NEWS FROM….

CONGRESSMAN LANE EVANS

RANKING DEMOCRATIC MEMBER

COMMITTEE ON VETERANS AFFAIRS

    U.S. HOUSE OF REPRESENTATIVES

An eight percent reduction in funding next year for the Department of Veterans Affairs (VA) is a "prescription for disaster," Congressman Lane Evans of Illinois, Democratic Leader of the House Veterans’ Affairs Committee, said today. Evans’ assessment came as he released the results of an analysis of an eight percent cut in VA funding for next year compared to funding this year, which VA prepared at Evans’ request. The eight percent decrease in funding reflects the reduction in discretionary spending allocated to the House Appropriations Subcommittee on VA, HUD and Independent Agencies for next year, a figure eight percent less than the amount Congress enacted for spending during 1999.

"Just a few months ago," Evans said, "Congress approved a budget for next year that provided a $1.5 billion increase in funding for VA compared to the Administration’s proposed budget. Now Congress looks to be on the verge of breaking that commitment to veterans and instead cutting VA funding dramatically. Any cut in funding for VA compared to the budget promise of a $1.5 billion increase next year for VA will be a very, very bitter pill for this nation’s veterans to swallow.

For health care, spending would be cut by $1.4 billion and there would be 14,500 fewer health care staff compared to the current 1999 fiscal year budget. Evans called these reductions "devastating, resulting in a drastic reduction of health care services for veterans in need."

VA would experience massive staff cuts and furloughs The result would be extensive reductions in services to the nation’s veterans. As a result of these decreases, over 4 million fewer outpatient visits for veterans would be provided and the number of veterans receiving inpatient care would be reduced by about 60,000 patients. "These cuts," Evans said, "will mean even more rationing, longer waits, delays and in some cases denial of needed health care to veterans byVA."

VA’s effort to improve veterans access to health care would essentially be halted and would be potentially reverse. The 89 currently-planned new community-based outpatient clinics would not open, and VA would likely close a number of recently opened community based clinics.

In medical and prosthetic research, there would be a loss of $25 million and 325 staff. That would eliminate as many as 285 projects focused on diagnosing and treating conditions that directly affect veterans. VA would continue research of illnesses affecting Gulf War veterans, but would terminate other ongoing research projects.

For medical construction, an eight percent cut would delay or cancel several major projects currently scheduled. It would chop $14 million from minor construction, delaying or eliminating high priority projects, including ward renovation, patient environment, clinical support space, life safety code issues, fire and safety issues, and work that affects accreditation.

VA’s state grant program would also be drastically reduced. VA’s state grant program provides matching funds to states to construct state veterans homes. States that already have matching funds available total $262 million, and 59 projects have applied for $370 million, against a State Grant Program that would be reduced to $37 million, a tenth of what that the states need.

An eight percent cut in spending for the Veterans Benefits Administration (VBA), would mean VBA would not be able to add essential personnel for claims processing. In addition, important VBA initiatives to improve the quality and timeliness of VA decision-making on veterans claims for non-medical benefits would be terminated, further exacerbating delays and errors in claims processing. "The failure to provide claims service in a timely and accurate fashion would continue unabated," says Evans, "and the veterans community could simply not be served in a manner close to fulfilling the obligation this Nation has to its disabled and needy veterans."

An eight percent reduction would keep VA from opening or activating four new national cemeteries. There would also be a dramatic impact on VA’s ability to maintain its national cemeteries as national shrines. More than half a million veterans die every year, and the death rate is increasing.

"I plan to make the consequences of an eight percent cut in funding for veterans known far and wide," Evans says. "Deep cuts in veterans benefits must be totally rejected by Congress if the service and sacrifice of those who have worn our nation’s uniform is to be honored in deed as well as word. If Congress approves deep cuts in funding for veterans benefits next year, it is a prescription for disaster for veterans."

"Programmatic Implications of an 8 Percent Reduction for FY 2000"

In response to your request for an impact statement with VA operating at 8 percent below a freeze at the 1999 level, we are providing the following information.

