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State of the U.S. Department of Veterans Affairs' (VA) Long-Term Care Programs.












MAY 9, 2007

SERIAL No. 110-21

Printed for the use of the Committee on Veterans' Affairs





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BOB FILNER, California, Chairman


VIC SNYDER, Arkansas
JOHN J. HALL, New York
PHIL HARE, Illinois
MICHAEL F. DOYLE, Pennsylvania
TIMOTHY J. WALZ, Minnesota

STEVE BUYER,  Indiana, Ranking
HENRY E. BROWN, JR., South Carolina
BRIAN P. BILBRAY, California




Malcom A. Shorter, Staff Director

MICHAEL H. MICHAUD, Maine, Chairman

VIC SNYDER, Arkansas
PHIL HARE, Illinois
MICHAEL F. DOYLE, Pennsylvania
JEFF MILLER, Florida, Ranking
HENRY E. BROWN, JR., South Carolina

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.



May 9, 2007

The State of the U.S. Department of Veterans Affairs (VA) Long-Term Care Program Present and Future


Chairman Michael Michaud
    Prepared statement of Chairman Michaud
Hon. Henry E. Brown
    Prepared statement of Congressman Brown
Hon. Timothy J. Walz


U.S. Department of Veterans Affairs, Patricia Vandenberg, MHA, BSN, Assistant Deputy Under Secretary for Health Policy and Planning, Veterans Health Administration
    Prepared statement of Ms. Vandenberg

American Legion, Shannon L. Middleton, Deputy Director, Health Care, Veterans Affairs and Rehabilitation Commission
     Prepared statement of Ms. Middleton
Disabled American Veterans, Adrian M. Atizado, Assistant National Legislative Director
     Prepared statement of Mr. Atizado
Maine Veterans’ Homes, Augusta, ME,  Raymond A. Nagel, Chief Executive Officer
     Prepared statement of Mr. Nagel
National Association of State Veterans Homes, R. Roy Griffith, Chairman, Liaison Committee, and Administrator, Oklahoma Veterans Center, Talihina, OK
     Prepared statement of Mr. Griffith
Paralyzed Veterans of America, Fred Cowell, Senior Associate Director, Health Analysis
     Prepared statement of Mr. Cowell


American Health Care Association, statement
America Occupational Therapy Association, statement
American Veterans (AMVETS), Kimo S. Hollingsworth, National Legislative Director, statement
Miller, Hon. Jeff, a Representative in Congress from the State of Florida, statement


Priority List of Pending State Home Construction Grant Applications for FY 2007, supplied by Dr. James F. Burris, Chief Consultant, Geriatrics and Extended Care, Veterans Health Administration, U.S. Department Of Veterans Affairs, in response to a request from Chairman Michaud


Wednesday, May 9, 2007
U. S. House of Representatives,,
Subcommittee on Health,
Committee on Veterans' Affairs,
Washington, DC.

The Committee met, pursuant to notice, at 10:02 a.m., in Room 334, Cannon House Office Building, Hon. Michael H. Michaud [Chairman of the Subcommittee] presiding.

Present:  Representatives Michaud, Hare, Salazar, Brown of South Carolina.
Also present: Representative Walz.


Mr. MICHAUD.  The Subcommittee will come to order.  I would like to thank everyone for coming today.  Before I begin, I would ask unanimous consent that Mr. Walz of Minnesota be invited to sit at the dais of the Subcommittee hearing today.  Hearing no objection, so ordered.

This morning the Subcommittee on Health will examine the state of VA’s long-term care programs and services.  In terms of demographics, the veterans population is aging and will require a great amount of long-term care services.  Out of a veterans population in this country of 25 million, nearly 45 percent are over the age of 65 and the number over the age of 80 is expected to reach 1.3 million by 2010.  In addition, the veteran population is poorer, sicker and older than their non-veteran counterparts. 

The VA will also be facing an entirely new generation of veterans in need of long-term care services, some of our wounded returning Operation Enduring Freedom and Operation Iraqi Freedom (OEF/OIF) veterans who have different needs than those of our older veterans.  Medicaid is a principal financer of long-term care.  In 2004, Medicaid spent $90 billion on long-term care services, of which $57.6 billion, or 64 percent, was for institutional care. 

The VA has requested $4.6 billion for long-term care services in fiscal year 2008.  Nearly 90 percent is for institutional care.  The VA must, in my view, maintain its nursing home capacity, while vigorously expanding its non-institutionalized care capabilities.  Contrary to the plain evidence of an increased long-term care demand, this year the VA will again ignore its clear legal responsibility to maintain its nursing home bed capacity.

The VA’s fiscal year 2008 budget estimates a further drop in the average daily census to 11,000, nearly 20 percent below the required level.  I am concerned that VA is not doing enough to maintain its nursing home capacity, while not moving fast enough to provide more home and community-based care.

An integral component of the VA’s institutional care service is the State Veterans Home Program.  Currently, State Veterans Homes handle over 50 percent of VA’s overall patient workload in nursing homes.  I believe we must maximize this existing resource, as well as other resources within our communities, to ensure the best possible care for our veterans.

The VA has a long history of providing long-term care services and I believe that the VA has many lessons it can teach other areas of the Federal Government and the private sector on how best to provide these services.  The VA can, indeed, be a long-term care model for others.

VA continues to have an obligation to meet the long-term care needs of our veterans and I look forward to hearing from our witnesses today as to how the VA should meet this obligation in the future.

