October 1, 2020
State Veterans Homes
State Veterans Homes (SVHs) are state-owned and state-
state homes. VA has the authority to set standards for
operated facilities that provide nursing home care,
facilities that utilize the grant program (38 C.F.R. Part 59).
domiciliary care, and adult day health care to eligible
veterans, spouses, and Gold Star parents (parents of a child
who died while serving in the armed forces). The SVH
Admission to SVHs is restricted to eligible veterans and
Program is a federal-state partnership whereby the Veterans
certain categories of veteran-related family members. A
Health Administration in the U.S. Department of Veterans
SVH cannot admit or provide care to other applicants.
Affairs (VA) provides federal assistance to SVHs in three
However, specific admission criteria are determined by the
state in which the SVH is located. In general, eligibility
requirements for admission to an SVH are as follows:
VA provides grants to states to construct,
acquire, remodel, or modify homes (38 U.S.C.
Veterans in need of skilled nursing care and who
have a general/honorable military discharge are
VA provides per diem payments to reimburse
given admission priority; and
states for each eligible veteran receiving care in
Spouses, surviving spouses, and Gold Star parents in
homes that are recognized and certified by the
need of skilled nursing care are also eligible for
VA (38 U.S.C. §1741 and §1745).
admission, if allowed by state policy.
VA provides payments to states for the hiring
VA is prohibited by law from exercising any supervision or
and retention of nurses (38 U.S.C. §1744).
control over the operation of a SVH, including setting
VA supports three different types of SVH programs in 156
admission criteria. The states also establish and manage
facilities, which may be co-located together in one facility:
operating procedures, personnel practices, and other
Nursing Homes Programs
(149 facilities): provide
operational matters. However, VA can require SVHs to
accommodation of convalescents or other persons who are
provide documentation related to policies, practices, and
not acutely ill and not in need of hospital care, but who
require skilled nursing care and related medical services.
SVHs that receive VA construction grants are required to
Domiciliary Facility Programs
(53 facilities): provide a
maintain an occupancy rate of 75% veterans to be eligible
home to a veteran, embracing the furnishing of shelter,
for VA per diem payments (see next section). If the SVH
food, clothing and other comforts of home, including
was constructed or renovated solely with state funds, then
necessary medical services.
SVHs may maintain an occupancy rate of 50% veterans in
order to be eligible for VA per diem payments. All
Adult Day Health Care Programs
(3 facilities): a
nonveteran residents must be veteran-related family
therapeutic outpatient care program that includes one or
members. P.L. 111-246, enacted September 30, 2010,
more of the following services, based on patient care needs:
enabled SVHs to furnish nursing home care to Gold Star
medical services, rehabilitation, therapeutic activities,
parents of veterans. The mix of residents varies from home
socialization, and nutrition. Services are provided in a
to home. Some states exercise their rights under law to
congregate (i.e., group) setting (38 C.F.R. Part 51.2).
accept up to 25% veteran-related family members, while
Brief Legislative History
others accept only veterans and some may accept only war
SVHs were first established during the Civil War and
originally paid for by state funds only, with no connection
Basic Per Diem Rates
to the federal government. Congress first provided
VA provides a fixed per diem to the state for each veteran
assistance to states in 1888 (Act of August 27, 1888, 25
provided care in a SVH. VA basic per diem payments to
Stat. 450). The act provided $100 per year for each eligible
states are paid for only the care of eligible veterans; care is
veteran residing in a SVH. The method of payment was
paid irrespective of whether the veteran has wartime or
changed from an annual payment to a per diem payment in
1960 (the Disabled Veterans Housing Payment Act; P.L.
86-625). The construction grant program for SVHs was first
VA pays a basic per diem rate for each day that the veteran
established in 1964 when Congress authorized $5 million in
is receiving care and has an overnight stay (overnight stay
appropriations for the program (P.L. 88-450).
requirements do not apply to adult day health care). In
certain circumstances, per diem is also paid when there is
no overnight stay (i.e., the veteran is temporarily absent
VA provides grants to participating states as a share of the
from the facility) if the facility has a 90% or greater
cost of construction. Specifically, VA provides states up to
occupancy rate. In those circumstances, payments are made
65% of the cost to construct, acquire, remodel, or modify
only (1) for the first 10 consecutive days during which the
veteran is admitted as a patient for any stay in a VA or
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State Veterans Homes
other hospital, and (2) for the first 12 days in a calendar
50% of the cost of employee incentive programs, but not
year during which the veteran is absent for purposes other
for standard employee benefits, such as salaries.
than receiving hospital care.
