Order Code RL34063
Veterans’ Medical Care:
FY2008 Appropriations
June 25, 2007
Sidath Viranga Panangala
Analyst in Social Legislation
Domestic Social Policy Division

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Veterans’ Medical Care: FY2008 Appropriations
Summary
The Department of Veterans Affairs (VA) provides benefits to veterans who
meet certain eligibility rules. Benefits to veterans range from disability compensation
and pensions to hospital and medical care. The VA provides these benefits through
three major operating units: the Veterans Health Administration (VHA), the Veterans
Benefits Administration (VBA), and the National Cemetery Administration (NCA).
The VHA is primarily a direct service provider of primary care, specialized care, and
related medical and social support services to veterans through the nation’s largest
integrated health-care system.
On February 5, 2007, the President submitted his FY2008 budget proposal to
Congress. The total amount requested by the Administration for the VHA for
FY2008 is $34.6 billion, a 1.7% increase in funding compared with the FY2007
enacted amount. For FY2008, the Administration is requesting $27.2 billion for
medical services, a $1.2 billion, or 4.6%, increase in funding over the FY2007
enacted amount. The Administration’s budget proposal is also requesting $3.4
billion for medical administration, $3.6 billion for medical facilities, and $411
million for medical and prosthetic research. As in previous budget requests, the
Administration has included several cost-sharing proposals.
On June 15, 2007, the House passed its version of the Military Construction and
Veterans Affairs Appropriations bill for FY2008 (H.R. 2642, H.Rept. 110-186).
H.R. 2642 provides $37.1 billion for the VHA for FY2008. This amount includes
$29.0 billion for medical services, $1.9 billion (6.9%) above the President’s request,
and $3.0 billion (11.7%) over the FY2007 enacted amount of $26.0 billion. H.R.
2642 also includes $3.5 billion for medical administration, $69 million above the
Administration’s request of $3.4 billion; $4.1 billion for medical facilities, a 14%
increase over the President’s request; and $480 million for medical and prosthetic
research, a 17% increase over the President’s request of $411 million. H.R. 2642 did
not include any bill language authorizing fee increases as requested by the
Administration’s budget proposal for the VHA for FY2008.
On June 14, 2007, the full Senate Appropriations Committee approved its
version of the Military Construction and Veterans Affairs Appropriations bill for
FY2008 (S. 1645, S. Rept.110-85). S. 1645, as reported, provides a total of $37.0
billion for the VHA. This amount includes $29.0 billion for medical services — a
$3 billion (11.5%) increase over the FY2007 enacted amount and $1.8 billion over
the FY2008 budget request — and $3.6 billion for medical administration, $200
million above the FY2008 Administration’s request. Furthermore, S. 1645, as
reported, provides $4.1 billion for medical facilities — a 14.0% increase over the
FY2008 request and 1.7% less than the FY2007 enacted amount — and $500 million
for medical and prosthetic research. The committee did not recommend any fee
increases as requested by the Administration’s budget proposal for the VHA for
FY2008.
This report tracks the VHA’s FY2008 appropriation process and will be updated
as legislative events warrant.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Eligibility for Veterans’ Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
“Promise of Free Health Care” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
VHA Health-Care Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Veteran’s Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Priority Groups and Scheduling Appointments . . . . . . . . . . . . . . . . . . . 9
Funding for the VHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Medical Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Medical Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Medical Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Medical and Prosthetic Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Medical Care Collections Fund (MCCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
FY2007 Budget Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Continuing Appropriations Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
FY2007 Supplemental Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
FY2008 VHA Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
FY2008 Congressional Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . 16
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Construction Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Construction Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Key Budget Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Assess an Annual Enrollment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Increase Pharmacy Co-payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Impact of Fee Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Third-Party Offset of First-Party Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Future Cost of Veterans’ Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Appendix A. Priority Groups and Their Eligibility Criteria . . . . . . . . . . . . . . . . 27
Appendix B. Veterans’ Payments for Health-Care Services,
by Priority Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Appendix C. Financial Income Thresholds for VA Health-Care Benefits . . . . . 30
Appendix D. VHA Appropriations for FY2005 and FY2006 . . . . . . . . . . . . . . . 31

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List of Figures
Figure 1. Present Co-payment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
List of Tables
Table 1. VA and VHA Appropriations, FY2006-FY2008 . . . . . . . . . . . . . . . . . . . 2
Table 2. Number of Veterans Enrolled in the VA Health-Care System . . . . . . . . 4
Table 3. Number of Patients Receiving Care from the VA . . . . . . . . . . . . . . . . . 5
Table 4. Medical Care Collections, FY2003-FY2006 . . . . . . . . . . . . . . . . . . . . 13
Table 5. VHA Appropriations by Account, FY2006-FY2008 . . . . . . . . . . . . . . . 19
Table 6. Appropriations for VA Construction Projects, FY2006-FY2008 . . . . . 21

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Veterans’ Medical Care:
FY2008 Appropriations
Most Recent Developments
On June 15, 2007, the House passed it version of the Military Construction and
Veterans Affairs Appropriations bill (MILCON-VA appropriations bill) for FY2008
(H.R. 2642, H.Rept. 110-186). H.R. 2642 provides $37.1 billion for the Veterans
Health Administration (VHA)for FY2008 (see Table 1). This amount includes $29.0
billion for medical services, $1.9 billion (6.9%) above the President’s request and
$3.0 billion (11.7%) over the FY2007 enacted amount of $26.0 billion. The
MILCON-VA appropriations bill also includes $3.5 billion for medical
administration, $69 million above the Administration’s request of $3.4 billion; $4.1
billion for medical facilities, a 14% increase over the President’s request; and $480
million for medical and prosthetic research, a 17% increase over the President’s
request of $411 million. The House-passed version of H.R. 2642 did not include any
bill language authorizing fee increases as requested by the Administration’s budget
proposal for the VHA for FY2008.1
On June 14, 2007, the full Senate Appropriations Committee approved its
version of the Military Construction and Veterans Affairs Appropriations bill
(MILCON-VA appropriations bill) for FY2008 (S. 1645, S. Rept.110-85). S. 1645,
as reported, provides a total of $37.0 billion for the VHA (see Table 1). This amount
includes $29.0 billion for medical services — a $3 billion (11.5%) increase over the
FY2007 enacted amount and $1.8 billion over the FY2008 budget request — and
$3.6 billion for medical administration, $200 million above the FY2008
Administration’s request. Furthermore, S. 1645, as reported, provides $4.1 billion
for medical facilities — a 14.0% increase over the FY2008 request and 1.7% less
than the FY2007 enacted amount — and $500 million for medical and prosthetic
research. The committee did not recommend any fee increases as requested by the
Administration’s budget proposal for the VHA for FY2008.
1 For detailed information on funding for the Veterans Benefits Administration (VBA) and
the National Cemetery Administration (NCA), see CRS Report RL34038, Military
Construction, Veterans Affairs, and Related Agencies: FY2008 Appropriations, by Daniel
H. Else, Christine Scott, and Sidath Viranga Panangala.

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Table 1. VA and VHA Appropriations, FY2006-FY2008
($ in thousands)
FY2008
FY2006
FY2007
FY2008
FY2008
Senate
enacted
enacted
request
House
Committee
Total Department of
Veterans Affairs (VA)
$71,457,832
$79,550,522 $83,903,751 $87,696,839
$87,501,280
Total Veterans Health
Administration (VHA)
$29,340,517
$34,024,013 $34,612,671 $37,122,000
$37,213,220
Source: S.Rept. 109-286, H.Rept. 109-464, H.Rept. 110-186, S.Rept. 110-85.
Background
The Department of Veterans Affairs (VA) provides a range of benefits and
services to veterans who meet certain eligibility rules, including disability
compensation and pensions, education, training and rehabilitation services, hospital
and medical care, assistance to homeless veterans,2 home loan guarantees, and death
benefits that cover burial expenses.3 The VA carries out its programs nationwide
through three administrations and the board of veterans appeals (BVA). The
Veterans Health Administration (VHA) is responsible for health-care services and
medical research programs.4 The Veterans Benefits Administration (VBA) is
responsible, among other things, for providing compensations, pensions, and
education assistance.5 The National Cemetery Administration (NCA)6 is responsible
for maintaining national veterans cemeteries; providing grants to states for
establishing, expanding, or improving state veterans cemeteries; and providing
headstones and markers for the graves of eligible persons, among other things.
The VA’s budget includes both mandatory and discretionary spending accounts.
Mandatory funding supports disability compensation, pension benefits, vocational
rehabilitation, and life insurance, among other benefits and services. Discretionary
funding supports a broad array of benefits and services, including medical care. In
FY2007, discretionary budget authority accounted for about 48.1% of the total VA
2 For detailed information on homeless veterans programs, see CRS Report RL34024,
Veterans and Homelessness, by Libby Perl.
3 For a detailed description on eligibility for veterans disability benefits programs, see CRS
Report RL33113 Veterans Affairs: Basic Eligibility for Disability Benefit Programs, by
Douglas Reid Weimer.
4 For a detailed description of veterans’ health-care issues, see CRS Report RL33993,
Veterans’ Health Care Issues, by Sidath Viranga Panangala.
5 For a detailed description of veterans’ benefits issues, see CRS Report RL33985, Veterans’
Benefits: Issues in the 110th Congress, by Carol D. Davis (Coordinator).
6 Established by the National Cemeteries Act of 1973 (P.L. 93-43).

