Apr112013
Hearing Transcript on Legislative Hearing on H.R. 4241.
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LEGISLATIVE HEARING ON H.R. 4241
HEARING BEFORE THE SUBCOMMITTEE ON HEALTH OF THE COMMITTEE ON VETERANS' AFFAIRS U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION MARCH 3, 2010 SERIAL No. 111-65 Printed for the use of the Committee on Veterans' Affairs
U.S. GOVERNMENT PRINTING OFFICE For sale by the Superintendent of Documents, U.S. Government Printing Office
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CORRINE BROWN, Florida |
STEVE BUYER, Indiana, Ranking |
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Malcom A. Shorter, Staff Director SUBCOMMITTEE ON HEALTH
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Veterans' Affairs are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined. |
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C O N T E N T S
May 3, 2010
Legislative Hearing on H.R. 4241
OPENING STATEMENTS
Chairman Michael Michaud
Prepared statement of Chairman Michaud
WITNESSES
U.S. Department of Veterans Affairs, James F. Burris, M.D., Chief Consultant, Geriatrics and Extended Care, Veterans Health Administration
Prepared statement of Dr. Burris
Maine Veterans’ Homes, Augusta, ME, Kelley J. Kash, Chief Executive Officer
Prepared statement of Mr. Kash
National Association of State Veterans Homes:
Colleen Rundell, M.S., LNHA, President, and Administrator, Vermont Veterans’ Home,
Bennington, VT
Prepared statement of Ms. Rundell
Robert D. Tuke, Chairman, Tennessee State Veterans Homes Board, Murfreesboro, TN
Prepared statement of Mr. Tuke
Keith T. Ribbentrop, State Veterans’ Home Liaison Officer, Yukio Okutsu State Veterans Home,
Hilo, HI
Prepared statement of Mr. Ribbentrop
Gary Bermeosolo, Legislative Officer, and Administrator, Nevada State Veterans Home,
Boulder City, NV
Prepared statement of Mr. Bermeosolo
SUBMISSIONS FOR THE RECORD
American Legion, Jacob B. Gadd, Assistant Director for Program Management, Veterans Affairs and Rehabilitation Commission, statement
American Veterans (AMVETS), Raymond C. Kelley, National Legislative Director, statement
Brown, Hon. Henry E. Brown, Jr., Ranking Republican Member, Subcommittee on Health and a Representative in Congress from the State of South Carolina, statement
Disabled American Veterans, Adrian M. Atizado, Assistant National Legislative Director, statement
National Association of State Directors of Veterans Affairs, Linda S. Schwartz, RN, MSN, DrPH, FAAN, Senior Vice-President, and Commissioner, Connecticut Department of Veterans’ Affairs, Rocky Hill, CT, statement
Paralyzed Veterans of America, statement
Veterans of Foreign Wars of the United States, Robert E. Wallace, Executive Director, letter
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Questions and Responses for the Record:
LEGISLATIVE HEARING ON H.R. 4241
Wednesday, March 3, 2010
U. S. House of Representatives,
Subcommittee on Health,
Committee on Veterans' Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:35 p.m., in Room 340, Cannon House Office Building, Hon. Michael H. Michaud, [Chairman of the Subcommittee] presiding.
Present: Representatives Michaud, Perriello, Rodriguez, and Donnelly.
OPENING STATEMENT OF CHAIRMAN MICHAUD
Mr. MICHAUD. While waiting for another Subcommittee Member to arrive, if the first panel could come forward, please.
I would like to call the hearing to order. I apologize for the delay. However, they called votes. In addition, the previous hearing we had scheduled, was snowed out. So I apologize to those who actually had come to DC, and were here waiting to testify a few weeks ago. I know I see some in the audience, as well as myself, who were here for that hearing.
Today’s legislative hearing is an opportunity for Members of Congress, veterans and other interested parties to provide their views on and discuss recently introduced legislation within this Subcommittee’s jurisdiction. This is an important part of the legislative process and I would encourage everyone to be frank and open on how we can move forward with the legislation we have before us today.
Today we will discuss H.R. 4241, a bill that I introduced to allow for increased flexibility in payment to State Veterans Nursing Homes. I look forward to hearing the views of the witnesses on this bill. I will just say a few words about the legislation that we have before us today. State Veterans Nursing Homes are one of the largest long-term care providers in the country.
According to the National Association of State Veterans Homes (NASVH), there were 137 such Homes in 50 States and Puerto Rico, providing over 28,000 total beds.
In 2006, Congress passed legislation with the intent to provide higher per diem payments to State Veterans Homes providing nursing home care for severely disabled veterans with service-connected disabilities.
Unfortunately, the implementation of this enacted legislation has had the unintended consequence of lowering total per diem payment and does not cover the actual cost incurred by State Veterans Homes. This unintended consequence threatens the financial viability of many State Veterans Homes and is especially a problem for those 30 States that have Medicare and Medicaid-certified State Veterans Homes because they are unable to bill the unpaid balance of the veterans’ care to Medicare and Medicaid.
That is why this legislation is before us today. The legislation provides clarity of the language so that State Veterans Homes may bill Medicare and Medicaid for the balance of veterans’ care remaining after the U.S. Department of Veterans Affairs (VA) makes the per diem payment.
In addition, the bill clarifies the payment to State Veterans Homes to reflect the actual cost of care and authorizes contracts for the State Veterans Homes that are similar to the VA’s Community Nursing Home Provider Agreement.
And once again, I want to thank both panels for coming today and I will turn it over to Mr. Perriello for any opening statements he may have.
