[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
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
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55-233 WASHINGTON : 2010
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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South HENRY E. BROWN, Jr., South
Dakota Carolina
HARRY E. MITCHELL, Arizona JEFF MILLER, Florida
JOHN J. HALL, New York JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas VERN BUCHANAN, Florida
JOE DONNELLY, Indiana DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia
Malcom A. Shorter, Staff Director
______
SUBCOMMITTEE ON HEALTH
MICHAEL H. MICHAUD, Maine, Chairman
CORRINE BROWN, Florida HENRY E. BROWN, Jr., South
VIC SNYDER, Arkansas Carolina, Ranking
HARRY TEAGUE, New Mexico CLIFF STEARNS, Florida
CIRO D. RODRIGUEZ, Texas JERRY MORAN, Kansas
JOE DONNELLY, Indiana JOHN BOOZMAN, Arkansas
JERRY McNERNEY, California GUS M. BILIRAKIS, Florida
GLENN C. NYE, Virginia VERN BUCHANAN, Florida
DEBORAH L. HALVORSON, Illinois
THOMAS S.P. PERRIELLO, Virginia
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.
C O N T E N T S
__________
March 3, 2010
Page
Legislative Hearing on H.R. 4241................................. 1
OPENING STATEMENTS
Chairman Michael Michaud......................................... 1
Prepared statement of Chairman Michaud....................... 21
WITNESSES
U.S. Department of Veterans Affairs, James F. Burris, M.D., Chief
Consultant, Geriatrics and Extended Care, Veterans Health
Administration................................................. 13
Prepared statement of Dr. Burris............................. 40
______
Maine Veterans' Homes, Augusta, ME, Kelley J. Kash, Chief
Executive Officer.............................................. 9
Prepared statement of Mr. Kash............................... 37
National Association of State Veterans Homes:
Colleen Rundell, M.S., LNHA, President, and Administrator,
Vermont Veterans' Home, Bennington, VT....................... 3
Prepared statement of Ms. Rundell.......................... 21
Gary Bermeosolo, Legislative Officer, and Administrator, Nevada
State Veterans Home, Boulder City, NV........................ 7
Prepared statement of Mr. Bermeosolo....................... 36
Tennessee State Veterans Homes Board, Murfreesboro, TN, Robert D.
Tuke, Chairman................................................. 4
Prepared statement of Mr. Tuke............................... 24
Yukio Okutsu State Veterans Home, Hilo, HI, Keith T. Ribbentrop,
State Veterans' Home Liaison Officer........................... 6
Prepared statement of Mr. Ribbentrop......................... 29
SUBMISSIONS FOR THE RECORD
American Legion, Jacob B. Gadd, Assistant Director for Program
Management, Veterans Affairs and Rehabilitation Commission,
statement...................................................... 41
American Veterans (AMVETS), Raymond C. Kelley, National
Legislative Director, statement................................ 42
Brown, Hon. Henry E. Brown, Jr., Ranking Republican Member,
Subcommittee on Health, and a Representative in Congress from
the State of South Carolina, statement......................... 43
Disabled American Veterans, Adrian M. Atizado, Assistant National
Legislative Director, statement................................ 43
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...................................... 45
Paralyzed Veterans of America, statement......................... 47
Veterans of Foreign Wars of the United States, Robert E. Wallace,
Executive Director, letter..................................... 49
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Questions and Responses for the Record:
Hon. Michael Michaud, Chairman, and Hon. Henry E. Brown, Jr.,
Ranking Republican Member, Subcommittee on Health,
Committee on Veterans' Affairs to Hon. Eric K. Shinseki,
Secretary, U.S. Department of Veterans Affairs, letter
dated March 9, 2010, and VA responses...................... 50
LEGISLATIVE HEARING ON H.R. 4241
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WEDNESDAY, MARCH 3, 2010
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Health,
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 on
p. 21.]
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 Homes, 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.
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 Veterans 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
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 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 Veterans 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 on p. 21.]
Mr. Michaud. Thank you very much.
Mr. Tuke.
STATEMENT OF ROBERT D. 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 on p. 24.]
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 on p.
29.]
Mr. Michaud. Thank you very much.
Mr. Bermeosolo.
STATEMENT OF GARY 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 of NASVH and the
Nevada State Veterans Home Program. I will be pleased to answer
any questions.
[The prepared statement of Mr. Bermeosolo appears on p.
36.]
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.
STATEMENT OF KELLEY J. 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 on p. 37.]
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 Veterans 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 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 on p. 40.]
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 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 appears on p. 53.]
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. More likely a year and a half to two.
Mr. Michaud. If we were to get what you would want for
regulations and actually put it in the Appropriations bill so
it would go into effect immediately without waiting a year or 2
years, would that be satisfactory.
Mr. Hall. Yes, sir, if you could accommodate all the
requirements of the regulations and statute, they are--
unfortunately it is a very--as you know, the regs are very
detailed and require, as these regulations did, careful
cooperation of working with the State Homes themselves, State
Home organizations to hopefully try to avoid the problems we
have with these regulations.
And once they are in statute, they are much more difficult
to change than they are when they are in regulations even.
Mr. Michaud. In your testimony you state that H.R. 4241
will increase the VA cost by $17.5 million next year and $200
million over a 10-year period. I am not sure whether that
number is accurate, but it implies that either the current
system is underpaying the State Veterans Homes by an equal
amount or that more 70-percent veterans will receive nursing
home care under this bill. Is that a fair assumption.
Dr. Burris. The estimate was made by--the States have told
us that--let me back up one more step. The law specifies that
we must pay either the prevailing rate or the actual cost of
care, whichever is less. The States have told us that in most
cases the actual cost of care determined in accordance with OMB
Circular A-87 is less than the prevailing rate, so the way that
that figure was derived was to say that if we are currently
paying the States the actual cost of care, and under this law
would instead pay them at the prevailing rate, then difference
between calculating the actual cost and the prevailing rate
would result in those numbers.
Mr. Michaud. And in your testimony you mentioned you were
concerned about double dipping. If it is made clear that there
is no double payment in this, would that change that fiscal
number at all.
Dr. Burris. It wouldn't alter the cost to VA.
Mr. Michaud. There are currently laws on the books that
would prevent double dipping and quite frankly no one wants to
get paid twice for the job that they are doing once. And that
is clearly not the intention of this legislation. So you know,
it is my intent to actually make that very clear that there
will not be double dipping.
My next question is, you heard from the previous panel,
that there is a lot of concern that some of the State Veterans
Nursing Homes will experience financial hardship depending upon
the acuity of care and the number of veterans on Medicare or
Medicaid who are eligible.
Quite frankly, you also heard that they will not be taking
veterans because they cannot operate in the red for too long.
And the other issue that we heard is that, yes, some State
Veterans Homes might still take some of the veterans, even
though they might be operating in the red, but they will have
to make a determination on whether or not they are going to
have to exclude the veterans who have the most acuity, the
veterans that really need the help.
I guess my question, Doctor, is when you said you could do
this administratively, how quickly can you solve the problems
that you have heard here today administratively.
Dr. Burris. Now, we have already addressed the issue of VA
providing specialty care. That is done. And we have not
continued to receive concern about that issue from the States.
I have asked them to let me know if there are needs where care
is denied.
We have met with CMS and we will push--the VA Chief of
Staff is taking direct interest in this issue. He has offered
to call--in fact, did call his counterpart to start this
process going. So we feel a sense of urgency about getting the
Medicare and Medicaid business cleared away and clear guidance
to both our field personnel and to the State Homes. We have
offered to provide assistance on the cost accounting principles
in OMB Circular A-87, to any of the States that feel they might
benefit from that.
In terms of a change in regulation to base the prevailing
rate on acuity of care, that would require a regulatory change
and that would take some time.
Mr. Michaud. Some time meaning a year or 2 years?
