may be different from those who received treatment at a VA facility.
30 GAO ,VA and DOD Health Care, Efforts to Coordinate a Single Physical Exam Process
for Servicemembers Leaving the Military, GAO-05-64, Nov. 2004, p. 4.
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each listed servicemember. VA has also requested monthly lists of servicemembers
being evaluated for medical separation from military service. As of May 2005, a
formal agreement with DOD was still pending. The issues that hinder a formal
agreement between DOD and VA include their differing understanding of the Health
Insurance Portability and Accountability Act of 1996 (HIPAA), particularly the
HIPAA privacy provisions that govern the sharing of individually identifiable health
data.31 According to GAO, VA believes that HIPAA allows DOD to share
servicemembers’ health data with VA because the departments serve the same or
similar populations — active duty service members who transition to veteran status.
In contrast, DOD believes that serving the same or similar populations would mean
that servicemembers have a dual eligibility for both DOD and VA services.
Although DOD acknowledges that some former servicemembers are dually eligible
for DOD and VA services, not all qualify for both services simultaneously.
Furthermore, according to VA, HIPAA allows DOD to share data sooner than the
decision by DOD that the servicemember will separate from active duty. However,
DOD is reluctant to provide individually identifiable health data to VA until DOD
is certain that a service member will separate from the military. DOD is concerned
that VA’s outreach to servicemembers who are still on active duty could work at
cross-purposes to the military’s retention goals.32
Legislation has been introduced in the Senate that requires VA and DOD to
exchange medical records for the provision of healthcare services and provide a
seamless transition from DOD health care services to VA health care services.
Fulfilling Our Duty to America’s Veterans Act of 2005 (S. 13) introduced in the
Senate, among other things, would require the development of interoperable
electronic records for military personnel and veterans that are utilized by both
departments.
For a detailed description on how returning servicemembers transition into the
VA system see Appendix 3.
Mental Health and Post-Traumatic Stress Disorder (PTSD). With the
ongoing conflicts in Iraq and Afghanistan, Congress is concerned about VA’s current
and future capacity to treat mental health issues of these new veterans. Among the
mental health issues that could affect veterans, Post-Traumatic Stress Disorder
(PTSD) has attracted the most attention. This a psychiatric disorder that can occur
following the experience or witnessing of life-threatening events such as military
combat, natural disasters, terrorist incidents, serious accidents, or violent personal
assaults like rape. People who suffer from PTSD often relive the experience through
nightmares and flashbacks, have difficulty sleeping, and feel detached or estranged;
these symptoms can be severe enough and last long enough to significantly impair
the person’s daily life.33 While there is no cure for PTSD, mental health experts
31 P.L. 104-191, § 264, 110 Stat. 1936, 2033-34; 45 C.F.R. §164.500.
32U.S. Government Accountability Office, DOD and VA: Systematic Data Sharing Would
Help Expedite Servicemember’s Transition to VA Services, GAO-05-722T, p. 7.
33National Center for PTSD Fact Sheet, available at [http://www.ncptsd.org/
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believe that early identification and treatment of PTSD symptoms may lessen the
their severity and improve the overall quality of life for individuals with PTSD.
According to DOD, only 3% of soldiers report serious mental health issues in
post-deployment assessments given as they prepare to return home.34 Early in the
Iraq War, the Army surveyed 3,671 returning veterans and found that up to 17% of
the soldiers were already suffering from depression, anxiety and symptoms of
PTSD.35 Other studies have indicated that protracted warfare in Iraq — with its
intense urban street fighting, civilian combatants and terrorism — could drive PTSD
rates even higher.36
Among the challenges faced by DOD and VA in treating returning
servicemembers with mental health issues is the apparent stigma associated with
disclosing PTSD symptoms to DOD clinicians. Reportedly, there is less stigma
associated with disclosing PTSD symptoms in VA settings, but there are perceived
risks associated with disclosure within military settings.37 Nondisclosure could result
in servicemembers not receiving early intervention and an underestimation of the
future demand for VA mental health services.
For more than two decades, Congress has highlighted the importance of PTSD
services for veterans. In 1984 Congress established the Special Committee on Post-
Traumatic Stress Disorder (Special Committee) to determine VA’s capacity to
provide assessment and treatment for Post-Traumatic Stress Disorder and to guide
VA’s educational, research and benefits activities with regard to PTSD.38 The
Special Committee is composed of PTSD experts from across a broad spectrum of
VA’s Mental Health and Readjustment Counseling Services (RCS). The Special
Committee issued its first report on ways to improve VA’s PTSD services in 1985
and its latest report, which includes 37 recommendations for VA, in 2004.39
33(...continued)
facts/general/fs_what_is_ptsd.html].
34 Scott Shane, “Military Plans a Delayed Test for Mental Issues,” New York Times, Jan. 30,
2005. Many returning servicemembers do not disclose mental health concerns at the time
of discharge in order to avoid being held up at their bases. Therefore, there is concern
among health care professionals about underreporting of mental health issues.
35 Charles W. Hoge, et al., “Combat Duty in Iraq and Afghanistan, Mental Health Problems,
and Barriers to Care,” New England Journal of Medicine, vol. 351, no. 1 (July 1, 2004), p.
16.