[The prepared statement of Chairman Michaud appears in the Appendix.]
Mr. PERRIELLO. I will hold off on a statement for now.
Mr. MICHAUD. Thank you very much. And I want to thank you, Mr. Perriello, for all your hard work and advocacy on behalf of our veterans. You definitely are a true advocate for our veterans and I am very pleased to see you here today to listen to the important testimony that we will hear.
So without any further ado, the first panel that we have before us is Colleen Rundell, who is the President of the National Association of State Veterans Home, and Administrator of the Vermont Veterans’ Home; Kelley Kash, who is the Chief Executive Officer of Maine Veterans’ Homes in Augusta, Maine; Gary Bermeosolo.
Mr. BERMEOSOLO. Close enough, sir.
Mr. MICHAUD. Close enough. Okay. From the Nevada State Veterans Nursing Home—if we had Congresswoman Berkley here, I would have her pronounce your name or introduce you—we have Keith Ribbentrop—
Mr. RIBBENTROP. Ribbentrop, yes, sir.
Mr. MICHAUD [continuing]. From the State of Hawaii, as well as Robert Tuke.
Mr. TUKE. Tuke?
Mr. MICHAUD. Tuke. Okay. From the Tennessee State Veterans Homes. So I want to thank all of you for coming here and we will start with Ms. Rundell.
STATEMENTS OF COLLEEN RUNDELL, M.S., LNHA, PRESIDENT, NATIONAL ASSOCIATION OF STATE VETERANS HOMES, AND ADMINISTRATOR, VERMONT VETERANS’ HOME, BENNINGTON, VT; ROBERT D. TUKE, CHAIRMAN, TENNESSEE STATE VETERANS HOMES BOARD, MURFREESBORO, TN; KEITH T. RIBBENTROP, STATE VETERANS’ HOME LIAISON OFFICER, YUKIO OKUTSU STATE VETERANS HOME, HILO, HI; GARY BERMEOSOLO, LEGISLATIVE OFFICER, NATIONAL ASSOCIATION OF STATE VETERANS HOMES, AND ADMINISTRATOR, NEVADA STATE VETERANS HOME, BOULDER CITY, NV; AND KELLEY J. KASH, CHIEF EXECUTIVE OFFICER, MAINE VETERANS’ HOMES, AUGUSTA, ME
STATEMENT OF COLLEEN RUNDELL, M.S., LNHA
Ms. RUNDELL. Mr. Chairman, Members of the Subcommittee, thank you for holding this hearing on H.R. 4241, legislation that would remedy the unintended consequences of the Section 211(a) of the 2006 Veterans Benefits Act of.
Implementation of the 70-Percent Program is not only inhibiting the long-term care of service-connected disabled veterans, but it is also threatening the financial viability of many of the Nation’s State Homes.
I am the Administrator of the Vermont Veterans' Home and President of the National Association of State Veteran Homes. NASVH consists of the administrators and staff of State-operated Veterans Homes throughout the United States. NASVH members currently operate 137 Veterans Homes, which provide approximately 28,000 skilled nursing home and domiciliary beds. We assist the VA by caring for more than 50 percent of their long-term care workload.
The 70-Percent Program is creating very serious difficulties for State Homes throughout the country. NASVH has met with Dr. Burris and other VA officials in an attempt to address these problems. Contrary to his written statement, however, Dr. Burris informed us that the issue can only be resolved fully by a modification to the law.
NASVH strongly supported, and still strongly supports, the intent of the 70-Percent Program. After the Millennium Act, a service-connected disabled veterans could receive cost-free care at a private nursing home, but that same veteran could not receive cost-free care at a State Veterans Home.
The 70-Percent legislation tried to achieve parity in the provision of nursing home benefits for our veterans. Unfortunately, the implementation of the program has failed to achieve this parity and has resulted in numerous problems and unintended consequences.
Specifically, although the VA regulations state that they provide a higher per diem rate for veterans with service-connected disabilities, the regulations actually result in a significantly lower total amounts being paid to many of the State Homes. The program simply does not provide to many State Homes adequate reimbursement for their actual cost of care. In short, without exaggeration, it threatens the financial viability of our Homes.
This problem is particularly acute in the 30 States that have Medicare and/or Medicaid-certified Homes. The impact is significant enough that several States have incurred substantial financial losses, and others have been forced to deny or limit admission for such veterans. Unfortunately, the implementation of the 70-Percent Program is having exactly the opposite result envisioned by Congress.
One typical example comes from my Vermont Veterans' Home. Prior to the 70-Percent Program, Sergeant Jakob Lurie was admitted to my Home under Medicare after a 3-day hospital stay. Sergeant Lurie required skilled care and as a result, received 3 hours of therapy each day.
The average daily cost for Sergeant Lurie was $476. This includes physical, occupational and speech therapy, medications, physician visits, specialized medical treatments and room and board. Under the 70-Percent Program, however, my Home would have received $302.00 a day for Sergeant Lurie’s Care, a loss of nearly $175 per day for just one resident. The math does not add up under the 70-Percent Program. Sergeant Lurie’s case is typical.
Since I have arrived in Washington this week, the Vermont Veterans' Home admitted our 11th veteran who qualifies for the 70-Percent Program and this number will only go up.
Among the first 10 veterans alone, I estimate an average loss for the Vermont Veterans' Home of $180,000.
NASVH supports H.R. 4241, which would allow service-connected disabled veterans to receive the nursing home care that Congress intended, while reimbursing State Veteran Homes fully and more accurately for such care.