Dr. Burris. Yes, sir. And whatever time is needed for the
States to ramp up to provide us the data.
Mr. Michaud. Both the majority and minority staff will be
submitting additional questions for the record. I just want to
reemphasize, Doctor, that it appears that there are two, maybe
three States that have no problem, which means that the
overwhelming majority of the States do have a huge problem with
the rules that were implemented to implement the statute.
As other Members of Congress hear more about what is
happening at the State Veterans Nursing Homes, they are getting
upset and rightfully so. And I don't want to have to deal with
my colleagues from all around the country wanting to know why
VA is not addressing this particular problem when we know they
have known about it for some time.
I appreciate your working with the State Veterans Nursing
Homes and I would encourage you to continue working with them
because we have to solve this problem.
By the same token, it is my intent to move forward with
this legislation in the event that you are not able to work
something out and are willing to work with the State Veterans
Homes to fine tune legislation to make clear what we intended
when we passed the original law. I can't sit back and not do
anything and expect VA to ask, because it is not all in your
control. You had mentioned CMS. They have jurisdiction so I
can't wait a year or 2 years in the meantime to hear similar
stories to what we heard earlier today from the Nevada State
Veterans Nursing Home, especially if you look at the service
that they provide.
It is my understanding when you compare the cost of the
State Veterans Nursing Home, to the cost of the VA long-term
care, the State home is much cheaper. I don't know if that is
still true today, but I assume that it is, so you are
definitely getting your money's worth. But more importantly you
are taking care of the veteran that needs that help, and that
is something I want to work with you on. But by the same token,
having talked with Ranking Member Brown, we don't want to take
chances and have nothing get done.
So we will work to move this legislation forward. At the
same time, hopefully, you are able to work within your separate
agencies to try to solve this as quickly as possible.
As I mentioned earlier in my testimony, I have always been
under the belief that we ought to allow those agencies the
flexibility to work within the law to implement the intention
of the law without having to have it very strict. I believe
that you need that flexibility because we cannot envision all
the problems that might occur down the road, and therefore,
that flexibility should be there.
But by the same token, I also believe and I have seen over
and over again, whether in the Maine legislature, when I was in
the legislature there or here in Congress, some agencies tend
to go beyond what the intent of the law was, whether because it
is poorly written or whether it was written appropriately but
those who are implementing the law just might like it, so they
are doing whatever they want to do to implement it.
This is an issue that is extremely important. I talked to
Senator Akaka yesterday at the Joint Hearing with the Senate
Veterans' Affairs Committee and I will be working with him as
well on this legislation. We have to solve the problem and I
know that you understand the importance of it, and hopefully,
with the testimony that you have heard today and with the
individual State Veterans Nursing Home talking to you about the
concerns they have, we can work together and solve these
problems and take care of the veterans that we are supposed to
be taking care of.
So I want to thank you, Doctor, for coming here and, Mr.
Hall, for coming here and I look forward to working with you
along with the State Veteran Nursing Homes across this country
to address this big concern that we are faced with today.
So thank you very much and we will provide additional
questions to the VA, as well as the State Veterans Nursing
Homes in writing and hopefully you can get the responses in
quickly.
If there is no other statement, then I would adjourn this
hearing. Thank you for coming, I appreciate it.
[Whereupon, at 3:42 p.m. the Subcommittee was adjourned.]
A P P E N D I X
----------
Prepared Statement of Hon. Michael H. Michaud, Chairman,
Subcommittee on Health
I would like to thank everyone for coming today.
Today's legislative hearing is an opportunity for Members of
Congress, veterans, the VA and other interested parties to provide
their views on and discuss recently-introduced legislation within the
Subcommittee's jurisdiction in a clear and orderly process. This is an
important part of the legislative process that will encourage frank
discussions and new ideas.
Today, we will discuss H.R. 4241, which allows for increased
flexibility in payments for State Veterans Homes.
I look forward to hearing the views of our witnesses on this bill
before us.
Prepared Statement of Colleen Rundell, M.S., LNHA, President, National
Association of State Veterans Homes, and Administrator, Vermont
Veterans Home, Bennington, VT
Mr. Chairman and Members of the Committee, on behalf of the
National Association of State Veterans Homes (``NASVH''), thank you for
holding this hearing on H.R. 4241, legislation that would remedy the
unintended consequences of the implementation of section 211(a) of the
Veterans Benefits, Health Care, and Information Technology Act of 2006
(Pub. L. No. 109-461) (the ``70-Percent Program''). Implementation of
the 70-Percent Program is not only inhibiting the long-term care of
service-connected disabled Veterans (the opposite of its intended
effect), but it is also threatening the financial viability of many of
the nation's State Veterans Homes.
NASVH consists of the administrators and staff of State-operated
Veterans homes throughout the United States and the Commonwealth of
Puerto Rico. NASVH members currently operate 137 Veterans Homes in all
50 States and Puerto Rico. Our nursing homes provide approximately
28,000 nursing home and domiciliary beds for Veterans and their
spouses, and the gold-star parents of Veterans. Our nursing homes
assist the United States Department of Veterans Affairs (``VA'') by
caring for approximately 53 percent of the VA's long-term care workload
at the very reasonable cost of only about 12 percent of the VA's long-
term care budget.
The national State Veterans Home system is an economical
alternative to other VA long-term care programs. In fact, the VA Office
of Inspector General has reported:
A growing portion of the aging and infirm veteran population
requires domiciliary and nursing home care. The SVH [State
Veterans Home] option has become increasingly necessary in the
era of VAMC [VA Medical Center] downsizing and the increasing
need to discharge long-term care patients to community based
facilities. VA's contribution to SVH per diem rates, which does
not exceed 50 percent of the cost to treat patients, is
significantly less than the cost of care in VA and community
facilities.
Implementation of the 70-Percent Program, however, is creating very
serious difficulties for State Veterans Homes throughout the country.
This program authorized payment of different per diem amounts by VA to
State Veterans Homes which provide nursing home care to Veterans with
service-connected disabilities. The VA did not issue regulations to
implement the 70-Percent Program until April 29, 2009, and problems
arose immediately with its implementation. NASVH has met with VA
officials in an attempt to address these problems administratively, but
the VA has informed us that the issue can only be resolved fully by a
modification of the law.
NASVH strongly supported, and strongly supports, the intent of the
70-Percent Program, which originated in legislation drafted by Senator
Daniel Akaka and Congressman Jeb Bradley. In fact, after the enactment
of the Veterans' Millennium Health Care and Benefits Act in 1999 (the
``Millennium Act''), NASVH noted a disparity in the long-term care
treatment of service-connected disabled Veterans. Specifically, after
enactment of the Millennium Act, a service-connected disabled Veteran
could receive cost-free care at a private community nursing home under
a VA community nursing home contract, but that same service-connected
disabled Veteran could not receive cost-free treatment at a State
Veterans Home. Accordingly, Senator Akaka, Chairman of the Senate
Committee on Veterans' Affairs, and Congressman Bradley introduced
legislation to eliminate this disparity.
Chairman Akaka's legislation tried to achieve parity in the
provision of nursing home benefits for our Veterans between community
nursing homes and State Veterans Homes. Unfortunately, the
implementation of Chairman Akaka's legislation has failed to achieve
such parity and has resulted in numerous problems and unintended
consequences.
Specifically, although the VA regulations implementing the 70-
Percent Program state that they provide a ``higher per diem rate'' for
Veterans with service-connected disabilities, the regulations actually
result in significantly lower total amounts being paid to many State
Veterans Homes providing nursing home care to Veterans with service-
connected disabilities. As implemented, the program simply does not
provide to many State Veterans Homes adequate reimbursement for their
actual cost of care for disabled Veterans, despite congressional intent
that it do so. To the extent that State Veterans Homes continue to
admit service connected disabled veterans under the 70-Percent Program,
it threatens the continued financial viability of such State Veterans
Homes.
