Veterans’ Medical Care:
FY2013 Appropriations
Sidath Viranga Panangala
Specialist in Veterans Policy
May 6, 2013
Congressional Research Service
7-5700
www.crs.gov
R42518
CRS Report for Congress
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Veterans’ Medical Care: FY2013 Appropriations

Summary
The Department of Veterans Affairs (VA) provides benefits to veterans who meet certain
eligibility criteria. 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).
This report focuses on funding for the VHA. 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. Eligibility for VA health care is based primarily
on previous military service, disability, and income. VA provides free inpatient and outpatient
medical care to veterans for service-connected conditions and to low-income veterans for
nonservice-connected conditions.
The President’s FY2013 budget request was submitted to Congress on February 13, 2012. The
President’s budget requested $135.6 billion in budget authority for the VA as a whole. This
included approximately $75 billion in mandatory funding and $61 billion in discretionary
funding. For FY2013, the Administration requested $53.3 billion for VHA. This included $41.5
billion for the medical services account, $5.7 billion for the medical support and compliance
account, $5.4 billion for the medical facilities account, and nearly $583 million for the medical
and prosthetic research account. The total requested amount for VHA represents a 4.1% increase
over the FY2012-enacted appropriations. Furthermore, as required by the Veterans Health Care
Budget Reform and Transparency Act of 2009 (P.L. 111-81), the President’s budget requested
$54.5 billion in advance appropriations for the three medical care accounts (medical services,
medical support and compliance, and medical facilities) for FY2014. On December 7, 2012, the
President submitted a $260 million supplemental request for VA for costs associated with
Hurricane Sandy.
Congress did not enact a regular Military Construction and Veterans Affairs and Related Agencies
Appropriations bill for FY2013 (MILCON-VA Appropriations bill) prior to the beginning of
FY2013, and funded most of the VA (excluding the three medical care accounts: medical services,
medical support and compliance, and medical facilities) through a six-month government-wide
continuing resolution (P.L. 112-175). On January 29, 2013, the Disaster Relief Appropriations
Act, 2013, was enacted as P.L. 113-2. This Act provided approximately $260 million for the VA.
On March 6, 2013, the House passed the Department of Defense, Military Construction and
Veterans Affairs, and Full-Year Continuing Appropriations Act, 2013 (H.R. 933). The Senate
passed an amended version of the bill on March 20, 2013, and the House agreed to the amended
version the next day. The Consolidated and Further Continuing Appropriations Act, 2013 (H.R.
933; P.L. 113-6), was signed into law by the President on March 26, 2013. Division E of P.L. 113-
6 contained funding for the VA. P.L. 113-6 provides $133.9 billion in budget authority for the VA
as a whole. This includes approximately $72.9 billion in mandatory funding and $61 billion in
discretionary funding. For FY2013, funding for VHA is $53.3 billion. Furthermore, as required
by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), P.L.
113-6 provides $54.5 billion in advance appropriations for the three medical care accounts
(medical services, medical support and compliance, and medical facilities) for FY2014.

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Veterans’ Medical Care: FY2013 Appropriations

Contents
Introduction ...................................................................................................................................... 1
Advance Appropriations ............................................................................................................ 2
Department of Veterans Affairs Budget ........................................................................................... 3
Overview of Veterans Health Administration’s Budget Formulation .............................................. 6
Funding for the VHA ....................................................................................................................... 6
Medical Services ....................................................................................................................... 7
Medical Support and Compliance (Previously Medical Administration) .................................. 7
Medical Facilities ...................................................................................................................... 7
Medical and Prosthetic Research ............................................................................................... 8
Medical Care Collections Fund (MCCF) .................................................................................. 8
FY2012 Budget Summary ............................................................................................................. 10
President’s Request .................................................................................................................. 10
House and Senate Action ......................................................................................................... 10
Consolidated Appropriations Act, 2012 ................................................................................... 11
FY2013 VHA Budget .................................................................................................................... 15
President’s Request .................................................................................................................. 15
House Budget Resolution ........................................................................................................ 15
House Floor Action and Senate Committee Action ................................................................. 17
Disaster Relief Appropriations Act, 2013 (P.L. 113-2) .................................................................. 18
Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6) .............................. 18
House and Senate Action ......................................................................................................... 18

Figures
Figure 1. FY2012 VA Budget Allocations ....................................................................................... 4
Figure 2. FY2013 VA Budget Request............................................................................................. 5

Tables
Table 1. Medical Care Collections, FY2007-FY2012 ..................................................................... 9
Table 2. VHA Appropriations, by Account, FY2011-FY2012, and Advance
Appropriations, FY2013 ............................................................................................................. 12
Table 3. VA Appropriations, FY2012-FY2013, and Advance Appropriations, FY2014 ............... 20
Table 4. VHA Appropriations by Account, FY2012-FY2013, and Advance
Appropriations, FY2014 ............................................................................................................. 22
Table A-1. VA Priority Groups and Their Eligibility Criteria ........................................................ 25

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Veterans’ Medical Care: FY2013 Appropriations

Appendixes
Appendix A. VA Priority Groups and Their Eligibility Criteria .................................................... 25

Contacts
Author Contact Information........................................................................................................... 26

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Introduction
The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans1
who meet certain eligibility rules; these benefits include medical care, disability compensation
and pensions,2 education,3 vocational rehabilitation and employment services,4 assistance to
homeless veterans,5 home loan guarantees,6 administration of life insurance as well as traumatic
injury protection insurance for servicemembers,7 and death benefits that cover burial expenses.8
The VA carries out its programs nationwide through three administrations and the Board of
Veterans Appeals (BVA). The Veterans Benefits Administration (VBA) is responsible for, among
other things, providing compensation, pensions, and education assistance. The National Cemetery
Administration (NCA)9 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
Veterans Health Administration (VHA) is responsible for health care services and medical and
prosthetic research programs. 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. The VHA is also a provider of health care education and
training for physician residents and other health care trainees.
In general, eligibility for VA health care is based on previous military service,10 presence of
service-connected disabilities,11 and/or other factors.12 Veterans generally must enroll in the VA