It is now my distinct pleasure to recognize the Acting Ranking Member, a member who I have served with ever since I came to the Veterans' Affairs Committee in different capacities, when I first became Ranking Member of the Benefit Subcommittee.  Then the distinguished Chairman was Chairman Henry Brown.  Following that Congress, I became Ranking Member of the Health Care Subcommittee.  At that time the distinguished Chairman was Henry Brown. 

And Mr. Brown has actually taken time out to come to the State of Maine to look at rural health care issues and likewise, I have gone to his State to look at issues in his State.  And I really appreciate his understanding of veterans issues, as well as his willingness to fight for veterans’ health care.  So I would yield to the acting ranking member, Henry Brown.

[The statement of Chairman Michaud appears in the Appendix.]


Mr. BROWN OF SOUTH CAROLINA.  Well, thank you, Mr. Chairman, and it has certainly been a pleasure of mine to serve alongside of you in many different capacities.  But in all the capacities we have served together was to better enhance the quality of health care for our veterans and I commend you for your continuation along this path. 

I am grateful for the members testifying before the committee this morning, and I have met some you earlier and I look forward to hearing your testimony.  I do have some opening remarks and I will be brief. 

Today, one of the biggest challenges in both VA and the private sector health care system is providing long-term care to a growing aging population.  This challenge is amplified for VA which must facilitate care for the special needs of our disabled and aging veterans.  The Department is also facing an emerging new need to care for seriously injured younger veterans returning from the Global War on Terror.

I appreciate at our hearing today we have witnesses representing the States Veterans Homes.  On Veterans Day last year, I had the privilege of dedicating a new State Veterans Home in Walterboro, South Carolina.  This 220-bed facility, the Veterans Victory House, is one of the most modern of its kind in the United States and includes a 52-bed secured dementia unit.

In partnership with the VA, State Veterans Homes can help provide a broad range of service to meet the long-term care needs of our veterans.  Last year with the enactment of Public Law 109-461, the Veterans Benefits, Health Care and Information Technology Act of 2006, Congress expanded the authorities for State Veterans Homes.  The law requires VA to reimburse State Veterans Homes for the full cost of care for a veteran with a 70 percent or greater service-connected disability rating and in need of care for service-connected conditions.  It also ensures that veterans with a 50 percent or greater service-connected disability receive, at no cost, medications they need through VA. 

Additionally, Public Law 109-461 requires VA to publish a strategic plan for long-term care.  Hopefully, this plan that has been a long time in coming will provide a clear map of the Department’s future plans for delivering long-term care for those veterans who rely on VA to provide these services.  I look forward to the delivery of this plan as required by law.  We have allowed VA to drag its feet on this issue for far too long. 

Mr. Chairman, we need to remember that the quality in which we provide long-term care is a reflection on how this country honors the sacrifices of our Nation’s veterans.

I look forward to our discussion today and to explore innovative steps we can take to provide the best patient centered care to enhance the quality of life of veterans in need of long-term care services. 

Knowing that was a busy day this is, I yield back the balance of my time and look forward to hearing from the witnesses.  Thank you, Mr. Chairman.  It is a pleasure to be here today.

[The statement of Mr. Brown appears in the Appendix.]

Mr. MICHAUD.  Thank you, Mr. Brown.  Mr. Walz, any opening statement?


Mr. WALZ.  Just to keep it short for you, Mr. Chairman.  First of all, I would like to thank you and the acting Ranking Member Brown for allowing me to be here.  But more importantly, I would like to thank you for your long service to our veterans and your commitment to them.  It is something that is well-known and I appreciate everything you have done.

I would also like to thank Mr. Nagel and Mr. Griffith for being here today.

As a 24-year veteran of our armed forces and someone who is deeply concerned with these issues here, I am here today because of a re-occurring issue that keeps coming up in Minneapolis with our Veterans Home there and it has been ongoing for quite some time.  And I know that everyone in this room is here to be committed to the care of our veterans and to figure out the best way to do that.  So I am here to listen to your expertise, listen to our Chairman and Ranking Member and try and figure out what we can do best to help you provide the care for our veterans and do it in a way that we avoid some of these problems.

So I thank the Chairman and I yield back.

Mr. MICHAUD.  Thank you very much, Mr. Walz.  We really appreciate your ongoing commitment to our veterans, as well as your service to this country.  I appreciate that. 

I will now ask unanimous consent that all written statements be made part of the record.  Without objection, so ordered.

Mr. MICHAUD.  And I also ask unanimous consent that all members be allowed five legislative days to revise and extend their remarks.  Without objection, so ordered.

The first panel, it gives me a pleasure to introduce Raymond Nagel who is the Chief Executive Office of the Maine Veterans’ Home, as well as Mr. Roy Griffith who is Chairman, Liaison Committee for the National Association of State Veterans Homes.  I look forward to both of your testimony and we will start out with Mr. Nagel.



Mr. NAGEL.  Good morning.  Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to testify today on behalf of the Maine Veterans' Homes on long-term care.  My name is Ray Nagel.  I am the CEO of Maine Veterans Homes.  I have 23 years of health care experience, including 21 years as a medical service corp. in the United States Army and the United States Army Reserve.  I am a combat veteran of Operations Desert Shield and Desert Storm.

The Maine Veterans' Homes runs six long-term care facilities.  We operate 640 skilled nursing, long-term nursing and domiciliary beds and we are very proud of the quality of the long-term care that we provide. 