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budget authority of approximately $80 billion, with about 90% of this discretionary
funding going toward supporting VA health-care programs.
The VHA operates the nation’s largest integrated direct health-care delivery
system.7 The VA’s health-care system is organized into 21 geographically defined
Veterans Integrated Service Networks (VISNs). Although policies and guidelines are
developed at VA headquarters to be applied throughout the VA health-care system,
management authority for basic decision making and budgetary responsibilities are
delegated to the VISNs.8 Congressionally appropriated medical care funds are
allocated to the VISNs based on the Veterans Equitable Resource Allocation (VERA)
system, which generally bases funding on patient workload.9 Prior to the
implementation of the VERA system, resources were allocated to facilities primarily
on the basis of their historical expenditures. Unlike other federally funded health
insurance programs, such as Medicare and Medicaid, which finance medical care
provided through the private sector, the VHA provides care directly to veterans.
In FY2007, the VHA operated 155 medical centers, 135 nursing homes,10 717
ambulatory care and community-based outpatient clinics (CBOCs),11 and 209
Readjustment Counseling Centers (Vet Centers).12 The VHA also pays for care
provided to veterans by private-sector providers on a fee basis under certain
circumstances. Inpatient and outpatient care is also provided in the private sector to
eligible dependents of veterans under the Civilian Health and Medical Program of the
7 Established on January 3, 1946, as the Department of Medicine and Surgery by P.L. 79-
293, succeeded in 1989 by the Veterans Health Services and Research Administration,
renamed the Veterans Health Administration in 1991.
8 Jian Gao, Ying Wang and Joseph Engelhardt, “Logistic Analysis of Veterans’ Eligibility-
Status Change,” Health Services Management Research, vol. 18, (August 2005), p. 175.
9 About 90% of the VHA appropriation is allocated through VERA. Networks also receive
appropriated funds not allocated through VERA for such things as prosthetics, homeless
programs, readjustment counseling, and clinical training programs. VA facilities could also
retain collections from insurance reimbursements and copayments, and use these funds for
the care of veterans.
10 Data on the number of hospitals and nursing homes include facilities damaged by
Hurricane Katrina. The data are current as of December 1, 2006.
11 Data on the number of CBOCs differ from source to source. Some count clinics located
at VA hospitals, whereas others count only freestanding CBOCs. The number represented
in this report excludes clinics located in VA hospitals. The VA plans to activate 38 new
CBOCs in FY2007 and FY2008.
12 On February 7, 2007, the Department announced that it will be establishing 23 new Vet
Centers in communities across the nation during 2007 and 2008. New Vet Centers will be
located in Montgomery, Alabama; Fayetteville, Arkansas; Modesto, California; Grand
Junction, Colorado; Orlando, Fort Myers, and Gainesville, Florida; Macon, Georgia;
Manhattan, Kansas; Baton Rouge, Louisiana; Cape Cod, Massachusetts; Saginaw and Iron
Mountain, Michigan; Berlin, New Hampshire; Las Cruces, New Mexico; Binghamton,
Middletown, Nassau County, and Watertown, New York; Toledo, Ohio; Du Bois,
Pennsylvania; Killeen, Texas; and Everett, Washington. During 2007, the VA plans to open
facilities in Grand Junction, Orlando, Cape Cod, Iron Mountain, Berlin, and Watertown.
The other new Vet Centers are scheduled to open in 2008.

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Department of Veterans Affairs (CHAMPVA).13 In addition, the VHA provides
grants for construction of state-owned nursing homes and domiciliary facilities, and
collaborates with the DOD in sharing health-care resources and services.
During FY2007, the VHA had an estimated total enrolled veteran population of
7.9 million and provided medical care to about 5.2 million unique veteran patients
(see Tables 2 and 3). According to VHA estimates, the number of unique veteran
patients is estimated to increase by approximately 110,000, from 5.2 million in
FY2007 to 5.3 million in FY2008. As shown in Table 3, there would be a 2.4%
increase in the total number of unique patients (both veterans and non-veterans),
from 5.7 million in FY2007 to 5.8 million in FY2008.
Table 2. Number of Veterans Enrolled in the VA
Health-Care System
FY2007
FY2008
Priority Groups
FY2006 Actual
Estimate
Estimate
1
912,787
915,068
917,349
2
522,829
524,135
525,442
3
996,063
998,552
1,001,041
4
241,716
242,320
242,924
5
2,538,228
2,544,571
2,550,913
6
265,253
265,916
266,579
Subtotal Priority Groups 1-6
5,476,876
5,490,562
5,504,248
7
218,248
218,793
219,339
8
2,177,314
2,182,755
2,188,194
Subtotal Priority Groups 7-8
2,395,562
2,401,548
2,407,533
Total Enrollees
7,872,438
7,892,110
7,911,781
Source: Department of Veterans Affairs.
13 For further information on CHAMPVA, see CRS Report RS22483, Health Care for
Dependents and Survivors of Veterans, by Jacqueline Rae Roche and Sidath Viranga
Panangala.

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The total number of outpatient visits, including visits to Vet Centers, reached
60.2 million during FY2006 and is projected to increase to 64.4 million in FY2007
and 67.4 million in FY2008.14 In FY2007, the VHA estimates that it will spend
approximately 64.8% of its medical services obligations on outpatient care.15
Table 3. Number of Patients Receiving Care from the VA
FY2007
FY2008
Priority Groups
FY2006 Actual
Estimate
Estimate
1
768,537
718,452
717,262
2
342,023
349,751
356,566
3
568,740
600,337
618,513
4
177,563
198,922
207,535
5
1,645,781
1,850,707
1,933,212
6
134,425
121,664
131,785
Subtotal Priority Groups 1-6
3,637,069
3,839,833
3,964,873
7
197,901
339,021
345,561
8
1,195,612
1,003,223
981,327
Subtotal Priority Groups 7-8
1,393,513
1,342,244
1,326,888
Subtotal Unique Veteran
Patientsa
5,030,582
5,182,077
5,291,761
Non-veteransb 435,488
503,069
527,415
Total Unique Patients
5,466,070
5,685,146
5,819,176
Source: Department of Veterans Affairs.
a. Unique veteran patients include Operation Iraqi Freedom (OIF) and Operation Enduring Freedom
(OEF) veterans. These patients number 155,272 in FY2006; estimated to be 209,308 in FY2007
and 263,345 in FY2008.
b. Non-veterans include CHAMPVA patients, reimbursable patients with VA-affiliated hospitals and
clinics, care provided on a humanitarian basis, and employees receiving preventive occupational
immunizations.
14 This number excludes outpatient care provided on a contract basis and outpatient visits
to readjustment counseling centers. U.S. Department of Veterans Affairs, FY2008
Congressional Budget Submissions, Medical Programs, vol. 1 of 4, pp. 3-12.
15 Ibid., pp. 3-15.

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Eligibility for Veterans’ Health Care
“Promise of Free Health Care”
To understand some of the issues discussed later in this report, it is important
to understand eligibility for VA health care, the VA’s enrollment process, and its
enrollment priority groups. Unlike Medicare or Medicaid, VA health care is not an
entitlement program. Contrary to numerous claims made concerning “promises” to
military personnel and veterans with regard to “free health care for life,” not every
veteran is automatically entitled to medical care from the VA.16 Prior to eligibility
reform in 1996, provisions of law governing eligibility for VA care were complex
and not uniform across all levels of care. All veterans were technically “eligible” for
hospital care and nursing home care, but eligibility did not by itself ensure access to
care.
The Veterans’ Health Care Eligibility Reform Act of 1996, P.L. 104-262,
established two eligibility categories and required the VHA to manage the provision
of hospital care and medical services through an enrollment system based on a
system of priorities.17 P.L 104-262 authorized the VA to provide all needed hospital
care and medical services to veterans with service-connected disabilities, former
prisoners of war, veterans exposed to toxic substances and environmental hazards
such as Agent Orange, veterans whose attributable income and net worth are not
greater than an established “means test,” and veterans of World War I. These
veterans are generally known as “higher priority” or “core” veterans (see Appendix
A, discussed in more detail below).18 The other category of veterans are those with
no service-connected disabilities and with attributable incomes above an established
means test (see Appendix C).
P.L.104-262 also authorized the VA to establish a patient enrollment system to
manage access to VA health care. As stated in the report language accompanying
P.L.104-262, “the Act would direct the Secretary, in providing for the care of ‘core’
veterans, to establish and operate a system of annual patient enrollment and require
that veterans be enrolled in a manner giving relative degrees of preference in
accordance with specified priorities. At the same time, it would vest discretion in the
Secretary to determine the manner in which such enrollment system would
operate.”19
Furthermore, P.L.104-262 was clear in its intent that the provision of health care
to veterans was dependent upon the available resources. The committee report
accompanying P.L.104-262 states that the provision of hospital care and medical
16 For a detailed discussion of “promised benefits,” see CRS Report 98-1006, Military
Health Care: The Issue of “Promised” Benefits, by David F. Burrelli.
17 U.S. Congress, House Committee on Veterans Affairs, Veterans’ Health Care Eligibility
Reform Act of 1996, report to accompany H.R. 3118, 104th Cong. 2nd sess., H.Rept. 104-690
p. 2.
18 Ibid., p.5.
19 Ibid., p.6.