This problem is particularly acute in the 30 States that have
Medicare-certified and/or Medicaid-certified State Veterans Homes. The
impact is significant enough to have caused several such States already
to incur substantial financial losses on the care of service-connected
disabled Veterans under the 70-Percent Program, and others to refrain
from admitting Veterans with service-connected disabilities, in order
to avoid such financial losses. Accordingly, the implementation of the
70-Percent Program is having exactly the opposite result envisioned by
Congress.
Although numerous representatives from NASVH, the American Health
Care Association, the National Governors' Association, and others have
all met with senior VA officials including Dr. James Burris to attempt
to remedy the problems with the 70-Percent Program, we have been
frustrated by the fact that senior VA officials appear simply to be
unable or unwilling to address the 70-Percent Program's serious
financial problems.
These problems can be illustrated by many examples from State
Veterans Homes, several of which the Committee will hear today. One
typical example comes from my home State of Vermont. Prior to
implementation of the 70-Percent Program, Sergeant Jakob Lurie (a
pseudonym for a 70 percent service-connected disabled veteran) was
admitted to the Vermont Veterans' Home, which is Medicare and Medicaid
certified. He had experienced a three-day hospital stay and was
admitted to the Vermont Veterans' Home thereafter under Medicare.
Sergeant Lurie had an acute medical condition that required
rehabilitation. As a result, Sergeant Lurie received three hours of
therapy each day, including an hour each day of physical, occupational,
and speech therapy.
As detailed below, the average daily cost for Sergeant Lurie was
$476.51. Under the 70-Percent Program, however, the Vermont Veterans'
Home would have received only $302 a day for Sergeant Lurie's Care. The
math does not add up under the 70-Percent Program, especially for
Veterans requiring skilled nursing care.
In this example from the Vermont Veterans' Home:
Physical therapy $47.11 an hour including benefits
Occupational therapy $53.83 an hour including benefits
Speech/language therapy $60.57 an hour including benefits
Medications $22.00 daily average
Physician visits\1\ $11.00 daily average
Wound vac machine for pressure area $33.00 daily average
Room and board $249.00 per day
\1\ Per Federal regulations, a Veteran must be seen by a physician within 48 hours of admission for a full
history and physical; then every 30 days for the first 90 days; then every 60 days. This schedule applies only
if the Veteran is medically stable. Often, Veterans are not medically stable and must be seen more frequently.
(Room and Board, includes all nurses, aides, meals, dietary, social
work staff, electricity, fuel for heat, medical supplies, adult briefs,
etc.)
Total actual average daily cost for Sergeant $476.51/day
Lurie:
Compared to a 70-Percent Program calculated payment of only $302/
day, this is a loss to the Vermont Veterans' Home of $174.51/day for
just one resident.
After I calculated the loss that the Vermont Veterans' Home would
have incurred on Sergeant Lurie under the 70-Percent Program, I
calculated the substantial actual losses and minor gains that the
Vermont Veterans' Home has experienced for other Veterans under the 70-
Percent Program. These losses and gains are as follows:
Currently, the Vermont Veterans' Home has ten Veterans who qualify
for the VA 70-Percent Program and this number is expected to grow. At a
70-Percent Program payment of $302 per day, below are the actual
financial results for these ten Veterans:
Veteran #1 loss of $108.77/day
Veteran #2 loss of $39.53/day
Veteran #3 loss of $127.91/day
Veteran #4 loss of $126.42/day
Veteran #5 loss of $42.01/day
Veteran #6 loss of $124.76/day
Veteran #7 above cost by $7.14/day
Veteran #8 above cost by $7.13/day
Veteran #9 above cost by $17.14/day
Veteran #10 above cost by $41.79/day
On the average, the 70-Percent Program rate will result, for just
the first ten veterans admitted under the Program, in an annual loss to
the Vermont Veterans' Home of $181,113.
As Veterans age, their medical needs often increase and further
aggravate the shortfall between a State Veterans Home's costs and VA
payments under the 70-Percent Program.
NASVH supports H.R. 4241, introduced by Congressman Michael H.
Michaud. The enactment of H.R. 4241 would allow service-connected
disabled veterans to receive the nursing home care that Congress
intended, while reimbursing State Veterans Homes fully and more
accurately for such care.
H.R. 4241 would do four things. First, it would allow State
Veterans Homes to serve service-connected disabled veterans, at no cost
to such veterans, under the VA's existing community nursing home
contract program. This was Senator Akaka's original intent in proposing
the legislation which became the 70-Percent Program, and we believe
that such intent should be honored now.
Second, if a community nursing home contract cannot be arranged
between the VA and a State Veterans Home for a service-connected
disabled Veteran, H.R. 4241 would require that payments under the VA's
70-Percent Program be computed according to a State Veterans Homes'
actual cost to care for a Veteran, and not computed according to OMB
Circular A-87, which in almost all instances allows a lesser
reimbursement than the prevailing rate determined by the Secretary of
the VA.
Third, H.R. 4241 would clarify that State Veterans Homes and
private medical providers could continue to receive payment from
sources other than the VA for services not reimbursed under the 70-
Percent Program and required for the medical treatment of service-
connected disabled veterans residing in State Veterans Homes.
Fourth, H.R. 4241 would clarify, consistent with existing law, that
payments made to a State Veterans Home under the 70-Percent Program
cannot be offset against any other payment made to assist a service-
connected disabled veteran.
In addition, NASVH would support a clarification to H.R. 4241 to
emphasize the fact that a State Veterans Home cannot receive payment
from the VA under more than one of the following alternative programs:
(1) the community nursing home contract program; (2) the 70-Percent
Program; or (3) the VA's basic (lower) per diem program, plus Medicaid
or Medicare, for a Veteran residing in a State Veterans Home, and that
a State Veterans Home cannot receive payment more than once for the
same service provided to any Veteran by a State Veterans Home. These
requirements generally are already subject to normal audits by the VA,
Medicare, and Medicaid under existing law, and can be enforced easily
under existing auditing processes. Lastly, we believe that the VA
should pay any co-pay required for the receipt of Medicare or Medicaid
services under the 70-Percent Program by a veteran so that such care is
provided at no cost to such veteran. Payment in full by the VA for a
veterans care means payment in full by the VA.
NASVH believes that enactment of H.R. 4241 will resolve the
problems that have arisen in implementing the 70-Percent Program, and
permit all State Veterans Homes to admit 70 percent Veterans without
adverse financial consequences. We welcome the efforts of this
Committee, the Senate Committee on Veterans' Affairs, and the VA to
work together to solve at the earliest possible time the reimbursement
problems with the 70-Percent Program.
There is widespread support for our efforts to address this issue
promptly. In addition to NASVH, the National Association of State
Directors of Veterans Affairs, the National Governors' Association, and
the American Health Care Association have all called for action to
remedy the reimbursement problems associated with the 70-Percent
Program. I have attached copies of resolutions and letters from these
organizations in support of our efforts. Other Veterans service
organizations such as the Military Order of the Purple Heart, the
Catholic War Veterans, American Gold Star Mothers, and the American
Legion all have indicated their support for H.R. 4241 as well.
It has been asked whether the reimbursement deficiencies under the
70-Percent Program could be resolved by the use of ``fee basis care''
payments from the VA to State Veterans Homes to cover costs not covered
by per diem payments under the 70-Percent Program. NASVH does not
believe that fee basis care payments ultimately can resolve this
problem. Fee basis care payments are discretionary by the VA, are
largely not designed for long-term nursing home care, and do not cover
many services required for nursing home care.