36Brett T. Litz, The Mental Health Impact of the Wars in Afghanistan and Iraq: What Can
We Expect? (Information for Professionals), Department of Veterans Affairs, National
Center for PTSD, available at [http://www.ncptsd.va.gov/facts/veterans/fs_Iraq-
Afghanistan_wars.html]
37Matthew Friedman, “Veterans’ Mental Health in the Wake of War,” New England Journal
of Medicine, vol 352, no. 13 (Mar. 31, 2005), p. 1288.
38 Section 110 of Veterans Health Care Act of 1984 (P.L. 98-528), as amended by Section
206 of the Veterans Millennium Health Care and Benefits Act (P.L. 106-117).
39Department of Veterans Affairs Undersecretary for Health’s Special Committee on Post-
(continued...)
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The Special Committee’s 2004 report indicates that combat veterans of OEF
and OIF are at high risk for PTSD and related problems. According to the Special
Committee, the suicide rate for soldiers in Iraq is higher than the Army’s base rate
and higher than suicide rates during the first Gulf War or the Vietnam War. It
estimates that an estimated 40% of OEF and OIF casualties returning by the way of
Walter Reed Army Medical Center report symptoms consistent with PTSD.40
Moreover, the Special Committee in its 2004 report concluded that “VA must meet
the needs of new combat veterans while still providing for veterans of past wars.
Unfortunately, VA does not have sufficient capacity to do this.”41
GAO reported in September 2004 that VA does not have a reliable estimate of
the total number of veterans it currently treats for PTSD and lacks the information
it needs to determine whether it can meet an increased demand for PTSD services.42
In February 2005, GAO reviewed 24 of the Special Committee’s 37
recommendations and reported that VA has not fully met any of the 24
recommendations.43 Specifically, GAO determined that VA has not met 10
recommendations and has partially met 14 of these 24 recommendations.44
According to VA it has undertaken many efforts to improve PTSD care
delivered to veterans. VA points out that it has developed an Iraqi War guide for
clinicians; implemented a national clinical reminder to prompt clinicians to assess
OEF and OIF veterans for PTSD, depression, and substance abuse; implemented a
national system of 144 specialized PTSD programs in all states;45 required all VA
outpatient clinics to either have a psychiatrist or psychologist on staff full-time or
ensure that veterans can consult a mental health provider in their community;
elevated the VHA’s chief psychiatrist to the agency’s National Leadership Board (a
key policymaking group that includes VHA’s other top executives and medical
39(...continued)
Traumatic Stress Disorder, Fourth Annual Report of the Department of Veterans Affairs:
Under secretary for Health’s Special Committee on Post-Traumatic Stress Disorder, 2004.
The Special Committee has issued 15 reports since its establishment, but did not issue a
report in every year.
40Department of Veterans Affairs, Undersecretary for Health’s Special Committee on Post-
Traumatic Stress Disorder, Fourth Annual Report, p. 4.
41Ibid., p. 5.
42 U.S. Government Accountability Office, VA and Defense Health Care: More Information
Needed to Determine if VA Can Meet an Increase in Demand for Post-Traumatic Stress
Disorder Services, GAO-04-109, Sept. 20, 2004.
43U.S. Government Accountability Office, VA Health Care, VA Should Expedite the
Implementation of Recommendations Needed to Improve Post-Traumatic Stress Disorder
Services, GAO-05-287. Of the 37 recommendations proposed by the Special Committee,
GAO examined only 24 recommendations related to clinical care. The full list of 24
recommendations is listed on pp. 41-43.
44Ibid., p .3.
45Statement of Jonathan B. Perlin, Mar. 17, 2005.
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personnel); and established uniform budgets for mental health care at VA’s 21
VISNs.46
Several bills have been introduced (H.R. 922, H.R. 1588, S. 13, S. 460) in the
109th Congress to improve and enhance mental health services, including PTSD for
returning combat veterans. These measures would in general carry out programs to
provide outreach at the community level to veterans who participated in OIF or OEF,
and who are or may be suffering from PTSD.
Setting Funding for VA Medical Care. Veterans’ advocates say that the
unpredictable timing, if not uncertain funding amounts, inherent in the yearly
discretionary appropriations process is a major management problem for VA.
Therefore, national veterans’ organizations have been calling for “assured funding”
for veterans’ health care. This has also been called “mandatory funding” by other
veterans’ advocates. This discussion will use mandatory funding to refer to these
policy proposals.
To understand mandatory funding proposals, it is essential to understand how
VA programs are funded presently. Under current law, VA programs are funded
through both mandatory and discretionary spending authorities. The following
programs are among mandatory spending programs: cash benefit programs, i.e.,
compensation and pensions (and benefits for eligible survivors); readjustment
benefits (education and training, special assistance for disabled veterans); home loan
guarantees; and veterans’ insurance and indemnities. Each of these programs is an
appropriated entitlement program that is funded through annual appropriations. With
any entitlement program, because of the underlying law, the government is required
to provide eligible recipients with the benefits to which they are entitled, whatever
the cost. With these mandatory veterans’ programs, Congress must appropriate the
money necessary to fund the obligation. If the amount Congress provides in the
annual appropriations act is not enough, it must make up the difference in a
supplemental appropriation. Like other entitlement programs, spending
automatically increases or decreases over time as the number of recipients eligible
for benefits varies. Certain of these VA entitlement benefits are indexed for
inflation; the benefit amount will increase automatically based on the measured
increase in the cost-of-living adjustment.