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services would be provided to “the extent and in the amount provided in advance in
appropriations Acts for these purposes. Such language is intended to clarify that
these services would continue to depend upon discretionary appropriations.”20
VHA Health-Care Enrollment
As stated previously, P.L. 104-262 required the establishment of a national
enrollment system to manage the delivery of inpatient and outpatient medical care.
The new eligibility standard was created by Congress to “ensure that medical
judgment rather than legal criteria will determine when care will be provided and the
level at which care will be furnished.”21
For most veterans, entry into the veterans’ health-care system begins by
completing the application for enrollment. Some veterans are exempt from the
enrollment requirement if they meet special eligibility requirements.22 A veteran may
apply for enrollment by completing the Application for Health Benefits (VA Form
10-10EZ) at any time during the year and submitting the form online or in person at
any VA medical center or clinic, or mailing or faxing the completed form to the
medical center or clinic of the veteran’s choosing.23 Once a veteran is enrolled in the
VA health-care system, the veteran remains in the system and does not have to
reapply for enrollment annually. However, those veterans who have been enrolled
in Priority Group 5 (see Appendix A, discussed in more detail below) based on
income must submit a new VA Form 10-10EZ annually with updated financial
information demonstrating inability to defray the expenses of necessary care.24
Veteran’s Status. Eligibility for VA health care is based primarily on
“veteran’s status” resulting from military service. Veteran’s status is established by
active-duty status in the military, naval, or air service and an honorable discharge or
release from active military service. Generally, persons enlisting in one of the armed
forces after September 7, 1980, and officers commissioned after October 16, 1981,
must have completed two years of active duty or the full period of their initial service
obligation to be eligible for VA health-care benefits. Servicemembers discharged at
any time because of service-connected disabilities are not held to this requirement.
20 Ibid., p.5.
21 Ibid., p.4.
22 Veterans do not need to apply for enrollment in the VA’s health-care system if they fall
into one of the following categories: veterans with a service-connected disability rated 50%
or more (percentage ratings represent the average impairment in earning capacity resulting
from diseases and injuries encountered as a result of or incident to military service; those
with a rating of 50% or more are placed in Priority Group 1); less than one year has passed
since the veteran was discharged from military service for a disability that the military
determined was incurred or aggravated in the line of duty, but the VA has not yet rated; or
the veteran is seeking care from the VA only for a service-connected disability (even if the
rating is only 10%).
23 VA Form 10-10EZ is available at [https://www.1010ez.med.va.gov/sec/vha/1010ez/
#Process].
24 38 C.F.R. §17.36 (d)(3)(iv) (2005).

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Also, reservists that were called to active duty and who completed the term for which
they were called, and who were granted an other than dishonorable discharge, are
exempt from the 24 continuous months of active duty requirement. National Guard
members who were called to active duty by federal executive order are also exempt
from this two-year requirement if they (1) completed the term for which they were
called and (2) were granted an other than dishonorable discharge.
When not activated to full-time federal service, members of the reserve
components and National Guard have limited eligibility for VA health-care services.
Members of the reserve components may be granted service-connection for any
injury they incurred or aggravated in the line of duty while attending inactive duty
training assemblies, annual training, active duty for training, or while going directly
to or returning directly from such duty. In addition, reserve component service
members may be granted service-connection for a heart attack or stoke if such an
event occurs during these same periods. The granting of service-connection makes
them eligible to receive care from the VA for those conditions. National Guard
members are not granted service-connection for any injury, heart attack, or stroke that
occurs while performing duty ordered by a governor for state emergencies or
activities.25
After veteran’s status has been established, the VA next places applicants into
one of two categories. The first group is composed of veterans with service-
connected disabilities or with incomes below an established means test. These
veterans are regarded by the VA as “high priority” veterans, and they are enrolled in
Priority Groups 1-6 (see Appendix A). Veterans enrolled in Priority Groups 1-6
include
! veterans in need of care for a service-connected disability;26
! veterans who have a compensable service-connected condition;
! veterans whose discharge or release from active military, naval, or
air service was for a compensable disability that was incurred or
aggravated in the line of duty;
! veterans who are former prisoners of war (POWs);
! veterans awarded the Purple Heart;
! veterans who have been determined by VA to be catastrophically
disabled;
! veterans of World War I;
! veterans who were exposed to hazardous agents (such as Agent
Orange in Vietnam) while on active duty; and
! veterans who have an annual income and net worth below a VA-
established means test threshold.
25 38.U.S.C. §101(24); 38 C.F.R. §3.6(c).
26 The term “service-connected” means, with respect to disability, that such disability was
incurred or aggravated in line of duty in the active military, naval, or air service. The VA
determines whether veterans have service-connected disabilities and, for those with such
disabilities, assigns ratings from 0 to 100% based on the severity of the disability.
Percentages are assigned in increments of 10%.

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CRS-9
The VA looks at applicants’ income and net worth to determine their specific
priority category and whether they have to pay co-payments for nonservice-connected
care. In addition, veterans are asked to provide the VA with information on any
health insurance coverage they have, including coverage through employment or
through a spouse. The VA may bill these payers for treatment of conditions that are
not a result of injuries or illnesses incurred or aggravated during military service.
Appendix B provides information on what categories of veterans pay for which
services.
The second group of veterans is composed of those who do not fall into one of
the first six priority groups — primarily veterans with nonservice-connected medical
conditions and with incomes and net worth above the VA-established means test
threshold. These veterans are enrolled in Priority Group 7 or 8.27 Appendix C
provides information on income thresholds for VA health-care benefits.
Priority Groups and Scheduling Appointments. The VHA is mandated
to provide priority care for non-emergency outpatient medical care for any condition
of a service-connected veteran rated 50% or more, or for a veteran’s service-
connected condition.28 According to VHA policies, patients with emergency or
urgent medical needs must be provided care, or must be scheduled to receive care as
soon as practicable, independent of service-connected status and whether care is
purchased or provided directly by the VA. Veterans who are service-connected 50%
or more need to be scheduled to be seen within 30 days of the desired date for any
condition.
Veterans who are rated less than 50% service-connected disabled, and who
require care for a service-connected condition, need to be scheduled to be seen within
30 days of the desired date. When VHA staff are in doubt as to whether the request
for care is for a service-connected condition, they are required to assume, on behalf
of the veteran, that the veteran is entitled to priority access and schedule within 30
days of the desired date.29
Veterans in other priority groups are to be scheduled to be seen within 120 days
of the desired date. According to VHA policies, all outpatient appointment requests
must be acted on as soon as possible, but no later than seven calendar days from the
date of the request. The VHA also requires that priority scheduling of any veteran
must not affect the medical care of any other previously scheduled veteran.
27 The VA considers a veteran’s previous year’s total household income (both earned and
unearned income, as well as his/her spouse’s and dependent children’s income). Earned
income is usually wages received from working. Unearned income includes interest earned,
dividends received, money from retirement funds, Social Security payments, annuities, and
earnings from other assets. The number of persons in the veterans family will be factored
into the calculation to determine the applicable income threshold. 38 C.F.R. § 17.36(b)(7)
(2006).
28 VHA Directive 2006-055, October 11, 2006.
29 Ibid.

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CRS-10
Furthermore, VHA guidelines state that veterans with service-connected conditions
cannot be prioritized over other veterans with more acute health-care needs.30
Funding for the VHA
The VHA is funded through multiple appropriations accounts that are
supplemented by other sources of revenue. Although the appropriations account
structure has been subject to change from year to year, the appropriation accounts
used to support the VHA traditionally include medical care, medical and prosthetic
research, and medical administration. In addition, Congress also appropriates funds
for construction of medical facilities through a larger appropriations account for
construction for all VA facilities. In FY2004, “to provide better oversight and [to]
receive a more accurate accounting of funds,” Congress changed the VHA’s
appropriations structure.31 The Department of Veterans Affairs and Housing and
Urban Development and Independent Agencies Appropriations Act, 2004 ( P.L.108-
199, H.Rept. 108-401), funded VHA through four accounts: (1) medical services, (2)
medical administration, (3) medical facilities, and (4) medical and prosthetic
research. Provided below are brief descriptions of these accounts.
Medical Services
The medical services account covers expenses for furnishing inpatient and
outpatient care and treatment of veterans and certain dependents, including care and
treatment in non-VA facilities; outpatient care on a fee basis; medical supplies and
equipment; salaries and expenses of employees hired under Title 38, United States
Code; and aid to state veterans homes. In its FY2008 budget request to Congress, the
VA requested the transfer of food service operations costs from the medical facilities
appropriations to the medical services appropriations. The House and Senate
Appropriations Committees have concurred with this request.32
Medical Administration
The medical administration account provides funds for the expenses in the
administration of hospitals, nursing homes, and domiciliaries; billing and coding
activities; quality of care oversight; legal services; and procurement.
30 Ibid.
31 U.S. Congress, Conference Committees, Consolidated Appropriations Act, 2004,
conference report to accompany H.R. 2673, 108th Cong., 1st sess., H.Rept. 108-401, p. 1036.
32 The cost of food service operations support hospital food service workers, provisions, and
supplies related to the direct care of patients.

