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Witness Testimony of Cheryl Beversdorf, RN, MHS, MA, National Coalition for Homeless Veterans, President and Chief Executive Officer

Introduction

The National Coalition for Homeless Veterans (NCHV) appreciates the opportunity to submit testimony to the Health Subcommittee of the House Committee on Veterans’ Affairs regarding the VA Grant and Per diem Program. Established in 1990, NCHV is a not for profit organization with the mission of ending homelessness among veterans by shaping public policy, promoting collaboration, and building the capacity of service providers. NCHV is the only national organization wholly dedicated to helping end homelessness among America’s veterans.

NCHV was founded by a group of community-based homeless veteran service providers who sought to educate the public about the extraordinarily high percentage of veterans among the homeless population and to place the needs of homeless veterans on the national public policy agenda.   The founders, all former members of the military, were concerned that neither the public nor policy makers understood either the unique reasons for homelessness among veterans or appreciated the reality that so many veterans were overlooked and underserved during their periods of personal crisis.

In the years since its founding, NCHV's membership has grown to nearly 280 organizations in 48 states and the District of Columbia.  As a network, NCHV members provide the full continuum of care to homeless veterans and their families, including emergency shelter, food and clothing, primary health care, addiction and mental health services, employment supports, educational assistance, legal aid and transitional housing.

Homelessness Among Veterans

The VA reports homeless veterans are mostly males (3 percent are females) and the vast majority are single, although service providers are reporting an increased number of veterans with children seeking their assistance.  About half of all homeless veterans have a mental illness and more than two thirds suffer from alcohol or other substance abuse problems. Nearly 40 percent have both psychiatric and substance abuse disorders. The VA reports the majority of women in homeless veteran programs have serious trauma histories, some life-threatening, and many of these women have been raped and reported physical harassment while in the military.

According to the VA Northeast Program Evaluation Center (NEPEC), male veterans are 1.3 times more likely to become homeless than their non-veteran counterparts, and female veterans are 3.6 times more likely to become homeless than their non-veteran counterparts.  Like their non-veteran counterparts, veterans are at high risk of homelessness due to extremely low or no livable income, extreme shortage of affordable housing, and limited access to health care. But these factors combined with their military service put them at even greater risk of homelessness.

Prior to becoming homeless, a large number of veterans at risk of homelessness have struggled with post traumatic stress disorder, also known as PTSD, or have addictions acquired during or after their military service. NEPEC reports nearly 74% of homeless veterans are likely to have medical problems upon admission to either VA or community-based assistance programs.  About 70 percent will have alcohol-related problems; 63% will have drug abuse histories; and 69% will have a mental illness diagnosis. These conditions can interrupt their ability to keep a job, establish savings, and in some cases, live with their families. Veterans’ family, social, and professional networks may have been damaged and their lives disrupted due to extensive mobility while in service or lengthy periods away from their hometowns and their civilian jobs. These problems are directly traceable to their experience in military service or to the difficulty of transitioning back into civilian society.

While most Americans believe our nation’s veterans are well-supported, in fact many go without the services they require and are eligible to receive.  According to a Congressional staff analysis of 2000 U.S. Census data, 1.5 million veterans have incomes that fall below the federal poverty level, including 634,000 with incomes below 50 percent of poverty. Neither the VA nor state and county veteran service departments are adequately funded to respond to these veterans’ health, housing, and supportive services needs. Moreover, community-based and faith-based service providers also lack sufficient resources to keep up with the number of veterans needing help.

The VA reports its homeless veteran programs serve about 100,000 veterans annually. NCHV member community-based organizations (CBOs) serve 150,000 each year. With an estimated 400,000 veterans experiencing homelessness at some time during the year, and the VA reaching only 25 percent and CBOs reaching 35 percent of those in need, that still leaves almost 40% of the nation’s homeless veterans who do not receive the help they need.  It is likely some of these veterans are receiving assistance from other community resources, but there is no way to determine the extent or nature of services being provided.

