Veterans’ Medical Care:
FY2014 Appropriations

Sidath Viranga Panangala
Specialist in Veterans Policy
August 14, 2013
Congressional Research Service
7-5700
www.crs.gov
R43179


Veterans’ Medical Care: FY2014 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.
The President’s FY2014 budget request was submitted to Congress on April 10, 2013. The
President’s budget requested $147.9 billion in budget authority for the VA as a whole. For
FY2014, the Administration requested $55.2 billion for VHA. This included $43.7 billion for the
medical services account, $6.0 billion for the medical support and compliance account, $4.9
billion for the medical facilities account, and nearly $586 million for the medical and prosthetic
research account. Furthermore, as required by the Veterans Health Care Budget Reform and
Transparency Act of 2009 (P.L. 111-81), the President’s budget requested $55.6 billion in advance
appropriations for the three medical care accounts (medical services, medical support and
compliance, and medical facilities) for FY2015.
On May 15, 2013, the House Military Construction and Veterans Affairs Subcommittee approved
its version of a Military Construction and Veterans Affairs and Related Agencies Appropriations
bill for FY2014 (MILCON-VA Appropriations bill). The full House Appropriations Committee
voted to report the measure on May 21, 2013, and the House passed H.R. 2216 on June 4, 2013.
The MILCON-VA Appropriations bill for FY2014 (H.R. 2216; H.Rept. 113-90) proposes a total
of $147.6 billion for the VA as whole. For FY2014, H.R. 2216 proposes $54.9 billion for VHA.
This included $43.6 billion for the medical services account, $6.0 billion for the medical support
and compliance account, $4.9 billion for the medical facilities account, and nearly $586 million
for the medical and prosthetic research account. H.R. 2216 (H.Rept. 113-90) proposes to rescind
$156 million of funding already appropriated for VHA in FY2014 (as advance appropriations)
and gives the Secretary the discretion to allocate these reductions across VHA accounts. H.R.
2216 includes $55.6 billion in advance FY2015 funding for the medical services, medical support
and compliance, and medical facilities accounts—the same level included in the House-passed
Budget Resolution, and the President’s request.
On June 18, 2013, the Senate Military Construction, Veterans Affairs, and Related Agencies
Subcommittee approved its version of the MILCON-VA Appropriations bill. The full Senate
Appropriations Committee voted to report (H.R. 2216; S.Rept. 113-48) on June 20. H.R. 2216
(S.Rept. 113-48) proposes appropriations totaling $147.9 billion for FY2014 for the functions of
the VA as a whole and $55.2 billion for VHA. VHA’s total includes $43.6 billion for the medical
services account (an additional $25 million over the FY2014 advance appropriations), $6.0 billion
for the medical support and compliance account, nearly $5.0 billion for the medical facilities
account (an additional $100 million over the FY2014 advance appropriations), and almost $586
million for the medical and prosthetic research account. Similar to the House version, the Senate
Committee approved version includes $55.6 billion in advance FY2015 funding for the medical
services, medical support and compliance, and medical facilities accounts.

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Veterans’ Medical Care: FY2014 Appropriations

Contents
Introduction ...................................................................................................................................... 1
The Veteran Patient Population ........................................................................................................ 2
Advance Appropriations ........................................................................................................... 5
Department of Veterans Affairs Budget ........................................................................................... 5
Overview of Veterans Health Administration’s Budget Formulation .............................................. 8
Funding for the VHA ................................................................................................................. 8
Medical Services ....................................................................................................................... 9
Medical Support and Compliance (Previously Medical Administration) .................................. 9
Medical Facilities .................................................................................................................... 10
Medical and Prosthetic Research ............................................................................................. 10
Medical Care Collections Fund (MCCF) ................................................................................ 10
FY2013 Budget Summary ............................................................................................................. 12
President’s Request .................................................................................................................. 12
Congressional Action ............................................................................................................... 12
FY2014 VHA Budget .................................................................................................................... 18
President’s Request .................................................................................................................. 18
House Budget Resolution ........................................................................................................ 18
Senate Budget Resolution ........................................................................................................ 19
House Action ........................................................................................................................... 19
Senate Appropriations Committee Action ............................................................................... 19

Figures
Figure 1. FY2013 VA Budget Allocations ....................................................................................... 6
Figure 2. FY2014 VA Budget Request............................................................................................. 7

Tables
Table 1. VHA Unique Enrollees, FY2010-FY2014 ......................................................................... 3
Table 2. VHA Unique Patients, FY2010-FY2014 ........................................................................... 4
Table 3. Medical Care Collections, FY2009-FY2014 ................................................................... 11
Table 4. VA and VHA Appropriations, FY2013, and Advance Appropriations, FY2014 .............. 14
Table 5. VHA Appropriations by Account, FY2013, and Advance Appropriations,
FY2014 ....................................................................................................................................... 16
Table 6. VA and VHA Appropriations, FY2013-FY2014, and Advance Appropriations,
FY2015 ....................................................................................................................................... 21
Table 7. VHA Appropriations by Account, FY2013-FY2014, and Advance
Appropriations, FY2015 ............................................................................................................. 23
Table A-1. Priority Groups and Their Eligibility Criteria .............................................................. 26
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Appendixes
Appendix. Priority Groups and Their Eligibility Criteria .............................................................. 26

Contacts
Author Contact Information........................................................................................................... 27

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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).9 The Veterans Benefits Administration (VBA) is responsible for, among
other things, providing compensation, pensions, and education assistance. The National Cemetery
Administration (NCA)10 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.11 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. Inpatient and outpatient care are also provided in
the private sector to eligible dependents of veterans under the Civilian Health and Medical
Program of the Department of Veterans Affairs (CHAMPVA).12 The VHA is also a provider of