1 In general, payments of benefits made to, or on account of, a beneficiary under any law administered by the VA are
exempt from federal taxation (38 U.S.C. §5301).
2 For a detailed description of disability compensation and pension programs see, CRS Report R42324, “Who is a
Veteran?”—Basic Eligibility for Veterans’ Benefits, by Christine Scott; CRS Report RL34626, Veterans’ Benefits:
Benefits Available for Disabled Veterans, by Christine Scott et al.; and CRS Report RS22804, Veterans’ Benefits:
Pension Benefit Programs, by Christine Scott and Carol D. Davis.
3 For a discussion of education benefits see, CRS Report R42785, GI Bills Enacted Prior to 2008 and Related
Veterans’ Educational Assistance Programs: A Primer, by Cassandria Dortch; and CRS Report R42755, The Post-9/11
Veterans Educational Assistance Act of 2008 (Post-9/11 GI Bill): Primer and Issues, by Cassandria Dortch.
4 For details on VA’s vocational rehabilitation and employment see, CRS Report RL34627, Veterans’ Benefits: The
Vocational Rehabilitation and Employment Program, by Benjamin Collins.
5 For detailed information on homeless veterans programs see, CRS Report RL34024, Veterans and Homelessness, by
Libby Perl.
6 For details on guaranteed loans, direct loans, and specially adapted housing grants see, CRS Report R42504, VA
Housing: Guaranteed Loans, Direct Loans, and Specially Adapted Housing Grants, by Libby Perl.
7 For details on insurance programs see, CRS Report R41435, Veterans’ Benefits: Current Life Insurance Programs, by
Christine Scott.
8 For details on death benefits, see CRS Report R41386, Veterans’ Benefits: Burial Benefits and National Cemeteries,
by Christine Scott.
9 Established by the National Cemeteries Act of 1973 (P.L. 93-43).
10 Veteran status is established by active-duty status in the U.S. Armed Forces 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.
11 A service-connected disability is a disability that was incurred or aggravated in the line of duty in the U.S. Armed
Forces (38 U.S.C. §101 (16), 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
(continued...)
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health care system to receive medical care. Once enrolled, veterans are assigned to one of eight
categories (see Table A-1).13 It should be noted that in any given year, not all enrolled veterans
obtain their health care services from VA. While some veterans may rely solely on VA for their
care, others may receive the majority of their health care services from other sources, such as
Medicare, Medicaid, private health insurance, and the military health system (TRICARE).14 VA-
enrolled veterans do not pay premiums or enrollment fees to receive care from the VA; however,
they may incur out-of-pocket costs for VA care related to conditions that are not service-
connected.15
This report focuses on appropriations for VHA. It begins with a brief overview of the VA’s budget
as a whole for FY2012 and the President’s request for FY2013. It then presents a brief overview
of VHA’s budget formulation, a description of the accounts that fund the VHA, and a summary of
the FY2012 VHA budget. The report ends with a section discussing recent legislative
developments pertaining to the FY2013 VHA budget.
Advance Appropriations16
In order to understand annual appropriations for the Veterans Health Administration (VHA), it is
essential to understand the role of advance appropriations. In 2009, Congress enacted the
Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81) authorizing
advance appropriations for three of the four accounts that comprise VHA: medical services,
medical support and compliance, and medical facilities. 17 The fourth account, the medical and
prosthetic research account, is not funded with an advance appropriation. P.L. 111-81 also
required the Department of Veterans Affairs to submit a request for advance appropriations for
VHA with its budget request each year. Congress first provided advance appropriations for the
three VHA accounts in the FY2010 appropriations cycle. The Consolidated Appropriations Act,
2010 (P.L. 111-117) provided advance appropriations for FY2011; the Department of Defense and
Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10) provided advance appropriations for
FY2012; the Consolidated Appropriations Act, 2012 (P.L. 112-74), enacted into law on December
23, 2011, provided advance appropriations for FY2013; and the Consolidated and Further

(...continued)
increments of 10 (38 C.F.R. §§4.1-4.31).
12 For information on eligibility for VA health care see, CRS Report R42747, Health Care for Veterans: Answers to
Frequently Asked Questions, by Sidath Viranga Panangala and Erin Bagalman.
13 For more information on enrollment in the VA health care system see, CRS Report R42747, Health Care for
Veterans: Answers to Frequently Asked Questions, by Sidath Viranga Panangala and Erin Bagalman.
14 TRICARE provides medical care to active duty servicemembers and other eligible beneficiaries (such as military
retirees) through a combination of direct care in military clinics and hospitals and civilian-purchased care. For more
information on TRICARE see, CRS Report RL33537, Military Medical Care: Questions and Answers, by Don J.
Jansen and Katherine Blakeley.
15 For more information on VA cost-sharing requirements see, CRS Report R42747, Health Care for Veterans:
Answers to Frequently Asked Questions, by Sidath Viranga Panangala and Erin Bagalman.
16 In general, an appropriations act makes budget authority available beginning on October 1 of the fiscal year for
which the appropriations act is passed (“budget year”). However, there are some types of appropriations that do not
follow this pattern; among them are advance appropriations. An advance appropriation means appropriation of new
budget authority that becomes available one or more fiscal years beyond the fiscal year for which the appropriations act
was passed (i.e., beyond the budget year).
17 Codified at 38 U.S.C. §117.
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Continuing Appropriations Act, 2013 (P.L. 113-6), enacted into law on March 26, 2013, provided
advance appropriations for FY2014.
Under current budget scoring guidelines, new budget authority for an advance appropriation is
scored in the fiscal year in which the funds become available for obligation. Therefore,
throughout the funding tables of this report, advance appropriations numbers are shown under the
label “memorandum” and in the corresponding fiscal year column. For example, advance
appropriations for FY2013 authorized by the Consolidated Appropriations Act, 2012 (P.L. 112-
74), are shown under a separate memorandum and in the FY2013 column. However, it should be
noted that budget authority for FY2013 refers to the budget authority authorized in P.L. 112-74
and augmented by supplemental funding provided by the Disaster Relief Appropriations Act,
2013 (P.L. 113-113–2) and by additional funding provided by Division E of the Consolidated and
Further Continuing Appropriations Act, 2013 (P.L. 113-6) that included funding for the medical
and prosthetic research account (the account that is not funded as advance appropriations).
Funding shown for FY2013 does not include advance appropriations provided in FY2013 by P.L.
113-6 for use in FY2014.
Department of Veterans Affairs Budget
The VA budget includes both mandatory18 and discretionary funding.19 Mandatory accounts fund
disability compensation, pensions, vocational rehabilitation and employment, education, life
insurance, housing, and burial benefits (such as graveliners, outer burial receptacles, and
headstones), among other benefits and services. Discretionary accounts fund medical care,
medical research, construction programs, information technology, and general operating
expenses, among other things.
Figure 1 provides a breakdown of FY2012 budget allocations for both mandatory and
discretionary programs. In FY2012, the total VA budget authority was approximately $122.2
billion; discretionary budget authority accounted for about 48% ($58.5 billion) of the total, with
about 88% ($51.2 billion) of this discretionary funding going toward supporting VA health care
programs, including medical and prosthetic research. The VA’s mandatory budget authority
accounted for about 52% ($63.8 billion) of the total VA budget authority, with about 80% ($51.2
billion) of this mandatory funding going toward disability compensation and pension programs.

18 Mandatory programs funded through the annual appropriations process are commonly referred to as appropriated
entitlements. In general, appropriators have little control over the amounts provided for appropriated entitlements;
rather, the authorizing statute establishes the program parameters (e.g., eligibility rules, benefit levels) that entitle
certain recipients to payments. If Congress does not appropriate the money necessary to meet these commitments,
entitled recipients (e.g., individuals, states, or other entities) may have legal recourse. For an overview of mandatory
spending see, CRS Report RL33074, Mandatory Spending Since 1962, by D. Andrew Austin and Mindy R. Levit.
19 Funding for discretionary programs are provided and controlled through the annual appropriations process. For more
information see, CRS Report R41726, Discretionary Budget Authority by Subfunction: An Overview, by D. Andrew
Austin.
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Figure 1. FY2012 VA Budget Allocations

Total Budget Authority= $122.2 billion
Construction, 1%
Information
(Discretionary)
Technology, 3%
(Discretionary)
Discretionary
Benefit Programs,
2%
Medical Programs,
42%
(Discretionary)
Mandatory Benefit
Departmental
Programs, 52%
Administration, 1%
(Discretionary)

Source: Chart prepared by the Congressional Research Service based on H.Rept. 112-331.
Notes: Discretionary budget authority includes medical programs; information technology; construction; other
discretionary benefits, such as operation and maintenance of VA’s national cemeteries; and departmental
administration. Mandatory benefits include disability compensation, pensions, education, vocational rehabilitation
and employment services, among other benefits and services. Totals may not add due to rounding.