Our facilities are relatively small in size, 30 to 150 beds each.  They are located throughout the State of Maine allowing greater access for veterans living in the rural parts of our State. 

We greatly appreciate the Subcommittee’s commitment to long-term care needs of veterans and your understanding of the indispensable function that State Veterans Homes perform.  We especially appreciate the consistent support of the Veterans Affairs' Committee and your colleagues on the Appropriations Committee to ensure that per diem payments by the VA will continue under current eligibility criteria.

As a Nation, we face the largest aging veterans’ population in our Nation’s history.  By the end of this decade, the number of veterans over the age of 85 will have tripled to over 1.3 million.  The State Homes now provide about 50 percent of the VA’s total long-term care workload and we should be treated as a resource that is integrated much more fully with the VA’s own long-term care program.

The State Homes have proposed that our beds be counted toward the VA’s overall long-term care census which will allow the VA to meet its statutory requirements.  Congress’ goal should be to provide long-term care in a manner that expands the VA’s capacity, while paying the lowest available per capita cost. 

The VA reports that the average daily costs of care at a VA long-term care facility is over $560 a day.  The same costs of care to the VA at a contract nursing home is more than $225 a day.  That same cost to the VA for long-term care at a State Home is far less, a per diem of under $68 a day.  I will repeat, $68 a day.

This substantially lower daily cost to the VA of the State Veterans Homes compared to other available long-term care options led the VA Inspector General to conclude that State Homes are an economical alternate to contract nursing homes or VA medical center nursing home care.

The State of Maine, with 640 beds already in operation, has built all of the long-term care beds for veterans that we expect to build.  Furthermore, we operate our long-term care beds at 96 percent capacity.

If the State of Maine is to provide greater levels of service to its veterans, Maine Veterans' Homes must expand the types of services that we provide.  At our 150-bed Bangor facility, we are proposing to construct an integrated veterans campus containing a community-based outreach clinic commonly called a CBOC, a seven-bed hospice facility, and an 18-unit housing facility.

Attached to my testimony are site plans for this veterans campus.  This campus can be constructed using solely the financial resources of Maine Veterans Homes, at no cost to Maine’s taxpayers.  Later, the services provided could be expanded to include assisting living in congregate housing, adult day care and home health care.  Our goal is to provide with an integrated setting comprehensive health care services covering the full continuum of care.

Furthermore, this concept could be replicated at our other five facilities in order to provide the veterans throughout the State of Maine with easier access to comprehensive health care, both in rural and urban settings.  This concept of veterans campus could be a model for other States.

Mr. Chairman, we thank you for your support of this concept and we look forward to welcoming you to the formal announcement of our plans at our Bangor facility. 

In conclusion, we believe that the State Veterans Homes can play a much more substantial role in meeting the long-term care needs of veterans.  We would be pleased to work with the Committee and the VA to explore options for developing pilot programs for innovative, long-term health care solutions and for more closely integrating the State Veterans Homes’ programs into the VA’s overall health care system.

Mr. Chairman and Members of the Subcommittee, I would be pleased to answer any questions you may have of me at this time.

[The statement of Mr. Nagel appears in the Appendix.]

Mr. MICHAUD.  Thank you very much, Mr. Nagel.

Mr. Griffith?


Mr. GRIFFITH.  Mr. Chairman and Members of the Subcommittee, I want to thank you for inviting the National Association of State Veterans Homes (NASVH) to testify on the role that State Homes do and can play in the VA provision of long-term care.

I especially want to thank you for allowing me to substitute for our National Legislative Chair, Bob Shaw, who was unable to make it to today’s hearing due to the recent death of his mother.

This morning I am speaking to you as a member of NASVH’s Executive Committee and Chairman of our VA Liaison Committee where I am responsible for interfacing with the Department of Veterans Affairs.  In addition, I am here as Administrator of the Oklahoma Veterans Center, Talihina, Oklahoma, which provides long-term care to 175 veterans, which includes 48 beds for dementia patients.

Mr. Chairman, with the aging of our baby boomer generation, America faces a looming long-term care crisis, one that many of our Nation’s veterans already know too well.  VA provides that today’s veteran population of 24.5 million will continue to fall through 2020, but that the number of veterans over 65 years of age will rise and ultimately peak in the year 2014, driven by the very large number of Vietnam veterans.  Most alarming, the number of veterans over the age of 85 is projected to increase by 173 percent by 2020, creating an even greater number of veterans seeking long-term care.

Mr. Chairman, it is clear that the long-term care needs of veterans will continue increasing in the coming years and VA must have a fully developed plan to provide that care.  Earlier this year, in response to a request by VA, NASVH surveyed a number of State Homes to determine the current unmet demand for State Home care.  We found substantial waiting lists which indicate as many as 10,000 veterans currently waiting to get into State Homes, and we believe that there are many more who don’t even bother to put their names on these long waiting lists.

Mr. Chairman, State Homes today already provide the bulk of long-term care for our Nation’s veterans, with more than 28,000 beds of which 22,000 are skilled beds.  Last year the U.S. Government Accountability Office (GAO) reported that State Homes provide more than 50 percent of VA overall patient workload in nursing homes, while consuming just 12 percent of the VA’s long-term care budget.  And the trend over recent years shows that State Homes are increasing their share of workload while their share of VA’s budget continues to decline.  VA pays just $67.71 as a per diem payment for each veteran residing in a State Home, which is less than one-third of the average cost of that veteran’s care. 