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 The BVA is part of the Department of Veterans Affairs, located in Washington, DC, and makes the final
determination on an appeal within the VA. The BVA reviews all appeals for entitlement to veterans’ benefits, including
claims for service connection, increased disability ratings, pension, insurance benefits, educational benefits, home loan
guaranties, vocational rehabilitation, dependency and indemnity compensation, health care services, and fiduciary
matters. For more information see CRS Report R42609, Overview of the Appeal Process for Veterans’ Claims, by
Daniel T. Shedd.
10 Established by the National Cemeteries Act of 1973 (P.L. 93-43).
11 38 U.S.C. §7301 and 38 U.S.C. §7303.
12 For more information on CHAMPVA see, CRS Report RS22483, Health Care for Dependents and Survivors of
Veterans
, by Sidath Viranga Panangala.
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health care education and training for physician residents and other health care trainees.13 The
other statutory missions of VHA are to serve as a contingency backup to the Department of
Defense (DOD) medical system during a national security emergency,14 and to provide support to
the National Disaster Medical System and the Department of Health and Human Services as
necessary.15
In general, eligibility for VA health care is based on previous military service,16 presence of
service-connected disabilities,17 and/or other factors.18 Veterans generally must enroll in the VA
health care system to receive medical care. Once enrolled, veterans are assigned to one of eight
categories (see Appendix).19 It should be noted that in any given year, not all enrolled veterans
obtain their health care services from the VA. While some veterans may rely solely on the 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).20
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.21
The Veteran Patient Population
In FY2013, approximately 8.9 million of the 22.2 million living veterans in the nation were
estimated to be enrolled in the VA health care system (see Table 1). From FY2010 through
FY2013 the total number of enrollees has increased by 6.6%. Of the total number of enrolled
veterans in FY2013, VA anticipated treating approximately 5.75 million unique veteran patients
(see Table 2).22 For FY2014, VHA estimates that it will treat about 5.8 million unique veteran
patients, and of these, VA anticipates treating more than 674,000 Operation Enduring Freedom

13 38 U.S.C. §7302.
14 38 U.S.C. §8111A.
15 38 U.S.C. §1785.
16 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.
17 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
increments of 10 (38 C.F.R. §§4.1-4.31).
18 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.
19 Ibid.
20 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.
21 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.
22 In a given year not all enrolled veterans receive care from the VA, either because they are not sick or they have other
sources of care such as the private sector.
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Veterans’ Medical Care: FY2014 Appropriations

(OEF), Operation Iraqi Freedom (OIF), and Operation New Dawn (OND) veterans.23 In FY2014,
OEF, OIF, and OND patients would represent approximately10.4% of the overall patients served
by the VA.
VHA also provides medical care to certain non-veterans; in FY2014 this population is expected to
increase by almost 18,000 patients over the FY2013 level.24 In total, including non-veterans, it is
estimated the VHA will treat nearly 6.5 million patients in 2014, a slight increase of 1.3% over
the number of patients treated in FY2013 (see Table 2). Between FY2010 and FY2013, the
number of patients treated by VA has grown by 7.1%.
The total number of outpatient visits, including visits to Vet Centers, reached 88.7 million during
FY2012 and is projected to increase to approximately 92.2 million in FY2013 and 95.5 million in
FY2014.25
Table 1. VHA Unique Enrollees, FY2010-FY2014
FY2010
FY2011
FY2012
FY2013
FY2014
Priority Groups
Actual
Actual
Actual
Estimate
Estimate
1
1,255,856
1,385,482
1,539,632
1,579,719
1,667,147
2
630,907
656,828
680,339
702,111
720,254
3
1,137,864
1,154,954
1,173,673
1,195,923
1,208,452
4
238,810
242,385
241,626
238,444
236,024
5
2,253,353
2,243,148
2,215,449
2,281,035
2,279,493
6
526,079
569,400
593,478
547,304
552,274
Subtotal Priority
Groups 1-6
6,042,869
6,252,197
6,444,197
6,544,536
6,663,644
7
175,088
188,823
171,031
246,932
247,455
8
2,125,160
2,133,178
2,147,320
2,106,206
2,119,159
Subtotal Priority
2,300,248
2,322,001
2,318,351
2,353,138
2,366,614
Groups 7-8
Total Enrol ees
8,343,117
8,574,198
8,762,548
8,897,674
9,030,258
Source: Table prepared by Congressional Research Service based on data from Department of Veterans Affairs,
FY2014 Budget Submission, Medical Programs and Information Technology Programs, Volume 2 of 4, April 2013, p.
1C-27.
Notes: For a description of Priority Groups see Appendix.