The occupancy rate is calculated by dividing the total
The primary methods of VA oversight are an annual
number of patients in the nursing home or domiciliary by
facility-based survey, audits, and reconciliation of records
the total recognized nursing home or domiciliary beds in
conducted by the VA medical center of jurisdiction. The
that facility. The Basic State Home Per Diem Rates for
VA survey process for SVH nursing home programs is
FY2020 are shown in Table 1.
similar to the survey process utilized by the Centers for
Table 1. Basic State Home Per Diem Rates, FY2020
Medicare & Medicaid Services (CMS) for long-term care
facilities. However, VA has no authority over the
management or control of any SVH (38 U.S.C. §1742(b)).
(Per Resident/ Per Day)
In general, state licensure is the primary oversight
mechanism for SVHs. To be certified for per diem
payments, SVHs must be licensed by the state for the
Adult Day Health Care
programs offered (38 C.F.R. §§51.210(f); 51.390; and
Department of Veterans Affairs, Veterans Health
51.475). Some SVHs are also certified under CMS to
Administration, Office of Community Care.
receive payments under Medicare and/or Medicaid and
thereby subject to CMS certification requirements and
Pursuant to federal regulation, the VA Secretary may adjust
annual survey process.
the basic per diem rates each year. When computing per
diem payments for nursing home care, domiciliary care, and
adult day health care, VA uses different methodologies
Per diem payments to SVHs and payments for retention and
depending on the type of program.
hiring of nurses are made from the VHA Medical
The VA basic per diem rate covers a portion of the total
Community Care Account. In FY2019, VA obligated $1.3
costs of care for a veteran in a SVH. Each state has
billion from the Medical Community Care Account for
different methods of funding the balance, which may
grants to state homes. VA estimates obligations of $1.5
include some combination of private out-of-pocket
billion in FY2020 and $1.6 billion in FY2021.
payments from the veteran, reimbursement from Medicare
Construction grants for SVHs are appropriated from a
(federal program) or Medicaid (joint state and federal
separate account. Sums appropriated under this program are
program) for eligible individuals in SVHs certified to
available until expended. In FY2019, Congress
participate, or state general funds. Some individuals may
appropriated $150 million for grants. However, VA used
have private long-term care insurance that may cover any
funds carried over from previous years for a total obligation
out-of-pocket payments to SVHs. Nonveterans are not
of $502 million. VA offered 34 grants to states in FY2019.
eligible for the basic per diem rate, and SVHs may also use
a combination of payment sources to cover the cost of their
Relevant Statutes, Regulations, and Policies
Title 38, U.S. Code, Chapter 17, Subchapter V
Prevailing Per Diem Rates
Title 38, U.S. Code, Chapter 81, Subchapter III
SVHs can accept a different payment structure for certain
Title 38, U.S. Code of Federal Regulations, Chapters 51, 53,
veterans in lieu of the basic per diem rates. VA provides a
prevailing per diem rate for veterans residing in a SVH who
receive nursing home services for care related to a service-
Department of Veterans Affairs, Veterans Health
connected disability or for veterans with a service-
Administration, State Home Per Diem (SHPD) Program
connected disability rated 70% or higher.
Directive 1601SH.01(1), April 7, 2020.
A SVH can negotiate a prevailing rate with VA through the
federal contracting process or enter into an agreement
CRS Report R44697, Long-Term Care Services for Veterans
(“state home care agreement”) whereby payments are
CRS In Focus IF10555, Introduction to Veterans Health Care
calculated based on a formula that accounts for the
CRS Report R42747, Health Care for Veterans: Answers to
geographic area in which the SVH is located.
Frequently Asked Questions
The SVH cannot charge any individual, insurer, or entity
(other than VA) for the nursing home care paid for by VA
under a state home care agreement. Prevailing per diem
U.S. Government Accountability Office, VA Needs to Continue
payments under these agreements are intended to cover the
to Strengthen Its Oversight of Quality of State Veterans Homes
full cost of nursing home care for eligible veterans.
GAO-20-697T, July 20, 2020.
Hiring and Retention of Nurses
Additional payments are available to SVHs that receive per
diem payments and have a documented nursing shortage.
Jared S. Sussman
, Analyst in Health Policy
Under this program, an SVH can receive funds for up to
State Veterans Homes
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
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