NASVH believes that the fairest and most accurate way to reimburse
Medicare-certified and Medicaid-certified State Veterans Homes for the
care of service-connected disabled Veterans under the 70-Percent
Program is for the VA to use the example of the existing Medicare
payment system as much as possible. Under Medicare, reimbursements for
nursing home care fluctuate according to the acuity (degree of illness)
of individual patients. Required pharmaceuticals and specialty care are
automatically reimbursed, if legitimately required. Nursing homes do
not ordinarily lose substantial amounts of money for patient care under
the Medicare program. Accordingly, NASVH believes that Congress should
not require the 30 States which operate Medicare-certified and
Medicaid-certified State Veterans Homes to change fundamentally the way
they fund their State Veterans Homes. Congress rather should require
the VA to coordinate its reimbursement schedules under the 70-Percent
Program, to the extent possible, with the example of the existing
Medicare system.
I want to thank you, Mr. Chairman, the entire House Veterans'
Affairs Committee, 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 within the State Veterans
Home system. I am sure that, working together, we can promptly remedy
the serious problems that exist in the VA's current 70-Percent Program.
Attachments [The attachments are being retained in the Committee
files.]
Prepared Statement of Robert D. Tuke, Chairman, Tennessee State
Veterans Homes Board, Murfreesboro, TN
Mr. Chairman and Members of the Committee, thank you for the
opportunity to submit testimony to you today. I am Robert Tuke, and I
am the 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. The Tennessee State Veterans Homes Board does
not receive funding for operations from the State. Instead, it must
maintain financial viability just as any other nursing home
organization. The Tennessee State Veterans Homes Board operates three
nursing homes, each with 140 beds, dually certified for Medicare and
Medicaid. The revenues generated and collected by our Homes are the
operating funds for the organization, from which the Board pays its
employees, vendors, debt service, repair and replacement of equipment
and buildings, and from which it funds its capital purchases.
As you know, the VA Regulations promulgated pursuant to the
Veterans Benefits, Health Care, and Information Technology Act of 2006
became effective on May 29, 2009. At that time, there were a total of
13 residents in our three homes who met the criteria for the VA 70-
Percent Program. By the end of January 2010, eight months later, the
total of such residents was 23, an 84.7 percent increase. Of the 23
current residents, 18 require skilled nursing home care and the other 5
require standard, custodial nursing care. Based on the average daily
census of our three homes, 5 percent of the patient population are
covered by the VA 70-Percent Program.
We anticipate these numbers to continue to increase as more
veterans become aware of the program and elect admission into the state
veterans homes. Tennessee does not limit and has no intention of
limiting admissions to its nursing homes on the basis of payor source,
and we will not limit admissions under the VA 70-Percent Program.
However, there are consequences to revenues and expenses arising from
the VA 70-Percent Program that are problematic to the long-term
financial viability of the Tennessee State Veterans Homes, just as
there are 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 our fiscal intermediary for Medicare reimbursement.
Therefore, the loss of revenue calculations we are presenting today are
based on actual payments received from VA compared to what our
reimbursement from Medicare would have been had we been able to bill
Medicare. Additionally, many expense items that are reimbursed
adequately under the consolidated billing rules for Medicare are not
reimbursed adequately under the VA 70-Percent Program. Examples include
services by an attending physician, specialists, and emergency
transportation. In addition, we can no longer bill Medicare Parts B and
D for services on this segment of our patient population. In essence,
when we admit residents who qualify for the VA 70-Percent Program, we
incur higher expenses and receive lower reimbursements for services
than we are able to bill for those same services to other applicable
payor sources.
The VA 70-Percent Program reimbursement is based on the lesser of
the prevailing rate as established by the Secretary for Veterans'
Affairs or the average daily cost of care for all residents based on
actual expenses incurred by the nursing 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 with
skilled care residents. For example, if 5 percent of the resident
population in a given home qualify for the VA 70-Percent Program and 15
percent of residents in the home are covered by Medicare, the remaining
80 percent require only intermediate or custodial nursing care. The
expenses associated with custodial care are significantly lower on a
per patient day basis than those for skilled care. Moreover, as the
calculation that follows shows, the VA 70-Percent Program residents
incur expenses which are higher than those incurred by our Medicare
residents. When the total expenses are divided by the total patient
days to obtain the `average daily cost of care,' the resulting average
is much less than the actual cost of care for the residents qualifying
under the VA 70-Percent Program.
A comparison between the charges and reimbursements for skilled
services billed to Medicare and billed to the VA 70-Percent Program
follows.
----------------------------------------------------------------------------------------------------------------
Description Medicare VA 70%
----------------------------------------------------------------------------------------------------------------
Room & Board $6,572 $6,572
----------------------------------------------------------------------------------------------------------------
Attending Physician - 200
----------------------------------------------------------------------------------------------------------------
Specialist - 300
----------------------------------------------------------------------------------------------------------------
Pharmacy 728 728
----------------------------------------------------------------------------------------------------------------
Medical Supplies 380 380
----------------------------------------------------------------------------------------------------------------
Oxygen 900 900
----------------------------------------------------------------------------------------------------------------
Physical Therapy 1.860 1,860
----------------------------------------------------------------------------------------------------------------
Speech Therapy 2,720 2,720
----------------------------------------------------------------------------------------------------------------
Laboratory 70 70
----------------------------------------------------------------------------------------------------------------
Radiology 150 150
----------------------------------------------------------------------------------------------------------------
Inhalation Therapy 16 16
----------------------------------------------------------------------------------------------------------------
Total Charges $13,396 $13,896
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Estimated due from Medicare $12,400 -
----------------------------------------------------------------------------------------------------------------
Billed to VA 70% Program 7,564
----------------------------------------------------------------------------------------------------------------
VA Standard per diem 2,387
----------------------------------------------------------------------------------------------------------------
Total Reimbursement $14,787 $7,564
----------------------------------------------------------------------------------------------------------------
Revenue Loss $7,223
----------------------------------------------------------------------------------------------------------------
As you can see, the current reimbursement methodology does not
provide sufficient funding to the State Veterans Homes. Tennessee
estimates the loss of $338,000 in revenues from May 29, 2009 to the
present because of the funding constraints of the VA 70-Percent
Program. Please see the attached graphic demonstrations. This
substantial loss does not include the realized increase in provision of
care costs experienced by the State Veterans Homes as prescribed under
the VA 70-Percent Program.
Obviously, the Tennessee State Veterans Homes Board cannot continue
to absorb this increase in expenses and reduction in reimbursement
without dire fiscal consequences. Therefore I urge you to support H.R.
4241.