The remaining programs, primarily VA health care programs, medical facility
construction, medical research, and VA administration, are funded through annual
discretionary appropriations. Congress must act each year to provide budget
authority for discretionary programs. As a discretionary program, the amount of
funds VHA can spend on health care programs for veterans is limited by the amount
of its appropriation.
Generally the mandatory funding proposals that have been suggested by
veterans’ advocates are based on a formula that takes into account the number of
46George Cahlink, “VA to Boost Mental-Health Services for Returning Troops,”
Government Executive, Sept. 28, 2004, available at [http://www.govexec.com/dailyfed/
0904/092804g1.htm].
CRS-19
enrolled and nonenrolled veterans eligible for VA medical care, and the rate of
medical care inflation. Proponents believe that mandatory funding will eliminate the
year-to-year uncertainty about funding levels and close the gap between funding and
demand for veterans’ health care. Opponents believe that with these proposals
spending for VHA will increase significantly as enrollment in the VA health care
system soars; in most of the proposed funding formulas, automatic funding increases
are primarily based on enrollment figures. Furthermore, critics believe that a static
funding formula cannot adequately take into consideration the changing needs of
veterans, which could affect the funding level necessary to provide a different mix
of services, and that Congress is better able to evaluate the funding needs through the
current appropriation process.
As highlighted by some budget analysts, changing veterans’ medical care into
a mandatory budget authority will not solve the issue of closing the gap between
funding and demand for veterans’ health care, since Congress could place caps on
spending for mandatory programs through budget reconciliation language which
could limit spending on veterans’ health programs. 47 Since Congress can act to
change the formula or cap the spending amounts, the issue of uncertainty in funding
amounts may not be resolved either.
Assured Funding for Veterans Health Care Act, 2005 (H.R. 515) has been
introduced in this Congress. This proposal would require the Secretary of the
Treasury to make mandatory appropriations for VA health care based on the
following formula: the amount of funds available for VA medical care in FY2007
would equal 130% of the total obligations made by VA for medical care programs
in FY2005. The amounts in succeeding years would be adjusted for medical inflation
and growth in the number of veterans enrolled in VA’s health care system and other
non-veterans eligible for care from VA. A companion measure, S. 331, has been
introduced in the Senate. Another measure introduced in the Senate, S. 13, uses a
similar formula for determining funding available for VA health care and adjusts
spending for changes in the veteran population and inflation.
Continued Suspension of Priority Group 8 Veterans. Veterans’
advocates want the suspension of Priority Group 8 veterans from enrolling in VA’s
health care system lifted, since they believe that all veterans must be able to receive
care from VA. It should be noted that some of these veterans may have other types
of health care coverage. The Veterans Health Care Eligibility Reform Act of 1996
(P.L. 104-262) included language that stipulated that medical care to veterans will
be furnished to the extent appropriations were made available by Congress on an
annual basis. Based on this statutory authority, the Secretary of Veterans Affairs
announced on January 17, 2003 that VA would temporarily suspend enrolling
Priority Group 8 veterans. Those who enrolled prior to January 17, 2003 in VA’s
health care system were not to be affected by this suspension. VA claims that,
despite its funding increases, it cannot provide all enrolled veterans with timely
access to medical services because of the tremendous increase in the number of
47Testimony of Richard Kogan, of the Center on Budget and Policy Priorities at the
Alternative Processes for Funding Veterans Health Care Forum, Thurs., June 3, 2004.
Transcript available at [http://www.dav.org/voters/mandatory_funding.html].
CRS-20
veterans seeking care from VA. In July 2002, VA estimated that there were more
than 310,000 enrolled veterans who had been unable to schedule an appointment or
have an appointment scheduled by VA more than six months from the veteran’s
desired date of appointment for a non-emergency clinic visit. As of December 2004,
VA is reporting that this number has been reduced to approximately 30,000.
Effect of the Enrollment Freeze. According to VA data, in FY2003
approximately 164,000 Priority Group 8 veterans could not enroll in VA health care
because of the suspension. In FY2004 an estimated 360,000 Priority Group 8
veterans were similarly effected; this number is expected to grow to 522,000 veterans
by the end of FY2005.48 Moreover, the number of Priority Group 8 veterans already
enrolled in VA’s health care system is expected to decline from 1.27 million in
FY2005 to 1.22 million in FY2006; this will be mostly due to projected death rates
for these veterans as well as the continued suspension of new enrollments.49 In 2004,
VA estimated that resumption of enrollment for Priority Group 8 veterans would
require an additional $519 million over the FY2005 requested VHA budget and an
estimated $2.3 billion in FY2012.50
Congress has shown a keen interest in access to care for Priority Group 8
veterans, and it is likely that legislative proposals will be introduced in this Congress
directly related to lifting the freeze on enrollment. However, since enrollment of
lower priority veterans is tied to available resources, there are doubts that such
measures will be enacted into law.
VA’s Cost Recoveries from Medicare. In general, VA is statutorily
prohibited from receiving Medicare payments for services provided to Medicare-
covered veterans.51 Many veterans’ advocates have suggested that VA should receive
Medicare payments for nonservice-connected disability care that VA provides for
veterans who are also covered by Medicare. However, there has been opposition to
these proposals because authorizing VA recoveries from Medicare could further
jeopardize the solvency of the Medicare trust fund and increase overall federal health
care costs, since Medicare is an entitlement program without a cap on its total
spending. GAO suggested that allowing VA to bill and retain recoveries from
Medicare would create strong incentives for VA facilities to shift their priorities
towards providing care to veterans with Medicare coverage.52
48Department of Veterans Affairs, “Enrollment — Provision of Hospital and Outpatient Care
to Veterans Subpriorities of priority Categories Seven and Eight and Annual Enrollment
Level Decision; Final Rule,” 68 Federal Register, Jan. 17, 2003.