23 On September 1, 2010, the combat mission in Iraq (Operation Iraqi Freedom, OIF) formally ended and transitioned
to Operation New Dawn (OND), which ended on December 15, 2011. VA considers OND to be part of the same
contingency operation that was formerly called OIF. Therefore, VA considers participants in OND to be eligible for
health care under the legal authorities pertaining to OIF. OEF/OIF/OND data from Department of Veterans Affairs,
FY2014 Budget Submission, Medical Programs and Information Technology Programs, Volume 2 of 4, April 2013
p.1A-4.
24 Non-veterans include Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)
patients (certain dependents of veterans), reimbursable patients in VA affiliated hospitals and clinics, care provided on
a humanitarian basis, veterans of World War II allied nations, and employees receiving preventative occupational
immunizations such as Hepatitis A&B and flu vaccinations.
25 Department of Veterans Affairs, FY2014 Budget Submission, Medical Programs and Information Technology
Programs,
Volume 2 of 4, April 2013 p.1C-28.
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Table 2. VHA Unique Patients, FY2010-FY2014
FY2010
FY2011
FY2012
FY2013
FY2014
Priority Groups
Actual
Actual
Actual
Estimate
Estimate
1
1,071,438
1,179,333
1,307,750
1,377,280
1,443,404
2
425,966
442,665
456,050
464,482
472,713
3
677,682
687,284
697,548
700,730
704,633
4
189,381
191,177
191,521
187,606
184,485
5
1,500,313
1,487,637
1,464,198
1,459,971
1,452,259
6
244,546
266,374
272,043
270,203
273,793
Subtotal Priority Groups 1-6
4,109,326
4,254,470
4,389,110
4,460,272
4,531,287
7
160,251
170,690
155,093
160,623
161,100
8
1,171,482
1,157,011
1,136,171
1,129,238
1,126,161
Subtotal Priority Groups 7-8
1,331,733
1,327,701
1,291,264
1,289,861
1,287,261
Subtotal Unique
5,441,059
5,582,171
5,680,374
5,750,133
5,818,548
Veteran Patients
OEF/OIF/OND veterans
400,127
470,755
539,970
607,362
674,754
included in the above total
Non-veteransa
559,051
584,020
652,717
676,576
694,470
Total Unique Veteran
and non-Veteran
6,000,110
6,166,191
6,333,091
6,426,709
6,513,018
Patients
Source: Table prepared by Congressional Research Service based on data from Department of Veterans Affairs,
FY2014 Budget Submission, Medical Programs and Information Technology Programs, Volume 2 of 4, April 2013, p.
1C-27. OEF/OIF/OND data from Department of Veterans Affairs, FY2014 Budget Submission, Medical Programs
and Information Technology Programs,
Volume 2 of 4, April 2013 p.1A-4.
Notes: For a description of Priority Groups see Appendix. Unique patients are those that receive at least one
episode of care from the VA or whose treatment is paid for by the VA and is counted only once in a given fiscal
year.
a. Non-veterans include Civilian Health and Medical Program of the Department of Veterans Affairs
(CHAMPVA) patients (certain dependents of veterans), reimbursable patients with VA affiliated hospitals
and clinics, care provided on a humanitarian basis, veterans of World War II allied nations, and employees
receiving preventative occupational immunizations such as Hepatitis A&B and flu vaccinations.
The rest of this report focuses on appropriations for VHA. It begins with a brief overview of VA’s
budget as a whole for FY2013 and the President’s request for FY2014. 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 FY2013 VHA budget. The report ends with a section discussing recent legislative
developments pertaining to the FY2014 VHA budget.
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Veterans’ Medical Care: FY2014 Appropriations

Advance Appropriations26
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.27 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. Subsequently, each successive
appropriation measure has provided advance appropriations for the VHA accounts: 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), provided advance appropriations for FY2013; and the Consolidated and Further
Continuing Appropriations Act, 2013 (P.L. 113-6), 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. 113-2), and by additional funding provided by Division E of the Consolidated and
Further Continuing Appropriations Act, 2013 (P.L. 113-6), which 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. Instead, the advance appropriation provided in FY2013
for use in FY2014 is shown in the memorandum in the FY2014 column. Similarly, funding
shown for FY2014 does not include advance appropriations provided in FY2014 for use in
FY2015.
Department of Veterans Affairs Budget
The VA budget includes both mandatory28 and discretionary funding.29 Mandatory accounts fund
disability compensation, pensions, vocational rehabilitation and employment, education, life

26 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).
27 Codified at 38 U.S.C. §117.
28 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
(continued...)
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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 FY2013 budget allocations for both mandatory and
discretionary programs (see also Table 4). In FY2013, the total VA budget authority was
approximately $134.1 billion; discretionary budget authority accounted for about 46% ($61.2
billion) of the total, with about 87% ($53.3 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 54% ($72.9 billion) of the total VA budget
authority, with about 83% ($60.63 billion) of this mandatory funding going toward disability
compensation and pension programs.
Figure 1. FY2013 VA Budget Allocations
Construction, 1.1%
(Discretionary)
Total Budget Authority = $134.1 billion
Information
Discretionary
Technology, 2.5%
Benefits Programs,
(Discretionary)
1.8%
Medical Programs,
39.8%
(Discretionary)
Mandatory Benefits
Programs, 54.5%
Departmental
Administration, 0.3%
(Discretionary)

Source: Chart prepared by the Congressional Research Service based on H.Rept. 113-90 and S.Rept. 113-48.
CRS calculated the FY2013 budget authority to reflect the 0.1% across-the-board rescission required of all
discretionary accounts of the VA by Section 3001 in Division G of P.L. 113-6, and the 0.032% across-the-board

(...continued)
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 Mindy R. Levit.
29 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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rescission required from all discretionary accounts of the VA as a result of Section 3004 in Division G of
P.L. 113-6. CRS calculations were based on the al ocated reductions calculated by the Office of Management and
Budget (OMB), available at http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/
reductions/fy13_atb_reductions_04_25_13.pdf (accessed June 10, 2013).
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 FY2014 President’s budget request for both mandatory and
discretionary programs (also see Table 6). For FY2014, the Administration requested
approximately $147.9 billion. This includes approximately $63.5 billion in discretionary funding
and $84.5 billion in mandatory funding.
Figure 2. FY2014 VA Budget Request
Construction,
Total Budget Authority=$147.9
0.8%
Discretionary Benefit
Information
(Discretionary)
Programs,
Technology,
1.8%
2.5%
(Discretionary)
Mandatory Benefit
Programs,
57.2%
Medical Programs
37.3%
(Discretionary)
Departmental
Administration
0.4%
(Discretionary)

Source: Chart prepared by the Congressional Research Service based on H.Rept. 113-90 and S.Rept. 113-48.
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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Overview of Veterans Health Administration’s
Budget Formulation30