Compare this to VA’s cost when contracting out with community nursing homes with VA covers a hundred percent of the cost, often upwards of $200 per day, or when VA provides the care through one of its own nursing homes where the average cost of care is excess of $500 per day.

Clearly, an investment in State Homes represented an efficient use of taxpayers’ dollars, one that we hope will continue to receive the strong support it has in the past from the Committee.  The State Homes Program gives you the biggest bang for your buck.

However, we are deeply troubled by recent cuts in the State Home Construction Grant Program over the past two years, which is down from $104.3 million to $85 million, which is a total funding reduction of approximately $40 million in the last two years.

As a result of these real dollar reductions, as well as the effects of inflation and rapidly rising construction costs, the backlog of State Home construction projects is rapidly rising.  There are currently $242 million in priority one projects, those that repair life and safety issues in the homes.  NASVH estimates that the total backlog of all potential qualifying State Home projects could soon surpass $1 billion.  Congress must increase this funding level to at least $160 million in FY 2008 in order to reduce the rising backlog, address the most serious life and safety issues, and protect the State Homes system for the future.

Mr. Chairman, since the Civil War, States have assumed the burden of care for veterans and today spend over $3 billion annually to provide this care, despite the fact that veterans of our armed forces are serving the whole Nation, not just their States.  Seen this way, the care rendered to veterans by the States actually constitutes a subsidy to the Federal Government.

Finally, Mr. Chairman, I would like to ask you and this Subcommittee to help ensure that VA moves forward with regulations necessary to implement legislation that has already passed Congress.  In 2004, Congress approved, and the President signed Public, Law 107-422 which authorized a scholarship program to help nurse recruitment and retention in State Homes, where there is a serious nursing shortage.

This program is modeled on a similar program that the VA currently operates, yet more than three years after the enactment, we are still waiting for implementing regulations.  Last year, with your strong support, Congress passed legislation that provided service-connected veterans in State Homes with equity, both in receiving prescription medications and the 70 percent service-connected veterans would receive full cost of care.  We are still awaiting these very important regulations.  While we have had hopeful talks with the VA about this progress, we believe a bit of oversight by Congress can help ensure that all these regulations come into force this fiscal year.

Mr. Chairman, this concludes my testimony and I would be pleased to answer any questions you might have.

[The statement of Mr. Griffith appears in the Appendix.]

Mr. MICHAUD.  Thank you very much, Mr. Griffith and Mr. Nagel for your enlightening testimony.  I have a couple of questions.

The first one to Mr. Nagel.  You mentioned that you plan on developing a veterans' campus in Bangor and I think that is a real innovative approach of what you are looking at, taking hospice and adult day care and what have you.  And you are looking at other facilities within Maine.  Is Maine unique or do you think other States can take that approach?  Have you talked to other State Veterans Homes in other areas?

Mr. NAGEL.  That is a very good question, Congressman.  I believe that the system that we are starting can be replicated pretty much anywhere across the country.  I think it works extremely well on Maine’s behalf because we are by large a rural State, and by consolidating the veterans’ resources at the Federal, State and local levels, it allows those veterans in those rural areas to come to one spot instead of driving many, many miles out of their way to receive the care at the different levels.

I would be very happy to share this with other States and I am sure that once our prototype is finished—and it will be successful—that it will be a pilot project for other States in the future.

Mr. MICHAUD.  Thank you.  I have been to the facilities in my other capacity when I was in the State Legislature, so I am very familiar with the facilities and thank you for thinking outside the box.

My next question is actually for both gentlemen, since you deal with different States, when you look at the cost difference for the VA for State Veterans Homes versus what the VA provides, there is a big difference.  However, do you think that the current capacity—I know for Maine, you said you pretty much do not intend to build any more right now—do you think that there is capacity out there throughout the country to take additional beds?

Mr. GRIFFITH.  You can tell by looking at the request for construction, the States wanting to build, especially in the areas like California, Texas, Florida, where there is a real large veteran population and not that many State Homes.  There is definitely an interest for the States to build more beds.

Mr. MICHAUD.  And how long do you think that process will take if we provided adequate funding?

Mr. GRIFFITH.  Not long.  The States—to get to priority one, those numbers I gave you earlier—to be a priority one, the State already has the matching funds available, which means you give them the Federal funds and they start to build.  They already have to have their architectural stuff already done and taken care of, so if Congress funds their side of it, the State is going to immediately bid it out and start building, because to get to priority one, you already have to have your State funds available.

Mr. MICHAUD.  Mr. Nagel, you mentioned you are pretty much at capacity now.  Do you envision that there is going to be a greater need, particularly with the war in Iraq and Afghanistan for additional beds in Maine?  And are you prepared to expand if need be?

Mr. NAGEL.  We are prepared to expand in the future if the studies indicate that there will be an increased need in the future.  I wouldn’t anticipate that the veterans that are returning right now would be requiring our long-term care needs, but that is certainly something to be considered for the future.

And to echo what my association has already said, I also believe that the other States—there may not be more reason to build more beds in Maine, but there is great reason to build State Homes in other States that have the need and the capacity.  And there is a very good system for indicating the level of need by State.

Mr. MICHAUD.  Okay.  My last question—and I see I am running out of time—do you feel that State Veterans Homes have the capacity to take care of our newer veterans in terms of traumatic brain injuries (TBI)?