In testimony presented to Congress in 2006, a U.S. Department of Veterans Affairs (VA) representative reported the number of homeless veterans on the streets of America on any given night decreased by nearly 25 percent during the last five years, from about 250,000 to 190,000. Despite the reported decrease, many veterans still need help. Findings from a survey conducted by NCHV in November 2006 suggest the homeless veteran population in America may be experiencing significant changes. Homeless veterans receiving services today are aging and many are in need of permanent supportive housing.  With the increase in the number of women serving in Iraq and Afghanistan, the percentage of women veterans seeking services is growing.  According to studies published by the New England Journal of Medicine and the VA, a growing number of combat veterans of Operation Iraqi Freedom, Operation Enduring Freedom and the Global War on Terror are returning home and suffering from war-related conditions including PTSD and traumatic brain injury, which may put them at risk for homelessness.

Homeless Provider Grant and Per Diem Program

Administered by the U.S. Department of Veterans Affairs, the Homeless Providers Grants and Per Diem (GPD) program is the nation’s largest VA program to help address the needs of homeless veterans and supports development of transitional, community-based housing and delivery of supportive services.  The program also funds GPD liaisons who coordinate outreach, case management, referrals to benefits counselors, and linkage to health care and housing assistance.  Also funded under the GPD program are Special Needs Grants, which assist homeless women veterans including homeless women veterans with children, in addition to veterans who are chronically mentally ill, frail elderly and terminally ill.

The Homeless Provider Grant and Per Diem Program provides competitive grants to community-based, faith-based, and public organizations to offer transitional housing or service centers for homeless veterans.  The GPD program is an essential component of the VA’s continuum of care for homeless veterans, assuring the availability of social services, employment supports, and direct treatment or referral to medical treatment.

In September 2006 the General Accountability Office (GAO) released its study, Improved Communications and Follow-up Could Further Enhance the Grant and Per Diem Program. The agency found while VA has attempted to improve its services and increase the capacity of the GPD program, an additional 9,600 transitional housing beds are needed to meet the current demand. According to the study, VA reports a total of 45,000 transitional beds are needed and has identified 35,400 beds available from various sources, including the GPD program, resulting in a shortfall of about 9,600 beds. In FY 2005, the GPD program had about 8,000 available for homeless veterans. GAO states VA plans to increase GPD beds by 2,200 in the near future.

NCHV is pleased that both the House and Senate have already passed bills increasing FY08 appropriations for the GPD program to the fully authorized level of $130,000,000.  Funding at this level will make more beds available to serve the expected number of men and women returning from Iraq and Afghanistan who are at risk of homelessness.  NCHV is hopeful Congress will soon pass a final bill that includes this level of funding and the bill will be signed into law.

Payment for Services

 In addition to needed increased program funding, however, NCHV believes the mechanism for paying providers under the Homeless Providers Grant and Per Diem Program (GPD) must be simplified. Current law (38 U.S.C. 2012(a) (2)) authorizes the VA Secretary to provide per diem payments to GPD providers at a rate not to exceed the rate authorized for State homes for domiciliary care.  GPD providers report even this maximum rate (up to $31.30 per day) provides far less than the actual daily cost of care to a veteran in the GPD program.

Moreover, VA has applied current law in a manner such that GPD providers must expend a significant level of effort and resources to gather and submit extensive documentation about each source of income and the location of costs for each homeless veteran being served with GPD funds. Providers often experience lengthy ongoing communication with the VA and questions regarding expenses incurred and accountability, resulting in a delay in timely reimbursement and ultimately, interruption of services to their clients. The accounting burden is particularly onerous for smaller faith-based and community-based organizations, and is contrary to the aim of the President’s Faith-Based and Community Initiative, which seeks to welcome grassroots organizations to federal funding streams.