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).31 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.”32 For instance, in 2012, VHA used data from FY2011 to develop its health care budget
estimate for the FY2014 request, including the advance appropriations request for FY2015.33
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.34 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

30 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; and U.S. Government Accountability Office, Veterans’ Health Care
Budget: Better Labeling of Services and More Detailed Information Could Improve the Congressional Budget
Justification
, GAO-12-908, September 2012, pp. 5-6.
31 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.
32 Department of Veterans Affairs, FY2014 Budget Submission, Medical Programs and Information Technology
Programs
, Volume 2 of 4, February 2013, p. 1A-6.
33 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.
34 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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Veterans’ Medical Care: FY2014 Appropriations

(currently known as medical support and compliance), (3) medical facilities, and (4) medical and
prosthetic research. Brief descriptions of these accounts are provided below.
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;35 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.36 The
Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6), approved this
transfer. The President’s budget request for FY2014 proposed to continue funding for biomedical
engineering services in the medical services account. The Military Construction and Veterans
Affairs, and Related Agencies Appropriations bill for FY2014 (H.R. 2216; H.Rept. 113-90) that
was passed by the House of Representatives June 4, 2013, and the Senate Appropriations
Committee reported version of H.R. 2216 (S.Rept. 113-48) continued this transfer for FY2014.
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.37 It also funds 21 Veterans
Integrated Service Network (VISN)38 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.

35 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.
36 Biomedical engineering services include the maintenance and repair of all medical equipment used in the treatment,
monitoring, diagnosis, or therapy of patients.
37 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.
38 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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Veterans’ Medical Care: FY2014 Appropriations

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.
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.39 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 the 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.40 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. Table 3 provides details of MCCF collections from FY2009 through
FY2014.

39 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.
40 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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Veterans’ Medical Care: FY2014 Appropriations

In its FY2014 congressional budget submission, the Administration is proposing two legislative
proposals to increase collections in FY2014. The first proposal would amend 38 U.S.C. Section
7332(b) and allow the VHA to disclose the veteran’s patient records, including the identity,
diagnosis, prognosis, or treatment of a patient relating to drug abuse, alcoholism or alcohol abuse,
infection with the human immunodeficiency virus (HIV), or sickle cell anemia to the veteran’s
private health insurance plans for the purpose of VHA obtaining reimbursement for nonservice-
connected care.41 The second proposal would provide authority for VHA to be considered a
participating provider whether or not an agreement is in place with a veteran’s private health
insurance plan. This would allow VHA to collect charges for treatment of a veteran’s nonservice-
connected conditions.42
Table 3. Medical Care Collections, FY2009-FY2014
($ in thousands)
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014

Actual
Actual
Actual
Actual
Estimate
Estimate
First-party pharmacy
$720,238 $698,325 $729,742 $706,784 $724,000 $799,000
copaymentsa
First-party copayments
for inpatient and
168,092 168,519 178,469 183,688 188,000 189,000
outpatient careb
First-party long-term
care copaymentsc
3,419 3,092 3,174 3,088 4,000 4,000
Subtotal first-party
copayments

891,749 869,936 911,385 893,560 916,000 922,000
Third-party insurance
col ectionsd
1,843,202 1,904,032 1,799,951 1,847,531 1,860,000 1,878,000
Enhanced use leasing
revenuee
1,601 1,694 1,398 9,671 2,000 2,000
Compensated work
therapy col ectionsf
56,106 57,108 55,099 58,835 57,000 57,000
Parking feesg
3,585 3,611 3,842 3,732 4,000 4,000
Compensation and
pension living
1,952 1,523 871 1,559 2,000 2,000
expensesh
MCCF
Total

$2,798,195 $2,837,904 $2,772,546 $2,814,888 $2,841,000 $2,935,000
Source: Table prepared by the Congressional Research Service based on figures obtained from the Department
of Veterans Affairs, FY2011-FY2014 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.

41 Department of Veterans Affairs, FY2014 Budget Submission, Medical Programs and Information Technology
Programs,
Volume 2 of 4, April 2013, p. 1G-18.
42 Ibid, p. 1G-21.
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Veterans’ Medical Care: FY2014 Appropriations

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.
FY2013 Budget Summary43
President’s Request
The President’s FY2013 budget request was submitted to Congress on February 13, 2012. The
President’s budget requested $135.8 billion in budget authority for the VA as a whole (see Table
4
). 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 (see Table 5). The total requested amount for VHA represented 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 $236.6 million supplemental request for VA for costs associated
with Hurricane Sandy, which included $27 million for VHA.
Congressional Action
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

43 For a detailed discussion of the FY2013 VHA appropriations see, CRS Report R42518, Veterans’ Medical Care:
FY2013 Appropriations
, by Sidath Viranga Panangala.
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Veterans’ Medical Care: FY2014 Appropriations

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 the approximately $236.6 million in
supplemental funding requested by the President for the VA, which included $27 million for
VHA.
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 provided $133.9 billion in budget authority for the VA
as a whole (excluding the Hurricane Sandy Funding Needs supplemental funding provided in P.L.
113-2). This includes approximately $72.9 billion in mandatory funding and $61 billion in
discretionary funding. For FY2013, funding for VHA is $53.3 billion (excluding the Hurricane
Sandy Funding Needs supplemental funding provided in P.L. 113-2). 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.
The Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6), required across-
the-board rescissions for all discretionary accounts including those of the VA. Section 3001 in
Division G of the act required a 0.1% across-the-board rescission for discretionary VA accounts
appropriated in FY2013. Section 3004 in Division G of P.L. 113-6 was intended to eliminate any
amount by which the new budget authority provided in the act exceeded 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. Subsequent to the enactment of P.L. 113-6, the Office of Management and Budget
(OMB) calculated that additional rescissions of 0.032% of security budget authority, and 0.2% of
nonsecurity budget authority, would be required. Table 4 and Table 5 shows the FY2013 amounts
(based on OMB calculations) following the 0.1% and 0.032% across-the-board rescissions.
Additionally, Table 4 and Table 5 shows the Hurricane Sandy Funding Needs supplemental
funding provided in P.L. 113-2).