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Figure 2. FY2013 VA Budget Request
Total Budget Authority = $135.6 billion
Construction, 1%
Discretionary
Information
Benefits Programs,
Technology, 2%
2%
Medical Programs,
39%
Mandatory Benefits
Programs, 55%
Departmental
Administration, 1%

Source: Chart prepared by the Congressional Research Service based on Department of Veterans Affairs, FY2013
Budget Submission, Summary Volume, Volume 1 of 4, February 2012, p. 1B-1, and H.Rept. 112-491 and S.Rept. 112-
168.
Notes: Discretionary budget authority includes medical programs; information technology; construction; other
discretionary benefits, such as operation and maintenance of VA’s national cemeteries; and departmental
administration. Mandatory benefits include disability compensation, pensions, education, vocational rehabilitation
and employment services, among other benefits and services. Totals may not add due to rounding.
Figure 2 provides a breakdown of the FY2013 President’s budget request for both mandatory and
discretionary programs (also see Table 3). For FY2013, the Administration requested
approximately $135.6 billion. This includes approximately $61 billion in discretionary funding
and nearly $74.6 billion in mandatory funding.
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Overview of Veterans Health Administration’s
Budget Formulation20
Similar to most federal agencies, the VA begins formulating its budget request approximately 10
months before the President submits the budget to Congress, generally in early February. VHA’s
budget request to Congress begins with the formulations of the budget based on the Enrollee
Health Care Projection Model (EHCPM).21 The model estimates the amount of budgetary
resources VHA will need to meet the expected demand for most of the health care services it
provides.
The EHCPM’s estimates are based on three basic components: the projected number of veterans
who will be enrolled in VA health care, the projected utilization of VA’s health care services—that
is, the quantity of health care services enrollees are expected to use—and the projected unit cost
of providing these services. Each component is subject to a number of adjustments to account for
the characteristics of VA health care and the veterans who access VA’s health care services. The
EHCPM makes projections three or four years into the future. Each year, VHA updates the
EHCPM estimates to “incorporate the most recent data on health care utilization rates, actual
program experience, and other factors, such as economic trends in unemployment and
inflation.”22 For instance, in 2011, VHA used data from FY2010 to develop its health care budget
estimate for the FY2013 request, including the advance appropriations request for FY2014.23
Funding for the VHA
As noted previously, VHA is funded through four appropriations accounts. These 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.
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.24 Specifically, 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
(currently known as medical support and compliance), (3) medical facilities, and (4) medical and
prosthetic research. Brief descriptions of these accounts are provided below.

20 A major part of this discussion was drawn from U.S. Government Accountability Office, Veterans’ Health Care: VA
Uses a Projection Model to Develop Most of Its Health Care Budget Estimate to Inform the President’s Budget
Request, GAO-11-205, January 2011, pp. 4-8.
21 The Veterans’ Health Care Eligibility Reform Act of 1996 (P.L. 104-262) required the VHA to manage the provision
of hospital care and medical services through an enrollment system based on a system of priorities.
22 Department of Veterans Affairs, FY2013 Budget Submission, Medical Programs and Information Technology
Programs, Volume 2 of 4, February 2012, p. 1A-6.
23 VHA uses methodologies other than the EHCPM to develop estimates of the amount of resources needed for long-
term care services, and various legislative and health care related initiatives that may change from year to year.
24 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.
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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 (U.S.C.); cost of hospital food service
operations;25 aid to state veterans’ homes; and assistance and support services for family
caregivers of veterans authorized by the Caregivers and Veterans Omnibus Health Services Act of
2010 (P.L. 111-163). For FY2013, the President’s budget request proposed the transfer of funding
for biomedical engineering services from the medical facilities account to this account.26 The
Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6), approved this
transfer.
Medical Support and Compliance (Previously
Medical Administration)
This account provides for expenses related to the management, security, and administration of the
VA health care system through the operation of VA medical centers, and other medical facilities
such as community-based outpatient clinics (CBOCs) and Vet Centers.27 It also funds 21 Veterans
Integrated Service Network (VISN)28 offices and facility director offices; chief of staff
operations; public health and environmental hazard programs; quality and performance
management programs; medical inspection; human research oversight; training programs and
continuing education; security; volunteer operations; and human resources management.
Medical Facilities
The medical facilities account funds expenses pertaining to the operations and maintenance of the
VHA’s capital infrastructure. These expenses include utilities and administrative expenses related
to planning, designing, and executing construction or renovation projects at VHA facilities. It also
funds leases, laundry services, grounds maintenance, trash removal, housekeeping, fire
protection, pest management, and property disposition and acquisition.

25 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 concurred with this request. The cost of food service operations support hospital food service workers,
provisions, and supplies related to the direct care of patients.
26 Biomedical engineering services include the maintenance and repair of all medical equipment used in the treatment,
monitoring, diagnosis, or therapy of patients.
27 Vet Centers are community-based counseling centers that provide a wide range of social and psychological services
such as professional readjustment counseling to veterans who have served in a combat zone, military sexual trauma
(MST) counseling, bereavement counseling for families who experience an active duty death, substance abuse
assessments and referral, medical referral, veterans’ benefits explanation and referral, and employment counseling,
among other services.
28 VISN offices provide management and oversight to the medical centers and clinics within their assigned geographic
areas. Each VISN office is responsible for allocating funds to facilities, clinics, and programs within its region and
coordinating the delivery of health care to veterans.
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Medical and Prosthetic Research
As required by law, the medical and prosthetic research program (medical research) focuses on
research into the special health care needs of veterans.29 This account provides funding for many
types of research, such as investigator-initiated research; mentored research; large-scale, multi-
site clinical trials; and centers of excellence. VA researchers receive funding not only through this
account but also from the Department of Defense (DOD), the National Institutes of Health (NIH),
and private sources.
In general, VA’s research program is intramural; that is, research is performed by VA investigators
at VA facilities and approved off-site locations. Unlike other federal agencies, such as NIH and
DOD, VA does not have the statutory authority to make research grants to colleges and
universities, cities and states, or any other non-VA entities.
Medical Care Collections Fund (MCCF)
In addition to direct appropriations accounts mentioned above, the Committees on Appropriations
include medical care cost recovery collections when considering funding for the VHA. Congress
has provided 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.30 Funds collected from first and third
party (copayments and insurance) bills are retained by the VA health care facility that provided
the care for the veteran.

29 38 U.S.C. §7303(a)(3). The Office of Research and Development (ORD) within the Veterans Health Administration
(VHA) manages the medical research program. The medical research program encompasses, among other things,
biomedical laboratory research, clinical trials, health services research, and rehabilitation research.
30 The Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272), enacted into law in 1986 established
means testing for veterans seeking care for nonservice-connected conditions. The Balanced Budget Act of 1997 (P.L.
105-33) established the Department of Veterans Affairs Medical Care Collections Fund (MCCF) and gave the VHA the
authority to retain these funds in the MCCF. Instead of returning the funds to the Treasury, the VA can use them,
without fiscal year limitations, for medical services for veterans. In FY2004, the Administration’s budget requested
consolidating several existing medical collections accounts into one MCCF. The conferees of the Consolidated
Appropriations Act of 2004 (H.Rept. 108-401) recommended that collections that would otherwise be deposited in the
Health Services Improvement Fund (former name), Veterans Extended Care Revolving Fund (former name), Special
Therapeutic and Rehabilitation Activities Fund (former name), Medical Facilities Revolving Fund (former name), and
the Parking Revolving Fund (former name) should be deposited in MCCF. 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.
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Table 1. Medical Care Collections, FY2007-FY2012
($ in thousands)
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012

