October 13, 2015
VA Funding: Where the $3B Injection Is Going

Earlier this year, the Veterans Administration (VA) announced that it needed at least another $2.5 billion to meet its budgetary obligations. Deputy VA Secretary Sloan Gibson told Congress that “the VA needs flexibility from Congress to close the budget gap.” Straits were dire: If the VA didn’t get some budgetary slack, it threatened to undertake cost-cutting actions such as furloughs and hiring freezes, which could have significantly and negatively affect services.

A brief respite

The good news is that in late summer, Congress passed a $3.3 billion bailout bill for the VA. The VA had proposed using money from the Veterans Choice program, a $10 billion pot of money earmarked for use over 3 years, to make access to care from local doctors easier for veterans. Indeed, this is just what Congress approved: The Surface Transportation and Veterans Health Care Choice Improvement Act, which passed the Senate with a vote of 91-4, lets the VA transfer $3.348 billion from Veterans Choice to pay for veterans care at non-VA facilities.

Not a hand-out

However, the bailout is a stop-gap — quite literally rushed through at the last minute, before Congress broke for the rest of the summer — and that’s why it comes with conditions.

  1. The department has to consolidate all non-VA programs into the Veterans Choice Program. Veterans Choice was originally meant to be a temporary funding pot; now, it’s going to be enshrined as part of the VA service administration. Thus, Veterans Choice will be expanded, and physicians and hospitals providing care and services to veterans will come under this umbrella in a to-be-determined structure.
  2. Veterans Choice will remain the structure for temporary care outside the VA system. The specifics are set to be reported to Congress by November 1, but we know the basics. Physicians and facilities will provide this care on a temporary basis — if the VA cannot provide the appropriate healthcare in a timely manner (within 30 days) , or locally (the veteran lives more than 40 miles from a VA facility). These vets no longer have to be grandfathered in; new veterans can be enrolled for care provided by Veterans Choice.
  3. Veterans Choice may be expanded. The bill acknowledges that not all VA facilities necessarily have the expertise or specialization to provide the care each veterans need. Thus, it includes language that allows for expansion of Veterans Choice, so that veterans who live within the prescribed radius — but who can’t get the required services at their local VA facility — may go to a private provider for healthcare.

Better future communication is needed

As noted, the VA is expected to outline how the new Veterans Choice will be structured for Congress by November 1. Some members of Congress have complained that, not only has oversight been lacking, so has communication with the government. According to one report:

Lawmakers have complained that the department knew about the shortfall for months, but did not alert them to the problem or a possible hospital shutdown until the last minute. “The possibility of a shutdown was never mentioned, even once, during a hearing that I called in late June, where VA first publicly admitted its budget troubles, or during any of the four times that Secretary [Bob] McDonald testified before Congress this year or anywhere in the quarterly financial plan that VA submitted in March, showing that VA was operating under budget so far this fiscal year,” said House Veterans’ Affairs Committee Chairman Jeff Miller, R-Fla., on the House floor. “Once again, this Congress comes to rescue a mismanaged Department of Veterans Affairs.

Although VA Secretary Robert McDonald has denied that the VA has hidden the organization’s budget problems, it’s clear that more — and more detailed — reporting will be the name of the game with Congress going forward.