Congressional Research Service
13


Table 4. VA and VHA Appropriations, FY2013, and Advance Appropriations, FY2014
($ in thousands)
Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
With
House
Senate Committee
Consolidated and Further
Across-the-
President’s Budget
(H.R. 5854;
(S. 3215;
Continuing Appropriations
Board
Request
H.Rept. 112-491)
S.Rept. 112-168)
Act, 2013 (P.L. 113-6)
Rescissions

FY2013a FY2014 FY2013b FY2014 FY2013 FY2014 FY2013c FY2014 FY2013d
Total Department of
$135,872,279 — $135,377,850 — $135,636,648 — $134,147,884 — $134,119,910
Veterans Affairs (VA)
Total
Mandatory 74,638,167 — 74,638,167 — 74,638,167 —
72,912,772 — 72,912,772
Total
Discretionary 61,234,112 — 60,739,683 — 60,998,481 —
61,235,112 — 61,207,138
Total Veterans Health
Administration
$53,315,674 — $53,123,674 — $53,278,674 —
$53,305,674 — $53,287,887
(VHA)e
Memorandum:
Advance
— $54,462,000 — $54,462,000 — $54,462,000 — $54,462,000 —
appropriations VHAf
Source: Table prepared by the Congressional Research Service. 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; Congressional Record, daily edition, vol. 159 (March 11, 2013), pp. S1585-S1587; H.Rept. 113-90; S.Rept. 113-48; and Office of Management and Budget (OMB)
Reduction Report to the Congress dated April 25, 2013.
a. The amounts shown in this column include 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. The amounts shown in this column reflect the 0.5% rescission of the federal employee pay raise (the House-passed measure did not provide funding for the 0.5%
percent federal employee pay raise assumed in the President’s budget request).
c. The amounts shown in this column do 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.
Adjusted figures are provided in the next column.
CRS-14


d. CRS calculated the FY2013 budget authority shown in this column to reflect the 0.1% across-the-board rescission required of all discretionary accounts of the VA by
Section 3001 in Division G of P.L. 113-6, and 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. CRS calculations were based on the al ocated reductions calculated by the Office of Management and Budget (OMB), available at
http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/reductions/fy13_atb_reductions_04_25_13.pdf (accessed June 10, 2013).
e. 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).
f.
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 annual congressional budget submission.
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 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.
CRS-15


Table 5. VHA Appropriations by Account, FY2013, and Advance Appropriations, FY2014
($ in thousands)
Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
Consolidated and
With
House
Senate Committee
Further Continuing
Across-the-
(H.R. 5854;
(S. 3215;
Appropriations Act, 2013
Board

President's Request
H.Rept. 112-491)
S.Rept. 112-168)
(P.L. 113-6)
Rescissions
Account FY2013a FY2014 FY2013 FY2014 FY2013 FY2014 FY2013b FY2014 FY2013c
Medical
Services
$41,354,000
— $41,354,000
— $41,354,000
— $41,354,000 — $41,340,767
Additional funding over FY2013
165,000
— — — 155,000
— 155,000
— 154,795
Advance Appropriations
Disaster Relief Appropriations Act, 2013 (P.L. 113-2)
21,000





21,000

21,000
Subtotal Medical Services
41,540,000

41,354,000
41,509,000
41,530,000
41,516,562
Medical Support and Compliance
5,746,000

5,746,000

5,746,000

5,746,000

5,744,161
Subtotal Medical Support and Compliance
5,746,000

5,746,000
5,746,000
5,746,000
5,744,161
Medical
Facilities
5,441,000
— 5,441,000
— 5,441,000
— 5,441,000
— 5,439,259
Disaster Relief Appropriations Act, 2013 (P.L.113-2)
6,000





6,000

6,000
Subtotal Medical Facilities
5,447,000

5,441,000
5,441,000
5,447,000
5,445,259
Medical and Prosthetic Research
582,674

582,674

582,674

582,674

581,905
Subtotal Medical and Prosthetic Research
582,674

582,674

582,674

582,674

581,905
Total VHA Appropriations(without collections)
53,315,674

53,123,674d
53,278,674
53,305,674
53,287,887
Medical Care Collection Fund (MCCF)
2,527,000

2,527,000

2,527,000

2,527,000

2,527,000
Total VHA Appropriations (with collections)
$55,842,674

$55,650,674
$55,805,674 $55,832,674 $55,814,887
CRS-16


Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
Consolidated and
With
House
Senate Committee
Further Continuing
Across-the-
(H.R. 5854;
(S. 3215;
Appropriations Act, 2013
Board

President's Request
H.Rept. 112-491)
S.Rept. 112-168)
(P.L. 113-6)
Rescissions
Memorandum:
Advance
Appropriations
FY2013 FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 FY2014 FY2013
Medical
Services
— $43,557,000 — $43,557,000 — $43,557,000 — $43,557,000 —
Medical Support and Compliance

6,033,000

6,033,000

6,033,000

6,033,000

Medical
Facilities
— 4,872,000 — 4,872,000 — 4,872,000 — 4,872,000 —
Total VHA Advance Appropriations
— $54,462,000 — $54,462,000 — $54,462,000 — $54,462,000 —
Source: Table prepared by the Congressional Research Service. 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; Congressional Record, daily edition, vol. 159 (March 11, 2013), pp. S1585-S1587; H.Rept. 113-90; S.Rept. 113-48; and Office of Management and Budget (OMB)
Reduction Report to the Congress dated April 25, 2013.
a. The amounts shown in this column include 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. The amounts shown in this column do 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.
Adjusted figures provided in the next column.
c. CRS calculated the FY2013 budget authority shown in this column to reflect the 0.1% across-the-board rescission required of all discretionary accounts of the VA by
Section 3001 in Division G of P.L. 113-6, and 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. CRS calculations were based on the al ocated reductions calculated by the Office of Management and Budget (OMB), available at
http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/reductions/fy13_atb_reductions_04_25_13.pdf (accessed June 10, 2013).
d. 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% percent federal
employee pay raise assumed in the President’s budget request).