49Department of Veterans Affairs, FY2006 Budget Submission, Medical Programs, vol. 2
of 4, pp. 2-4.
50U.S. Congress, Senate Committee on Appropriations, Department Veterans Affairs, and
Housing and Urban Development and Independent Agencies Appropriations for FY2005,
hearings on H.R. 5041/S. 2825, 108th Cong., 2nd sess., Apr. 6, 2004, S.Hrg. 108-776, p. 379.
5142 U.S.C § 1395f(c).
52U.S. Government Accountability Office, VA Health Care, Issues Affecting Eligibility
Reform Efforts, GAO/HEHS-96-160, Sept. 1996, p. 85.
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In past Congresses proposals have been introduced to authorize VA recoveries
from Medicare either for all Medicare-eligible veterans or for those with higher
incomes. In the 106th and 107th Congresses this issue was known as Medicare
Subvention, meaning a transfer of money from the Medicare trust funds to VA to pay
for Medicare-covered services provided to veterans who are Medicare beneficiaries.
The Balanced Budget Act of 1997 (P.L. 105-33) authorized the DOD to
implement a Medicare subvention pilot program in their MTFs. The Medicare
subvention demonstration permitted DOD to create managed care organizations that
participated in the Medicare+Choice program (now Medicare Advantage) and enroll
Medicare-eligible retirees. In this demonstration, Medicare payments were structured
on a capitation basis, with DOD receiving monies after meeting its level of effort to
ensure that it sustained its prior level of spending on its Medicare beneficiaries.
Under the demonstration, enrolled retirees received their Medicare-covered benefits
and additional TRICARE benefits (notably prescription drugs) through TRICARE
Senior Prime, the DOD-run managed care organizations set up by the demonstration.
To be eligible for Senior Prime, retirees had to reside in one of the six geographic
areas covered by the demonstration, be enrolled in both Medicare Part A and Part B,
and had to be eligible for military health care benefits. They also had to have either
(1) used an MTF before July 1, 1997, or (2) turned age 65 on or after July 1, 1997.
While the demonstration had positive results for enrollees, the three-year pilot
program was judged not to be cost-effective for DOD and it expired at the end of
2001.53
VA was not authorized to establish a similar Medicare subvention
demonstration. However, with its decision to no longer accept applications for
enrollment of Priority Group 8 veterans, VA and the Centers for Medicare and
Medicaid Services (CMS) began discussions to form a VA Advantage proposal in
2004. According to VA, it had planned to offer Medicare-eligible Priority 8 veterans
who were unable to enroll for VA health care the option of receiving their Medicare
benefits through VA. To accomplish this, VA would have contracted with an
existing Medicare Advantage organization with the stipulations that VA would define
the benefit package to be offered, and enrollees in VA Advantage would receive the
majority of their health care benefits through VA facilities. Other benefits under the
VA Advantage plan that are not provided in VA facilities would have been provided
via arrangements with providers and facilities that contract with VA. It is likely that
out-of-plan-area emergency and urgent care services would have fallen into this last
category. Under the VA Advantage proposal, Medicare would have borne the full
cost of care for veterans enrolled in the program.
Although VA had made plans to implement this program in September 2004,
VA’s General Counsel determined that legislation authorizing the implementation
of the program was necessary. Moreover, it was not clear how attractive this option
would have been to Medicare-eligible veterans. As mentioned earlier, only
Medicare-eligible Priority 8 veterans who were unable to enroll for VA health care
53U.S. General Accounting Office, Medicare Subvention Demonstration: Pilot Satisfies
Enrollees, Raises Costs and Management Issues for DOD Health Care, GA0-02-284, Feb.
2002, pp. 3-4.
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would have been offered the option of enrolling in VA Advantage. The veteran’s
spouse or other Medicare-eligible dependents of the veteran would not have been
eligible for the VA Advantage plan. It is unclear at this time if Congress may
introduce legislation to implement the VA Advantage program.
Filling of Privately Written Prescriptions at VA. As part of VA’s
comprehensive medical care benefits package, VA provides all veterans who are
enrolled for VA care appropriate prescription medications, at the nominal charge of
$7 for a 30-day supply. In general, the copayments are waived if the prescription is
for a service-connected condition or if the veteran is severely disabled or indigent.
VA dispenses medications, however, only to those veterans who are enrolled for, and
who actually receive VA-provided care. Generally, VA does not provide medications
to veterans unless those medications are prescribed by a physician who is employed
by or under contract with VA.
However, to address the growing wait lists for primary care and specialty care
appointments and to reduce the waiting times for a first appointment, VA
implemented a program in September 2003 to provide access to VA prescription
drugs for veterans experiencing long waits for their initial primary care appointment.
This temporary program was known as the Transitional Pharmacy Benefit (TPB).
Under this program, VA pharmacies and VA’s Consolidated Mail Outpatient
Pharmacies (CMOPs) were authorized to fill prescriptions written by non-VA
(private) physicians until a VA physician could examine the veteran and determine
an appropriate course of treatment. The TPB included most, but not all, of the drugs
listed on the VA National Formulary (VANF). To be eligible for the program,
veterans had to be enrolled in the VA health care system prior to July 25, 2003, and
had to have requested their initial primary care appointment prior to July 25, 2003.