Thank you.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VA 70% MCR A VA Supp MCR plus VA Supp Difference Days
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 1 $24,382.00 $48,928.30 $7,445.00 $56,373.30 ($31,991.30) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 2 $24,382 $43,972.74 $7,445.00 $51,417.74 ($27,035.74) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 3 $24,382.00 $39,210.20 $7,445.00 $46,655.20 ($22,273.20) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 4 $19,506 $35,323.00 $5,956.00 $41,279.00 ($21,773.40) 80
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 5 $17,311.22 $27,494.56 $5,285.95 $32,780.51 ($15,469.29) 71
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total ($118,542.93)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/20 admit Resident 6 $0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/21 admit Resident 7 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Used actual 70 percent rate $243.82 vs Actual MCR rate per day per resident including supplement........................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Residents that were eligible to access MCR Part A since May-09..........................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
[GRAPHIC] [TIFF OMITTED] 55233.001
--------------------------------------------------------------------------------------------------------------------------------------------------------
VA 70% MCR A VA Sup MCR plus VA Supp Difference Days
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 1 $23,867.00 $33,227.00 $7,442.00 $40,669.00 ($16,802.00) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 2 $10,024 $12,883.54 $3,256.26 $16,139.80 ($6,115.66) 42 DC
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 3 $23,867.00 $38,623.70 $7,442.00 $46,065.70 ($22,198.70) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 4 $19,332 $29,788.55 $6,028.02 $35,816.57 ($16,484.30) 81 DC
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 5 $6,921.43 $12,140.91 $2,158.18 $14,299.09 ($7,377.66) 29 DC
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 6 $5,251 $12,140.91 $1,637.24 $13,778.15 ($8,527.41) 22 DC
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 7 $23,867.00 23,017.10 7,753.00 30,770.10 ($6,903.10) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Total Loss ($84,408.83)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Used Actual 70 percent Rate for Humboldt $238.67 vs Actual MCR rate per day per resident................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Residents that were eligible to access MCR Part A since May-09..........................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
[GRAPHIC] [TIFF OMITTED] 55233.002
--------------------------------------------------------------------------------------------------------------------------------------------------------
VA 70% MCR A VA Supplement MCR with VA Difference Days
--------------------------------------------------------------------------------------------------------------------------------------------------------
x Resident 1 $21,828.00 $23,373.00 $7,656.59 $31,029.59 ($9,201.59) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 2 $20,300 $30,734.47 $7,210.29 $37,944.76 ($17,644.72) 93
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 3 $13,533.36 $22,246.50 $4,800.04 $27,046.54 ($13,513.18) 62
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 4 $1,528 $2,733.78 $542.71 $3,276.49 ($1,748.53) 7 DC 10/16
--------------------------------------------------------------------------------------------------------------------------------------------------------
x Resident 5 $21,828.00 $41,414.00 $7,753.00 $49,167.00 ($27,339.00) 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
x Resident 6 $18,336 $36,355.00 6512.52 $42,867.52 ($24,532.00) 84
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 7 $19,429.92 $33,559.00 6900.17 $40,459.17 ($21,029.25) 89
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 8 $16,589 $21,490.00 $5,892.28 $27,382.28 ($10,793.00) 76
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resident 9 $10,695.72 $16,357.00 $3,798.97 $20,155.97 ($9,460.25) 49
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total ($135,261.52)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Used Knoxville VA 70 percent Rate of ($219,670.35)
$218.28 vs Actual MCR rate per day per
resident
--------------------------------------------------------------------------------------------------------------------------------------------------------
Residents that were eligible to access MCR Part A since May-
09
--------------------------------------------------------------------------------------------------------------------------------------------------------
[GRAPHIC] [TIFF OMITTED] 55233.003
Prepared Statement of Keith T. Ribbentrop, State Veterans
Home Liaison Officer, Yukio Okutsu State Veterans Home, Hilo, HI
Mr. Chairman and Members of the Subcommittee:
My name is Keith Ribbentrop. 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 here today, grateful for the
opportunity to advocate for my comrades-in-arms. Thank you for the
honor to speak on their behalf.
The Veterans Benefits, Health Care, and Information Technology Act
of 2006 (Pub. L. No. 109-461) authorized the United States Department
of Veterans Affairs (VA) to make payments to State Veterans Homes that
provide nursing home care to certain veterans with service-connected
disabilities (also known as the 70-Percent Program).
VA regulations implementing section 211(a) of the statute that took
effect earlier this year purport to provide a higher per diem rate for
70-Percent Program eligible veterans. However, the program as
implemented has actually resulted 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 Veterans Homes despite
congressional intent.
The problem is particularly urgent for states that are Medicare and
Medicaid (CMS) certified. There are 30 states across the nation with
CMS certified Homes, one of which is Hawaii. Our Home receives payment
for the care of veterans with service-connected disabilities for a
limited period of time under the Medicare program. However, those
veterans eligible for the higher per diem rate are not eligible for
Medicaid funds. The following table and charts reflect that as the
number of veterans eligible for the higher per diem rate increases
(1200% in Hawaii since June 2009), the disparity between per diem and
cost increases as well thereby threatening the State Homes' viability.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Monthly Expenses Monthly Un-
2009 70% Program Number in Pgm. Eligible's \1\ Avg Daily Expense Pgm. Daily Excess Total Per Diem Paid Reimbursed
Residence Eligible's Costs \2\ Expenses
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Feb 1 $ 2,331.00 $ 388.50 $ 57.15 $ 1,988.10 $ 342.90
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Mar 1 $ 12,043.50 $ 388.50 $ 57.15 $ 10,271.85 $ 1,771.65
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
April 1 $ 11,655.00 $ 388.50 $ 57.15 $ 9,940.50 $ 1,714.50
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
May 1 $ 12,747.75 $ 411.22 $ 79.87 $ 10,271.85 $ 2,475.90
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Jun 1 $ 13,950.46 $ 465.02 $ 133.67 $ 9,940.50 $ 4,009.96
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Jul 3 $ 32,103.09 $ 785.80 $ 888.85 $ 18,555.60 $ 27,554.40
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Aug 5 $ 51,382.62 $ 582.44 $ 1,255.47 $ 30,152.85 $ 38,919.46
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sep 4 $ 59,622.29 $ 496.85 $ 662.01 $ 39,762.00 $ 19,860.29
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Oct 7 $ 98,969.32 $ 495.82 $ 1,153.85 $ 67,519.92 $ 35,769.34
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Nov 11 $ 129,318.19 $ 485.97 $ 1,704.86 $ 89,695.58 $ 51,145.73
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dec 12 $ 152,088.23 $ 474.91 $ 1,713.12 $ 111,209.28 $ 51,393.63
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Actual expenses incurred by 70-Percent Program eligible veterans for the number in-residence days at the State Veterans Home under the 70-Percent Program.
\2\ Daily VA per diem rate from February through October 2009 $331.35; from October 2009 through December 2009 $330.98.
[GRAPHIC] [TIFF OMITTED] 55233.004
[GRAPHIC] [TIFF OMITTED] 55233.005
[GRAPHIC] [TIFF OMITTED] 55233.006
[GRAPHIC] [TIFF OMITTED] 55233.007
I believe the VA has done all that it can under current law.
However, the VA's administrative measures only relieve a portion of the
financial burden. Hawaii Island, where the State Veterans Home is
located, suffers from a critical shortage of doctors (see attachment)
as well as specialty medical services. This shortage requires transport
of a resident 200 miles by air to the island of Oahu where care would
be available.
The rapid growth of the 70-Percent Program eligible veterans in our
Home is duplicated nationwide. Because of this growth and the financial
implications, many states have constrained admission of veterans under
the new program. The Yukio Okutsu State Veterans Home is proud to
report that it is nearing capacity. We are 99 percent filled and soon
will need to establish a waiting list. Our Home's wait list is
established with priority given to service connected disabled veterans
by rank order of disability rating.
The 70-Percent Program has been a blessing for many veterans and
their families. As the Yukio Okutsu State Veterans Home--Hilo reaches
capacity, Mr. Mark Moses, State Director, Office of Veterans Services
has begun to assess the need for Hawaii's next State Home. The 70-
Percent Program will have a profound impact on his planning and
implementation.
The National Association of State Veterans Homes has proposed
technical amendments to the 70-Percent Program that are reflected in
H.R. 4241, introduced by Representative Michael H. Michaud, a member,
House Committee on Veterans' Affairs. The amendments contained in H.R.
4241 will allow all State Veterans Homes greater flexibility for
admission and for care of veterans with service-connected disabilities
without jeopardizing the future of the Homes. As you and the Committee
on Veterans' Affairs deliberate H.R. 4241, please know that it will be
beneficial to both veterans as well as the Homes built to serve them. I
urge you to support 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.