Mr. GRIFFITH.  That is more of a specialized care.  We are more long-term care.  That is kind of what the VA in my opinion—the specialty care should be done by the VA and we take care of what we call the primary care.  Now, in Oklahoma, I do IV therapy in-house and we have all—so we are really a step above a private nursing home, because, you know, if you catch pneumonia and you are at the veterans center, we are going to put you on a IV and treat you at the veterans center, where if you are in a private-sector home, they are going to ship you to the hospital and collect these big dollars from the hospital for your care there.  So we are kind of a—but the specialty care, I take—in Oklahoma, we don’t do dialysis nor ventilator-dependent.  Those are the only two long-term cares that we can’t manage there.

Mr. MICHAUD.  Okay.

Mr. GRIFFITH.  In my opinion, that is what the VA should be doing is this specialty stuff.

Mr. MICHAUD.  Okay.  So for anyone who needs long-term care that has TBI, you feel that this is best left with the VA system?


Mr. MICHAUD.  Okay.  Great.  I thank you.

Mr. Brown, do you have any questions?

Mr. BROWN OF SOUTH CAROLINA.  Thank you, Mr. Chairman.

And thank you, gentlemen, for this informative briefing.  Let me see if I can get some clarification on this.  You state that the VA pays only about $68 a day to provide long-term nursing home care at State Veterans Home.  However, Public Law 109-461 requires VA to reimburse State Veterans Homes for the entire cost of care for service-connected disabled veterans rated 70 percent or higher for a veteran in need of which such care for a service-connected disability.

What is your estimate of what VA will be required to pay for the care of these veterans under Public Law 109-461?

Mr. GRIFFITH.  They give us five options.  We have met with the VA, our association has, on this topic.  There is five different options that they can do.  It could go anywhere from the local Medicaid rate, the Medicare rate, their local contract rate, cost of care of our Homes nationally or regionally.  So there is like several different ways it can go.  Mine is, we need to the VA to hurry up and get us some regulations. 

I have already got families at home that saw this law passed and are wondering why I am still charging them.  They are having to pay for part of their care.  And I said well, until the VA promulgates these rules, I have no way of, you know—you are entitled to this. 

The law passed December 22nd.  It became law March the 22nd.  But the way—it is just like the nurse recruitment thing I was telling you about.  It happened in 2004.  We still have no regulations on it and we are afraid the 70 percenters are going to go the same route if something doesn’t happen.  These veterans are going to be sitting out there which deserve full cost of care. 

They are actually being drove to a private nursing home to get a lower level of care for free instead coming into the State Veterans Home and get a higher level of care, but they have to pay for part of that care.  And that is just not right.

Mr. BROWN OF SOUTH CAROLINA.  What percent are they having to pay now?


Mr. BROWN OF SOUTH CAROLINA.  What percent will they have to pay?

Mr. GRIFFITH.  Seventy percent or more.

Mr. NAGEL.  No.  What percentage do they have to pay?

Mr. BROWN OF SOUTH CAROLINA.  Right.  I mean what would be their co-payment?

Mr. NAGEL.  It depends on what type of funding source that they have.  If it is Medicare, Medicaid, and Medicaid would vary by State.

Mr. GRIFFITH.  Every State is a little bit different.  In Oklahoma, for a married veteran it is 50 percent of total family income, 85 percent for a single veteran.  So they are having to actually pay for their care by using part of their pension, and that is not what it is for.  And the law specifically states that they shouldn’t pay.

Mr. BROWN OF SOUTH CAROLINA.  Why is it such a differential between the VA nursing home and the State Veterans Home?

Mr. NAGEL.  I can answer that, sir.  In Maine, we operate under a competitive model.  We take the stipend money that we receive from the VA and we apply that to our veteran population.  And in addition, as opposed to appropriating money from the State of Maine for our budget, we act as a competitive nursing home, just like any other for-profit company, although we are a public not-for-profit organization.

So under our system, we bill Medicare and Medicaid and as a result, our veterans receive superb quality of care because we are competitive.  And we are no different than any other nursing home chain in that aspect.  We are held to the same standards, same quality standards and even more, because we have to be inspected by both the VA system, as well as our State systems.  And it actually has proven to be a very cost effective as well as efficient model.

Mr. GRIFFITH.  I have got another little approach that—I have been the Liaison Chairman of the National Association of State Veterans Homes for the past ten years and I have always been curious about how the VA actually costs their stuff out.  You know, I don’t know where they came up with the dollar figures so high.  In Oklahoma, we provide—we have doctors on staff or on pharmacy, laboratory, ventilation therapy and our costs are around $220.  So I don’t know how they come up—but the numbers are there and it is their numbers we use.  They are extremely high, but—

Mr. BROWN OF SOUTH CAROLINA.  So the $560 is a pretty representative number you think?

Mr. GRIFFITH.  Those are VA’s numbers we are using.  I don’t know how they come up with them, but it is their numbers and they are extremely high.

Mr. BROWN OF SOUTH CAROLINA.  Okay.  Thank you, gentlemen, thank you.

I will yield back the balance of my time.

Mr. MICHAUD.  Mr. Walz?

Mr. WALZ.  Thank you, Mr. Chairman.

And thank you both for your testimony and the work that you are doing.  The need for our veterans’ care, long-term care is unquestionable and growing and we see that and it is a trend we have to take into consideration.  And I do appreciate what the State Veterans Homes have done in terms of efficient, effective care for our veterans.

I am trying to understand the relationship between the VA, the Veterans Homes, the States and how this works.  I am coming from this from the perspective in Minnesota that our VA hospital in Minneapolis is a polytrauma center, recognized as one of the best I would say in the world.  The care is outstanding.