To qualify for this program, veterans also must have been waiting more than 30 days
for the initial primary care appointment as of September 22, 2003.
Although VA anticipated that around 200,000 veterans would be eligible to
participate in the program, only about 41,000 veterans were finally eligible to enroll
in the program; of those veterans about 8,300 veterans participated in the program.
VA attributes low participation to the fact that many veterans had already received
VA services by the start of the program. According to the VA, the TPB program
increased the administrative prescription processing costs due to the increased labor
requirements associated with contacting private physicians to suggest formulary
alternatives because many private physicians had prescribed medications that were
not on VA’s formulary. At present VA has discontinued this pilot program.
There was considerable interest in the 108th Congress to provide a prescription-
only health care benefit for veterans. While several bills were introduced none of
them were enacted into law. Furthermore, in FY2004 and FY2005 the House and
Senate Committees on Appropriations, and the conference committee, included bill
language authorizing the dispensing of prescription drugs from VHA pharmacies to
enrolled veterans with privately written prescriptions based on requirements
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established by VHA.54,55 The following bills have been introduced in the 109th
Congress: H.R. 693, H.R. 1585, S. 13, and S. 614. These measures would, among
other things, require VA pharmacies to dispense medications on prescriptions
written by private medical practitioners.
Capital Asset Realignment for Enhanced Services (CARES). VA
holds a substantial inventory of real property and facilities throughout the country.
A majority of these buildings and property support VHA’s mission. Much of VA’s
medical infrastructure was built decades ago when its focus was inpatient care. In
the past several years VA has been shifting from a hospital-based system and, today,
more than 80% of the treatment VA provides is on an outpatient basis through
Community Based Outpatient Clinics (CBOCs). GAO projected that one in four
medical care dollars is spent on maintaining and operating VA’s buildings and land,
and estimated that VA has over 5 million square feet of vacant space which can cost
as much as $35 million a year to maintain.56
In October 2000, VA established the CARES program with the goal of
evaluating the projected health care needs of veterans over the next 20 years and of
realigning VA’s infrastructure to better meet those needs. In August 2003, VA’s
Undersecretary for Health issued a preliminary Draft National CARES Plan (DNCP).
The DNCP, among other things, recommended that seven VA health care facilities
close and duplicative clinical and administrative services delivered at over 30 other
VHA facilities be eliminated. The sites slated to be closed were in the following
locations: Canandaigua, New York; Pittsburgh, Pennsylvania (Highland Drive
Division); Lexington, Kentucky (Leestown Division); Cleveland, Ohio (Brecksville
Unit); Gulfport, Mississippi; Waco, Texas; and Livermore, California. Patients
currently provided services at these VHA facilities would have been provided care
at other nearby sites. The DNCP recommended that new major medical facilities be
built in Las Vegas, Nevada and East Central Florida. Furthermore, the DNCP
recommended significant infrastructure upgrades at numerous sites including, at or
near locations where VA proposed to close facilities. In addition, the draft plan
called for the establishment of 48 new high-priority CBOCs.
Following the release of the DNCP, the VA Secretary appointed a 16-member
independent commission to study the draft plan. The commission was composed of
individuals from a wide variety of backgrounds outside of the federal government.
The CARES Commission developed and applied six factors in the review of each
proposal in the DNCP: (1) impact on veterans’ access to health care; (2) impact on
health care quality; (3) veteran and stakeholder views; (4) economic impact on the
54U.S. Congress, Conference Committees, Making Appropriations for Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies for the Fiscal Year
Ending September 30, 2004, Conference Report to accompany H.R. 2673, 108th Cong., 1st
sess., H.Rept. 108-401, p. 365.
55 U.S. Congress, Conference Committees, Making Appropriations for Foreign Operations,
Export Financing, and Related Programs for the Fiscal Year Ending September 30, 2005,
Conference Report to accompany H.R. 4818, 108th Cong., 2nd sess., H.Rept. 108-792, p. 483.
56U.S. General Accounting Office, VA Health Care: Capital Asset Planning and Budgeting
Need Improvement, GAO/T-HEHS-99-83, Mar. 10, 1999, pp. 1 and 6.
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community; (5) impact on VA missions and goals; and (6) cost to the government.
The commission conducted 38 public hearings and 81 site visits throughout 2003,
and submitted its recommendations to the Secretary in February 2004. After
reviewing the recommendations, the Secretary announced the final details of the
CARES plan in May 2004 (Secretary’s CARES Decision).
The final plan includes consolidating the following facilities: (1) Highland
Drive campus in Pennsylvania with University Drive and Heinz campuses in
Pennsylvania; (2) Brecksville campus in Ohio with Wade Park campus in Cleveland,
Ohio; and (3) Gulfport campus with Biloxi campus in Mississippi. The following
facilities will be partially realigned: (1) Knoxville campus in Iowa; (2) Canandaigua
campus in New York; (3) Dublin campus in Georgia; (4) Livermore campus in
California; (5) Montrose campus in New York; (6) Butler campus in Pennsylvania;
(7) Saginaw campus in Michigan; (8) Ft. Wayne campus in Indiana, and (9) Kerrville
campus in Texas.57
The final plan also calls for building new hospitals in Orlando and Las Vegas;
adding 156 new CBOCs, four new spinal cord injury centers, and two blind
rehabilitation centers; and expanding mental health outpatient services nationwide.