Actual
Actual
Actual
Actual
Actual
Estimate
First-party pharmacy
$760,616 $749,685 $720,238 $698,325 $729,742 $696,000
copaymentsa
First-party copayments
for inpatient and
150,964 168,274 168,092 168,519 178,469 177,000
outpatient careb
First-party long-term
care copaymentsc
3,699 3,751 3,419 3,092 3,174 4,000
Subtotal first-party
915,279 921,710 891,749 869,936 911,385 877,000
copayments
Third-party insurance
1,261,346 1,497,449 1,843,202 1,904,032 1,799,951 1,825,000
col ectionsd
Enhanced use leasing
1,692 1,422 1,601 1,694 1,398 2,000
revenuee
Compensated work
therapy col ectionsf
43,296 52,372 56,106 57,108 55,099 57,000
Parking feesg 3,136
3,355
3,585
3,611
3,842
4,000
Compensation and
1,904 1,572 1,952 1,523 871 2,000
pension living expensesh
MCCF Total
$2,226,653 $2,477,880
$2,798,195
2,837,904
2,772,546
2,767,000
Source: Table prepared by the Congressional Research Service based on figures obtained from the Department
of Veterans Affairs, FY2009-FY2013 Congressional Budget Submissions.
a. In FY2002, Congress created the Health Services Improvement Fund (HSIF) to col ect increases in
pharmacy copayments (from $2 to $7 for a 30-day supply of outpatient medication; currently $8 for Priority
Groups 2-6 veterans and $9 for Priority Groups 7 and 8 veterans), which 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 all copayments for
outpatient medications.
b. Authorized at 38 U.S.C. §1710(f) and 1710(g).
c. Authority to collect long-term care copayments 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 copayments. The Honoring America’s Veterans and Caring for Camp Lejeune
Families Act of 2012 (P.L. 112-154) extended the authority to col ect copayments for nursing home care
through September 30, 2013.
d. Authorized at 38 U.S.C. §1729(a).
e. 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.
f.
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 col ected from the sale of these products and/or services are
deposited into the MCCF.
g. 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.
h. Under the compensation and pension living expenses program, veterans who do not have either a spouse
or child 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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Total MCCF revenue increased 25% over the past four fiscal years, from approximately $2.2
billion in FY2007 to nearly $2.8 billion in FY2011 (see Table 1). VHA is expecting MCCF total
collections to approximate $2.8 billion in FY2012, although this amount is lower than MCCF
collections in FY2009 and FY2010. Furthermore, total third-party revenue increased 42.7 % over
the last four fiscal years from $1.3 billion in FY2007 to approximately $1.8 billion in FY2011.
However, in FY2012 VHA expects lower first-party copayments. This estimated decline is
“attributable to fewer veterans with billable insurance and increased numbers of veterans
requesting hardship waivers and exemptions from first-party copayments.”31 Furthermore, VHA
has stated that it continues to experience a decline in third-party collections “to billings ratios as
commercial health insurers shift more responsibility to the patient for health care costs including
copayments and deductibles, which VHA cannot collect.”32 It should be noted that 38 U.S.C.
§1729 prevents VHA from billing the veteran if the health insurer does not pay. Additionally,
according to VHA, “FY2012 begins to reflect the shift in workload for Vietnam-era veterans
aging to 65 years and older. Once a veteran is Medicare-eligible, Medicare becomes the primary
insurance coverage and VA can bill insurance companies only for the portions Medicare does not
cover (typically their deductibles). This significantly reduces the amount VA can collect.”33
FY2012 Budget Summary34
President’s Request
The President submitted his FY2012 budget request to Congress on February 14, 2011. The
Administration’s FY2012 budget request for VHA (medical services, medical support and
compliance, medical facilities, and medical and prosthetic research) was $51.4 billion (reflecting
the advance appropriation provided in FY2011 and excluding estimated MCCF collections). The
President’s budget proposed to set up a contingency fund that would have provided additional
funds up to $953 million, to become available for obligation if the Administration determined that
additional funds were required due to changes in economic conditions in 2012. Furthermore, as
required by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81),
the President’s budget requested $52.5 billion in advance appropriations for the three medical
care accounts (medical services, medical support and compliance, and medical facilities) for
FY2013 (Table 4).
House and Senate Action
On June 14, 2011 the House passed the Military Construction and Veterans Affairs and Related
Agencies Appropriations bill (MILCON-VA Appropriations bill) for FY2012 (H.R. 2055; H.Rept.
112-94). The House-passed measure provided $51.1 billion for VHA for FY2012 (Table 2). The

31 Department of Veterans Affairs, FY2013 Budget Submission, Medical Programs and Information Technology
Programs, Volume 2 of 4, February 2012, p 1C-18.
32 Ibid.
33 U.S. Congress, House Committee on Veterans’ Affairs, U.S. Department of Veterans Affairs Budget Request for
Fiscal Year 2012, 112th Cong., 1st sess., February 17, 2011 (Washington: GPO, 2011), p. 163. VHA is statutorily [42
U.S.C §1395f(c)] prohibited from receiving Medicare payments for services provided to Medicare-covered veterans.
34 For a detailed description of the FY2012 VHA appropriations see, CRS Report R41944, Veterans’ Medical Care:
FY2012 Appropriations, by Sidath Viranga Panangala.
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Senate passed its version of the MILCON-VA Appropriations bill for FY2012 (H.R. 2055;
S.Rept. 112-29) on July 20. The Senate-passed version of H.R. 2055 provided a total of $51.2
billion for VHA (Table 2). The House- and Senate-passed versions of the MILCON-VA
Appropriations bill for FY2012 each provided $52.5 billion in advance appropriations for
FY2013. Furthermore, both the House and Senate versions of the MILCON-VA Appropriations
bill for FY2012 (H.Rept. 112-94; S.Rept. 112-29) did not approve the President’s proposal to set
up a $953 million contingency fund.
Consolidated Appropriations Act, 2012
Congress did not pass the MILCON-VA Appropriations bill for FY2012 before the fiscal year
began on October 1, 2011, and funded most of the VA through a series of short-term continuing
resolutions (CRs). On December 15, 2011, House and Senate conferees of H.R. 2055 reported a
conference agreement (H.Rept. 112-331), which was titled the Consolidated Appropriations Act,
2012, and included nine appropriations bills. Division H of this measure contained the MILCON-
VA Appropriations Act, 2012. The Consolidated Appropriations Act, 2012 (P.L. 112-74; H.Rept.
112-331), was enacted into law on December 23, 2011. P.L. 112-74 provided a total of $51.2
billion for VHA for FY2012 and $52.5 billion in advance appropriations for FY2013 (Table 2).
The Consolidated Appropriations Act, 2012 (P.L. 112-74) did not include the President’s proposal
to set up a $953 million contingency fund.

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Table 2. VHA Appropriations, by Account, FY2011-FY2012, and Advance Appropriations, FY2013
($ in thousands)
Consolidated
Full-Year Continuing
House
Appropriations Act, 2012
Appropriations Act, 2011
President’s Budget
(H.R. 2055;
Senate
(P.L. 112-74;
(H.R. 1473; P.L. 112-10)
Request
H.Rept. 112-94)
(H.R. 2055; S.Rept. 112-29)
H.Rept. 112-331)
Account
FY2011a FY2012 FY2012 FY2013 FY2012 FY2013
FY2012
FY2013
FY2012
FY2013
Medical
Services

$37,061,728
—
$39,649,985 —
$39,649,985 —

$39,649,985 —
$39,649,985 —
Additional
Funding over
— —
$240,000
— — —
—
— — —
FY2012 Advance
Appropriation
Subtotal Medical
37,061,728 —
39,889,985 —
39,649,985 —
39,649,985 —
39,649,985 —
Services
Medical Support
and Compliance
(Previously
5,296,454 —
5,535,000 —
5,535,000 —
5,535,000 —
5,535,000 —
Medical
Administration)
Pay Freeze
Rescission
-34,000 — — —
— —
— — —
—
(P.L. 112-10)
Subtotal Medical
Support and
Compliance
5,262,454 —
5,535,000 —

5,535,000 —

5,535,000 —
5,535,000 —
(Previously Medical
Administration)
Medical
Facilities

5,728,550 —
5,426,000 —

5,426,000 —

5,426,000 —
5,426,000 —
Pay Freeze
Rescission
-15,000 — — —
— —
— — —
—
(P.L. 112-10)
Subtotal Medical
Facilities
5,713,550 —
5,426,000 —

5,426,000 —

5,426,000 —
5,426,000 —
Medical and
Prosthetic
579,838 —
508,774 —

530,774 —

581,000 —
581,000 —
Research
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Consolidated
Full-Year Continuing
House
Appropriations Act, 2012
Appropriations Act, 2011
President’s Budget
(H.R. 2055;
Senate
(P.L. 112-74;
(H.R. 1473; P.L. 112-10)
Request
H.Rept. 112-94)
(H.R. 2055; S.Rept. 112-29)
H.Rept. 112-331)
Account
FY2011a FY2012 FY2012 FY2013 FY2012 FY2013
FY2012
FY2013
FY2012
FY2013
Subtotal Medical
and Prosthetic
579,838 —
508,774 —