We would also support clarifying language to the legislation that made clear that a State Home cannot receive payment from the VA under more than one of the alternatives provided in the bill. State Homes do not want to be paid twice for anything that we do. However, we do want to be paid once for everything we do.
NASVH believes that the enactment of the bill will resolve all of the problems that have arisen in the 70-Percent Program, and permit State Homes to admit covered Veterans without adverse financial consequences.
We are pleased that there is widespread support for our efforts to address this issue. The National Association of State Directors of Veterans Affairs, the National Governors’ Association, the American Health Care Association, the Military Order of the Purple Heart, the Catholic War Veterans, American Gold Star Mothers and the American Legion have all called for action to remedy these problems.
I want to thank you, Mr. Chairman, the entire Subcommittee and its professional staff for the leadership and skill that you have shown in addressing the long-term care needs of our Nation’s service-connected disabled veterans. I appreciate the opportunity to testify and will be very happy to answer any questions.
[The prepared statement of Ms. Rundell appears in the Appendix.]
Mr. MICHAUD. Thank you very much.
Mr. Tuke.
Mr. TUKE. Mr. Chairman, Members of the Subcommittee, thank you for the opportunity to testify today. I am Robert Tuke, and I am Chairman of the Tennessee State Veterans Homes Board. As a Marine Vietnam Veteran with a minor service-connected disability, I am especially interested in supporting efforts to assist disabled veterans whenever possible. So it is a double privilege and honor to address you today.
The Tennessee State Veterans Homes operate much in the same manner as private nursing homes. We do not receive funding for operations from our State. Instead, we must maintain financial viability just as any other nursing home organization. We operate three nursing homes, each with 140 beds, dually certified for Medicare and Medicaid. The revenues generated and collected by our Homes are our operating and capital fund.
When the VA regulations for the 70-Percent Program became effective last May, we had a total of 13 residents in our three Homes who met the criteria for the 70-Percent Program. By the end of January 2010, 8 months later, the total of such residents was 23, an 85 percent increase. Of the 23 current residents, 18 require skilled nursing home care and the other 5 require standard, custodial nursing care.
We anticipate these numbers will continue to increase as more veterans become aware of the program and elect admission into the State Veterans Homes instead of community homes.
Tennessee does not limit, and has no intention of limiting, admissions to its nursing homes based on payor source, and we do not intend to limit admissions under the 70-Percent Program. But for how long can we honor this commitment, especially given the consequences to revenues and expenses arising from the 70-Percent Program. These threaten the long-term financial viability of the Tennessee State Veterans Homes and to State Veterans Homes nationwide.
As I have pointed out, the vast majority of the new admissions under this program require skilled nursing care services. This means that the billings for services for these residents are submitted to the VA instead of to Medicare. Therefore, the loss of revenue calculations that we have presented today in my written testimony are based on actual payments received from VA compared to what our reimbursements would have been from Medicare.
Additionally, many expense items that are reimbursed adequately under consolidated billing rules for Medicare are not reimbursed adequately under the 70-Percent Program. Examples include services by attending physicians, specialists, and emergency transportation. In essence, when we admit residents who qualify for the 70-Percent Program, we incur higher expenses and receive lower reimbursement for services, as compared to reimbursements from other applicable payor sources. This is because the 70-Percent Program reimbursement is based on the lesser of the prevailing rate as established by the Secretary for Veterans Affairs and the average daily cost of care for all residents based on actual expenses incurred by the home.
The average daily cost of care calculation results in a reimbursement skewed by the much larger percentage of intermediate care residents in each home as compared to a skilled care resident. The expenses associated with custodial care are significantly lower on a per patient day basis than those for skilled care. Moreover, the 70-percent veterans incur expenses, which are higher than those incurred by our typical Medicare residents.
When total expenses are divided by total resident days to obtain the average daily cost of care, the resulting average is much less than the actual cost of care for qualifying residents.
The chart included in my written testimony outlines those charges and reimbursements for skilled services covered under Medicare and under the 70-Percent Program.
In sum, the current reimbursement methodology for the 70-Percent Program does not provide sufficient funding for State Homes. In fact, we estimate a loss of $338,000 in revenues over the last 8 months alone because of the funding constraints of the 70-Percent Program. My written testimony outlines the details.
Obviously, the Tennessee State Veterans Homes Board cannot continue to absorb this increase in expenses and reduction in reimbursements without dire fiscal consequences, nor can others as you have heard.
In addition, you have received written testimony in support of this legislation from veterans service organizations and others. I urge you to review in particular the testimony of Linda Schwartz on behalf of the State Directors of Veterans Affairs.
Thank you again for the opportunity to testify. We urge support for H.R. 4241 and I would be happy to answer any questions that Members of the Subcommittee or, Mr. Chairman, you may have. Thank you.
[The prepared statement of Mr. Tuke appears in the Appendix.]
Mr. MICHAUD. Thank you very much.
Mr. Ribbentrop?
STATEMENT OF KEITH T. RIBBENTROP
Mr. RIBBENTROP. Mr. Chairman and Members of the Subcommittee, my name is Keith Ribbentrop and I am the State Veterans’ Home Liaison Officer to the Yukio Okutsu State Veterans Home in Hilo, Hawaii. I am retired from the United States Air Force, and as a disabled combat veteran of the Vietnam War, I am grateful for the opportunity to be here today and advocate for my fellow comrades-in-arms. Thank you for the honor to speak on their behalf.
As you know, the Veterans Benefits, Health and Information Technology Act of 2006 authorized the Department of Veterans Affairs to make payments to State Veterans Homes that provide nursing home care to veterans with service-connected disabilities.