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CRS-11
Medical Facilities
The medical facilities account covers, among other things, expenses for the
maintenance and operation of VHA facilities; administrative expenses related to
planning, design, project management, real property acquisition and deposition,
construction, and renovation of any VHA facility; leases of facilities; and laundry
services.
Medical and Prosthetic Research
This account provides funding for VA researchers to investigate a broad array
of veteran-centric health topics, such as treatment of mental health conditions,
rehabilitation of veterans with limb loss, traumatic brain injury and spinal cord
injury, organ transplantation, and the organization of the health-care delivery system.
VA researchers receive funding not only through this account but also from the DOD,
the National Institutes of Health (NIH), and private sources.
Medical Care Collections Fund (MCCF)
In addition to direct appropriations for the above accounts, the Committees on
Appropriations include medical care cost recovery collections when considering the
amount of resources needed to provide funding for the VHA. The Consolidated
Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272), enacted into law in 1986,
gave the VHA the authority to bill some veterans and most health-care insurers for
nonservice-connected care provided to veterans enrolled in the VA health-care
system, to help defray the cost of delivering medical services to veterans.33
The Balanced Budget Act of 1997 (P.L. 105-33) gave the VHA the authority to
retain these funds in the Medical Care Collections Fund (MCCF). Instead of
returning the funds to the Treasury, the VA can use them for medical services for
veterans without fiscal year limitations.34 To increase the VA’s third-party
collections, P.L. 105-33 also gave the VA the authority to change its basis of billing
insurers from “reasonable costs” to “reasonable charges.”35 This change in billing
was intended to enhance VA collections to the extent that reasonable charges result
in higher payments than reasonable costs.36 In FY2004, the Administration’s budget
requested consolidating several medical existing collections accounts into one
MCCF. The conferees of the Consolidated Appropriations Act of 2004 (H.Rept.
33 Veterans’ Health-Care and Compensation Rate Amendments of 1985, 100 Stat. 372, 373,
383.
34 For a detailed history of funding for VHA from FY1995 to FY2004, see CRS Report
RL32732, Veterans’ Medical Care Funding FY1995-FY2004, by Sidath Viranga Panangala.
35 Under “reasonable costs,” the VA billed insurers based on its average cost to provide a
particular episode of care. Under “reasonable charges,” the VA bills insurers based on
market pricing for health-care services.
36 U.S. Government Accountability Office (GAO), VA Health Care: Third-Party Charges
Based on Sound Methodology; Implementation Challenges Remain, GAO/HEHS-99-124,
June 1999.

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CRS-12
108-401) recommended that collections that would otherwise be deposited in the
Health Services Improvement Fund (former name), Veterans Extended Care
Revolving Fund (former name), Special Therapeutic and Rehabilitation Activities
Fund (former name), Medical Facilities Revolving Fund (former name), and the
Parking Revolving Fund (former name) should be deposited in MCCF.37 The
Consolidated Appropriations Act of 2005, (P.L. 108-447, H.Rept. 108-792) provided
the VA with permanent authority to deposit funds from these five accounts into the
MCCF. The funds deposited into the MCCF would be available for medical services
for veterans. These collected funds do not have to be spent in any particular fiscal
year and are available until expended.
The conferees of the FY2006 Military Construction, Military Quality of Life and
Veterans Affairs Appropriations Act (P.L.109-114, H.Rept. 109-305), required the
VA to establish a revenue improvement demonstration project. The purpose of this
pilot project is to provide a “comprehensive restructuring of the complete revenue
cycle including cash-flow management and accounts receivable.”38 The conferees
included this provision because the Appropriation Committees were concerned that
the VHA was collecting only 41% percent of the billed amounts from third-party
insurance companies. Currently, the VHA has established a pilot Consolidated
Patient Account Center in VISN 6.
As shown in Table 4, MCCF collections increased by 31%, from $1.5 billion
in FY2003 to $2.0 billion in FY2006. During this same period, first-party collections
increased by 26%, from $685 million to $863 million. In FY2006, first-party
collections represented approximately 43% of total MCCF collections.
37 For a detailed description of these former accounts, see CRS Report RL32548, Veterans’
Medical Care Appropriations and Funding Process, by Sidath Viranga Panangala.
38 U.S. Congress, Conference Committees, Military Construction, Military Quality of Life
and Veterans Affairs Appropriations Act, 2006, conference report to accompany H.R. 2528,
109th Congress, 1st session, H.Rept. 109-305, p. 43.

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CRS-13
Table 4. Medical Care Collections, FY2003-FY2006
($ in thousands)
FY2003
FY2004
FY2005
FY2006
Actual
Actual
Actual
Actual
First-party pharmacy
co-paymentsa
$576,554
$623,215
$648,204
$723,027
First-party co-payments for
inpatient and outpatient care
104,994
113,878
118,626
135,575
First-party long-term care
co-paymentsb
3,461
5,077
5,411
4,347
Third-party insurance
collections
804,141
960,176
1,055,597
1,095,810
Enhanced use leasing
revenuec
234
459
26,861
3,379
Compensated work therapy
collectionsd
38,834
40,488
36,516
40,081
Parking feese
3,296
3,349
3,443
3,083
Compensation and pension
living expensesf
376
634
2,431
2,075
MCCF Total
$1,531,890
$1,747,276
$1,897,089
$2,007,377
Sources: Table prepared by CRS based on data provided by the Department of Veterans Affairs, and
U.S. Department of Veterans Affairs, FY2008 Congressional Budget Submissions, Medical Programs,
vol. 1 of 4, pp. 3-8.
Notes: The following accounts were not consolidated into the MCCF until FY2004: enhanced use
leasing revenue, compensated work therapy collections, parking fees, and compensation and pension
living expenses. Collection figures for these accounts for FY2003 are provided for comparison
purposes.
a. In FY2002, Congress created the Health Services Improvement Fund (HSIF) to collect increases
in pharmacy co-payments (from $2 to $7 for a 30-day supply of outpatient medication) that went
into effect on February 4, 2002. The Consolidated Appropriations Resolution, 2003 (P.L.
108-7) granted the VA the authority to consolidate the HSIF with the MCCF and granted
permanent authority to recover co-payments for outpatient medications.
b. Authority to collect long-term care co-payments was established by the Millennium Health Care and
Benefits Act (P.L. 106-117). Certain veteran patients receiving extended care services from VA
providers or outside contractors are charged co-payments.
c. Under the enhanced-use lease authority, the VA may lease land or buildings to the private sector
for up to 75 years. In return the VA receives fair consideration in cash and/or in-kind. Funds
received as monetary considerations may be used to provide care for veterans.
d. The compensated work therapy program is a comprehensive rehabilitation program that prepares
veterans for competitive employment and independent living. As part of their work therapy,
veterans produce items for sale or undertake subcontracts to provide certain products and/or
services, such as providing temporary staffing to a private firm. Funds collected from the sale
of these products and/or services are deposited into the MCCF.
e. The Parking program provides funds for construction and acquisition of parking garages at VA
medical facilities. The VA collects fees for use of these parking facilities.
f. Under the compensation and pension living expenses program, veterans who do not have either a
spouse or child would have their monthly pension reduced to $90 after the third month a veteran
is admitted for nursing home care. The difference between the veteran’s pension and the $90
is used for the operation of the VA medical facility.

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CRS-14
FY2007 Budget Summary39
On February 6, 2006, the President submitted his FY2007 budget proposal to
Congress. The Administration requested $32.7 billion for the VHA, an 11.3%
increase over the FY2006 enacted amount of $29.3 billion and a 10% increase over
FY2005 enacted amount of $29.7 billion (see Table 5 and Appendix D). The
FY2007 request included $25.5 billion for medical services, a 12% increase over the
FY2006 enacted amount; $3.2 billion for medical administration, an 11.2% increase
over FY2006; $3.6 billion for medical facilities, an 8.2% increase over FY2006; and
$399 million for medical and prosthetic research, a 3.2% decrease from the FY2006
enacted amount. (For a detailed breakdown of funding levels for the VHA for
FY2005 and FY2006, see Appendix D).
House Action
On May 19, 2006, the House passed its version of the Military Construction,
Military Quality of Life, and Veterans Affairs Appropriations bill (MIL-CON-
QUAL-appropriations bill) for FY2007 (H.R. 5385, H.Rept. 109-464). H.R. 5385
provided $32.7 billion for the VHA, a $3.4 billion (11.4%) increase over the FY2006
enacted amount of $29.3 billion and about the same as the President’s request. This
amount included $25.4 billion for medical services, $100 million less than the
President’s request and $2.6 billion (11.6%) over the FY2006 enacted amount of
$22.8 billion. The MIL-CON-QUAL-appropriations bill for FY2007 also provided
$3.3 billion for medical administration, $100 million above the Administration’s
request of $3.2 billion, and $3.6 billion for medical facilities, $25 million above the
budget request. H.R. 5385 also provided $412 million for medical and prosthetic
research, a 3.2% increase over the President’s request of $399 million (see Table 5).
Senate Action
On November 14, 2006, the Senate passed by voice vote its version of the
Military Construction and Veterans Affairs, and Related Agencies Appropriations
bill (MIL-CON-VA-appropriations bill) for FY2007 (H.R. 5385, S.Rept. 109-286).
H.R. 5385, as amended by the Senate, provided $32.7 billion for the Veterans Health
Administration (VHA) for FY2007, about the same as the House-passed amount and
the President’s request. This amount included $28.7 billion for medical services, a
26.0% increase over the FY2006 enacted amount, a 12.5% increase over the
President’s request, and a 13.0% increase over the House-passed amount. The
Senate-passed version of H.R. 5385 also provided $3.6 billion for medical facilities,
which was the same as the Administration’s request and $25.0 million less than the
House-passed amount, and $412 million for medical and prosthetic research. This
amount was the same as the House-passed amount and $13.0 million above the
President’s request (see Table 5).
39 For a detailed description of VA Medical Care Appropriations for FY2007, see CRS
Report RL33409, Veterans’ Medical Care: FY2007 Appropriations, by Sidath Viranga
Panangala.