Physician Needs Estimate Provided by Hilo Medical Center
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Specialty 2010 Service 2010 Adjusted Total Estimated Number of Estimated Estimated 2010 Estimated 2011 Estimated
---------------------------------------------------------------- Area Service Area Physician Need Existing Reduction Reduction Net Need Net Need
Population Population \1\ ---------------------- Physicians in in
-------------------------------- ------------- Practicing Practicing -----------------------------------
Physicians Physicians
Hi Low 2010 \2\ 2011 \2\
-------------------------- Hi Low Hi Low
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
General/Family Practice 85381 63438 20.7 15.9 18 5 3 7.7 2.9 10.7 3.7
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
General Internal Medicine 85381 63438 18.7 18.1 16 4 2 6.7 6.1 8.7 10.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pediatrics 85381 63652 10 7.9 5 1 0 6 3.9 6 6.7
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
OB/Gyn 85381 77364 9.7 7.7 7 1 0 3.7 1.7 3.7 2.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Neonatal/Perinatal 85381 74905 0.7 0 0 0 0 0.7 0 0.7 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pediatric Subspecialties 85381 79012 1.3 0 0 0 0 1.3 0 1.3 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cardiology 85381 77833 5.1 2.5 3 1 0 3.1 0.5 3.1 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Endocrinology 85381 69637 0.8 0.6 0 0 0 0.8 0.6 0.8 1.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Gastroenterology 85381 79293 2.7 2.1 3 2 0 1.7 1.1 1.7 0.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Hematology/Oncology 85381 67733 1.8 2.5 1 1 0 1.8 2.5 1.8 4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Infectious Diseases 85381 74794 0.9 0.7 0 0 0 0.9 0.7 0.9 1.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Nephrology 85381 76314 1.3 0.9 1 0 0 0.3 -0.1 0.3 -0.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pulmonology 85381 74597 1.9 1.1 1 1 0 1.9 1.1 1.9 1.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Rheumatology 85381 69372 0.8 0.5 0 0 0 0.8 0.5 0.8 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Allergy & Immunology 85381 79012 0.9 0.7 0 0 0 0.9 0.7 0.9 1.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dermatology 85381 70602 2.2 2 2 0 0 0.2 0 0.2 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
General Surgery 85381 58939 5.9 5.7 3 1 1 3.9 3.7 4.9 7.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Colon & Rectal Surgery 85381 79012 0.3 0 0 0 0 0.3 0 0.3 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Neurology 85381 79012 2.8 1.8 1 1 0 2.8 1.8 2.8 2.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Neurosurgery 85381 7317 0.1 0.1 0 0 0 0.1 0.1 0.1 0.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ophthalmology 85381 92893 5.5 4.4 3 0 0 2.5 1.4 2.5 2.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Orthopedic Surgery 85381 67989 4.6 4.2 1 1 0 4.6 4.2 4.6 7.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ENT 85381 55353 1.7 1.8 1 0 0 0.7 0.8 0.7 1.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Plastic Surgery 85381 79012 1.6 0.9 0 0 0 1.6 0.9 1.6 1.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Thoracic Surgery 85381 79012 1.3 0.7 0 0 0 1.3 0.7 1.3 1.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Urology 85381 63609 2 2 1.5 0.5 0 1 1 1 1.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Psychiatry 85381 69859 9.2 11.1 3 2 0 8.2 10.1 8.2 18.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Rehabilitation 85381 79012 1.6 1.3 2 0 0 -0.4 -0.7 -0.8 -1.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Population adjusted for market share.
\2\ Reduction estimates based on number of physicians who will turn 65 within time frame.
Prepared Statement of Gary Bermeosolo, Legislative Officer, National
Association of State Veterans Homes, and Administrator, Nevada State
Veterans Home, Boulder City, NV
Mr. Chairman and other Distinguished Members of the Subcommittee on
Health of the U.S. House of Representatives Committee on Veterans'
Affairs, thank you for inviting me to testify at this legislative
hearing.
As the Legislative Officer of the National Association of State
Veterans Homes (NASVH) and as the Administrator of the Nevada State
Veterans Home (NSVH), I am honored to be here with you this afternoon
to request your support for H.R. 4241, a bill to amend chapter 17 of
title 38, of the United States Code, to allow for increased flexibility
in payments for state veterans homes.
When Public Law 109-461 passed in 2006, its intent was to correct
the inequities that existed in the system, whereby veterans with a 70
percent or greater service connected disability rating couldn't come to
a state veteran home at no cost, but they could go to a community
nursing home at no cost. This was a well-intended law and we thought it
would correct this inequity.
However, when Public Law 109-461 took effect, on April 29, 2009,
the regulations implementing it created more inequities than it
corrected. In essence, state veterans homes are being offered a flat
rate to assume all responsibility for the veteran's care, which has and
will continue to create financial hardships on state veterans homes.
Previously, we were able to admit veterans with a 70 percent or
greater service connected disability as ``private pay'' residents. Now,
we are being required to admit them under a program intended to cover
their total cost of care, but one which actually places the cost of
their care on the state. Consequently, many states can't admit these
veterans because of this financial burden.
It is difficult to calculate the actual cost of this burden and/or
the number of states currently impacted because many states aren't
accepting these veterans because they don't have the funds to provide
the required care. They are simply unwilling to assume the risk by
exposing their states to the financial uncertainties of this new
program.
Let me assure you, this is not an issue confined to any one state.
This is a nation-wide problem. NASVH is comprised of the 137 state
veterans homes across the country. Since Public Law 109-461 was
implemented, I have been contacted by administrators and directors of
state home programs from all over the United States requesting my
assistance, as NASVH's Legislative Officer, with the financial
challenges this law has created for their states.
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 with you just one of
the many experiences I have had in Nevada in recent months.
The wife of an applicant, who we'll call Mr. Disabled Veteran
(D.V.), came to our Home on July 21, 2009, seeking admission for her
husband, a World War II veteran. She was desperate to get him in our
Home where she could be confident he would receive quality care and
have opportunities to socialize with other vets who he could relate to.
We gave her a tour and brought her back to the office to review our
Home's offerings and application process. 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, she was not
being charged for his care at the community nursing home where he
currently resided. We explained to Mrs. D.V. the difference between the
community nursing home's and the state home program's reimbursement
arrangement with VA and shared with Mrs. D.V. that we cannot, under the
current law, provide care for her husband because of the potential
financial implications for the State of Nevada.
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 gave Mrs. D.V. a history of how we arrived
at this point and indicated I was working with other state home
programs and Congress to fix this problem, but until it's fixed, we
simply can't assume the risk of admitting 70 percent or more disabled
veterans.
Mrs. D.V. then reached in her purse and retrieved her check book.
As she waived it in the air she stated, ``But I'll pay for his care if
you'll just admit him.'' We then shared with her that VA Regulations
won't allow her to pay for the cost of her husband's care. She began
sobbing as she tried to come to terms with what we were telling her. At
this point, I looked this woman in the eyes 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. called
me back in August, then again in September, and again in October, and
again in November, each time asking if ``the 70 percent thing'' was
fixed yet. Each time, we had to tell her ``no, but we're 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 their current residents.
Mr. Chairman and Members of the Committee, I implore you--please
correct this injustice. We are turning away the people who most deserve
and need care in state veterans homes. H.R. 4241 corrects the
inequities and achieves the end result we were 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 of the National Association of State
Veterans Homes and the Nevada State Veterans Home Program. I will be
pleased to answer any questions.
Prepared Statement of Kelley J. Kash, Chief Executive Officer,
Maine Veterans' Homes, Augusta, ME
Mr. Chairman, and Members of the Subcommittee, thank you for
inviting me to testify here today at this hearing on H.R. 4241. My name
is Kelley J. Kash, and I am the Chief Executive Officer of the Maine
Veterans' Homes. The Maine Veterans' Homes strongly supports H.R. 4241.
The Maine Veterans' Homes is a public non-profit system of State
Veterans Homes established by the government of the State of Maine. We
currently operate 640 skilled nursing, long-term care nursing, and
domiciliary beds at six locations throughout the State of Maine, at
Augusta, Bangor, Caribou, Scarborough, South Paris, and Machias. The
Maine Veterans Homes operates its nursing facilities entirely with its
own employees, under a Board of Trustees appointed by the Governor of
Maine, and we have no management arrangements with private corporate
entities.