VA regulations implementing the 70-Percent Program purport to provide a higher per diem rate for eligible veterans. However, the program, as implemented, actually results in significantly lower payments to many State Veterans Homes. Unless revised, the 70-Percent Program will not provide the actual cost of care to State Homes despite Congressional intent.
The problem is particularly urgent in States that are Medicare and/or Medicaid-certified. Hawaii is one of the 30 States across the Nation that is so certified. Under the current program, those veterans eligible for the higher per diem rate are not eligible for Medicaid funds. The tables and charts in my written testimony show the impact of the 70-Percent Program on our Home.
At the end of 2009, we had 12 veterans in our Home under the program. Because the program does not fully compensate our costs, our Home loses more than $50,000 a month on the care of those veterans.
The more veterans we admit under the program, the greater our losses become. Over time, the program will clearly cut into our ability to provide long-term care to any veteran in our State.
Hawaii is an island State. Our Home is located on a big island, which suffers from a critical shortage of doctors as well as specialty medical services. My written testimony details our physician needs. This shortage, at times, requires that we transport a resident 200 miles by air to the island of Oahu where speciality care could be available.
The rapid growth of the 70-Percent Program eligible veterans in our Home is duplicated nationwide. Because of this growth and its financial implications, many States have constrained admission to veterans under the new program.
Yukio Okutsu State Veterans Home is proud to report that it is nearing capacity. We are approaching 99 percent filled and soon will need to establish a waiting list. Our Home’s wait list gives priority to service-connected veterans by order of service-connected disability rating.
As the Yukio Okutsu State Veterans Home reaches capacity, our State Director of Veterans Services, Mr. Mark Moses, has begun to assess the need for Hawaii’s next State Home. The losses under this 70-Percent Program will risk the construction of any future State Home in the State of Hawaii.
Mr. Chairman, the 70-Percent Program, was intended to be a blessing for veterans and their families. As currently designed, however, it jeopardizes our ability to care for our most deserving veterans.
The National Association of State Veterans Homes has proposed amendments to the 70-Percent Program that are reflected in H.R. 4241. The legislation will allow State Homes greater flexibility in admission and care for veterans with service-connected disabilities without risking the future of our Homes.
As you and the Committee on Veterans’ Affairs consider H.R. 4241, please know that it will be beneficial to both the veterans as well as the Homes that were built to serve them. I urge you to pass this measure.
Mr. Chairman, thank you for your dedication, and the dedication of the Committee on Veterans’ Affairs in support of our Nation’s veterans.
[The prepared statement of Mr. Ribbentrop appears in the Appendix.]
Mr. MICHAUD. Thank you very much.
Mr. Bermeosolo?
Mr. BERMEOSOLO. Mr. Chairman, I am Gary Bermeosolo, and I thank you for inviting me to testify today.
As the Legislative Officer of NASVH and the Administrator of the Nevada State Veterans Home, I am honored to be here with you to request your support of H.R. 4241.
When Public Law 109-461 passed in 2006, its intent was to correct an inequity that existed in the system, whereby veterans with a 70 percent or greater service-connected disability rating couldn’t come to a State Veterans Home at no cost, but they could go to a community nursing home at no cost. This was a well-intended law that we supported because we thought it would correct this inequity.
However, the implementing regulations created more inequities than they corrected. Now, we are being required to admit these veterans under a program intended to cover their total cost of care, but one which actually does not. Consequently, many States can’t admit these veterans because of this financial burden.
Let me assure you, this is not an issue confined to any one State. This is a nationwide problem. NASVH is comprised of the 137 State Veterans Homes across the country. Since the new law was implemented, I have been contacted by administrators and directors of State Homes from all over the country about the financial challenges this law has created. And, while I am very concerned as the Legislative Officer for NASVH, I am also very concerned as the Administrator of the Nevada State Veterans Home in Boulder City. Let me share just one of the many actual experiences I have had.
On July 21st of 2009, the wife of a World War II veteran, whom we shall call Mr. Disabled Veteran, Mr. D.V., came to our Home seeking admission for her husband. She was desperate to get him into our Home where she could be confident he would receive quality care and have opportunities to socialize with other vets he could relate to.
As we began discussing our daily cost of care, Mrs. D.V. indicated her husband had a 100-percent service-connected disability rating and, consequently, was not being charged for his care at his community nursing home. Well, we explained to Mrs. D.V. the difference between the VA’s reimbursement policies for a community home and for a State Home. We shared with her that we cannot, under current law, provide care for her husband because VA reimbursement may not cover our costs.
At this point, Mrs. D.V. began crying and asked how this could be possible since we aren’t just a nursing home, but a nursing home especially for veterans. I told Mrs. D.V. how we arrived at this point and indicated I was working with other State Homes in Congress to fix this problem, but until it is fixed, we simply cannot assume the risk of admitting veterans under this program.
Mrs. D.V. then retrieved her checkbook from her purse and she waived it in the air saying, “But I’ll pay for his care if you will just admit him.” We responded that VA regulations won’t allow her to pay for the cost of her husband’s care. She began sobbing and she tried to come to terms with what we were telling her. At this point, I looked this woman in the eye and I promised her I would do everything possible to get this fixed.
As our meeting concluded, we encouraged Mrs. D.V. to check back with us periodically to see if the law had been fixed. Mrs. D.V. did call me back in August, then again in September, again in October, and yet again in November, each time asking if the 70-percent thing was fixed. Each time, we had to tell her, no, we are still working on it.
Mrs. D.V. doesn’t call me anymore. Her husband died on December 16, 2009, never able to access the care he deserved as a 100-percent service-connected disabled veteran.