CRS-17

Veterans’ Medical Care: FY2014 Appropriations

FY2014 VHA Budget
President’s Request
The President submitted his FY2014 budget request to Congress on April 10, 2013. The FY2014
President’s Budget is requesting $147.9 billion for the VA as a whole (see Table 6). For VA
medical services, the Administration’s budget is requesting $157.5 million in additional funding
above the FY2014 advance appropriations of $43.6 billion provided in FY2013. According to the
VA, the increased funding levels requested for FY2014 reflect the increased costs of medical care
requirements resulting from the implementation of the Caregivers and Veterans Omnibus Health
Services Act of 2010 (P.L. 111-163) and the Honoring America’s Veterans and Caring for Camp
Lejeune Families Act of 2012 (P.L. 112-154).44 In total, the President is requesting $55.2 billion
for VHA for FY2014. This includes $43.7 billion for the medical services account, $6.0 billion
for the medical support and compliance account, $4.9 billion for the medical facilities account,
and nearly $586 million for the medical and prosthetic research account (see Table 7). As
required by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81),
the President’s budget is requesting $55.6 billion in advance appropriations for the three medical
care appropriations (medical services, medical support and compliance, and medical facilities) for
FY2015 (see Table 7).
House Budget Resolution45
On March 13, 2013, the House Budget Committee reported a budget resolution (H.Con.Res.
25H.Con.Res. 25, 113th Congress), and the budget resolution was agreed to by the House on
March 21, 2013. According to the committee report that accompanied H.Con.Res. 25 (H.Rept.
113-17):
The resolution calls for $145.7 billion in budget authority and $145.4 billion in outlays in
fiscal year 2014 [for Veterans Benefits and Services]. Discretionary spending is $63.3 billion
in budget authority and $63.1 billion in outlays in fiscal year 2014. This in an increase of 3.1
percent from last year’s discretionary level. Mandatory spending in 2014 is $82.4 billion in
budget authority and $82.3 billion in outlays. The ten-year totals for budget authority and
outlays are $1.7 trillion and $1.7 trillion, respectively. This resolution also authorizes up to
$55.483 billion for fiscal year 2015 in advance appropriations for medical care, consistent
with the Veterans Health Care Budget and Reform Transparency Act of 2009. Since the
President has yet to submit a budget request this year, the VA’s request for veterans-medical-
care advance appropriations for fiscal year 2015 is unavailable as of the writing of this
concurrent resolution. The amount authorized in this resolution reflects the amount requested
in the administration’s fiscal year 2013 request for fiscal year 2015 and is the most up-to-
date estimate on veterans’ health-care needs requested by the Department of Veterans
Affairs.46

44 Department of Veterans Affairs, FY2014 Budget Submission, Medical Programs and Information Technology
Programs,
Volume 2 of 4, April 2013, p. 1A-4.
45 For more details of the budget resolution see, CRS Report R43068, The Federal Budget: Issues for FY2014 and
Beyond
, by Mindy R. Levit.
46 U.S. Congress, House Committee on the Budget, Concurrent Resolution on the Budget Fiscal Year 2014, report to
(continued...)
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Veterans’ Medical Care: FY2014 Appropriations

Senate Budget Resolution47
On March 14, 2013, the Senate Budget Committee reported a budget resolution (S.Con.Res. 8,
113th Congress), and the budget resolution was agreed to by the Senate on March 23, 2013.
According to the committee print that accompanied S.Con.Res. 8 (S.Rept. 113-12):
The budget resolution sets fiscal year 2014 levels at $145.5 billion for budget authority [BA]
and $145.3 billion for outlays for [Veterans Benefits and Services]. Over the FY 2014-2018
period, BA totals $779.5 billion, with $776.4 billion in outlays. From FY 2014-2023, the
[Veterans Benefits and Services] function totals $1.688 trillion in BA and $1.68 trillion in
outlays. For discretionary spending, the resolution calls for FY 2014 levels of $63.1 billion
in BA and $62.9 billion in outlays. BA totals $336.3 billion and outlays equal $333.6 billion
over five years. From FY 2014-2023, the discretionary total for [Veterans Benefits and
Services] is $730.9 billion in BA and $723.8 billion in outlays.48
House Action
On May 15, 2013, the House Military Construction and Veterans Affairs Subcommittee approved
its version of a Military Construction and Veterans Affairs and Related Agencies Appropriations
bill for FY2014 (MILCON-VA Appropriations bill). The full House Appropriations Committee
voted to report the measure on May 21, 2013, and the House passed H.R. 2216 on June 4, 2013.
The MILCON-VA Appropriations bill for FY2014 (H.R. 2216; H.Rept. 113-90) proposes a total
of $147.6 billion for the VA (see Table 6). The total includes $84.5 billion for mandatory
programs, and $63.1 billion for discretionary programs (see Table 6).
H.R. 2216 (H.Rept. 113-90) (see Table 6) as passed by the House proposes $54.9 billion for VHA
for FY2014, which comprises four accounts: medical services, medical support and compliance,
medical facilities, and medical and prosthetic research. The House-passed measure does not
include the additional funding amount of $157.5 million (above the FY2014 advance
appropriations) for the medical services account that was requested by the President for FY2014,
and proposes to rescind $156.0 million from the FY2014 VHA amount that was provided as an
advance appropriation in FY2013, giving the Secretary the discretion to allocate these reductions
across VHA accounts. H.R. 2216 proposes $55.6 billion in advance FY2015 funding for the
medical services, medical support and compliance, and medical facilities accounts—the same
level included in the House-passed Budget Resolution, and the President’s request (see Table 7).
Senate Appropriations Committee Action
On June 18, 2013, the Senate Military Construction, Veterans Affairs, and Related Agencies
Subcommittee approved its version of the MILCON-VA Appropriations bill. The full Senate
Appropriations Committee marked up the bill and voted to report the measure on June 20, 2013.