530,774 —

581,000 —
581,000 —
Research
Total VHA
Appropriations
48,617,570
—
51,359,759
—
51,141,759
—
51,191,985
—
51,191,985
—
(without
collections)
Medical Care
Cost Collections
3,393,000 —
3,326,000 —

3,326,000 —

3,326,000 —
3,326,000 —
(MCCF)
Total VHA
Appropriations $52,010,570
—
$54,685,759
—
$54,467,759
—
$54,517,985
—
$54,517,985
—
(with
collections)











Memorandum:










Advance
Appropriationsb
Medical
Services
— $39,649,985

— $41,354,000
—
$41,354,000

— $41,354,000
— $41,354,000
Medical Support
and Compliance
(Previously
—
5,535,000 —
5,746,000 —

5,746,000
—

5,746,000 —
5,746,000
Medical
Administration)
Medical Facilities
—
5,426,000
—
5,441,000
—
5,441,000
—
5,441,000
—
5,441,000
Total VHA
Appropriations
—
$50,610,985
—
$52,541,000
—
$52,541,000
—
$52,541,000
—
$52,541,000
Source: Prepared by the Congressional Research Service. FY2011 enacted figures based on information from the House Committee on Appropriations, Subcommittee on
Military Construction, Veterans Affairs, and Related Agencies, and S.Rept. 112-29. FY2012 request and House and Senate figures based on H.Rept. 112-94, and S.Rept. 112-
29. Final enacted numbers for FY2012 based on H.Rept. 112-331.
a. This amount also reflects the 0.2% government-wide rescission required by Division B, Section 1119(a) of the Department of Defense and Full-Year Continuing
Appropriations Act, 2011 (P.L. 112-10), and the FY2011 pay freeze rescission.
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b. The Veterans Health Care Budget Reform and Transparency Act 2009 (P.L. 111-81; codified at 38 U.S.C. §117) provided for advance appropriations (appropriations
that become available one fiscal year after the fiscal year for which the appropriations act was enacted) for VA’s medical services, medical support and compliance, and
medical facilities appropriations accounts, and requires the VA to submit a request for advance appropriation with its budget submission year. The Department of
Defense and Ful -Year Continuing Appropriations Act, 2011 (P.L. 112-10) provided budget authority for FY2012 for the fol owing accounts: medical services, medical
support and compliance, and medical facilities. Under current budget scoring guidelines new budget authority for an advance appropriation is scored in the fiscal year in
which the funds become available for obligation. Therefore, in this table the budget authority provided as an advance appropriation in FY2011 is recorded in the
FY2012 column. Likewise, the Consolidated Appropriations Act, 2012 (P.L. 112-74; H.Rept. 112-331) provided advance appropriations budget authority for FY2013 for
those same accounts. Under current budget scoring guidelines, new budget authority for an advance appropriation is scored in the fiscal year in which the funds
become available for obligation. Therefore, in this table the budget authority provided as an advance appropriation in FY2012 is recorded in the FY2013 column.

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FY2013 VHA Budget
President’s Request35
The Obama Administration’s FY2013 budget request was submitted to Congress on February 13,
2012. The President’s budget requested $135.6 billion in budget authority for the VA as a whole.
This included approximately $75 billion in mandatory funding and $61 billion in discretionary
funding (Table 3). For FY2013, the Administration requested $53.3 billion (reflecting the
advance appropriation provided in FY2012 and excluding estimated MCCF collections) for VHA.
This included $41.5 billion for the medical services account, $5.7 billion for the medical support
and compliance account, $5.4 billion for the medical facilities account, and nearly $583 million
for the medical and prosthetic research account (Table 4). The total requested amount for VHA
represents a 4.1% increase over the FY2012-enacted appropriations. According to the VA, this
increase reflects the increased costs of the implementation of the Caregivers and Veterans
Omnibus Health Services Act (P.L. 111-163), and the Agent Orange36 and Amyotrophic Lateral
Sclerosis (ALS) presumptions established by the VA.37
As required by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-
81), the President’s budget requested $54.5 billion in advance appropriations for the three medical
care appropriations (medical services, medical support and compliance, and medical facilities) for
FY2014, an increase of approximately 3.7% over the FY2013-enacted amount of $52.5 billion for
the same three accounts. In FY2014, the Administration’s budget request would have provided
$43.6 billion for the medical services account, $6.0 billion for the medical support and
compliance account, and $4.9 billion for the medical facilities account (Table 4).
House Budget Resolution
On March 20, 2012, the Chairman of the House Budget Committee released the Chairman’s mark
of the FY2013 House budget resolution. The House Budget Committee considered the
Chairman’s mark on March 21, 2012, and voted to report the budget resolution to the full House.

35 Throughout text of this report the “President’s request” excludes the Hurricane Sandy Funding Needs supplemental
that was submitted to Congress on December 7, 2012, available at http://www.whitehouse.gov/sites/default/files/
supplemental__december_7_2012_hurricane_sandy_funding_needs.pdf.pdf (accessed on April 15, 2013).
36 In August 2010, VA issued regulations establishing presumptive service connection for three new conditions: B-cell
leukemias, such as hairy cell leukemia; Parkinson’s disease; and ischemic heart disease (see Department of Veterans
Affairs, “Diseases Associated With Exposure to Certain Herbicide Agents (Hairy Cell Leukemia and Other Chronic B-
Cell Leukemias, Parkinson’s Disease and Ischemic Heart Disease),” 75 Federal Register 53202-53216, August 31,
2010). This rule change resulted in an increase in service-connected patients, and added new patients to VA’s health
care system. Furthermore, it changed the priority levels of veterans currently enrolled in VA’s health care system.
37 In 2008, the VA, through regulation, established a presumptive service connection for ALS, making those veterans
with ALS eligible for free health care for symptoms associated with ALS (see Department of Veterans Affairs,
“Presumption of Service Connection for Amyotrophic Lateral Sclerosis,” 73 Federal Register 54691-54693, September
23, 2008). To be eligible for this presumptive service connection, a veteran must have served on continuous active duty
for a period of 90 days or more. For more information on presumptive service connection see CRS Report R41405,
Veterans Affairs: Presumptive Service Connection and Disability Compensation, coordinated by Sidath Viranga
Panangala. U.S. Department of Veterans Affairs, FY2013 Budget Submission, Medical Programs and Information
Technology Programs, Volume 2 of 4, February 2012, p. 1A-3.
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H.Con.Res. 112 was introduced in the House on March 23, 2012, and was accompanied by the
House Budget Committee report (H.Rept. 112-421). The House passed H.Con.Res. 112 on March
29, 2012. According to the Committee report to accompany H.Con.Res 112:
The resolution calls for $134.6 billion in budget authority [for VA] and $135.2 billion in
outlays in fiscal year 2013.... Discretionary spending is $61.3 billion in budget authority and
$62.1 billion in outlays in fiscal year 2013. This resolution also provides for up to $54.5
billion in advance appropriations for medical care, consistent with the Veterans Health Care
Budget and Reform Transparency Act of 2009. Mandatory spending in 2013 is $73.3 billion
in budget authority and $73.2 billion in outlays.38
The Senate did not pass a budget resolution, but on April 19, 2012, the Senate Appropriations
Committee allotted subcommittee funding levels that were equal to the total $1.047 trillion cap in
the Budget Control Act of 2011 (BCA, P.L. 112-25).
Budget Control Act of 2011 (BCA, P.L. 112-25), as Revised by the American
Taxpayer Relief Act of 2012 (ATRA, P.L. 112–240), and VHA Appropriations
FY2013 discretionary appropriations were considered in the context of the Budget Control Act of 2011 (BCA, P.L.
112-25), which established discretionary spending limits for FY2012-FY2021. The BCA also tasked a Joint Select
Committee on Deficit Reduction to develop a federal deficit reduction plan for Congress and the President to enact
by January 15, 2012. Because deficit reduction legislation was not enacted by that date, an automatic spending
reduction process established by the BCA was triggered; this process consists of a combination of sequestration and
lower discretionary spending caps, initially scheduled to begin on January 2, 2013. The “joint committee”
sequestration process for FY2013 required the Office of Management and Budget (OMB) to implement across-the-
board spending cuts at the account and program level to achieve equal budget reductions from both defense and
nondefense funding at a percentage to be determined, under terms specified in the Balanced Budget and Emergency
Deficit Control Act of 1985 (BBEDCA, Title II of P.L. 99-177, 2 U.S.C. 900-922), as amended by the BCA. For further
information on the Budget Control Act, see CRS Report R41965, The Budget Control Act of 2011, by Bill Heniff Jr.,
Elizabeth Rybicki, and Shannon M. Mahan.
The American Taxpayer Relief Act (ATRA, P.L. 112-240), enacted on January 2, 2013, made a number of significant
changes to the procedures in the BCA. First, the date for the joint committee sequester to be implemented was
delayed for two months, until March 1, 2013. Second, the dol ar amount of the joint committee sequester was
reduced by $24 billion. Third the statutory caps on discretionary spending for FY2013 (and FY2014) were lowered.
For further information on the changes to BCA procedures made by ATRA, see CRS Report R42949, The American
Taxpayer Relief Act of 2012: Modifications to the Budget Enforcement Procedures in the Budget Control Act, by Bill Heniff Jr.
Pursuant to the BCA, as amended by ATRA, President Obama ordered that the joint committee sequester be
implemented on March 1, 2013.39 However, all programs administered by the VA, including Veterans’ Medical Care
and al administrative expenses were exempt from sequestration under Section 255(b) of BBEDCA, as amended.