The Maine Veterans' Homes is located in one of the 30 States in the
nation that have Medicare-certified and/or Medicaid-certified State
Veterans Homes. In fact, all nursing facilities of the Maine Veterans'
Homes are both Medicare and Medicaid certified, and we have operated
successfully in this manner for almost 30 years. As such, the Maine
Veterans' Homes provides in conjunction with the Medicare and Medicaid
payment systems a wide range of post-acute, post-operative, and
rehabilitative services to Maine veterans, at no cost, or at very low
cost, to such veterans. Such post-acute, post-operative and therapeutic
care is known in the health care community as ``skilled nursing care.''
The Maine Veterans' Homes provides a lot of skilled nursing care to
Maine veterans, and as you have heard here today, skilled nursing care
is precisely the type of nursing care for which the VA's new 70-Percent
Program causes a State Veterans Home to incur the greatest financial
losses.
The more skilled nursing care that a State Veterans Home provides
to veterans under the 70-Percent Program, the larger are its losses. In
fact, the Maine Veterans' Homes has estimated that, based on the
demographics of the Maine Veteran Population, if we were to admit every
veteran in Maine that reasonably could seek admission to the Maine
Veterans' Homes under the 70-Percent Program, the Maine Veterans' Homes
would sustain a net loss of between $8 and $16 million per year, and be
bankrupt within 1\1/2\ to 3 years. Concerning this fact, it is
important to note that the 70-Percent Program in its final form,
contrary to Senator Akaka's original intent, does not serve only those
``severely-disabled service-connected veterans'' with a 70 percent or
greater disability. The 70-Percent Program serves any veteran with a
service-connected disability of as low as 10 percent if that service-
connected disability in any way requires nursing home care.
Furthermore, if a State Veterans Home were to provide any significant
amount of skilled nursing care, post-acute care, post-operative care,
or therapeutic care to a veteran under the 70-Percent Program (to say
nothing of kidney dialysis services, hospice services, therapeutic
radiation, oncology services, expensive drugs, or even dentistry) a
State Veterans Home is almost guaranteed of incurring substantial
financial losses under the 70-Percent Program.
This is why the testimony of the President of the National
Association of State Veterans Homes (NASVH), Colleen Rundell, from the
State of Vermont, argues the VA's numbers simply do not add up and that
the VA's 70-Percent Program substantially underpays a State Veterans
Home for providing skilled nursing care to service-connected disabled
veterans. This is why the testimony from the State of Hawaii State
Veterans Home demonstrates that it is losing money at the rate of more
than $600,000 per year, in its only home, under the 70-Percent Program,
and has lost money consistently under the 70-Percent Program since the
Program became effective on May 29, 2009. This is why the State of
Hawaii previously has called the 70-Percent Program a ``financial
disaster.'' This is why the State of Tennessee reports that its State
Veterans Homes are currently incurring losses of approximately $1.4
million per year under the 70-Percent Program and anticipates that
these losses will increase. This is why NASVH's National Legislative
Director from the State of Nevada has called the reimbursement methods
under the VA's 70-Percent Program a ``nation-wide problem,'' and why
the Nevada State Veterans Home has entirely avoided admitting any
service-connected disabled veteran under the 70-Percent Program since
the Program became effective. This is also why the Maine Veterans'
Homes has admitted no veteran intentionally under the 70-Percent
Program since the Program became effective. This is exactly the
opposite result that Congress hoped to achieve by the enactment of the
legislation that became the 70-Percent Program.
In order to illustrate the financial losses that would be incurred
by the Maine Veterans' Homes if we were to provide skilled nursing care
to substantial numbers of service-connected disabled veterans at our
nursing facilities under the 70-Percent Program, as opposed to being
reimbursed under Medicare or Medicaid, we pulled the files of six
typical skilled nursing residents at our facilities. These files showed
that we would lose an average of $238 per resident per day under the
VA's 70-Percent Program compared to existing sources of funds such as
Medicare or Medicaid. These data are consistent with the facts being
reported here today by other Medicare-certified and Medicaid-certified
State Veterans Homes and also by such homes in other States throughout
the nation. The only State Veterans Homes in the nation that have any
hope of not incurring substantial financial losses under the VA's new
70-Percent Program are those State Veterans Homes which are not
Medicare or Medicaid-certified or which only provide a minimal amount
of skilled nursing care. The financial summary of our investigations of
actual resident records is appended to my testimony.
Since the 70-Percent Program became effective on May 29, 2009, we
have met several times with VA officials including Dr. James Burris,
who testified before you today. Frankly, Dr. Burris does not understand
the problem that the 70-Percent Program poses for State Veterans Homes
that provide skilled nursing services under Medicare and Medicaid, and
he does not understand the enormity of this problem for the majority of
the States in the nation. In simple language, the VA's 70-Percent
Program does not pay State Veterans Homes enough to provide skilled
nursing care to veterans.
In short, in implementing the 70-Percent Program, the VA replaced a
payment system that pays adequately for skilled nursing care at State
Veterans Homes (Medicare/Medicaid) with a payment system that pays
inadequately for skilled nursing care at State Veterans Homes (the 70-
Percent Program). This has caused Medicare and Medicaid-certified State
Veterans Homes to avoid or refuse admission to service-connected
disabled veterans requiring skilled nursing. This is clearly not what
was intended by Congress when it passed the legislation that eventually
became the 70-Percent Program.
To make matters worse, shortly after this hearing was scheduled,
the Togus VA Medical Center at Augusta, Maine, on February 1, 2010,
advised the Maine Veterans' Homes by telephone, that upon the oral
``direction'' of the VA central office, it was withholding all VA per
diem payments from the Maine Veterans' Homes because it suspected that
some eligible veterans in Maine were not being enrolled mandatorily in
the 70-Percent Program--the same program that could cost Maine
Veterans' Homes an estimated minimum of $8 million per year. The VA's
illegitimate and wholesale withholding of all VA per diem payments
without justification by itself could have cost the Maine Veterans'
Homes an estimated $800,000 per month unless we had successfully
complained to the VA that it was unlawfully withholding funds from us.
The VA in the past has said that it could cure the problems with the
70-Percent Program administratively, but it has not done so. The result
has been a 70-Percent Program in chaos. We have simply run out of
patience with the VA. The VA can no longer hide its head in the sand
from the disarray that it has created for our nation's veterans and our
nation's State Veterans Homes.
What should be done about this? First, Congress should allow State
Veterans Homes the option of continuing to receive payments from
Medicare or Medicaid, plus the basic (lower) VA per diem rate for the
care of service-connected disabled veterans, until the VA can devise a
permanent system and adopt regulations under the 70-Percent Program to
pay State Veterans Homes at rates comparable to those available from
Medicare and Medicaid, plus the basic (lower) VA per diem rate. The VA
should be required also to pay any co-pay required by a veteran for the
receipt of Medicare or Medicaid benefits under the 70-Percent Program,
so that such care is at no cost to the veteran. ``Payment in full'' by
the VA to a State Veterans Home for a veteran's nursing home care means
``payment in full'' to a State Veterans Home for a veteran's nursing
home care. Second, Congress should allow State Veterans Homes to use
the existing VA Community Nursing Home 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
financial problems of the VA's current 70-Percent Program.