Medical Care – a reduction of $1.4 billion and over 14,500 FTE from FY 99 enacted budget would result in a devastating, compounded effect on the veterans health care system, resulting in a drastic reduction of health care services for veterans in need. The magnitude of this cut, coupled with planned management efficiencies, would combine to a $2.5 billion adjustment from the current level of resources. A change of this magnitude beginning this fall would produce chaos in management and risk the quality of care to veterans. VA would expect massive RIFs, furloughs, and extensive reductions in services to our nation’s veterans. This level of reduction could be expected to produce over 4 million fewer outpatient visits and an inpatient workload reduced by about 60,000 patients. The planned 89 new CBOCs [Community-Based Outpatient Clinics] would not be implemented and VHA would likely close a number of existing CBOCs. The extreme, negative, long-term impact would be even worse than the described short-term, compounded cuts. It would destroy the years of effort spent re-engineering the veterans’ healthcare system’s efficiency to its current achievement and suspend efforts to move it to where VHA had planned. This reduction would create an irrevocable effect on the veterans’ view of the nation’s commitment to those who served in the Nation’s armed services.

Medical and Prosthetic Research – a reduction of $25 million and 325 FTE from the existing budget would result in 285 fewer projects that would have focused on diagnosing and treating conditions that directly affect veterans. Some of these projects would have included collaborative efforts with both government and private sector institutions to maximize the effectiveness of VHA’s research investment. VHA would continue research of illnesses affecting Gulf War veterans, but maintaining this funding level would force us to terminate other ongoing research projects. A reduction of this magnitude would also compromise VHA’s ability to achieve the recommendations contained in the report of the Research Realignment Advisory Committee.

Medical Administration and Miscellaneous Operating Expenses (MAMOE) – a reduction of $3.2 million from the request would significantly affect direct healthcare and support for quality care for veterans. This would cause the loss of at least 12% of the headquarters staff, which provides corporate leadership and program oversight. This proposal would bring programs like medical inspection, quality assurance, performance monitoring, and patient care services to a virtual stand still as the effect of a massive RIF unfolds. The negative impact on the VHA healthcare restructuring, patient safety monitoring, patient care oversight, and the examination of clinical outcomes would be irrevocable.

Medical Major Construction/Minor Construction/State Grant Program – The reduction of $5 million in major construction will delay several or cancel one of the following projects: Kansas City, Missouri – Surgical Suite, Tampa, Florida - Spinal Cord Injury Unit, Murfreesboro, Tennessee – Psychiatric Patient Privacy, and Leavenworth, Kansas – Facility Right Sizing/Gravesite Develop.

Reducing the minor construction program by $14 million is a 8 percent reduction from the 1999 level and will negatively impact the Networks’ ability to maintain and improve their facilities to meet strategic goals. Types of projects that will be cancelled or delayed include ward renovation, patient environment, clinical support space, life safety code issues, fire and safety issues, and accreditation issues.

The reduction of $3 million from the proposed State Grant Program of $40 million will severely impact the VA’s ability to provide for veterans’ long term healthcare needs. States have submitted State Grant Proposal requests totaling $370 million. States that already have matching funds available total $262 million and 59 projects.

Veterans Benefits Administration – In the last two years the Veterans Benefits Administration (VBA) has experienced increases in both the size of the pending compensation and pension (C&P), case backlog, and the average age of cases which comprise this backlog. In addition to the problem of increasing workload, VBA will start to lose "seasoned" adjudication staff as they soon reach retirement age. The budget proposes to begin hiring staff critical to C&P functions to improve timeliness and accuracy as well as beginning a succession plan to replace the soon to retire employees. New hires would join personnel shifted from other program areas to yield a net addition of 440 much needed staff devoted to adjudication functions. In addition to adding new staff, focused overtime efforts must be used to control the growing workload.

This budget also contains important funding to continue and expand the demonstration project to test electronic claims processing. VBA is working with Highway 1 to use products from five companies to develop an electronic work environment through imaging and various other technologies. Initial results of the demonstration project indicate that the Highway 1 electronic claims processing initiative will dramatically improve VBA’s ability to access veteran information, exchange data with other VA components and DoD, increase access to Veterans Service Organizations, and improve the timeliness of claims processing.

VBA has achieved dramatic improvements this year in the remand rate of claims from the Board and in phone access to veterans. The nationwide blocked call rates for March 1999 were 17% as compared with 57% for March of 1998. The improvements are primarily the result of several initiatives that involve the expanded use of interactive voice response technology and improvements in equipment and accessibility. Several other phone initiatives are in the development stage, which are expected to help drive the blocked call rate into single digits.