38 U.S. Congress, House Committee on the Budget, Concurrent Resolution On The Budget—Fiscal Year 2013, Report
to accompany H.Con.Res. 112, 112th Cong., 2nd sess., March 23, 2012, H.Rept. 112-421 (Washington: GPO, 2012),
p. 107.
39 White House, President Obama, Sequestration Order for Fiscal Year 2013 Pursuant to Section 251A of the Balanced
Budget and Emergency Deficit Control Act, As Amended, March 1, 2013, available at http://www.whitehouse.gov/
sites/default/files/2013sequestration-order-rel.pdf (accessed April 30, 2013).


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House Floor Action and Senate Committee Action
On May 8, 2012, the House Military Construction and Veterans Affairs Subcommittee approved
its version of a Military Construction and Veterans Affairs and Related Agencies Appropriations
bill for FY2013 (MILCON-VA Appropriations bill). The full House Appropriations Committee
voted to report the measure on May 16, and the House passed H.R. 5854 on May 31, 2012. The
MILCON-VA Appropriations bill for FY2013 (H.R. 5854; H.Rept. 112-491) proposed a total of
$135.4 billion for the VA. This amount was $13.2 billion (10.8%) above the FY2012-enacted
amount of $122.2 billion and 0.2% below the President’s requested amount of $135.6 billion for
FY2013 (excluding the Hurricane Sandy Funding Needs supplemental request).
H.R. 5854 (H.Rept. 112-491) as passed by the House proposed $53.1 billion for VHA, which
comprises four accounts: medical services, medical support and compliance, medical facilities,
and medical and prosthetic research. The total amount for VHA was approximately $2.0 billion
above the FY2012-enacted amount and 0.3% less than the Administration’s budget request for
FY2013 (excluding the Hurricane Sandy Funding Needs supplemental request).
During committee mark-up of the MILCON-VA Appropriations bill, the House Appropriations
Committee noted with concern VHA’s revision of budget estimates for FY2012 and FY2013 and
the lack of timely notification to the Appropriation Committees. According to the President’s
budget submission in February 2012, there had been a significant revision to both the FY2012
and FY2013 VHA budget estimates. This revision occurred after VHA ran its Enrollee Healthcare
Projection Model in the spring of 2011 using updated information. The result of this update was a
lowering of required appropriations for VHA in FY2012 by nearly $3 billion, and nearly $2
billion for FY2013. VHA subsequently made an internal decision to reallocate those resources to
fund a variety of initiatives. To address this lapse of notification to Congress, the committee
included bill language requiring the VHA to notify the Congress of any changes in funding
requirements exceeding $250 million identified when the Enrollee Healthcare Projection Model is
recalculated in the spring of each year. Additionally, H.R. 5854 contained bill language requiring
the VHA to submit a reprogramming request when it proposes a change in funding for initiatives
listed on the ‘‘VA Medical Care Obligations by Program’’ page in the President’s budget
submission to Congress.40
The Senate Appropriations Committee, Military Construction, Veterans Affairs Subcommittee
approved its version of a draft MILCON-VA Appropriations bill on May 15, 2012; the full Senate
Appropriations Committee reported the draft measure on May 22, 2012. The Senate
Appropriations Committee-reported MILCON-VA Appropriations bill (S. 3215; S.Rept. 112-168)
proposed a total of $135.6 billion for VA, same as the President’s request (excluding the
Hurricane Sandy Funding Needs supplemental request), and $13.4 billion above the FY2012-
enacted amount.
The Senate Appropriations Committee reported MILCON-VA Appropriations bill (S. 3215;
S.Rept. 112-168) proposed $53.3 billion for VHA for FY2013, which comprises four accounts:
medical services, medical support and compliance, medical facilities, and medical and prosthetic
research. The total amount for VHA was approximately $2.1 billion above the FY2012-enacted

40 U.S. Congress, House Committee on Appropriations, Military Construction and Veterans Affairs and Related
Agencies Appropriations bill 2013, report to accompany H.R. 5854, 112th Cong., 2nd sess., May 23, 2010, p. 35.
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amount and $10 million less than the Administration’s request (excluding the Hurricane Sandy
Funding Needs supplemental request).
Disaster Relief Appropriations Act, 2013 (P.L. 113-2)
On December 7, 2012, the President submitted a $260 million supplemental request for VA for
costs associated with Hurricane Sandy. On January 29, 2013, the Disaster Relief Appropriations
Act, 2013, a disaster assistance measure largely focused on responding to Hurricane Sandy, was
signed into law as P.L. 113-2.41 Among other provisions, this Act provided funding of
approximately $260 million for the VA as a whole. This included $21 million for the medical
services account and $6 million for the medical facilities account. In total P.L. 113-2 provided
$27 million for VHA for FY2013 (see Table 4).42 This funding is designated for replacing
medical equipment, and repairing and reconstructing VA medical facilities, which sustained flood
damage during the storm.
Consolidated and Further Continuing
Appropriations Act, 2013 (P.L. 113-6)
House and Senate Action
The 112th Congress did not enact a regular Military Construction and Veterans Affairs and Related
Agencies Appropriations bill for FY2013 (MILCON-VA Appropriations bill) prior to the
beginning of FY2013, and funded most of the VA (excluding the three medical care accounts:
medical services, medical support and compliance, and medical facilities) through a six-month
government-wide continuing resolution (P.L. 112-175). That extended into the start of the 113th
Congress.
On March 6, 2013, the House passed the Department of Defense, Military Construction and
Veterans Affairs, and Full-Year Continuing Appropriations Act, 2013 (H.R. 933). The Senate
passed an amended version of the bill on March 20, 2013, and the House agreed to the amended
version the next day. The Consolidated and Further Continuing Appropriations Act, 2013 (H.R.
933; P.L. 113-6), was signed into law by the President on March 26, 2013. Division E of P.L. 113-
6 contained funding for the VA. P.L. 113-6 provides $133.9 billion in budget authority for the VA
as a whole. This included approximately $72.9 billion in mandatory funding and $61 billion in
discretionary funding. P.L. 113-6 provides $53.3 billion for VHA for FY2013, which comprises
four accounts: medical services, medical support and compliance, medical facilities, and medical
and prosthetic research. The total amount for VHA is approximately $2.1 billion above the
FY2012-enacted amount and $10 million less than the Administration’s request (excluding the
Hurricane Sandy Funding Needs supplemental request).