Three blocks away we have our State Veterans Home and it has had continuous issues that are coming up of care, serious issues.  And my question is on this and on the funding is, the way that this has been dealt with—and I have watched this evolve over the past couple years and I am deeply concerned with it—is that violations result in punitive financial hold-backs from the institution, from the State Veterans Home. 

And I question, I ask both of you, is this the most efficient way to get and expect change when we are withholding money that is making it more difficult for them to take veterans in and to provide the care and it seems that it has spiraled into a continuous set of violations that has now rippled out into other things that I think may be attributable to the lack of resources. 

Perhaps the withholding of wages from the people involved with that might have been more efficient.  But please, if you could help me understand this on this funding issue and why they are doing it this way.  And they are under threat now that the Federal Government in June is going to cut all funding to them, which will basically shut them down at a time when we need them.  So if you could help me with this?

Mr. GRIFFITH.  It is a VA rule as far as I know.  That is the only leverage they have over a State Home is to pull your per diem.  And that is what—but if they did, if you are having problems because you are not paying staff enough, you are not getting good staff, you need some facility changes, whatever, if they cut your money—well, right now, if the VA would jerk per diem, the State Home Program would cease to exist because there is no way they could operate. 

So if you are already in a problem because you need more money to get better staff—well, I don’t think pulling your money would be a very good solution from where I am sitting at.

Mr. WALZ.  But our only option is the staffs, the VA to change that—the way they go about it apparently right now.  I am very frustrated by it because it hasn’t worked in the past and they have tried it several times.  They are continuing to do per diem pulls every day on this thing and I am—it just seems to me we are in a situation we are going to lose that home.  It is spiraling down and I have deep concern over that.

So what would your suggestions be on this?  And I ask you not—I know you don’t know the specifics maybe of that institution.  But how would you handle it?

Mr. NAGEL.  May I—

Mr. WALZ.  Sure.

Mr. NAGEL.  That is a really good question.  And I am not exactly sure how the system operates in Minnesota.  But I can tell you that in Maine we look at this from a preventative standpoint.  We have extremely tight, stringent internal controls.  And because we operate as a competitive type of facility as opposed to a State institution or an appendage of the State, we have two sets of internal control mechanisms that we have to respond to at least twice a year.  And that is the VA oversight which is pretty strict—

Mr. WALZ.  Right.

Mr. NAGEL.  —as well as the State and Federal Medicare or Medicaid guidelines.  Now, in States that don’t participate in Medicare or Medicaid, they won’t have those guidelines that they have to follow as well.  So in Maine, we have the guidelines that we have to meet under Medicare/Medicaid, as well as the VA and we also initiate—because we do operate as a private type of organization, we have a very, very strict peer review council where members of different disciplines go from one home to another and they do pre-evaluations on those homes and they are pretty scathing and it keeps us in line.

So in a nutshell, what I will tell you is that we basically look at it from a preventative standpoint and that by doing that, it helps to avoid the costly penalties that would happen.  Now, and one more thing is that the VA’s penalizing of stipend, I would not agree with it either.  But it is no different, honestly, than what Medicare does.  And Medicare does what is called a civil monetary penalty, Medicare/Medicaid.  So if you have deficiencies, they fine you.  So it is very similar in that regard.

Mr. WALZ.  Very good.  Thank you.

Thank you, Mr. Chairman.

Mr. MICHAUD.  Thank you.

Mr. Hare?

Mr. HARE.  Thank you, Mr. Chairman.  My apologies for getting here a little late.  So if the questions that I am asking have already been covered, I hope you will bear with me.  There have recently been reports that some of the State Veterans Homes aren’t safe or the quality of care isn’t what it should be.

How can the VA better ensure that these homes perform to the national standards that are required of them?  What can we do or what should the VA be able to do to get these homes up to standard?

Mr. NAGEL.  Personally?

Mr. HARE.  Sure.

Mr. NAGEL.  Personally I think that the State Homes should be following both the VA standards as well as the Medicare/Medicaid guidelines.  If they are following Medicare or Medicaid guidelines, they are going to have two sets of eyes that are looking at them all the time.  And that is a built in internal control mechanism that ensures quality to the patients.

Mr. GRIFFITH.  That is one thing our association has talked about for years with the VA, is why the VA doesn’t use CMS guidelines.  The VA writes their own regulations.  CMS has got theirs.  We are being inspected by two different sets of regulations.  With being two Federal agencies—and this is my personal—I don’t know why that we are not inspected by the CMS regulations.  Because if you are Medicare or Medicaid, CMS comes in with their regulations, VA comes in with their regulations.  And we are like them.  We have a peer review of our own internal agency that does our own peer review which in Oklahoma is tougher than the other two.

But they are all using different sets of regulations and mine is, I don’t know why that the VA and CMS doesn’t get together, or the VA use their regulations.  I mean because they are tough and they provide—they are geared towards quality of care.  But we in the field have to kind of dance to both tunes at the same time.

Mr. HARE.  Okay.  Thank you.  Mr. Griffith, you mentioned in your testimony that the State Homes in Oklahoma are developing programs or plans for more adult day health care programs and other approaches to developing care in less restricted settings.  I wonder—

Mr. GRIFFITH.  Yeah, it is in Maine.  We are not doing adult day health care in Oklahoma yet.