By opening health care access to more veterans, VA expects to increase the
percentage of enrolled veterans from 28% of the veterans’ population today, to 30%
in 2012 and 33% in 2022. This percentage increase can be attributed in part to a
projected decline in the veteran population. Nationally, the number of veteran
enrollees is projected to increase 6% by 2012 and decrease 5% by 2022 from the
number of veteran enrollees reported in 2001. VA asserts that the CARES plan will
reduce the cost of maintaining vacant space over the period 2006 to 2022 from an
estimated $3.4 billion to $750 million and allow VA to redirect those funds to patient
care.58
Critics of the CARES plan contend that closures are being considered without
assessing what kind of facilities will be needed for long-term care and mental health
care in the future. For instance, at the time of the release of the DNCP, projections
for outpatient and acute psychiatric inpatient care contained data inconsistencies on
future needs. VA asserted that it would improve its forecasting models to ensure that
projections adequately reflect future need. Also, some believe that the CARES plan
does not focus enough on future nursing home needs, would leave VA short of beds
in a few decades, and thus VA would not have any choice but to privatize some parts
of the health care system. Moreover, some veterans’ groups believe that CARES is
only about closing “surplus” hospitals and do not believe that CARES will result in
the building of new and modern facilities. Finally, the closure of some VA medical
57The Draft National CARES Plan (DNCP) defines realignment as: moving services from
one facility to another, contracting for care to ensure inpatient access to care is available
when needed, and in all cases maintaining outpatient services in the community.
58Department of Veterans Affairs, Office of the Secretary, Secretary of Veterans Affairs,
CARES Decision, May 2004, pp. 1-8.
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facilities raised serious concern among some Members of Congress who felt that they
had little control over the CARES process.59
In December 2003, the Veterans Health Care, Capital Asset, and Business
Improvement Act of 2003 (P.L.108-170) was signed into law. Section 222 of this
Act requires a 60-day notice and a waiting period before VA could close any
facilities under the final CARES plan. In addition, Section 221 of this Act requires
VA to wait 45 days after reporting to the Veterans’ and Appropriations Committees
before carrying out major construction projects as specified in the final CARES
report. The Veterans Health Programs Improvement Act of 2004 (P.L.108-422)
signed in to law on November 30, 2004 requires VA to notify Congress of the
impact of actions that may result in a facility closure, consolidation, or administrative
reorganization. The law also prohibits such actions from occurring until 60 days
following the notification or 30 days of continuous session of Congress as specified.
This law superseded Section 221 of P.L.108-170.
The Secretary’s CARES Decision identified implementation issues that required
further study, including additional stakeholder input at selected sites. On September
29, 2004, the Secretary of VA established an Advisory Committee for CARES
Business Plan Studies. The committee and its subcommittees generally consists of
representatives from veterans’ service organizations, governmental agencies, health
care providers, planning agencies, and community organizations with a direct interest
in the CARES process. This committee will consult with stakeholders during
implementation of the Secretary’s CARES Decision. The committee will ensure that
the full range of stakeholder interests and concerns are assembled, publicly
articulated, accurately documented, and considered in the development of site-level
business plans. In January 2005, VA awarded a contract to PriceWaterhouseCoopers
to complete studies at 18 sites throughout the country during a 13-month period as
required by the Secretary’s CARES Decision. According to VA, the studies will be
completed no later than February 2006.60 Legislative action with regard to the
CARES implementation would follow the release of this report.
VA as a Model for Other Health Care Systems. For decades the VA
health care system had a reputation for providing suboptimal care to veterans, at least
in certain circumstances.61 These quality problems were highlighted in the popular
59Honorable Bob Graham, “Statements on Introduced Bill and Joint Resolutions,” remarks
in the Senate, Congressional Record, 108th Congress, vol. 149 (June 18, 2003), p. S8135.
60 The 18sites are: Boston, MA (VISN1); Canandaigua, NY (VISN 2); Montrose, NY
(VISN 3); New York City, NY(VISN 3); St. Albans, NY (VISN 3); Perry Point, MD (VISN
5); Montgomery, AL (VISN 7); Louisville, KY (VISN 9); Lexington, KY (VISN 9); Poplar
Buff, MO (VISN15); Biloxi, MS(VSIN 16); Muskogee, OK (VISN 16); Waco, TX (VISN
17); Big Spring, TX (VISN 18); Walla Walla, WA (VISN 20); White City, OR (VISN 20)
Livermore, CA (VISN 21); West LA, CA (VISN 22).
61Sheldon Greenfield, “Creating a Culture of Quality: The Remarkable Transformation of
the Department of Veterans Affairs Health Care System,” Annals of Internal Medicine, vol.
141, no. 4 (Aug. 17, 2004), p. 316.
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press at that time.62 As described earlier, however, VA initiated a systemwide
reengineering, among other things, to improve the quality of care.63 VA is seen by
many as a leader in improving quality of care. One of the most highly regarded VA
initiatives is the National Surgical Quality Improvement program (NSQIP). The
initiatives key components are: periodic performance measurement and feed back,
along with self-assessment tools, site visits, and best practices to improve the
outcome of major surgeries performed by VA surgeons.
