Filner Holds Hearing on Advance Appropriations for Veterans’ Health Care

Washington, D.C. – On Wednesday, April 29, 2009, House Committee on Veterans’ Affairs Chairman Bob Filner conducted a hearing to explore securing timely funding for veterans’ health care through advance appropriations.  The hearing focused on the efficacy of the health care budget forecasting model currently used by the Department of Veterans Affairs (VA) to formulate budget requests.   

“Our goal is to make sure that the VA has sufficient budgets to meet the needs of veterans and that these budgets are provided in a timely fashion in order for the VA to make the most out of these dollars,” said Chairman Filner.  “Today, we will begin the discussion as to how best to fund the VA of the future, and we must consider a historic new approach.

For too many years, VA has had to make do with insufficient budgets resulting in restricted access for many veterans.  When funding is short, it is our veterans who pay the price.”

Chairman Filner introduced legislation to authorize Congress to approve VA medical care appropriations one year in advance of the start of each fiscal year.  Unlike proposals to convert VA health care to a mandatory funding program, H.R. 1016 does not create PAYGO concerns since VA health care funding would remain discretionary.  Congress employs a PAYGO rule which demands that new proposals must either be budget neutral or offset with savings derived from existing funds.  In addition, an advance appropriation would provide VA with up to a year in which to plan how to deliver the most efficient and effective care to an increasing number of veterans with increasingly complex medical conditions.  Daniel K. Akaka (D-HI), Chairman of the Senate Veterans’
Affairs Committee, has introduced S. 423, a companion bill to H.R. 1016.

Paralyzed Veterans of America National Legislative Director Carl Blake testified on behalf of The Partnership for Veterans Health Care Budget Reform.  The Partnership generally supports the idea of advance appropriations as a way to make a program function more effectively and provide insulation from annual partisan political maneuvering.  Blake also addressed concerns regarding unforeseen events and catastrophes not being included in budget forecasts if they are prepared in advance.

“The Partnership does not believe that the advance appropriations proposal somehow changes the actions that Congress would take under these circumstances,” said Blake.  “There seems to be an assumption that if our entire proposal were to be enacted, that Congress would no longer have or choose not to use its authority to provide emergency supplemental appropriations when warranted.” 

A panel of economists and analysts discussed the efficacy of the current forecasting model used to determine future budget needs.  In 2008, the Rand Corporation published a report entitled “Gauging Future Demand for Veterans’ Health Care: Does the VA Have the Forecasting Tools It Needs?”
The evaluation found that the model is useful for short-term budget planning, but is less useful for long-term strategic planning and policy analysis.  However, the model allows for modifications to improve support for long-term planning.

H.R 1016 includes provisions to direct the Governmental Accountability Office (GAO) with studying and reporting to Congress for the next three years on VA’s budget forecasting model and estimates.  By shedding sunlight on VA’s internal budget process, Congress will have a much greater ability and incentive to develop appropriation bills that provide sufficient funding to meet the best estimate of anticipated demand for VA health care services in future years.

Secretary of Veterans Affairs Eric K. Shinseki discussed advance appropriations and the challenge of projecting VA’s budget needs two years into the future.  He testified, “Implementing an advance funding mechanism is not without challenges and careful planning is needed to ensure timely funding without unintended consequences. Budget projections are rarely right on the mark, and the further out they are made, the farther off the mark they are likely to be.  For an advance appropriations mechanism to function effectively, it must be linked to a forecasting model that is both reliable and accurate, to the extent possible.” 

Filner concluded: “There is no question that we have made great strides towards correcting funding problems during the past two years – increasing the veterans’ budget and providing the appropriations at the start of the fiscal year.  However, we have an opportunity to permanently reform the VA health care budget process in a commonsense way to help ensure that future generations never again face these kinds of problems.  We need to balance the two competing issues of having access to funding on time and having access to an accurate estimate.  I am convinced that an inaccurate budget projection is better than no budget at all.” 

Witness List

Panel 1:

*       Joseph Violante, Disabled American Veterans, The Partnership for
Veterans Health Care Budget Reform

*       Steve Robertson, The American Legion, The Partnership for
Veterans Health Care Budget Reform

*       Carl Blake, Paralyzed Veterans of America, The Partnership for
Veterans Health Care Budget Reform

Panel 2:

*       Katherine M. Harris, Senior Economist, RAND Corporation

*       Sidath Viranga Panangala, Analyst in Veterans Policy,
Congressional Research Service, Library of Congress

*       Jessica Banthin, Director of Modeling and Simulation of the
Center for Financing, Access and Cost Trends (CFACT), Agency for Healthcare Research and Quality, U.S. Department of Health and Human Services

*       Randall Williamson, Director, Healthcare Team, VA/DOD Health
Care Issues

Accompanied by

o       Susan J. Irving, Director for Federal Budget Analysis, Strategic
Issues, U.S. Government Accountability Office

Panel 3:

*       The Honorable Eric K. Shinseki, Secretary, U.S. Department of
Veterans Affairs

Accompanied by

o       Patricia Vandenberg, MHA, BSN, Assistant Deputy Under Secretary
for Health for Policy and Planning, Veterans Health Administration

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Prepared testimony and a link to the webcast of the hearing are available on the internet at this link:
http://veterans.house.gov/hearings/hearing.aspx?newsid=382