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CRS-15
Continuing Appropriations Resolution
At the end of the 109th Congress, Congress did not pass the MIL-CON-VA-
appropriations bill for FY2007, and funded most government agencies, including the
VA, through a series of Continuing Appropriations Resolutions (P.L. 109-289,
division B, as amended by P.L. 109-369 and P.L. 109-383). On January 31, 2007,
the House passed the Revised Continuing Appropriations Resolution, 2007 (H.J.Res.
20), and the Senate passed it without amendment on February 14. 40 On February 15,
2007, the President signed into law the Revised Continuing Appropriations
Resolution, 2007 (H.J. Res 20, P.L. 110-5). It provided $32.7 billion for the VHA
for FY2007, a $14.7 million increase over the President’s request and $3.3 billion
above the FY2006 enacted amount. This amount included $25.5 billion for medical
services, $3.2 billion for medical administration, $3.6 billion for medical facilities,
and $414 million for medical and prosthetic research. These amounts were the same
as the President’s request, except for the medical and prosthetic research account,
which was $15 million above the President’s request. The Revised Continuing
Appropriations Resolution did not include any provisions that would have given the
VA the authority to implement fee increases as requested by the Administration’s
budget proposal for the VHA for FY2007.
FY2007 Supplemental Appropriations
On May 24, 2007, the House and Senate approved the U.S. Troop Readiness,
Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007
(H.R. 2206). The bill was signed into law on May 25 (P.L 110-28). Among other
things, P.L.110-28 provided a total of $1.34 billion for the VHA for FY2007. This
amount was in addition to the amount appropriated under P.L. 110-5. This amount
included $467 million for medical services: (1) $30.0 million for at least one new
Level I polytrauma center; (2) $9.4 million for polytrauma residential transition
rehabilitation programs; (3) $10 million for additional transition caseworkers; (4) $20
million for substance abuse treatment programs; (5) $20 million for readjustment
counseling (Vet Centers); (6) $10 million for blind rehabilitation services; (7) $100
million for enhancement of mental health services; (8) $8 million for polytrauma
support clinic teams; (9) $5.4 million for additional polytrauma points of contact;
(10) $229 million for treatment of Operation Enduring Freedom/Operation Iraqi
Freedom (OEF/OIF) veterans; and (11) $25 million for prosthetics.
P.L.110-28 also provided $326 million for the Construction, Minor Projects
account, with specific funding of $36.0 million for construction costs related to
establishing polytrauma residential transitional rehabilitation programs.41 It also
provided $250 million for medical administration and $595 million for medical
facilities, including specific funding of (1) $45.0 million for facility and equipment
40 To calculate the total funding level remaining for the VA in FY2007, the Department
would subtract the funding provided in the previously enacted FY2007 Continuing
Resolutions from the amount provided in P.L 110-5.
41 Conference Report published in Congressional Record, vol. 153, part II (May 24, 2007),
pp. H5776-H5910.

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CRS-16
upgrades at polytrauma centers and (2) $550 million for non-recurring maintenance
to address structural deficiencies in VA medical facilities.42
FY2008 VHA Budget
On February 5, 2007, the President submitted his FY2008 budget proposal to
Congress. The total amount requested by the Administration for the VHA for
FY2008 is $34.6 billion, a 1.7% increase in funding compared with the FY2007
enacted amount. The total amount of funding that would be available for the VHA
under the President’s budget proposal for FY2008, including collections, is
approximately $37.0 billion (see Table 5). For FY2008, the Administration is
requesting $27.2 billion for medical services, a $1.2 billion, or 4.6%, increase in
funding over the FY2007 enacted amount. The Administration’s budget proposal is
also requesting $3.4 billion for medical administration, $3.6 billion for medical
facilities, and $411 million for medical and prosthetic research (see Table 5). As in
FY2003, FY2004, FY2005, FY2006, and FY2007, the Administration has included
several cost-sharing proposals. These legislative proposals are discussed in detail in
the key budget issues section at the end of this report.
FY2008 Congressional Budget Resolution
On May 17, 2007, the House and Senate adopted the Conference Report
(H.Rept. 110-153) to accompany the Concurrent Resolution on the Budget for
FY2008 (S.Con.Res. 21). The conference agreement provides a total of $85.3 billion
in budget authority for all veterans benefits and services for FY2008, and a total of
$452.8 billion in budget authority for FY2008-FY2012. Of the amount allocated for
FY2008, the conference agreement provides $43.1 billion for discretionary veterans’
programs, which consists mainly of VA medical care. Furthermore, the conference
agreement rejected the veterans’ health-care enrollment fees and co-payment
increases that were proposed by the President’s budget request.
House Action
On May 22, 2007, the House Appropriations Committee, Subcommittee on
Military Construction, Veterans Affairs, and Related Agencies, approved by voice
vote a draft measure recommending funding levels for FY2008 for military
construction programs, the VA, and related agencies. On June 6, the full House
Appropriations Committee recommended $37.1 billion for the VHA for FY2008, a
9.1% increase over the FY2007 enacted amount of $34.0 billion and 7.3% above the
President’s request. This amount included $28.9 billion for medical services, $1.8
billion (6.4%) above than the President’s request and $2.9 billion (11.2%) over the
FY2007 enacted amount of $26.0 billion. Of the amount recommended for the
medical services account, the committee included bill language stipulating $2.9
billion for speciality mental health care, $130 million for the homeless veterans grant
42 A list of structural deficiencies identified by the VA can be found at [http://www1.va.gov/
opa/pressrel/docs/Environment_of_Care_Roll-up.pdf].

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CRS-17
and per diem program, $429 million for the substance abuse program, and $100
million for blind rehabilitation services.
The committee recommendation also included $3.6 billion for medical
administration, $193 million above the Administration’s request of $3.4 billion; $4.1
billion for medical facilities, a 14% increase over the President’s request; and $480
million for medical and prosthetic research, a 17% increase over the President’s
request of $411 million (see Table 5). The committee did not recommend any fee
increases as requested by the Administration’s budget proposal for the VHA for
FY2008. The Military Construction and Veterans Affairs (MILCON-VA)
appropriations bill for FY2008 (H.R. 2642, H.Rept. 110-186) was reported out of
committee on June 11.
On June 15, 2007, the house passed H.R. 2642. As amended, H.R. 2642
provides $29.0 billion for medical services. This includes the transfer of $125
million from the medical administration account to the medical services account.
The reason for this transfer was because during House floor debate, Representative
Shelley Moore Capito offered an amendment to transfer $5 million to the medical
services account for the establishment of an Office of Rural Health within the Office
of the Under Secretary for Health, as directed by P.L. 109-461. Representative Jerry
Moran also offered an amendment to transfer $120 million to the medical services
account to increase funding for veterans’ travel expenses.
The MILCON-VA appropriations bill, as amended, also provides $3.5 billion
for the medical administration account, $68.6 million above the FY2008 request and
$82.6 million above the FY2007 enacted amount. All other amounts for the VHA
are equal to the committee-recommended funding levels.
Construction Projects. H.R. 2642 has provided approximately $1.6 billion
for VA construction projects (excluding grants for construction of state veterans
cemeteries), including funding for Capital Asset Realignment for Enhanced Services
(CARES) projects (see Table 6).43 A large portion of this amount is for construction
and building improvements of VA medical facilities. The House Appropriations
Committee has not recommended any funding amounts for various construction and
projects submitted by Members of Congress or by the Administration. According to
H.Rept. 110-186, “individual project allocations will be considered comprehensively
after the Committee has properly analyzed all relevant information.”44
43 For a detailed description of the Capital Asset Realignment for Enhanced Services
(CARES) program, see CRS Report RL33993, Veterans’ Health Care Issues, by Sidath
Viranga Panangala.
44 U.S. Congress, House Committee on Appropriations, Military Construction, Veterans
Affairs, and Related Agencies Appropriations Bill, 2008, report to accompany H.R. 2642,
110th Congress, 1st session, H.Rept. 110-186, p. 51.