It is impossible to convey how difficult it is to turn these folks away. State Home administrators across the country are unwilling to assume the risk of bankrupting their programs, which would have the catastrophic effect of displacing the current residents.
Mr. Chairman and Members of the Committee, I implore you, please correct this injustice. We are turning away the very people who most deserve and need care in State Veterans Homes. H.R. 4241 corrects inequities and achieves the end result we are all hoping for and, most importantly, that our veterans deserve.
Mr. Chairman, this concludes my statement. Thank you for permitting me to testify today on behalf NASVH and the Nevada State Veterans Home Program. I will be pleased to answer any questions.
[The prepared statement of Mr. Bermeosolo appears in the Appendix.]
Mr. MICHAUD. Thank you very much, and thank you for sharing that story.
I'd better not mess up this pronunciation, the next witness, Mr. Kash.
Mr. KASH. Thank you, Mr. Chairman and Members of the Subcommittee. Thank you for inviting me to testify here today. My name is Kelley Kash. I am the Chief Executive Officer of the Maine Veterans’ Homes and also retired Air Force Officer Hospital Administrator and Commander.
The Maine Veterans’ Homes is a public not-for-profit system established 30 years ago by the government of the State of Maine. We operate 640 skilled nursing, long-term care and domiciliary beds at six locations
All of our Homes are both Medicare and Medicaid-certified. We provide a considerable amount of skilled nursing care, including post-acute, post-operative, and rehabilitative care at no cost, or at very low cost, to Maine’s veterans. Skilled nursing care, however, is precisely the type of nursing care for which the VA’s new 70-Percent Program causes the greatest financial losses.
We have estimated that if we were to admit every Maine veteran that reasonably could seek admission under the 70-Percent Program, we would lose between $8 and $16 million per year. We would be bankrupt within 1 1/2 to 3 years. We calculated this by reviewing the files of several typical skilled nursing residents. They showed us that we would lose an average of $238 per resident per day under this program compared to existing sources of funds with Medicare or Medicaid. Our data is consistent with the facts being reported here today by other Medicare and Medicaid-certified State Homes.
Keep in mind, that this program applies to all admissions that are service-connected, not just those with a 70-percent or higher disability. A veteran with as little as a 10-percent disability could qualify.
The only State Homes in the Nation that have any hope of not incurring substantial financial losses under this program are those State Homes, which are not Medicare or Medicaid-certified or which provide only a minimal amount of skilled nursing care.
As my colleagues have testified, the VA’s numbers simply do not add up. Under the 70-Percent Program, the VA substantially underpays for skilled nursing care and as implemented, the program is a financial disaster for the State Homes. As a result, many States have avoided admitting any service-connected disabled veterans. This is exactly the opposite result that Congress intended.
As a medical professional, I find this places me in a moral dilemma. I must deny admission to some of our most deserving veterans in order to stay in business to continue to serve any veterans.
Since the 70-Percent Program took effect last year, we have met several times with VA officials, including Dr. Burris. Frankly, I believe that Dr. Burris does not understand the problem or the enormity of the problem that the program creates in the majority of the State Homes in the Nation.
In simple language, the 70-Percent Program does not pay State Veterans Homes enough to provide skilled nursing care to veterans. The VA in the past had said that it could cure the problems with the 70-Percent Program administratively, but it has not done so. The result has been a program in chaos. We have simply run out of patience with the VA. The VA can no longer hide its head in the sand with the disarray that it has created for our Nation’s veterans in our State Homes.
What should be done? Congress should allow State Veterans Homes the option of continuing to receive payments from Medicare or Medicaid, plus the basic VA per diem rate until the VA can devise a permanent system and adopt regulations paid to State Homes at rates comparable to existing Medicare rates. The VA should be required also to pay any co-pay required by the veteran for his Medicare benefits, so that such care is at no cost to the veteran. Payment in full by the VA to a State Veterans Home should mean payment in full.
Congress should also allow State Veterans Homes to use the existing VA Community Nursing Home Provider Contract Program so that we can provide immediate long-term care services to service-connected disabled veterans at no cost to such veterans.
The enactment of H.R. 4241 would give the VA the authority to accomplish both of these goals quickly, and we urge its speedy passage. We thank the Chairman and Members of the Subcommittee for the opportunity to testify today, and we look forward to working with both Congress and the VA to effect a permanent solution to the substantial problems of the current 70-Percent Program.
[The prepared statement of Mr. Kash appears in the Appendix.]
Mr. MICHAUD. Thank you very much. I want to thank all of you for your service to this great country of ours, as well.
The first question I have is for Ms. Rundell. We have heard a lot about the Medicare and Medicaid-certified homes. How many of those State Veterans Nursing Homes are not Medicare or Medicaid-certified? Or are they all Medicare and Medicaid-certified, but just some more than others?
Ms. RUNDELL. There is no paintbrush that covers each State. There are some States that have Medicare and Medicaid-certified homes in the law, so within the State have a facility that is non-Medicare/Medicaid. At this point, slightly more than half of the State Veteran Homes in the Nation and Puerto Rico, are Medicare and Medicaid-certified.
Mr. MICHAUD. After reading Mr. Burris’ testimony, you suggest that a number of States are satisfied with the new rate for mandatory veterans, but others are not. How many State Veterans Nursing Homes have no problem with the new rate, those who—
Mr. BERMEOSOLO. Mr. Chairman, I would like to take that question if I may. Gary Bermeosolo, for the record.
We are currently having our mid-winter conference here in Washington, D.C. and I asked that question yesterday—how many of you are satisfied with the current law. No hands went up. None.