Often the VA demands repayment of funds when providers temporarily have empty beds -- the problem that comes about because the formula is based on an unsuitable model. At the time the original law was written, Congress was limited in determining how services to veterans outside traditional VA facilities should be reimbursed.  As a result, the rate authorized for State homes for domiciliary care was used as the standard for paying homeless veteran service providers. Over the past several years, however, evidence has shown because clients in the two settings have different needs a payment system reflecting those needs and the more comprehensive services they are receiving must be applied.  Residents receiving domiciliary care in state homes are more likely to remain permanently in VA facilities while the goal of community based homeless veteran service providers is to promote independent living for its clients and reintegration back into civilian life. The current GPD system is too rigid and doesn't reflect the reality of hiring and compensating staff even when beds are temporarily empty.

To address these issues, NCHV urges Congress to introduce legislation that would provide relief to current community- and faith-based providers in addition to organizations that may be interested in applying to the GPD program in the future. The new legislation would revise the per diem payment program to allow payments to be related to service costs rather than a capped rate and would also encourage high cost service areas to participate. The revised system would allow the Secretary to increase annually and adjust accordingly the rate of payment to providers to reflect changes in the cost of furnishing services in a particular geographic area.  The Secretary would set a maximum amount providers would receive based on available funds.

To ensure GPD funds are being spent in accordance with the purpose of the GPD program, NCHV supports statutory language requiring the VA Secretary to develop a reasonable system of outcome and performance measurement of GPD providers.  In the current arena, the VA Homeless Grant and Per Diem liaison (HGPD) assigned to each grant program through the local VA medical center, provides continuous oversight throughout the year and conducts an annual inspection of each program. Results of these activities are reported to the VA HGPD Office.  Oversight includes an inspection of the physical plant where the program operates, and a review and evaluation of the overall program including veterans’ goals, objectives and outcomes as described in the original grant proposal that received the award. Maintaining the reporting process between the VA HGPD Office and the Secretary ensures the Secretary has in place a procedure that can determine if GPD funds are justified and utilized appropriately. Grant recipients provide the VA with information on financial integrity, solvency, operational accounting systems, as well as an annual independent audit.

Use of other funding

In addition to revising the GPD payment system, new legislation should change the requirements for grant recipients and allow service providers to use other available sources of income besides the GPD program to furnish services to homeless veterans. These sources may include payments or grants from other departments and agencies of the United States or from departments or agencies of State or local government.

While the current law was intended to insure VA per diem payments do not replace payments or contributions from other income sources, it has instead created the unintended consequence of penalizing GPD providers successful in securing other sources of income for services to homeless veterans by reducing their per diem payment rate. Thus, the predictable effect of this provision is that it discourages providers from developing partnerships with other federal agencies or state and local governments. Congress should devise a payment provision that encourages GPD providers to continue to seek funding from non-VA sources in a manner that does not penalize them if they are successful.

 Matching funds

All payment modifications should also allow VA funds to be used as a match or leverage for other federal funds and allow other Federal funds to be used without offset by VA. When GPD providers are able to receive the maximum rate in addition to other income sources, they are able to expand the scope and quantity of services to homeless veterans and increase the likelihood of their successful reintegration into the community. Conversely, when GPD providers are forced to use other sources of income to offset any reduction in payments made under the GPD program, as is currently the case, new services cannot be offered.  Providers may not use such other income to develop and support additional housing units, provide veterans a more robust service package, or serve homeless veterans not qualified for GPD support.

Currently, GPD grantees are being required to submit extensive documentation on all of their sources of project funding in order to secure per diem payments at the maximum rate permitted by statute, straining grantees and VA alike. If the GPD program is to remain viable in the future, Congress needs to simplify the conditions under which GPD payment amounts are established.

 Conclusion

The verdict is clear from homeless veteran service providers and veterans’ advocates that the current GPD payment mechanism affects the ability of community- and faith-based organizations to effectively and efficiently serve veterans experiencing homelessness.  We urge Congress to address this situation in whatever legislation is deemed an appropriate vehicle.

Thank you for providing NCHV an opportunity to present our views. I am happy to answer your questions.