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Senate Action
On June 13, 2007, the Senate Appropriations Committee, Subcommittee on
Military Construction, Veterans Affairs, and Related Agencies, approved a draft
version of the MILCON-VA appropriations bill. On June 14, the full Senate
Appropriations Committee approved the measure. The bill was reported to the
Senate on June 18 (S. 1645, S. Rept.110-85). S. 1645, as reported, provides a total
of $37.2 billion for the VHA. This amount includes $29.0 billion for medical
services, a $3 billion (11.5%) increase over the FY2007 enacted amount and $1.8
billion over the FY2008 budget request, and $3.6 billion for medical administration,
$214 million (6.2%) above the FY2007 enacted amount and $200 million above the
FY2008 Administration’s request. Furthermore, the Senate version of the MILCON-
VA appropriations bill, as reported, provides $4.1 billion for medical facilities — a
14.0% increase over the FY2008 request and 1.7% less than the FY2007 enacted
amount — and $500 million for medical and prosthetic research — a 12% increase
over the FY2007 enacted amount, a 22.0% increase over the FY2008 request, and
4.2% above the House-passed amount. The committee did not recommend any fee
increases as requested by the Administration’s budget proposal for the VHA for
FY2008.
Construction Projects. S. 1645, as reported, provides a total of $1.7 billion
for VA construction projects (excluding grants for construction of state veterans
cemeteries). Unlike the House-passed measure (H.R. 2642), the Senate bill (S. 1645)
provides funding for specific VA construction projects requested by the President.
However, the committee has continued the practice of not earmarking major
construction projects that are not requested in the President’s budget proposal.

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CRS-19
Table 5. VHA Appropriations by Account, FY2006-FY2008
($ in thousands)
FY2008
FY2006
FY2007
FY2007
FY2007
FY2007
FY2008
FY2008
Senate
Program
enacted
request
House
Senate
enacted
request
House
Committee
Medical services
$21,322,141
$25,512,000
$25,412,000
$28,689,000
$25,518,254
$27,167,671
$29,031,400
$28,979,220
Emergency appropriations
1,225,000
—
—
—
—
—
—
—
Emergency appropriations — Defense, the Global
War on Terror, and Hurricane Recovery
(P.L 109-234)
198,265
—
—
—
—
—
—
—
Emergency appropriations — Avian Flu
Pandemic
(P.L.109-148)
27,000
—
—
—
—
—
—
—
Emergency appropriations — U.S. Troop
Readiness, Veterans’ Care, Katrina Recovery, and
Iraq Accountability
(P.L. 110-28)
— -
—
414,982
454,131
466,778
—
—
—
Subtotal medical services
22,772,406
25,512,000
25,826,982
29,143,131
25,985,032
27,167,671
29,031,400
28,979,220
Medical administration
2,858,442
3,177,000
3,277,000
—
3,177,968
3,442,000
3,510,600
3,642,000
Emergency appropriations
(P.L. 110-28)
—
—
256,300
250,000
250,000
—
—
—
Subtotal medical administration
2,858,442
3,177,000
3,533,300
250,000 3,427,968
3,442,000
3,510,600
3,642,000
Medical facilities
3,297,669
3,569,000
3,594,000
3,569,000
3,569,533
3,592,000
4,100,000
4,092,000
Emergency appropriations
(P.L. 110-28)
—
—
595,000
595,000
595,000
—
—
—
Subtotal medical facilities
3,297,669
3,569,000
4,189,000
4,164,000
4,164,533
3,592,000
4,100,000
4,092,000
Medical and prosthetic research
412,000
399,000
412,000
412,000
413,980
411,000
480,000
500,000
Emergency appropriations
(P.L. 110-28)
—
—
35,000
30,000
32,500
—
—
—
Subtotal medical and prosthetic research
412,000
399,000 447,000
442,000
446,480
411,000
480,000
500,000
Total VHA appropriations (without
collections)
29,340,517
32,657,000
33,996,282
33,999,131
34,024,013
34,612,671
37,122,000
37,213,220
Medical care cost collection (MCCF)
2,170,000
2,329,000
2,329,000
2,329,000
2,329,000
2,414,000
2,414,000
2,414,000
Total: VHA (appropriations and collections)
$31,510,517
$34,986,000
36,325,282
36,328,131
$36,353,013
$37,026,671
$39,536,000
$39,627,220

---

CRS-20
Sources: Table prepared by the Congressional Research Service based on H.Rept. 109-95; S.Rept. 109-105; H.Rept. 109-305; H. Rept.109-359; H.Rept. 109-464; H.Rept. 109-494;
S.Rept. 109-286; P.L.110-5; H.Rept. 110-64; S.Rept 110-37; H.Rept. 110-60; Congressional Record, vol. 153, May 24, 2007, H5786-H5787; H.Rept. 110-186; and S.Rept. 110-85.

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CRS-21
Table 6. Appropriations for VA Construction Projects,
FY2006-FY2008
($ in thousands)
FY2008
FY2006
FY2007
FY2008
FY2008
Senate
Enacted
enacted
Request
House
Committee
Construction, major projectsa
$607,100
$399,000
$727,400 $1,410,800
$727,400
Emergency Appropriations — Gulf
Coast Hurricanes (P.L. 109-148)
367,500
—
—
—
—
Emergency Appropriations — Defense,
the Global War on Terror, and
Hurricane Recovery
(P.L 109-234)
585,919
—
—
—
—
Subtotal construction, major projects
1,560,519
399,000
727,400
1,410,800
727,400
Construction, minor projectsb
198,937
198,937
233,396
615,000
751,398
Emergency Appropriations — Gulf
Coast Hurricanes (P.L. 109-148)
1,800
—
—
—
—
Emergency appropriations — U.S.
Troop Readiness, Veterans’ Care,
Katrina Recovery, and Iraq
Accountability
(P.L. 110-28)
—
326,000
—
—
—
Subtotal construction, minor projects
200,737
524,937
233,396
615,000
751,398
Grants for construction of state
extended care facilitiesc
85,000
85,000
85,000
165,000
250,000
Subtotal Grants for construction of
state extended care facilities
85,000
85,000
85,000
165,000
250,000
Total $1,846,256
$609,937 $1,045,796 $1,637,300
$1,728,798
Sources: Table prepared by CRS based on H.Rept 109-464; H.Rept. 109-494; S.Rept. 109-286; P.L.
110-5; H.Rept. 110-64; S.Rept 110-37; H.Rept. 110-60; Congressional Record, vol. 153, May 24,
2007, H5786-H5787; H.Rept. 110-186; and S.Rept. 110-85.
Note: This table excludes grants for construction of state veterans cemeteries.
a. This account provides funds for constructing, altering, extending, and improving any VA facility,
including planning, assessments of needs, architectural and engineering services, CARES
projects, and site acquisition, where the estimated cost of a project is $10 million or more or
where funds for a project were made available in a previous major project appropriation.
Emphasis is placed on correction of safety code deficiencies in existing VA medical facilities.
b. This account provides funds for constructing, altering, extending and improving any VA facility,
including planning, architectural and engineering services, CARES projects, and site acquisition,
where the estimated cost of a project is less than $10 million. VA medical center projects that
need minor improvements costing $500,000 or more are funded from this account.
c. This account provides grants to states to acquire or construct state nursing home and domiciliary
facilities, and to remodel, modify, or alter existing hospitals, nursing homes, and domiciliary
facilities in state homes. A grant may not exceed 65% of the total cost of the project.
P.L.102-585 granted permanent authority for this program, and P. L. 104-262 added Adult Day
Health Care as another level of care that may be provided by state homes. This is a no-year
account.

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CRS-22
Key Budget Issues
In its FY2008 budget request, the Administration has put forward several
legislative proposals. These proposals are similar to previous ones included in the
Administration’s budget requests for FY2003, FY2004, FY2005, FY2006, and
FY2007 and rejected by Congress each year.45 However, unlike previous budget
proposals, revenue from the proposals in the FY2008 budget request would not be
deposited in the Medical Care Collections Fund (MCCF), but would be classified as
mandatory receipts to the Treasury. Aside from the Administration’s budget
proposals, the House and Senate Appropriations Committees have expressed concern
on the long-term cost of providing health care for veterans and the Administration’s
inability to accurately estimate the future cost of providing those services.46
The President’s FY2008 budget request includes three major policy proposals:
! Assess a tiered annual enrollment fee for all Priority 7 and 8 veterans
based on the family income of the veteran.
! Increase pharmaceutical co-payments from $8 to $15 (for each 30-
day prescription) for all enrolled veterans in Priority Groups 7 and
8.
! Bill veterans receiving treatment for nonservice-connected
conditions for the entire co-payment amount.
A detailed description of these budget proposals follows.
Assess an Annual Enrollment Fee
The Administration is proposing a tiered annual enrollment fee, which is
structured to charge $250 for Priority 7 and 8 veterans with family incomes from
$50,000 to $74,999; $500 for those with family incomes from $75,000 to $99,999;
and $750 for those with family incomes equal to or greater than $100,000. The VA
has estimated that this proposal would contribute more than $138 million to the
Treasury annually, beginning in FY2009, and will increase revenue by $526 million
over five years.
The House-passed bill (H.R. 2642) does not include any bill language that
would give the VA the authority to impose enrollment fees. The Senate
45 In FY2003, the VA proposed a $1,500 deductible for all Priority Group 7 veterans for
nonservice-connected disabilities. For proposals included in FY2004, FY2005, FY2006,
and FY2007, see CRS Report RL32548, Veterans’ Medical Care Appropriations and
Funding Process, by Sidath Viranga Panangala; CRS Report RL32975, Veterans’ Medical
Care: FY2006 Appropriations, by Sidath Viranga Panangala; and CRS Report RL33409,
Veterans Medical Care: FY2007 Appropriations, by Sidath Viranga Panangala.
46 U.S. Congress, House Committee on Appropriations, Military Construction, Veterans
Affairs, and Related Agencies Appropriations Bill, 2008, report to accompany H.R. 2642,
110th Congress, 1st session, H.Rept. 110-186, p.14.