Mr. HARE.  Okay.  Well, I am wondering if you could elaborate on what other emerging approaches, other things that you are doing and is this just restricted to the State or are there other State Homes trying to do the same?

Mr. NAGEL.  Well, we are trying to bring—there is an idea in the Army and it is called far forward medicine.  And in Maine they didn’t call it that, but they thought of it before the Army did.  And I think they did it out of necessity because the State is pretty rural. 

So rather than—in certain States they have large compounds where the State Veterans Homes are at.  In Maine they decided to build smaller facilities, but locate them all over the State so that it would serve that area of the State.  So it is much more patient friendly, if you will.

And taking that one step further and thinking outside of the box, what we have done is, we have such a good relationship in Maine between all levels of the veterans service organizations, whether it is at the Federal level, State, community, local.  We have gotten together with all of them and we have decided to take that idea one step further and try and put the Federal, the State and the community veterans services on one little campus, on those campuses so that they don’t have to travel to numerous places to receive the services that they are entitled to.

And we are starting with our Bangor campus because it is a proven facility.  We have willing partners there.  And the VA hospice physician approached us asking us to open up a hospice there.  So we have plans to open up a hospice, a seven-bed hospice there adjacent to our facility, which is something that I think that the VA should actually start paying a stipend for, because I think that is a big——

Mr. HARE.  I agree.

Mr. NAGEL.  —need.  We are also opening up—we are hoping to link with the VA and open up a community-based outpatient clinic which right now is located a couple miles away.  And this way they would—our same residents would be able to access medical care there with the doctors that they already see.  And we are hoping possibly one day to build maybe adult day care, as well as veteran housing.  So those are the programs that we are looking at currently.

Mr. HARE.  That is great.  Thank you very much, Mr. Nagel.

I yield back, Mr. Chairman.

Mr. MICHAUD.  Thank you.

Mr. Salazar?

Mr. SALAZAR.  Mr. Chairman, I have no questions at this time.

Mr. MICHAUD.  Thank you.

Before we release the panel, I just want to ask one question of Mr. Griffith. 

You mentioned the two different regulations between the VA and the CMS.  Which is the tougher of the two?


Mr. MICHAUD.  The CMS, okay.

Mr. GRIFFITH.  Seems to be.  I am not survey, but a lot of the States are.  Maine is one of them.  Colorado is one.  Ours is, we just—and we have asked this—as Liaison Chairman, we meet with the VA twice a year and we have asked for this one reg for years and there is one reason or another we haven’t done it.  But it really makes a lot of sense that if you are being inspected, you should be inspected by one regulation.

Mr. MICHAUD.  Great.  Well, once again, I would like to thank both of you gentlemen for your testimony and answering questions.  It has definitely been very helpful.  So thank you both very much.

Mr. GRIFFITH.  Thank you, Mr. Chairman.

Mr. NAGEL.  Thank you, sir.

Mr. MICHAUD.  I would ask the second panel to come forward.   The second panel consists of Shannon Middleton, who is the Deputy Director of Health Care, Veterans Affairs and Rehabilitation Commission for the American Legion, Mr. Adrian Atizado, who is the Assistant National Legislative Director for Disabled American Veterans, and Fred Cowell, who is the Senior Associate Director, Health Analysis for the Paralyzed Veterans of America.  I want to thank all three for coming today.  I look forward to hearing your testimony.  And we will start with Ms. Middleton.



Ms. MIDDLETON.  Mr. Chairman, Members of the Subcommittee, thank you for this opportunity to present the American Legion’s views on VA’s strategic direction and plans to address the aging veteran population and the needs of recently separated veterans.

A July 1984 study, "Caring for the Older Veteran," predicted that a wave of elderly World War II and Korean Conflict veterans would occur some 20 years ahead of the elderly in the general U.S. population and had the potential to overwhelm the VA long-term care system if not properly planned for. 

The study cited an imminent need to provide a coherent and comprehensive approach to long-term care for veterans.  Twenty-three years later, the comprehensive approach prescribed has yet to materialize.

The American Legion supports a requirement to mandate that VA publish a comprehensive long-term strategic plan.  In recent testimony, GAO indicated that veterans’ access to noninstitutional long-term care was still limited by service gaps and facility restrictions.  GAO assessment demonstrated that for four of the six services, the majority of facilities did not offer the services or did not provide access to all veterans living in the geographic area.

On the issue of nursing home care, VA has been equally resistant in complying with the mandates of the Millennium Act.  The Act required VA to maintain its in-house nursing home care unit bed capacity at the 1998 level. 

The American Legion believes that VA should be required to restore its nursing home care unit capacity as intended by Congress to the 1998 level.  Additionally, VA should be prohibited from including any but their own nursing home care unit beds for the purpose of compliance with the provisions of the Millennium Act. 

VA claims it cannot maintain both the mandated bed capacity and implement all the requires of the Millennium Act.  The American Legion believes VA should provide the quality of care mandated by Congress for the long-term care of America’s veterans and Congress should provide adequate funding to VA to implement its mandates.

Since 1984, nearly all planning for VA inpatient nursing home care has revolved around State Veterans Homes and contracts with public and private nursing homes.  Currently, VA is authorized to make payments to State for construction and maintenance of State Veterans Homes.  Recognizing the growing long-term health care needs of older veterans, it is essential that the State Veterans Home Program be maintained as a viable and important alternative health care provider to the VA system.