I am not aware of any States that are satisfied with the current program. I am aware of a number of States that are in financial distress, some of them here at the table with Hawaii, Colorado, Maine, Tennessee, Idaho. The list goes on.
But I don’t know where he gets his information from or where he got that piece of information from, but the majority of the States within our association have definitely indicated that they have severe issues with the law.
Mr. MICHAUD. Thank you. And do you believe that it is mandatory for your Homes to admit service-connected veterans even though you would incur losses by admitting such veterans?
Mr. TUKE. Mr. Chairman, if I may address that. Each State has autonomy and discretion in admitting residents to its homes and so no category is mandatory, not even for people in the 70-Percent Program, but some of us believe that it is our moral duty to admit these people. I am a Marine. We take care of our own. The only thing is, when we run a State Veterans Home that we do in Tennessee with three of them, we can’t bankrupt our Homes caring for some because the VA won’t pay for them and, therefore, imperils the care that we give to all.
Mr. BERMEOSOLO. Mr. Chairman, if I might piggyback on to that. There are a number of States that have different admission criteria. For instance, many States only accept war-time veterans. Some States accept peace-time veterans and yet other States would also accept spouses of veterans and Goldstar Care and it is up to 25 percent of the beds, which are allowed by law, so it varies from State to State.
Ms. RUNDELL. Sir, if I may also add that every time that we have a 70-percent service-connected admission, I am faced with a moral dilemma because I need to, for the first time, really take a look at what it is going to cost and whether or not my facility is going to be able to handle the financial risks attached to that and still be able to be financially viable to take care of my other 142 veterans.
Mr. KASH. And sir, if I might add a final note to that. The problem for me is identifying who those are, in fact. The question is do you know if they are 70 percent or if they are program eligible.
As I mentioned before, I am not—I am intentionally not admitting any of these. When I report to the VA, I believe I have 9 of those. They came back to me and said, no, you, in fact, you have 27. Yesterday they informed me, no, you have 22 more. You actually have 49. This afternoon I found out that one of the people we thought was 100 percent disabled was, in fact, not eligible for the program, the fact that he has been in our Home for 2 1/2 years under this, quote, "program."
So for me, it is really hard. How do you sort this out and you can’t figure out if, in fact, your person qualifies for 70-percent service-connected admission?
Ms. RUNDELL. So if we admit them, believing they are 70-percent service-connected, it is a very difficult to go back and bill if they are not 70-percent service-connected. With Medicaid, I am only allowed to go back 90 days and pick up billing, and I don’t think it is fair to hit a family member with a bill to say, hi, no, they weren’t really 70-percent service-connected because I received the information from the Department of Veterans Affairs to know what my reality is or the family’s or the veteran’s.
Mr. RIBBENTROP. Mr. Chairman, in the State of Hawaii, we have the latitude to accept a lot of veterans because we are reaching capacity and the Board of Governors has said that we must establish a waiting list. That waiting list mandates the higher percentage service-connected disabled veterans be put to the top of the waiting list. In a very short period of time we will have a home for the 100-percent disabled veterans.
Mr. MICHAUD. But by the same token, the more disabled veterans go to the top of your waiting list. The cost of taking care of those veterans will be much higher and, therefore, if the VA is not paying the actual cost of care, it would put you in bankruptcy even sooner.
Mr. RIBBENTROP. Yes, sir.
Mr. MICHAUD. Mr. Donnelly?
Mr. DONNELLY. No questions.
Mr. MICHAUD. Other Subcommittee Members might have additional questions if they are submitted in writing. I know Ranking Member Brown is very interested in this. Unfortunately, he had another Committee hearing he had to go to, but he is very interested in trying to solve this problem.
I guess my final question and concern is, you said your Veteran Nursing Homes in Maine, will lose anywhere from $8 to $16 million, while another, Vermont, will lose $180,000. I assume that is because Maine has six Veteran Nursing Homes. I assume that number includes all six.
Do you have any data from all the State Veterans Nursing Homes on what they actually would lose if the VA continues with the current policy? Or can you provide some more data to us?
Mr. KASH. Sir, we are happy to share what data we have collected. We have not heard from every State, but certainly have a good sample of States, including the States here, as well as Idaho and we feel we can get a lot of those numbers. But I can you tell that consistently, in Maine, estimated conservatively when we first looked at this issue that we would be losing approximately $100 to $125 per day per resident. We are finding it much higher than that. I know Tennessee found that theirs were a little bit over $200 per day.
But we would be happy, and we have committed ourselves all along with VA to work and collect data for them and provide them that data. We would be happy to provide what we have now.
[The information follows:]
Mr. Kelly supplied the data and analyses on the impact of the 70-Percent Program implementation as requested. Extensive patient data and Medicare Cost Reports were also provided to the VA Deputy Assistant Secretary for Intergovernmental Affairs and the VA Office of Inspector General. The data and analyses readily show that VA’s Higher Per Diem payment only covers the approximate cost of room, board, and basic nursing. The VA's Higher Per Diem payment does not pay adequately for skilled care, and in fact, appears to pay only about 1/2 to 2/3 of what Medicare or other payers would reimburse the State Veterans Homes for the same care for nearly every State reporting to us. [The data supplied to the Subcommittee will be retained in the Committee files.]
Mr. MICHAUD. Thank you very much. I would like to thank each of you for your testimony today and I look forward to working with you as we move forward to resolve these issues. Thank you all.