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CRS-23
Appropriations Committee has not addressed this issue because it is in the purview
of the authorizing committees.
Increase Pharmacy Co-payments
The Administration proposes increasing the pharmacy co-payments from $8 to
$15 for all enrolled Priority Group 7 and Priority Group 8 veterans whenever they
obtain medication from the VA on an outpatient basis for the treatment of a
nonservice-connected condition. The Administration put forward this proposal in its
FY2004, FY2005, FY2006, and FY2007 budget requests as well, but did not receive
any approval from Congress. At present, veterans in Priority Groups 2-8 pay $8 for
a 30-day supply of medication, including over-the-counter medications.47
The Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) authorized the
VA to charge most veterans $2 for each 30-day supply of medication furnished on
an outpatient basis for treatment of a nonservice-connected condition. The Veterans
Millennium Health Care and Benefits Act of 1999 (P.L. 106-117) authorized the VA
to increase the medication co-payment amount and establish annual caps on the total
amount paid, to eliminate financial hardship for veterans enrolled in Priority Groups
2-6.48 When veterans reach the annual cap, they continue to receive medications
without making a co-payment.
On November 15, 2005, the VHA issued a directive stating that effective
January 1, 2006, the medication co-payment will be increased to $8 for each 30-day
supply of medication furnished on an outpatient basis for treatment of a nonservice-
connected condition, and that the annual cap for veterans enrolled in Priority Groups
2-6 will be $960.49 There is no cap for veterans in Priority Groups 7 and 8 (see
Appendixes B and C). The VA estimates that if the current proposal to raise the co-
payment were enacted, it would contribute $311 million to the Treasury in FY2008
and will increase revenue by $1.6 billion over five years. The House-passed bill
(H.R. 2642) does not include any bill language that would give the VA the authority
47 The following veterans are exempt from paying copayments: veterans receiving a pension
for a nonservice-connected disability from the VA; veterans with incomes below $10,929
(if no dependents) and $14,313 (with one dependent plus $1,866 for each additional
dependent); veterans receiving care for conditions such as Agent Orange or Military Sexual
Trauma, and combat veterans within two years of discharge; and veterans who are former
POWs.
48 This law allowed the VA to increase the copayment amount for each 30-day or less supply
of medication provided on an outpatient basis (other than medication administered during
treatment) for treatment of a nonservice-connected condition. Accordingly, the VA
increased the co-payment amount from $2 to $7. The medication co-payment charge for
each subsequent calendar year after 2002 is established by using the prescription drug
component of the Medical Consumer Price Index. When an increase occurs, the co-payment
increases in whole dollar amounts. The amount of the annual cap increases $120 for each
$1 increase in the co-payment amount.
49 VHA Directive 2005-052, Implementation of Medication Copayment Changes, November
15, 2005.

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CRS-24
to increase co-payments. Similarly, the Senate Appropriations Committee has not
addressed this issue because it is in the purview of the authorizing committees.
Impact of Fee Proposals. According to VA estimates, of the 5.8 million
unique patients that it expects to see in 2008, 111,000 may choose not to use the
system if an enrollment fee is imposed and the pharmacy copays are increased.
Third-Party Offset of First-Party Debt
The Administration is requesting that Congress amend the VA’s statutory
authority by eliminating the practice of reducing first-party co-payment debts with
third-party health-insurance collections. The VA asserts that this proposal would
align the VA with the DOD health-care system for military retirees and with the
private sector.
With the enactment of P.L. 99-272 in 1986, Congress authorized the VA to
collect payments from third-party health insurers for the treatment of veterans with
nonservice-connected disabilities; it also established co-payments from veterans for
this care.50 Under current law, the VA is authorized to collect from third-party health
insurers to offset the cost of medical care furnished to a veteran for the treatment of
a nonservice-connected condition.51 If the VA treats an insured veteran for a
nonservice-connected disability, and the veteran is also determined by the VA to
have co-payment responsibilities, the VA will apply the payment collected from the
insurer to satisfy the veteran’s co-payment debt related to that treatment.
Under the current co-payment billing process, in cases where the cost of a
veteran’s medical care for a nonservice-connected condition appears to qualify for
billing under reimbursable insurance and co-payment, the VA medical facilities sends
the bill to the insurance provider. The veteran’s co-payment obligation is placed on
hold for 90 days pending payment from the third-party payer. If no payment is
received from the third-party payer within 90 days, a bill is sent to the veteran for the
full co-payment amount. However, when insurers reimburse the VA after the 90-day
period, the VA must absorb the cost of additional staff time for processing a refund
if the veteran has already paid the bill. On all insurance policies, the entire amount
of the claim payment is applied first to the co-payment. The veteran is then billed
only for the portion of the co-payment not covered by the insurance reimbursement
and the portion of the co-payment for services not covered by the veteran’s insurance
plan (see Figure 1).
50 Consolidated Omnibus Budget Reconciliation Act of 1985, 100 Stat. 372, 373, 383.
51 38 U.S.C. §1729; 38 U.S.C. §1710; and 38 U.S.C. 1722A.

---

CRS-25
Figure 1. Present Co-payment Process
Source: Department of Veterans Affairs.

---

CRS-26
Under the Administration’s proposal, veterans receiving medical care services
for treatment of non-service-connected disabilities will receive a bill for their entire
co-payment, and the co-payment will not be reduced by collection recoveries from
third-party health plans. This proposal would apply to all veterans who make
co-payments.
According to VA estimates, this proposal will increase revenue by $44 million
in FY2008 and $217 million over five years. The House and Senate Appropriations
Committees have not addressed this issue because it is an issue in the purview of the
authorizing committees.
Future Cost of Veterans’ Health Care
On February 15, 2007, the Congressional Budget Office (CBO) testified that
“assuming no major changes in policy and no major changes in enrollment trends ...
that [VHA] medical spending would increase from $35 billion in 2007 to $66 billion
in 2025, or 88 percent cumulative real growth. That increase implies annual real
growth that averages 3.6 percent over the period.”52
The House and Senate Appropriations Committees have expressed concern that
the President’s budget has not accurately projected the future cost of health care for
veterans from FY2008-FY2012. Furthermore, the House Appropriations Committee
expressed doubt in the actuarial model currently used to project health-care demand
for Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF) veterans.
The House Appropriations Committee has included a general provision in H.R 2642
directing the CBO to submit a report projecting the annual funding level necessary
for the VHA to continue providing health care for veterans from FY2009 through
FY2012.
52 Statement of Allison Percy, Principal Analyst, on the Future Medical Spending by the
Department of Veterans Affairs, before the House Committee on Appropriations,
Subcommittee on Military Construction, Veterans Affairs, and Related Agencies, February
15, 2007.

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CRS-27
Appendix A. 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 the VA to be catastrophically disabled
Priority Group 5
Nonservice-connected disabled veterans and noncompensable service-connected veterans rated 0% disabled whose
annual income and net worth are below the established VA Means Test thresholds
Veterans receiving VA pension benefits
Veterans eligible for Medicaid benefits
Priority Group 6
Compensable 0% service-connected disabled veterans
World War I veterans
Mexican Border War veterans
Veterans solely seeking care for disorders associated with
— exposure to herbicides while serving in Vietnam; or
— ionizing radiation during atmospheric testing or during the occupation of Hiroshima and Nagasaki; or
— for disorders associated with service in the Gulf War; or
— for any illness associated with service in combat in a war after the Gulf War or during a period of hostility after
November 11, 1998.
Priority Group 7
Veterans who agree to pay specified co-payments who have income and/or net worth above the VA Means Test
threshold and income below the HUD geographic index
— Subpriority a: Noncompensable 0% service-connected disabled veterans who were enrolled in the VA Health Care
System on a specified date and who have remained enrolled since that date
— Subpriority c: Nonservice-connected disabled veterans who were enrolled in the VA Health Care System on a
specified date and who have remained enrolled since that date.
— Subpriority e: Noncompensable 0% service-connected disabled veterans not included in Subpriority a above
— Subpriority g: Nonservice-connected disabled veterans not included in Subpriority c above
Priority Group 8
Veterans who agree to pay specified co-payments with income and/or net worth above the VA Means Test threshold
and the HUD geographic index
— Subpriority a: Noncompensable 0% service-connected disabled veterans enrolled as of January 16, 2003 and who
have remained enrolled since that date
— Subpriority c: Nonservice-connected disabled veterans enrolled as of January 16, 2003 and who have remained
enrolled since that date
— Subpriority e: Noncompensable 0% service-connected disabled veterans applying for enrollment after January 16,
2003
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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CRS-28
Appendix B. Veterans’ Payments for
Health-Care Services, by Priority Group
Copayments
Inpatient
Geographic
VA
Means Test
Means
Out-
Insurance
Humanitarian
Copayment
Test
patient
Medicationa
Billing
Emergency Billing
Yes, but only if
care was for
Priority Group 1
No
No
No
No
nonservice-
No
connected
condition
Yes, but only for
veterans with
less than 50%
service
connected
Yes, but only if
disability and
care was for
Priority Groups
medication is for nonservice-
No
2, 3,b 4c
No
No
No
nonservice-
connected
connected
condition
condition.
Former POWs
are exempt from
all medications
co-payments
Yes, but only if
care was for
Priority Group 5
No
No
No
Yes
nonservice-
No
connected
condition
Priority Group 6
Yes, but only if
(WWI, and 0%
care was for
service-
No No
No
Yes
nonservice-
No
connected
connected
compensable)
condition
Priority Group 6
Yes, but only if
(Veterans
care was for
receiving care
No
Nod
Nod
Nod
nonservice-
No
for exposure or
connected
experience)d
condition
Yes, but only if
Yes, but only if
care was for
care was for
Priority Group
Yes
No
Yes
nonservice-
nonservice-
No
7a
connected
connected
condition
condition
Yes, but only if
Yes, but only if
care was for
care was for
Priority Group
Yes
No
Yes
nonservice-
nonservice-
No
7c
connected
connected
condition
condition