(...continued)
accompany H.Con.Res. 25, 113th Cong., 1st sess., March 15, 2013, H.Rept. 113-17 (Washington: GPO, 2013), p. 95.
47 For more details of the budget resolution see, CRS Report R43068, The Federal Budget: Issues for FY2014 and
Beyond
, by Mindy R. Levit.
48 U.S. Congress, Senate Committee on the Budget, Concurrent Resolution on the Budget FY2014, committee print,
113th Cong., 1st sess., March 2013, S.Rept. 113-12 (Washington: GPO, 2013), pp. 128-129.
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Veterans’ Medical Care: FY2014 Appropriations

The MILCON-VA Appropriations bill for FY2014 (H.R. 2216; S.Rept. 113-48) proposes a total
of $147.9 billion for the VA for FY2014. The total includes $84.5 billion for mandatory programs,
$63.5 billion for discretionary programs.
The Senate Appropriations Committee approved measure does not include the full additional
funding amount of $157.5 million (above the FY2014 advance appropriations) for the medical
services account that was requested by the President for FY2014, and instead proposes a $25
million increase for the medical services account (see Table 7). The committee notes that:
The justification accompanying the budget request provides few details regarding the data
and assumptions that were modified in the updated actuarial model projection. Absent this
data, the Committee cannot accurately assess the merits of an additional request. The
Committee also notes that the Department routinely carries forward significant funds from
one fiscal year to the next and directs that any of funding carried forward from fiscal year
[FY] 2013 be applied to unanticipated needs.49
Furthermore, the Senate Appropriations Committee approved measure (H.R. 2216; S.Rept. 113-
48) proposes an additional $100 million for the medical facilities account for FY2014 for
nonrecurring maintenance projects (see Table 7).


49 U.S. Congress, Senate Committee on Appropriations, Military Construction, Veterans Affairs and Related Agencies
Appropriations Bill, 2014,
report to accompany H.R. 2216, 113th Cong., 1st sess., June 27, 2013, S.Rept. 113-48, p. 42.
Congressional Research Service
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Table 6. VA and VHA Appropriations, FY2013-FY2014, and Advance Appropriations, FY2015
($ in thousands)
Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
Consolidated and Further
With
Continuing
Across-the-
Appropriations Act, 2013
Board
President’s Budget
House
Senate Committee

(P.L. 113-6)
Rescissions
Request
(H.R. 2216; H.Rept. 113-90) (H.R. 2216; S.Rept. 113-48)

FY2013a FY2014 FY2013b FY2014 FY2015 FY2014 FY2015 FY2014 FY2015
Total Department
of Veterans Affairs
$134,147,884
$134,119,910
$147,919,266 $147,581,766 $147,938,308

(VA)
Total
72,912,772
72.912,772
84,461,636
84,461,636
84,461,636

Mandatory
Total
61,235,112
61,207,138
63,457,630
63,120,130
63,476,672

Discretionary
Total Veterans
Health
$53,305,674
$53,287,887
$55,205,164
$54,891,664 $55,172,644

Administration
(VHA)c
Memorandum:
Advance
$54,462,000
$55,634,227 $55,634,227
$55,634,227
appropriations
VHAd
Source: Table prepared by the Congressional Research Service based on Congressional Record, daily edition, vol. 159 (March 11, 2013), pp. S1585-S1587; H.Rept. 113-90;
S.Rept. 113-48; and Office of Management and Budget (OMB) Reduction Report to the Congress dated April 25, 2013.
a. The amounts shown in this column 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.
Adjusted figures are provided in the next column.
b. CRS calculated the FY2013 budget authority shown in this column to reflect the 0.1% across-the-board rescission required of all discretionary accounts of the VA by
Section 3001 in Division G of P.L. 113-6, and the 0.032% across-the-board rescission required from al discretionary accounts of the VA as a result of Section 3004
CRS-21


in Division G of P.L. 113-6. CRS calculations were based on the al ocated reductions calculated by the Office of Management and Budget (OMB), available at
http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/reductions/fy13_atb_reductions_04_25_13.pdf (accessed June 10, 2013).
c. Includes funding for medical services, medical support and compliance, medical facilities, and medical and prosthetic research accounts, and excludes collections
deposited into the Medical Care Collections Fund (MCCF).
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 annual congressional budget submission.
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 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. Likewise, the Administration’s
advance appropriations request for FY2015 and advance appropriations budget authority for FY2015 proposed in the Military Construction and Veterans Affairs, and
Related Agencies Appropriations bill, 2014 (H.R. 2216; H.Rept. 113-90; and S.Rept. 113-48), are recorded in the FY2015 column.