Recent studies have shown that VA’s quality of care has improved dramatically
when compared to the quality of care in the VA health care system before its
reengineering.64 Moreover, studies done following VA’s transformation have shown
that some aspects of VA’s quality of care are better than what is offered in the
general health care system. For instance, researchers (affiliated with VA, the RAND
Corporation, and several universities) found that patients in the VA health care
system are more likely to receive better chronic and preventive care than the general
population. This study also found that VA performed better across the entire
spectrum of care: screening, diagnosis, treatment, and follow-up.65
Moreover, certain attributes of VA’s health care system may have relevance to
improving the quality of care provided in the broader health care system. For
instance, VHA’s Barcode Medication Administration System for dispensing
pharmaceuticals has been in place since 2000, before the Food and Drug
Administration’s (FDA) attempt to put a similar system in place in the broader health
care system.66 The Barcode Medication Administration System, which is in all VA
hospitals now, lets doctors and nurses verify the time, dose and name of a patient
receiving a medication. VA hospitals give patients a bar-coded wristband inscribed
with patient information, and attaches a bar code to every medication. A nurse scans
the patient’s wristband for identity verification, and the system retrieves the
medication record from VA’s Electronic Healthcare Record System and displays it
on the PC or handheld screen.
62“Investigator Cites Poor Care at Veterans Hospitals,” New York Times, Nov. 22, 1991, p.
A26.
63Ashish K. Jha, et. al., “Effect of the Transformation of the Veterans Affairs Health Care
System on the Quality of Care,” New England Journal of Medicine, vol. 348, no. 22 (May
29, 2003), p. 2219.
64 Ibid., p. 2222. See also E.A. Kerr, et al., “Diabetes Care Quality in the Veterans Affairs
Health Care System and Commercial Managed Care: The TRIAD Study,”Annals of Internal
Medicine, vol. 141, no. 4 (Aug. 17, 2004), pp. 272-281.
65Steven M. Asch, et al., “Comparison of Quality of Care for Patients in the Veterans Health
Administration and Patients in a National Sample,” Annals of Internal Medicine, vol. 141,
no. 12, p. 942.
66FDA issued its final bar coding rule in Feb. 2004. It applies to medications used in
hospitals, as well as blood and blood products used in transfusions. New medications
covered by the rule will have to include bar codes within 60 days of their approval; most
previously approved medicines and all blood and blood products will have to comply with
the new requirements within two years.
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VA is also leading an effort to reduce medication errors with a wireless
application designed to ensure that patients receive the correct medications. Industry
press indicates that VA not only has outpaced private hospitals in implementing
health care IT systems, but the department is leapfrogging its private-sector
counterparts in using mobile and wireless devices and applications directly in patient
care.67
The VHA is also known for its Electronic Healthcare Record (EHR) technology.
The Veterans Health Information Systems and Technology Architecture (VistA)
system (VA’s electronic health record system) is currently in more than 1,300 VA
facilities to maintain the records of over 5 million veterans. CMS and VHA are
collaborating to configure VistA technology so that it might be adopted for use in the
private physician office setting nationwide. The new product will be known as “The
VistA-Office EHR,” and the targeted release date is July 2005.
Since the late 1990s, VA has been generally recognized as a leader in patient
safety. In 1999, the VA established a National Center for Patient Safety (NCPS) to
lead the agency’s patient safety efforts and develop a culture of safety throughout the
VA health care system. The NCPS developed an internal, confidential, non-punitive
reporting and analysis system, the Patient Safety Information System (PSIS), which
permits VA employees to report both adverse events and close calls without fear of
punishment. Other countries such as Australia, Japan, Denmark, the United
Kingdom have adopted strategies from portions of VA’s patient safety program.
Furthermore, the Joint Commission for the Accreditation of Health Care
Organization’s (JCAHO) patient safety goals have been influenced by VA’s advances
in this area. In May 2000, the VA signed an agreement with the National
Aeronautics and Space Administration (NASA) to develop the Patient Safety
Reporting System (PSRS), an independent, external reporting system. The PSRS,
which was inaugurated in 2002 at VA hospitals nationwide, is operated by NASA.
It is intended to provide VA employees with a “safety valve” that allows them
confidentially to report close calls or adverse events that, for whatever reason, would
otherwise go unreported.
In the area of pharmaceutical purchasing VA has been able to obtain
prescription drugs at competitive prices. VA has been successful in using a number
of purchasing arrangements to obtain substantial discounts on prescription drugs.
For the bulk of its pharmaceutical purchases, VA obtains favorable prices through the
Federal Supply Schedule (FSS).68 By statute, in order to be able to obtain
reimbursement for drugs for Medicaid beneficiaries, manufacturers must offer their
drugs on the FSS.69 FSS prices are intended to be no more than the prices
manufacturers charge their most-favored non-federal customers under comparable
terms and conditions. VA also buys some brand-name drugs for prices less than-
those listed under the FSS. For example, by statute VA can buy brand-name drugs-
67Mary Mosquera, “VA’s Dose of WiFi,”Government Computer News, vol. 24, no. 9 (Apr.
24, 2005).
68The pharmaceutical portion of the Federal Supply Schedule (FSS) contains over 17,000
products available to federal agencies and other entities.