---

CRS-29
Copayments
Inpatient
Geographic
VA
Means Test
Means
Out-
Insurance
Humanitarian
Copayment
Test
patient
Medicationa
Billing
Emergency Billing
Yes, but only if
Yes, but only if
care was for
care was for
Priority Group
No
Yes
Yes
nonservice-
nonservice-
No
8a
connected
connected
condition
condition
Yes, but only if
Yes, but only if
care was for
care was for
Priority Group
No
Yes
Yes
nonservice-
nonservice-
No
8c
connected
connected
condition
condition
Source: Table prepared by CRS based on information from the Department of Veterans Affairs.
Notes: Priority Group 7a and 7c veterans have income above the VA Means Test threshold but below
the Geographic Means Test threshold and are responsible for 20% of the inpatient co-payment and
20% of the inpatient per diem co-payment. The geographic means test co-payment reduction does
not apply to outpatient and medication co-payment, and veterans will be assessed the full applicable
co-payment charges. Note that reduced inpatient co-payments can apply to veterans in Priority Groups
4 and 6 based on the income of the veteran.
Priority Group 8a and 8c veterans have income above the VA Means Test threshold and above the
Geographic Means Test threshold. Veterans enrolled in this priority group are responsible for the full
inpatient co-payment and the inpatient per diem co-payment for care of their nonservice-connected
conditions. Veterans in this priority group are also responsible for outpatient and medication co-
payments for care of their nonservice-connected conditions.
a. An annual medication co-payment cap has been established for veterans enrolled in Priority Groups
2-6. Medication will continue to be dispensed after co-payment cap is met. An annual
co-
payment cap has not been established for veterans enrolled in Priority Groups 7 or 8.
b. Veterans in receipt of a Purple Heart are in Priority Group 3. This change occurred with the
enactment of the Veterans Millennium Health Care and Benefits Act (P.L. 106-117) on Nov.
30, 1999.
c. Priority Group 7 veterans who are determined to be catastrophically disabled and who are placed
in Priority Group 4 for treatment are still subject to the co-payment requirements as a Priority
Group 7 veteran.
d. Priority Group 6 — veterans claiming exposure to Agent Orange; veterans claiming exposure to
environmental contaminants; veterans exposed to Ionizing Radiation; combat veterans within
two years of discharge from the military; veterans who participated in Project 112/SHAD;
veterans claiming military sexual trauma; and veterans with head and neck cancer who received
nasopharyngeal radium treatment while in the military are subject to co-payments when their
treatment or medication is not related to their exposure or experience. The initial registry
examination and follow-up visits to receive results of the examination are not billed to the health
insurance carrier and are not subject to co-payments. However, care provided that is not related
to exposure, if it is nonservice-connected, will be billed to the insurance carrier and co-payments
can apply.

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CRS-30
Appendix C. Financial Income Thresholds
for VA Health-Care Benefits
Free VA prescriptions and
Free VA inpatient and
travel benefits for veterans
outpatient care for veterans
Veterans with —
with incomes of —
with incomes of —
No dependents
$10,929 or less
$27,790 or less
1 dependent
$14,313 or less
$33,350 or less
2 dependents
$16,179 or less
$35,216 or less
3 dependents
$18,045 or less
$37,082 or less
4 dependents
$19,911 or less
$38,948 or less
For each additional
dependent, add:
$1,866
$1,866
Source: Department of Veterans Affairs.

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CRS-31
Appendix D. VHA Appropriations for FY2005 and FY2006
( $ in thousands)
FY2005
FY2005
FY2005
FY2005
FY2006
FY2006
FY2006
FY2006
Program
request
House
Senate
enacted
request
House
Senate
enacted
Medical services
— $19,498,600
$19,498,600a $19,316,995
$19,995,141 $20,995,141
$21,331,011
$21,322,141
Supplemental appropriations (P.L. 108-324)
$38,283
—
—
38,283
—
—
—
—
Supplemental appropriations
975,000b
975,000c 1,500,000d
1,500,000e
—
—
—
—
Emergency appropriations
—
—
—
—
1,977,000f
—
1,977,000g
1,225,000h
Emergency appropriations- Gulf Coast Hurricanes
(P.L. 109-148)
—
—
—
—
198,265
—
—
198,265
Emergency appropriations-Avian Flu Pandemic
(P.L.109-148)
—
—
—
—
27,000
—
—
27,000
Subtotal medical services
1,013,283
20,473,600
20,998,600
20,855,278
22,197,406
20,995,141
23,308,011
22,772,406
Medical administration
—
4,705,000
4,705,000
4,667,360
4,517,874
4,134,874
2,858,442
2,858,442
Supplemental appropriations (P.L. 108-324)
1,940
—
—
1,940
—
—
—
—
Subtotal medical administration
1,940
4,705,000 4,705,000
4,669,300
4,517,874
4,134,874
2,858,442
2,858,442
Medical facilities
—
3,745,000
3,745,000 3,715,040
3,297,669
3,297,669
3,297,669
3,297,669
Supplemental appropriations (P.L. 108-324)
46,909
—
—
46,909
—
—
—
—
Subtotal medical facilities
46,909
3,745,000
3,745,000
3,761,949
3,297,669
3,297,669
3,297,669
3,297,669
Medical and prosthetic research
384,770
384,770
405,593
402,348
393,000
393,000
412,000
412,000
Information technology
—
—
—
—
—
—
1,456,821
—
Medical carei
26,748,600
—
—
—
—
—
—
—
Total VHA appropriations (without collections)
28,195,502
28,308,370
28,854,193
29,688,875
30,405,949
28,820,684
31,332,943
29,340,517
Medical care cost collection (MCCF)j
2,002,000
2,002,000
2,002,000
1,985,984
2,170,000
2,170,000
2,170,000
2,170,000
Total: VHA (appropriations and collections)
$30,197,502 $31,310,370
$30,856,193 $31,674,859
$32,575,949 $30,990,684
$33,502,943
$31,510,517

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CRS-32
Source: Table prepared by the Congressional Research Service based on H.Rept. 108-674; S.Rept. 108-353; H.Rept. 109-95; S.Rept. 109-105; H.Rept. 109-305; H. Rept.109-359;
and House Appropriations Committee data.
Notes: Appropriation amounts for FY2005 adjusted to account for the 0.8% across-the-board reduction in most discretionary accounts as called for in Division J, Section 122 (a)(1)
of P.L. 108-447. Supplemental appropriations for FY2005 are not subject to the 0.8% across-the-board reductions. Appropriation amounts for FY2006 are not subject to any cross-the-
board reductions as stipulated in Division B, Title III, Section 3801(c)(2) of P.L.109-148.
a. This amount includes $1.2 billion designated as an emergency requirement.
b. On June 30, 2005, the Administration requested an additional $975 million for medical services for FY2005.
c. On June 30, 2005, the House passed H.R. 3130.
d. On June 29, 2005, the Senate passed an amendment to H.R. 2361, the Department of the Interior, Environment, and Related Agencies Appropriations bill, 2006 to add $1.5 billion
in emergency funds for medical services.
e. On August 2, 2005, the FY2006 Department of the Interior, Environment, and Related Agencies appropriations bill (H.R 2361, P.L. 109-54) was signed into law.
f. On July 14, 2005, the Administration requested an additional $1.977 billion for medical services for FY2006.
g. On July 21, 2005, the Senate Committee on Appropriations reported H.R. 2528 favorably out of committee (S.Rept. 109-105) and designated this amount as an emergency
appropriation.
h. On November 18, 2005, the House and Senate adopted the conference report (H.Rept.109-305) to accompany H.R. 2528 and designated this amount as an emergency appropriation.
i. This amount includes funding for medical services, medical administration, and medical facilities.
j. Medical Care Cost Collection Fund (MCCF) receipts are restored to the VHA as an indefinite budget authority equal to the revenue collected, estimated to be $1.985 billion in
FY2005, $2.17 billion in FY2006, and $2.33 billion in FY2007.

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