CRS-22


Table 7. VHA Appropriations by Account, FY2013-FY2014, and Advance Appropriations, FY2015
($ in thousands)
Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
With
Consolidated and Further
Across-the-
Continuing Appropriations
Board
House
Senate Committee
Act, 2013 (P.L. 113-6)
Rescissions
President’s Request
(H.R. 2216; H.Rept. 113-90)
(H.R. 2216; S.Rept. 113-48)
Account
FY2013a FY2014 FY2013b FY2014 FY2015 FY2014 FY2015 FY2014 FY2015
Medical Services
$41,354,000
$41,340,767
$43,557,000
$43,557,000
$43,557,000

Additional funding over FY2013
Advance Appropriation
155,000
154,795


— — —
Additional funding over FY2014
Advance Appropriation


157,500


25,000

Disaster Relief Appropriations
Act, 2013 (P.L. 113-2)
21,000
21,000



— —
Subtotal Medical Services
41,530,000 — 41,515,061
43,714,500 —
43,557,000 —
43,582,000
Medical Support and
Compliance
5,746,000
5,743,961
6,033,000
6,033,000
6,033,000

Subtotal Medical Support an
Compliance

5,746,000 —
5,743,961
6,033,000 —
6,033,000 —
6,033,000
Medical Facilities
5,441,000
5,439,009
4,872,000
4,872,000
4,872,000

Additional funding over FY2014

— —

— —

100,000
Advance Appropriation
Disaster Relief Appropriations
6,000
6,000






Act, 2013 (P.L. 113-2)
Subtotal Medical Facilities
5,447,000 —
5,445,009
4,872,000 —
4,872,000 —
4,972,000

Medical and Prosthetic
582,674
581,905
585,664
585,664
585,644

Research
CRS-23


Disaster Relief
Appropriations Act, 2013
(P.L. 113-2); and
With
Consolidated and Further
Across-the-
Continuing Appropriations
Board
House
Senate Committee
Account
Act, 2013 (P.L. 113-6)
Rescissions
President’s Request
(H.R. 2216; H.Rept. 113-90)
(H.R. 2216; S.Rept. 113-48)
Subtotal Medical and Prosthetic
582,674 —
581,905 585,664 —
585,664 —
585,644
Research
Across-the-Board Administrative
— — — — — (156,000)


Rescission
Total VHA
Appropriations(without

53,305,674 — 53,285,936
55,205,164 —
54,891,664 — 55,172,644
collections)
Medical Care Collection Fund
2,527,000
2,527,000
2,485,000
2,485,000
2,485,000

(MCCF)
Total VHA
Appropriations(with

$55,832,674 — $55,812,936
$57,690,164 — $57,376,664 — $57,657,644
collections)










Memorandum:
Advance Appropriationsc
FY2013 FY2014 FY2013 FY2014 FY2015 FY2014 FY2015 FY2014 FY2015
Medical Services

$43,557,000


$45,015,527

$45,015,527
$45,015,527
Medical Support and

6,033,000


5,879,700

5,879,700
5,879,700
Compliance
Medical Facilities

4,872,000


4,739,000

4,739,000
4,739,000
Total VHA Advance

$54,462,000
— —
$55,634,227

$55,634,227
$55,634,227
Appropriations
Source: Table prepared by the Congressional Research Service based on Congressional Record, daily edition, vol. 159 (March 11, 2013), pp. S1585-S1587; H.Rept. 113-90;
S.Rept. 113-48; and Office of Management and Budget (OMB) Reduction Report to the Congress dated April 25, 2013.
a. The amounts shown in this column do 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.
Adjusted figures are provided in the next column.
CRS-24


b. CRS calculated the FY2013 budget authority shown in this column to reflect the 0.1% across-the-board rescission required of all discretionary accounts of the VA by
Section 3001 in Division G of P.L. 113-6, and 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. CRS calculations were based on the al ocated reductions calculated by the Office of Management and Budget (OMB), available at
http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/reductions/fy13_atb_reductions_04_25_13.pdf (accessed June 10, 2013).
c. 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 annual congressional budget submission.
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 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. Likewise, the Administration’s
advance appropriations request for FY2015 and advance appropriations budget authority for FY2015 proposed in the Military Construction and Veterans Affairs, and
Related Agencies Appropriations bill, 2014 (H.R. 2216; H.Rept. 113-90; and S.Rept. 113-48), are recorded in the FY2015 column.
CRS-25

Veterans’ Medical Care: FY2014 Appropriations

Appendix. Priority Groups and Their Eligibility
Criteria

Table A-1. 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 POWs a
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: FY2014 Appropriations

Veterans who served on active duty at Camp Lejeune in North Carolina for not less than 30 days during the period
beginning on January 1, 1957, and ending on December 31, 1987, for any of the 15 medical conditions specified in 38
U.S.C. 1710(e)(1)(F).d
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 (Currently not
eligible for enrollment
)
Subpriority g: Nonservice-connected veterans not meeting the above criteria (Currently not eligible for
enrollment
)
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.
d. Veterans who served on active duty at Camp Lejeune in North Carolina between January 1, 1957 and
December 31, 1987 are placed in Priority Group 6. These veterans are eligible to receive free medical care
for the following 15 illnesses or conditions: esophageal cancer; lung cancer; breast cancer; bladder cancer;
kidney cancer; leukemia; multiple myeloma; myleodysplasic syndromes; renal toxicity; hepatic steatosis;
female infertility; miscarriage; scleroderma; neurobehavioral effects; and non-Hodgkin’s lymphoma. This
change occurred with the enactment of the Honoring America’s Veterans and Caring for Camp Lejeune
Families Act of 2012 (P.L. 112-154) on August 6, 2012.

Author Contact Information
Sidath Viranga Panangala
Specialist in Veterans Policy
spanangala@crs.loc.gov, 7-0623

Congressional Research Service
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