6938 U.S.C. § 8126(a)(4).
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at a price at least 24% lower than the non-federal average manufacturer price
(NFAMP), which may be lower than the FSS price for many drugs.70 In addition, VA
has obtained some drugs at lower than FSS prices through national contracts with a
single manufacturer based on a competitive-bid process. VA may solicit competitive
bids for therapeutically equivalent drugs and may select one winner based on price
alone for exclusive or preferred use on their formularies. Often VA and DOD
consolidate their buying power and negotiate contracts together. In FY2003, the total
cost avoidance was estimated to be $376 million for VA and DOD contacts.71,72
Several measures (H.R. 376, H.R. 563, H.R. 1626,S. 123, S. 563) have been
introduced in this Congress to allow the Department of Health and Human Services
(DHHS) to negotiate contracts with manufacturers of covered Medicare Part D
pharmaceuticals similar to VA. However, many veterans’ advocates have voiced
concerns that if prices offered to VA were extended to Medicare recipients or other
entities, it would result in increased prices for VA, since pharmaceutical companies
will not give the same price discounts that it presently offers VA.
70The Veterans Health Care Act of 1992 (P.L. 102-585). The other agencies covered by this
act are: DOD, the Public Health Service, and the Coast Guard.
71Based on experience, about 74% of joint VA/DOD drug purchases are consumed by VA
beneficiaries. The VA’s FY2003 projections assumed that 74.4% of the total cost avoidance
figure would be attributable to VA beneficiaries. Actual data from the first three quarters
of FY2003 reflected a 74.3% share.
72The VA does not provide a figure on how much it saves by purchasing pharmaceuticals
through negotiations. According to the VA officials, it is difficult to put an exact amount
on the amount of money that VA “saves” by its contracting in regard to prescription drugs
because although VA knows what the price paid is, it is difficult to develop a baseline
comparison.
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Appendix 1. Map of All 21 Veterans’ Integrated
Services Networks
Source: Department of Veterans Affairs.
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Appendix 2. Priority Groups and Their Eligibility Criteria
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 VA to be catastrophically disabled
Priority Group 5
Nonservice-connected 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 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 copayments with income and/or net worth above the VA means test
threshold and income below the HUD geographic index
Subpriority a: Noncompensable 0% service-connected 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 veterans who were enrolled in the VA health care system on a
specified date and who have remained enrolled since that date.
Subpriority e: Noncompensable 0% service-connected veterans not included in Subpriority a above
Subpriority g: Nonservice-connected veterans not included in Subpriority c above
Priority Group 8
Veterans who agree to pay specified copayments with income and/or net worth above the VA means test
threshold and the HUD geographic index
Subpriority a: Noncompensable 0% service-connected veterans enrolled as of January 16, 2003 and who
have remained enrolled since that date
Subpriority c: Nonservice-connected veterans enrolled as of January 16, 2003 and who have remained
enrolled since that date
Subpriority e: Noncompensable 0% service-connected veterans applying for enrollment after January
16, 2003
Source: 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.
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Appendix 3. How an Injured Servicemember Enters
the VA Health Care System.
When a servicemember is wounded or injured in a theater of operations, he or
she is first treated by either a combat lifesaver (another servicemember that is not a
combat medic but has been trained in advanced first aid) or a combat medic (with
Emergency Medical Technician, EMT qualifications). The servicemember is
stabilized for evacuation to the Company/Battalion Aid Station, and if necessary and
the resources are available, evacuated directly to a level III medical treatment facility
(MTF) in the combat theater. The Transportation Command (TRANSCOM) then
evacuates the patient from the Level III MTF to a Level IV MTF such as Landstuhl
Regional Medical Center in Landstuhl, Germany. After treatment and restablization,
the patient may be sent back to duty in the theater of combat if they are deemed
medically fit for duty. If the patient requires further medical treatment, he or she is
then evacuated to a MTF in the United States, such as Walter Reed Army Medical
Center (WRAMC), with exception of burn patients who are sent directly to Brooke
Army Medical Center in San Antonio, Texas. Upon treatment and medical
determination, the patient can have several outcomes. He or she may be:
! retained at WRAMC for further treatment;
! transferred to another MTF or back to the mobilization site;
! transferred into the Department of Veterans Affairs (VA) health care system;
or returned to duty.
Assuming the patient is retained and admitted to a MTF to which VA personnel
are assigned, Veterans Benefits Administration (VBA) Benefits counselors meet with
the patient and family as soon as feasible to introduce themselves and provide written
information on VA benefits. The counselors may explain VA benefits at that time,
or may return at a later time at the convenience of the patient. They will also assist
the patient with the claims application process.
Once Department of Defense (DOD) medical personnel have determined that
the patient is to be transferred from the MTF to another medical facility, they notify
the VA/DOD liaisons at the MTF. The VA/DOD liaisons will then assist the MTF
treatment team with discharge planning activities, identify the appropriate VHA
facility for follow-up treatment, make arrangements for an inpatient bed or outpatient
appointment with the VHA facility’s point of contact (POC), and arrange for the
transfer of care to the VHA facility. The VA/DOD liaisons also assist with
enrollment into the VA health care system and with arranging TRICARE
authorizations as necessary.73
Once the patient is admitted to a VHA medical facility, VA personnel will
manage the care and interact with the patient and family. If the patient is still on
active duty, VA personnel will coordinate the patient’s care with DOD medical
personnel at the referring MTF or at the patient’s TRICARE Prime enrollment site.
73 For further information on TRICARE, see CRS Issue Brief IB93103, Military Medical
Care Services: Questions and Answers, by Richard A. Best, Jr.