In testimony delivered in 2006 addressing VA long-term care, GAO identified estimating which veterans will seek care from VA and what their nursing home needs will be as a major challenge in VA’s ability to plan for nursing home care.  The unpredictability of long-term care needs of those suffering from polytrauma, blast injuries and lasting mental health conditions as a result of participation in the ongoing Global War on Terror will no doubt make planning even more challenging.

The Commission on the Future for America’s Veterans was established to ascertain the needs of veterans 20 years in the future.  The Commission has been conducting town hall meetings around the country to allow veterans, family members and caregivers an opportunity to express their views on the future needs of servicemembers, especially those who have been injured in the current Global War on Terror.

At the conclusion of this fact finding initiative, the Commission will create a report that will include recommendations for addressing the needs identified.  The Commission plans to deliver recommendations to the President, Congress and the American public by Memorial Day 2008 and the American Legion supports this timely and proactive endeavor in the hopes that VA and Congress will utilize the findings to prepare for long-term care needs of the newest era of war veterans.

A new generation of young Americans is once again deployed around the world answering the Nation’s call to arms.  Unfortunately, without urgent changes in health care funding, new veterans will soon discover that their battles are not over.  They will be forced to fight for the life of a health care system that was designed specifically for their unique needs.

The American Legion believes that the solution to the Veterans Health Administration’s recurring financial difficulties will only be achieved when VA funding becomes mandatory.  Under a mandatory funding, VA health care would be funded by law for all enrollees who meet the eligibility requirements, guaranteeing yearly appropriations for the earned health care benefits of enrolled veterans.

The Veterans Health Administration is now struggling to meet its requirement to provide timely access to care and the American Legion believes that health care rationing for veterans must end.  It is time to guarantee health care funding for all veterans.

Mr. Chairman, this concludes my testimony.  Again, thank you for giving the American Legion an opportunity to present its views on this important issue.

[The statement of Ms. Middleton appears in the Appendix.]

Mr. MICHAUD.  Thank you very much.

Mr. Atizado?


Mr. ATIZADO.  Mr. Chairman, Members of the Subcommittee, I want to thank you for this opportunity to present the views of the Disabled American Veterans on the present and future state of VA’s long-term care programs.

I will try to cover as many items that DAV believes to be with regards to overarching issues that exist today that hold tremendous sway over the future of VA long-term care programs.

As with this Committee, the DAV is greatly concerned about the last published strategic plan for VA’s long-term care which was prepared over seven years ago.  Whatever strategic planning VA has for the program, the DAV is also concerned that VA has not sought involvement, input or advice from veteran service organizations, unlike the 1999 strategic plan in which this community was directly involved.

The 1998 report of the Advisory Committee on the Future of VA Long-Term Care compelled this 1999 VA strategic plan.  Sustaining this momentum, passage of Public Law 106-117, Veterans’ Millennium Health Care and Benefits Improvement Act, brought about some degree parity between long-term care and acute care.  However, some bias remains within VA’s medical benefits package that has translated down and between institutional and noninstitutional extended care.

By policy, noninstitutional services must be made available to all enrolled veterans in need of such care.  But VA is required to provide institutional services only to a subset of these enrolled veterans.

Mr. Chairman, coupling this protocol with a tremendous pressure of limited resources requires VA to drive down the costs of care while increasing the number of veterans served.  This produces a synergistic effect that puts long-term care at a disadvantage against other services in VA’s medical benefits package, and all the more so for the resource intensive institutional extended care service line.

It is without doubt that our concern remains about VA’s obvious shift away from meeting its statutory mandate of maintaining nursing home capacity.  This practice must be addressed considering VA’s own projection of the growing gap between capacity and demand.  As VA shifts more of its institutional care workload to State Veterans Homes, we applaud Congress for taking what we hope is a first step to provide equitable relief to State Veterans Homes.

What seems to be lost is what DAV believes, that long-term care is a fundamental part of the continuum of medical care.  Further, while institutional care has been painted with a broad brush, it is most certainly still needed.  As our colleagues from the State Veterans Homes have testified, particularly for veterans that VA has termed hard to place patients.

While VA has become highly efficient at converting its non-service-connected community nursing home placements to Medicaid status, it has established no formal tie to centers of Medicaid and Medicare services, or with the States to oversee that unwritten policy. 

Also, with regards to institutional and home hospice, despite offering to purchase hospice, VA refers thousands of veterans from its own program to those of Medicare without acknowledging it is doing so.

Mr. Chairman , VA is the only public health care system that charges co-payments to hospice patients.  The DAV recommends the fulfillment of Congress’ original intent in Public Law 108-422 in exempting veterans from having to pay co-payments when they receive VA hospice care in any setting.

As a number of dying veterans have increased to a current average of 1,800 a day, it is unconscionable to use co-payments as a health care utilization tool on dying veterans.  With regard to noninstitutional care, the DAV believes growing its capacity is important to meet the swelling long-term care needs of aging veterans. 

We applaud VA leadership in eliminating local restrictions that depress capacity and limit access to noninstitutional care.  However, the reports we continue to receive about veterans not receiving the care they need for their service-connected conditions tells us more needs to be done, particularly in the funding level that VA requests or that which Congress provides.

In closing, Mr. Chairman, the DAV urges this Subcommittee to consider holding additional hearings in order for Congress and the public to gain fuller understanding of what needs to be done for our Nation’s aging, sick and disabled veterans.

This concludes my statement and I would be happy to answer any questions you may have.

[The statement of Mr. Atizado appears in the Appendix.]