41 For more information on the Hurricane Sandy supplemental, see CRS Report R42869, FY2013 Supplemental
Funding for Disaster Relief, coordinated by William L. Painter and Jared T. Brown.
42 The rest of the funding includes $207 million for renovation and repair of the VA Manhattan Medical Center, and
$531,000 to renovate and replace information technology equipment that was damaged or destroyed due to Hurricane
Sandy.
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Across‐the‐Board Rescissions
Sections 3001 and 3004 in Division G of P.L. 113‐6 included across- the-board rescissions for all discretionary
accounts, including those of the VA. Section 3001 required a 0.1% across-the-board rescission for discretionary VA
accounts appropriated in FY2013. Section 3004 of P.L. 113-6 is intended to eliminate any amount by which the new
budget authority provided in the Act exceeds the FY2013 discretionary spending limits in section 251(c)(2) of the
Balanced Budget and Emergency Deficit Control Act, as amended by the Budget Control Act of 2011 and the
American Taxpayer Relief Act of 2012. As enacted, this section provides two separate across-the-board rescissions—
one for nonsecurity budget authority and one for security budget authority—of 0%, to be applied at the program,
project, and activity level. The section requires the percentages to be increased if OMB estimates that additional
rescissions are needed to avoid exceeding the limits. Subsequent to the enactment of P.L. 113-6, OMB calculated that
additional rescissions of 0.032% of security budget authority, and 0.2% of nonsecurity budget authority, would be
required.43 The tables and discussion below exclude these additional across- the-board rescissions of budget authority
required under P.L. 113-6.

Table 3 and Table 4 provide funding levels for FY2013 and advance appropriations for FY2014.
Funding levels for VA for FY2013 include funding provided in the Disaster Relief Appropriations
Act, 2013 (P.L. 113-2) and the Consolidated and Further Continuing Appropriations Act, 2013
(P.L. 113-6); they exclude the across-the-board rescissions discussed in the text box.44

43 OMB determined that these two additional rescissions would be necessary on April 4, 2013. The OMB Director is
required to submit a report to the appropriations committees specifying the amount of the reduction at the account level
by April 26, 2013. For further information, see OMB, “Consolidated and Further Continuing Appropriations Act,
2013,” Budget Enforcement Act (7-Day-After Reports), April 4, 2013, p. 54, available at
http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/7_day_after/bea_report_hr933_04-04-
13.pdf (accessed April 30, 2013).
44 Details of the allocated reductions calculated by the Office of Management and Budget (OMB) are available at
http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/reductions/
fy13_atb_reductions_04_25_13.pdf (accessed April 30, 2013).
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Table 3. VA Appropriations, FY2012-FY2013, and Advance Appropriations, FY2014
($ in thousands)
Disaster Relief
Appropriations Act, 2013
Consolidated
(P.L. 113-2); and
Appropriations Act, 2012
House
Senate Committee
Consolidated and Further
(P.L. 112-74;
President’s Budget
(H.R. 5854;
(S. 3215;
Continuing Appropriations
H.Rept. 112-331)
Request
H.Rept. 112-491)
S.Rept. 112-168)
Act, 2013 (P.L. 113-6)

FY2012 FY2013 FY2013a FY2014 FY2013b FY2014 FY2013 FY2014 FY2013c FY2014
Total Department of
$122,226,272 — $135,872,279 — $135,377,850 — $135,636,648 — $134,146,884 —
Veterans Affairs (VA)
Total Mandatory
63,764,919
—
74,638,167
—
74,638,167
—
74,638,167
—
72,912,772
—
Total
58,461,353 —
61,234,112 —
60,739,683
— 60,998,481 —
61,234,234 —
Discretionary
Total Veterans Health
Administration
$51,191,985 —
$53,315,674 —
$53,123,674 — $53,278,674 —
$53,305,674 —
(VHA)d
Memorandum:
Advance
— $52,541,000
— $54,462,000 — $54,462,000
—
$54,462,000 — $54,462,000
appropriations VHAe
Source: Table prepared by the Congressional Research Service. The FY2012 final enacted numbers are based on H.Rept. 112-331. FY2013 House and Senate figures and
FY2014 advance appropriations figures are based on H.Rept. 112-491; S.Rept. 112-168; Congressional Record, daily edition, vol. 158 (May 31, 2012), pp. H3311-H3314;
Congressional Record, daily edition, vol. 159 (January 15, 2013), p. H111; and Congressional Record, daily edition, vol. 159 (March 11, 2013), pp. S1585-S1587.
a. This figure includes the President’s regular FY2013 budget request that was submitted to Congress on February 13, 2012, and the Hurricane Sandy Funding Needs
supplemental request that was submitted to Congress on December 7, 2012.
b. This amount reflects the 0.5% rescission of the federal employee pay raise (the House-passed measure did not provide funding for the 0.5% federal employee pay raise
assumed in the President’s budget request).
c. This amount does not reflect the 0.1% across-the-board rescission required of al discretionary accounts of the VA by Section 3001 in Division G of P.L. 113‐6; or the
0.032% across-the-board rescission required from al discretionary accounts of the VA as a result of Section 3004 in Division G of P.L. 113‐6. Details of the allocated
reductions calculated by the Office of Management and Budget (OMB) are available at http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/
reductions/fy13_atb_reductions_04_25_13.pdf (accessed April 30, 2013)
d. Includes funding for medical services, medical support and compliance, medical facilities, and medical and prosthetic research accounts, and excludes col ections
deposited into the Medical Care Collections Fund (MCCF).
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Veterans’ Medical Care: FY2013 Appropriations

e. The Veterans Health Care Budget Reform and Transparency Act 2009 (P.L. 111-81; codified at 38 U.S.C. §117) provided for advance appropriations (appropriations
that become available one fiscal year after the fiscal year for which the appropriations act was enacted) for VA’s medical services, medical support and compliance, and
medical facilities appropriations accounts, and requires the VA to submit a request for advance appropriation with its budget submission year. The Consolidated
Appropriations Act, 2012 (P.L. 112-74; H.Rept. 112-331) provided advance appropriations budget authority for FY2013 for the following accounts: medical services,
medical support and compliance, and medical facilities. Under current budget scoring guidelines new budget authority for an advance appropriation is scored in the
fiscal year in which the funds become available for obligation. Therefore, in this table the budget authority provided as an advance appropriation in FY2012 is recorded
in the FY2013 column. The Administration’s advance appropriations request for FY2014 and advance appropriations budget authority for FY2014 provided in the
Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6) are recorded in the FY2014 column.
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Veterans’ Medical Care: FY2013 Appropriations