If an 8% cut were applied to VBA’s 2000 funding request, VBA would not only not be able to add essential FTE for claims processing, the magnitude of such a reduction would necessitate losing critical on board staff. Important initiatives described above would be terminated further exacerbating the challenges in timely adjudication functions. Timeliness increases, already at unacceptably high levels, would continue unabated, and the veteran community could simply not be served in any manner close to fulfilling the obligation this Nation has already occurred to its disabled and needy veteran population.

National Cemetery Administration: An 8 percent reduction would reduce NCA’s budget by $7.4 million.

Fiscal Year 2000 will be a year of continued significant growth for the National Cemetery Administration (NCA). During 2000, NCA has scheduled the opening of the new Dallas/Ft. Worth National Cemetery near Dallas and Ft. Worth, Texas; and the new Ohio Western Reserve National Cemetery near Cleveland, Ohio. These cemeteries are both currently under construction. During the last quarter of 1999 NCA also plans to activate the new Saratoga National Cemetery near Albany, New York and the Abraham Lincoln National Cemetery near Chicago, Illinois.

For NCA the 2000 President’s Budget requested an increase of $5.0 million over the 1999 Appropriation of $92.0 million. The preponderance of this increase, $3.5 million, is needed for federal pay raises, inflation and other cost increases. The remaining increase contains $0.8 million for increased interment workload at existing cemeteries, $0.2 million for on-going activation and operation of the four new national cemeteries, $0.3 million to replace equipment that has reached the end of it’s useful life, and $0.2 million to develop additional data collection instruments for improving service delivery and customer satisfaction.

Assuming enactment of the revised funding levels noted above, NCA will not be able to open and begin burial operations at the Abraham Lincoln National Cemetery, or the Saratoga National Cemetery when construction of these cemeteries is completed in 1999. Also, NCA will not be able to begin activation at the new Dallas/Ft. Worth National Cemetery or the new Ohio Western Reserve National Cemetery. As a result, this funding reduction will prevent NCA from reaching it’s strategic planning objective to increase the percentage of veterans served by a national or state veterans cemetery within a reasonable distance of their residence to 80 percent by the year 2004.

In addition to not being able to open these new cemeteries, NCA will have to absorb the $3.5 million of federal pay raises, inflation and other cost increases, along with the additional $7.4 million reduction to achieve the proposed Fiscal Year 2000 revised amount within its operations and maintenance budget. Some currently open national cemeteries will prematurely close, and there will be a further reduction of interment services at the remaining cemeteries. This would be unprecedented in the history of NCA.

There will also be a dramatic impact on NCA’s ability to maintain its national cemeteries as national shrines. A reduction of significant maintenance resources at the cemeteries, in addition to reductions in needed maintenance and repair of cemetery infrastructure, and lack of supplies and equipment for proper turf maintenance will impact cemetery appearance. There will be a degradation in the appearance of the national cemeteries resulting in a decline in public confidence in the ability of the VA to meet customer expectations.

Staff Offices: An 8 percent reduction from the FY 1999 Current Estimate level for all staff office budgets would have a devastating impact. Since personal-services costs comprise the majority of most budgets, a reduction of this magnitude could not be realized without Department-wide Reductions-in-Force. Staff reductions would have to begin this fiscal year in order to position VA for the FY 2000 funding level. In addition, ongoing critical projects would have to be suspended or cancelled altogether. Services provided by each office would be seriously compromised. These activities include legal services required by statute and the adjudication of claims before the Board of Veterans Appeals and Court of Veterans Appeals.

Specifically, an 8 percent reduction would:

• increase the backlog of cases before the Court of Veterans Appeals and place VA in serious legal jeopardy due to decreased representational capability;
• compromise VA’s adjudication and appellate program goals by increasing response time and appeals resolution time;
• delay implementation of the new human resources and payroll system (HR LINK$);
• and delay congressionally mandated activities such as program evaluations; the National Survey of Veterans; and establishment of the Office of the Chief Actuary.

Office of the Inspector General: In addition, The Office of Inspector General would not be able to maintain its current level of FTE – let alone staff new initiatives to address waste, fraud and inefficiency, or contract out for the audit of VA’s consolidated financial statement.