I invite up the next panel, Dr. Burris, who is the Chief Consultant for Geriatrics and Extended Care under the Veterans Health Administration (VHA), and he is accompanied by Walter Hall, who is the Assistant General Counsel for the Department of Veterans Affairs.
I want to thank you, Doctor, for coming today. We look forward to your testimony and without any further ado, I will turn it over to you, Doctor.
STATEMENT OF JAMES F. BURRIS, M.D., CHIEF CONSULTANT, GERIATRICS AND EXTENDED CARE, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY WALTER A. HALL, ASSISTANT GENERAL COUNSEL, OFFICE OF GENERAL COUNSEL, U.S. DEPARTMENT OF VETERANS AFFAIRS
STATEMENT OF JAMES F. BURRIS, M.D.
Dr. BURRIS. Thank you, Mr. Chairman and Members of the Subcommittee. I appreciate the opportunity to appear before you today to discuss H.R. 4241 and how VA has been working together with the State Veterans Homes to try to resolve issues that, as you know, are affecting a number of Homes.
For background, I will use the term "mandatory veterans" to refer to veterans who have a service-connected disability rated 70 percent or more or who need nursing home care because of a service-connected disability at a lower rate. These are the group of veterans for whom VA has been mandated to pay for nursing home care.
Under the State Home program, VA provides support to States to construct and operate nursing homes and domiciliaries for the care of veterans. In return, State Homes provide nursing home care to many of our Nation’s veterans.
In testimony, we will begin by describing some of the issues that have arisen during implementation of the most recent legislative changes and the rules and how we have been working to address them and then briefly address H.R. 4241 specifically.
For many years prior to the enactment of Public Law 109-461, VA paid the full cost of the mandatory veterans’ care in VA or private nursing homes. For State Homes, VA only paid a fixed basic per diem rate for all veterans. In 2006, Congress directed VA to pay State Homes the full cost of nursing home care for mandatory veterans. VA regulations implementing this Congressional mandate became effective last May.
Although some States are satisfied with the new rates VA pays for mandatory veterans, many have reported problems. Some States report that they are now receiving smaller total payments from all payors for the care of these veterans because they believe they are no longer able to bill veterans or other payors. Some States report that VA payments do not cover their actual costs and, as a result, they can no longer afford to admit mandatory veterans. Others reported that VA facilities stopped providing specialty physician services to their mandatory veterans. I want to assure impeding Subcommittee that VA is committed to the State Home Program and when we ascertain circumstances for the intent of Public Law 109-461, we are working hard and have been working for some time to try to find solutions and avoid adverse impact on veterans.
In an effort to better understand these difficulties, VA has met on several occasions with representatives of the National Association of State Directors of Veterans Affairs, the National Association of State Veterans Homes, the National Governors' Association and Congressional staff. As a result of these discussions, we believe that there are non-legislative actions that VA, working in cooperation with the State Veterans Homes, can take to ameliorate some of these issues.
We have asked the States to share with us supporting documentation that demonstrates how their actual costs for the care of ambulatory veterans exceed the allowable VA per diem payment under the current law and some of the States have provided those data, including Maine and Idaho and Vermont. With this information, we will be in a better position to understand the impact of Public Law 109-461 and address the States’ concerns.
As you will note in my written testimony, we will also need that data to come to a conclusion on one element of the legislation we are here to discuss today, the provision related to using contracts for the State Homes.
VA has already taken steps toward resolving one of the reported difficulties. On October 19, 2009, VA issued guidance to its field facilities that the full per diem payment to State Homes covers nursing home services only and that VA facilities are to continue providing most specialty care to mandatory veterans as they did prior to the initiation of the new payments. This has assured veterans of access to needed care and provided cost avoidance for the State Homes.
There are also interagency discussions taking place because other Federal agencies payment rules form part of the Homes' support and we need to make sure everyone is clear on the interpretation of those regulations.
Further, we believe that some States may need assistance in understanding the provisions of Office and Management and Budget (OMB) Circular A-87, which States must use to calculate their actual cost of care for mandatory veterans. VA has offered to work individually with States to improve their understanding of Circular A-87 cost-accounting rules and enhance their cost recovery.
VA’s official positions on the provisions of H.R. 4241 are stated in the written testimony which was submitted, so I won’t reiterate that now but I will summarize that VA cannot support the legislation as it now written.
Mr. MICHAUD. Thank you for—are you all done?
Dr. BURRIS. Just to emphasize, as I did earlier this week at the winter meeting of the National Association of State Veterans Homes, that we are committed to finding a solution, we will continue to work with the State Homes and other partners to ensure these veterans are properly served. And please note that we are happy to meet with you and your staff at any time to discuss these issues and provide technical assistance. Thank you, sir.
[The prepared statement of Dr. Burris appears in the Appendix.]
Mr. MICHAUD. Thank you very much, Doctor, and I want to thank you, Mr. Hall, for coming here today as well, and I appreciate your willingness. You say that you can fix with this without legislation. However, as a Member who is sitting on this side of the aisle who passed the bill and has seen it take 2 1/2, 3 years to implement, I have a concern with what has happened or is going to happen to our veterans who need long-term care.
We heard a devastating story of a veteran in Nevada. That is unconscionable and that is something that I would not be very proud of if I were over at VA.
Also, you mentioned in your testimony that the language in Public Law 109-461 stated that the veterans State nursing homes should be paid the full cost. What is your interpretation of "full cost?"
Dr. BURRIS. Well, Public Law 109-461 specifies that VA is to pay the full cost of nursing home care and the elements of nursing home care are defined in our regulations and include, for example, basic primary physician care, skilled nursing, nutrition and dietary services, routine and emergency medications, rehabilitation services and then there are some additional services that the Home is required to make available to veterans living there, but those other services, such as dental services, can be charged for.