Table 4. VHA Appropriations by Account, FY2012-FY2013, and Advance Appropriations, FY2014
($ in thousands)
Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
Consolidated
Consolidated and Further
Appropriations Act, 2012
House
Senate Committee
Continuing
(P.L. 112-74;
(H.R. 5854;
(S. 3215;
Appropriations Act, 2013
H.Rept. 112-331)
President’s Budget Request
H.Rept. 112-491)
S.Rept. 112-168)
(P.L. 113-6)
Account
FY2012 FY2013 FY2013a FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 FY2014
Medical Services
$39,649,985
—
$41,354,000
—
$41,354,000
—
$41,354,000
—
$41,354,000
—
Additional
Funding over
FY2013 Advance
— — 165,000
— — — 155,000
155,000
—
Appropriation
Disaster Relief
Appropriations
Act, 2013 (P.L.
— — 21,000
— — — — — 21,000
—
113-2)
Subtotal Medical
39,649,985
— 41,540,000
— 41,354,000
— 41,509,000
— 41,530,000
—
Services
Medical Support
and Compliance
(Previously
5,535,000 —
5,746,000 —
5,746,000 —
5,746,000 —
5,746,000 —
Medical
Administration)
Subtotal Medical
Support and
Compliance
5,535,000
— 5,746,000
— 5,746,000
— 5,746,000
— 5,746,000
—
(Previously Medical
Administration)
Medical
Facilities
5,426,000 —
5,441,000 —
5,441,000 —
5,441,000 —
5,441,000 —
Disaster Relief
Appropriations
Act, 2013 (P.L.
— —
6,000
— — — — —
6,000
—
113-2)
Subtotal Medical
Facilities
5,426,000
— 5,447,000
— 5,441,000
— 5,441,000
— 5,447,000
—
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Veterans’ Medical Care: FY2013 Appropriations

Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
Consolidated
Consolidated and Further
Appropriations Act, 2012
House
Senate Committee
Continuing
(P.L. 112-74;
(H.R. 5854;
(S. 3215;
Appropriations Act, 2013
H.Rept. 112-331)
President’s Budget Request
H.Rept. 112-491)
S.Rept. 112-168)
(P.L. 113-6)
Account
FY2012 FY2013 FY2013a FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 FY2014
Medical and
Prosthetic
581,000 —
582,674 —
582,674 —
582,674 —
582,674 —
Research
Subtotal Medical
and Prosthetic
581,000
— 582,674
— 582,674
— 582,674
— 582,674
—
Research
Total VHA
Appropriations
(without
51,191,985
—
53,315,674
—
53,123,674b
—
53,278,674
—
53,305,674c
—
collections)
Medical Care
Cost Collections
3,326,000 —
2,527,000 —
2,527,000 —
2,527,000 —
2,527,000 —
(MCCF)
Total VHA
Appropriations
(with
$54,517,985
—
$55,842,674
—
$55,650,674
—
$55,805,674
—
$55,832,674 —
collections)











Memorandum:










Advance
Appropriations
d
Medical Services
—
$41,354,000
—
$43,557,000
—
$43,557,000
—
$43,557,000
—
$43,557,000
Medical Support
and Compliance
(Previously
— 5,746,000
— 6,033,000
— 6,033,000
— 6,033,000
— 6,033,000
Medical
Administration)
Medical Facilities
—
5,441,000
—
4,872,000
—
4,872,000
—
4,872,000
—
4,872,000
Total VHA
—
$52,541,000
— $54,462,000 — $54,462,000 — $54,462,000
— $54,462,000
Appropriations
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Veterans’ Medical Care: FY2013 Appropriations

Source: Table prepared by the Congressional Research Service. Final enacted numbers for FY2012 based on H.Rept. 112-331. FY2013 House and Senate figures and
FY2014 advance appropriations figures are based on H.Rept. 112-491; S.Rept. 112-168; Congressional Record, daily edition, vol. 158 (May 31, 2012), pp. H3311-H3314;
Congressional Record, daily edition, vol. 159 (January 15, 2013), p. H111; and Congressional Record, daily edition, vol. 159 (March 11, 2013), pp. S1585-S1587.
a. This figure includes the President’s regular FY2013 budget request that was submitted to Congress on February 13, 2012, and the Hurricane Sandy Funding Needs
supplemental request that was submitted to Congress on December 7, 2012.
b. This amount does not reflect the 0.5% rescission of the federal employee pay raise (the House-passed measure did not provide funding for the 0.5% federal employee
pay raise assumed in the President’s budget request).
c. This amount does not reflect the 0.1% across-the-board rescission required of al discretionary accounts of the VA by Section 3001in Division G of P.L. 113‐6; or the
0.032% across-the-board rescission required from al discretionary accounts of the VA as a result of Section 3004 in Division G of P.L. 113‐6. Details of the allocated
reductions calculated by the Office of Management and Budget (OMB) are available at http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/
reductions/fy13_atb_reductions_04_25_13.pdf (accessed April 30, 2013).
d. The Veterans Health Care Budget Reform and Transparency Act 2009 (P.L. 111-81; codified at 38 U.S.C. §117) provided for advance appropriations (appropriations
that become available one fiscal year after the fiscal year for which the appropriations act was enacted) for VA’s medical services, medical support and compliance, and
medical facilities appropriations accounts, and requires the VA to submit a request for advance appropriation with its budget submission year. The Consolidated
Appropriations Act, 2012 (P.L. 112-74; H.Rept. 112-331) provided advance appropriations budget authority for FY2013 for the following accounts: medical services,
medical support and compliance, and medical facilities. Under current budget scoring guidelines new budget authority for an advance appropriation is scored in the
fiscal year in which the funds become available for obligation. Therefore, in this table the budget authority provided as an advance appropriation in FY2012 is recorded
in the FY2013 column. The Administration’s advance appropriations request for FY2014 and advance appropriations budget authority for FY2014 provided in the
Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6) are recorded in the FY2014 column.

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Veterans’ Medical Care: FY2013 Appropriations

Appendix A. VA Priority Groups and Their
Eligibility Criteria
Table A-1. VA Priority Groups and Their Eligibility Criteria
Priority Group 1
Veterans with service-connected disabilities rated 50% or more disabling
Veterans determined by VA to be unemployable due to service-connected conditions
Priority Group 2
Veterans with service-connected disabilities rated 30% or 40% disabling
Priority Group 3
Veterans who are former POWsa
Veterans awarded the Purple Heartb
Veterans in receipt of the Medal of Honorc
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 catastrophical y 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
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 as follows:
—Veterans discharged from active duty on or after January 28, 2003, who were enrol ed as of January 28,
2008, and veterans who apply for enrol ment after January 28, 2008, for five years post discharge
—Veterans discharged from active duty before January 28, 2003, who apply for enrol ment after January 28,
2008, until January 27, 2011
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Veterans’ Medical Care: FY2013 Appropriations

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 VA national geographic income thresholds
Priority Group 8
Veterans who agree to pay specified copayments with income and/or net worth above the VA means test threshold
and the VA national geographic threshold
Subpriority a: Noncompensable 0% service-connected and enrol ed as of January 16, 2003, and who have remained
enrolled since that date and/or placed in this subpriority due to changed eligibility status
Subpriority b: Noncompensable 0% service-connected and enrol ed on or after June 15, 2009, whose income exceeds
the current VA means test threshold or VA national geographic income thresholds by 10% or less
Subpriority c: Nonservice-connected veterans enrol ed as of January 16, 2003, and who have remained enrol ed since
that date and/or placed in this subpriority due to changed eligibility status
Subpriority d: Nonservice-connected veterans enrol ed on or after June 15, 2009, whose income exceeds the current
VA means test threshold or VA national geographic income thresholds by 10% or less
Subpriority e: Noncompensable 0% service-connected veterans not meeting the above criteria
Subpriority g: Nonservice-connected veterans not meeting the above criteria
Source: Department of Veterans Affairs.
Notes: 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
a. Veterans who are former Prisoners of War (POWs) are placed in Priority Group 3. This change occurred
with the enactment of the Former Prisoner of War Benefits Act of 1981(P.L. 97-37) on August 14, 1981.
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 November 30, 1999.
c. Veterans in receipt of the Medal of Honor are in Priority Group 3. This change occurred with the
enactment of the Caregiver and Veterans Omnibus Health Services Act of 2010 (P.L. 111-163) on May 5,
2010.


Author Contact Information

Sidath Viranga Panangala

Specialist in Veterans Policy
spanangala@crs.loc.gov, 7-0623

Congressional Research Service
26

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