So our sense is that the speciality medical services that the State Homes have referred to, such as dialysis or speciality physician care, would fall outside of the services that we’re paying for with the per diem and that potentially those other services could be billed for. We have had staff level discussions with Medicare and Medicaid, staff level folks who have clarified for us that under the Centers for Medicare and Medicaid Services (CMS) rules, Medicare and Medicaid pay for a bundled set of services in the nursing home, but the unbundled services that fall outside of that package can be billed for.
We have recently met with the legislative office at the U.S. Department of Health and Human Services and the policy office at CMS to explain problems that have arisen in the implementation of the law and they have said that they will take that under consideration, go back to their general counsel and discuss it and try to come forward with a clarifying letter on what their policy is.
Mr. MICHAUD. And when do you expect that to happen, next year or the year after? I mean, I don’t want to be sarcastic about it, but I am concerned that I see our veterans are not being taken care of because of what I feel is improper implementation of the law that we passed. It is probably our fault for not specifying in more detail what full cost means, but it is our hope as legislators that we don’t want to tie administrators hands so that they have no wiggle room. We expect common sense to be used.
But by the same token, we don’t want to have legislation that would give you that flexibility, and at the same time be contrary to what the intent of the law was. Now, you mentioned that some services can be billed. It is my understanding that once the VA makes its payment to a State veterans nursing home, then they can no longer bill Medicare and Medicaid because that is considered payment in full.
So if that isn’t payment in full, then you have a lot of State Veterans Nursing Homes that have a high population of Medicare and Medicaid, then they are on the short end of the stick, so who are they going to bill if they can’t bill Medicare and Medicaid?
You know, that is the problem that we are facing and we do have a lot of nursing homes with both Medicare and Medicaid patients. So who are they going to bill? You mentioned that they can bill for those other services. If it is not Medicare or Medicaid, then who are they going to bill?
Dr. BURRIS. Well, there is quite a bit of variation from State to State in the way the Homes are funded. Some State Homes do receive a direct appropriation from the State. Many do not. They fall under different lines of authority in the State. Some are under the State Department of Veterans Affairs. Some are under the State Department of Public Health.
So it is very difficult to give a single answer to your question. But if the veteran had long-term care insurance, that might cover some of the services that are not part of our defined bundle of nursing home services.
If the veteran is eligible for care from VA, many services can be provided through the VA health care system.
Mr. MICHAUD. The VA runs long-term care facilities as well, correct?
Dr. BURRIS. Yes, sir, that is correct.
Mr. MICHAUD. How many veterans in your long-term care facilities have long-term care health insurance?
Dr. BURRIS. I don’t know that number, sir.
Mr. MICHAUD. Would you have to go after that insurance first before the VA pays for it?
Dr. BURRIS. No. No. The VA per diem payment to the State would be made irrespective of what other sources are paying.
Mr. MICHAUD. Well, I am talking about the veterans that are in the VA facilities. You mentioned collecting payments from long-term care insurance, but I doubt very much that many veterans have long-term care health insurance. So my point is, if, in fact, you are taking care of veterans in the VA’s long-term care facilities, you must have some idea of how many of those have long-term care health insurance, that you could probably go after third-party billing for. Would that be possible?
Dr. BURRIS. I do not have that data.
Mr. MICHAUD. Do you have to go after third-party billing for veterans in the long-term care facilities?
Mr. HALL. I believe for care provided for a non-service-connected disability, we may collect against third-party insurers.
Mr. MICHAUD. You may?
Mr. HALL. Yes.
Mr. MICHAUD. Have you?
Mr. HALL. I honestly couldn’t tell you, sir.
[The VA met with Committee staff regarding the State Homes issues]
Mr. MICHAUD. Well, my point is when the doctor mentioned collecting payments from veterans with long-term care insurance, I doubt very much if you are going to find veterans who need nursing home care if they have long-term care health insurance, so I think that argument is not valid.
My next question is, you mentioned that a number of States are satisfied with the new rates that the VA pays for mandatory veterans. What States are satisfied with the rules? You said "a number of States." So could you let me know what States are satisfied and whether or not they have a high Medicare or Medicaid population?
Dr. BURRIS. Well, I have only heard from a few States either directly either for or against.
Mr. MICHAUD. What are the few? In your testimony you say "a number." You’re saying a few, so what are the States that are satisfied?
Dr. BURRIS. The State of Connecticut, the State of Utah. There was a third.
Mr. MICHAUD. If you could provide to the Committee the States that are satisfied, I would also like to know how many veteran nursing homes they have within those States and whether or not they are Medicare and Medicaid eligible.
[The VA provided the information in the response to Question #8 in the Post-Hearing Questions and Responses for the Record, which appear in the Appendix.]
Mr. MICHAUD. My next question is, would a reimbursement schedule that bases payment on the actual acuity of each patient such as the VA does with the Resource Utilization Group, be an effective mechanism to properly and accurately reimburse State Veterans Homes on 70-percent veterans?
Dr. BURRIS. We have had discussions about that point. We believe that it might. We have not been able to—many of the State Homes are providing rough data for us now, but not all, so we wouldn’t be able to implement that at the present time, but with the cooperation of the States to provide the data and a change in the method by which we calculate the prevailing rate, we would be able to do that.
Mr. MICHAUD. Once you have that information, how quickly do you think you might be able to put that system in place?
Dr. BURRIS. That would require a change in the regulations and it is, as you know, that is a fairly lengthy process. At best, a year.&
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