Maine Veterans' Homes--Sample of 70-Percent Disabled Veterans Admissions
----------------------------------------------------------------------------------------------------------------
Resident A B C D E F
----------------------------------------------------------------------------------------------------------------
Payor Medicare Private Pay Medicaid Medicare Medicare Medicaid
----------------------------------------------------------------------------------------------------------------
Days 89 30 30 14 31 31
----------------------------------------------------------------------------------------------------------------
Room & Board $24,933 $8,310 $7,560 $3,878 $8,990 $8,122
----------------------------------------------------------------------------------------------------------------
Pharmacy $4,273 $4,311 $5,605
----------------------------------------------------------------------------------------------------------------
Lab $222
----------------------------------------------------------------------------------------------------------------
IV Therapy $1,465
----------------------------------------------------------------------------------------------------------------
Radiology $298 $1,193
----------------------------------------------------------------------------------------------------------------
Therapy (PT, OT, & ST) $20,610 $2,450 $4,670 $8,540 $11,490
----------------------------------------------------------------------------------------------------------------
Total Charges $50,038 $10,760 $7,560 $14,622 $24,328 $19,612
----------------------------------------------------------------------------------------------------------------
Total Reimbursements $43,236 $7,462 $5,350 $7,752 $15,875 $12,345
----------------------------------------------------------------------------------------------------------------
Difference ($6,802) ($3,298) ($2,210) ($6,870) ($8,453) ($7,267)
----------------------------------------------------------------------------------------------------------------
VA basic rate per diem $5,135 $2,223 $2,233 $1,042 $2,307 $2,307
----------------------------------------------------------------------------------------------------------------
Difference after per diem ($1,667) ($1,075) $23 ($5,828) ($6,146) ($4,960)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
VA ``Higher Per Diem'' Payment $21,154 $7,931 $6,479 $3,328 $7,368 $7,368
----------------------------------------------------------------------------------------------------------------
Difference ($28,884) ($2,829) ($1,081) ($11,294) ($16,960) ($12,244)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Average daily reimbursement $543 $323 $253 $628 $587 $473
(includes basic rate per diem)
----------------------------------------------------------------------------------------------------------------
VA ``Higher Per Diem'' Rate $238 $264 $216 $238 $238 $238
(lesser of prevailing or OMB A-
87)
----------------------------------------------------------------------------------------------------------------
Difference ($305) ($59) ($37) ($390) ($349) ($235)
----------------------------------------------------------------------------------------------------------------
Maine Veterans' Homes--Projected Losses from 70-Percent Disabled Veterans Program Admissions
----------------------------------------------------------------------------------------------------------------
Resident A B C D E F
----------------------------------------------------------------------------------------------------------------
Primary Payor Medicare Private Pay Medicaid Medicare Medicare Medicaid
----------------------------------------------------------------------------------------------------------------
Days 89 30 30 14 31 31
----------------------------------------------------------------------------------------------------------------
Reimbursements (with basic rate $48,371 $9,685 $7,583 $8,794 $18,182 $14,652
per diem)
----------------------------------------------------------------------------------------------------------------
VA ``Higher Per Diem'' Payments $21,154 $7,931 $6,479 $3,328 $7,368 $7,368
----------------------------------------------------------------------------------------------------------------
Total Reimbursements $107,267
----------------------------------------------------------------------------------------------------------------
Total 70% Program HPD Payments $53,628
----------------------------------------------------------------------------------------------------------------
Difference ($53,639)
----------------------------------------------------------------------------------------------------------------
Total Bed Days 225
----------------------------------------------------------------------------------------------------------------
Average Loss per Resident Day $(238)
----------------------------------------------------------------------------------------------------------------
Prepared Statement of James F. Burris, M.D., Chief Consultant,
Geriatrics and Extended Care, Veterans Health Administration,
U.S. Department of Veterans Affairs
Good afternoon Mr. Chairman and Members of the Committee. I
appreciate the opportunity to appear before you today to discuss H.R.
4241 and the mechanism by which the Department of Veterans Affairs (VA)
supports the States' operation of their nursing homes for mandatory
Veterans. I will use the term ``mandatory Veterans'' to refer to
Veterans who have a service connected disability rated 70 percent or
more or need nursing home care for their service connected disability.
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. Today, there are 137 State homes, and every
State operates at least one. Last fiscal year, 27,413 Veterans were
cared for in these homes.
IMPLEMENTATION OF NEW PER DIEM FOR MANDATORY VETERANS
For many years prior to the enactment of Public Law 109-461, VA
paid the full cost of these Veterans' care in VA or private nursing
homes but not in State homes. By law, VA could only pay one rate for
all eligible Veterans in a State home. The rate was the lesser of one-
half of the cost of the care in the State home or an amount established
by VA each year. This changed when, in 2006, Congress directed VA to
pay State nursing homes a new rate for mandatory Veterans: the lesser
of a prevailing rate determined by VA or the actual cost of care in the
State home. VA regulations implementing this congressional mandate were
effective May 29, 2009, with provision for retroactive payment to March
21, 2007.
Although a number of States are satisfied with the new rates VA
pays for mandatory Veterans, several have reported problems. Some
States report that after the enactment of Public Law 109-461, they now
receive smaller total payments for the care of these veterans because
they are no longer able to bill Veterans or other payors. Some States
report that the VA payments do not cover their actual costs and as a
result, they cannot afford to admit mandatory Veterans anymore. Other
States reported that VA facilities stopped providing specialty
physician services to their mandatory Veterans. We are committed to
taking steps to ascertain circumstances where the intent of Public Law
109-461 is not being met, and work with the State home program for
remedies to avoid any adverse impact upon Veterans.
In an effort to further understand these reported difficulties, VA
has met with representatives of the National Association of State
Directors of Veterans Affairs, the National Association of State
Veterans Homes, the National Governors Association, congressional
staff. We believe that with the help of the State Veterans Homes
represented here today there are non-legislative steps that can be
taken to resolve the difficulties reported by the States. We have asked
States to share with us supporting documentation that demonstrates how
their actual costs for the care of these veterans exceed the allowable
VA per diem payment under current law. With this information, we will
be better positioned to understand the impact of Public Law 109-461 and
address their concerns.
VA has already taken steps toward resolving one of those 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 must continue to
provide most specialty care to mandatory Veterans as they did prior to
the initiation of the new payments. That clarification eliminated one
source of confusion.
Further, we believe that some States need assistance in
understanding the provisions of the Office of Management and Budget
(OMB) Circular A-87, which States must use to compute their actual cost
of care for mandatory Veterans. VA has offered to work individually
with States to improve their understanding. We will continue to work
with the State homes and our other partners to ensure that Veterans are
being served appropriately.
H.R. 4241
H.R. 4241 contains several provisions intended to resolve the
difficulties that States have with the new VA payments for mandatory
Veterans. Section 1(a)(3) of the bill would authorize VA to enter into
agreements with State homes to provide care for mandatory Veterans
under VA's contract nursing home care authority in lieu of making per
diem payments. As noted, different State homes have widely varying
circumstances and patient populations - without a complete
understanding of how State homes are currently being impacted by Public
Law 109-461, we are unable to comment on whether a contract mechanism
would be a viable solution to the reported problems.
Section 1(b) of the bill would delete the requirement in current
law that VA pay the actual cost of care if that cost is less than the
prevailing rate (i.e., VA would simply pay the prevailing rate, which
for most States is higher than the calculated actual cost). VA opposes
this provision, as it would result in VA paying more than the actual
cost of care.
Section 1(c) would provide that VA's ``full per diem'' payments for
mandatory Veterans' nursing home care is payment in full only with
respect to other VA payments under title 38, United States Code. State
homes could thus bill other payors for this care, including the
mandatory Veterans themselves. VA's payment is intended to be payment
in full with respect to the Veteran, and elimination of Veteran billing
(and the resulting disparity with VA Community Living Centers and
contracted arrangements) was part of the purpose of the changes made in
Public Law 109-461. We therefore oppose this provision.
Section 1(d) would permit State homes to bill Medicare and Medicaid
for nursing home care provided to mandatory Veterans without these
payments being reduced by the amount of the VA payments. As noted
above, VA's payment for mandatory Veterans is intended to be payment in
full for nursing home care. Because this provision could result in the
Federal government making duplicate payments for the same care, we
oppose it as well.
We anticipate that enactment of H.R. 4241 would require additional
VA expenditures of approximately $17.5 million in the first year and
more than $200 million over 10 years.
Thank you once again for the opportunity to testify. We are
prepared to address your questions.
Statement of Jacob B. Gadd, Assistant
Director for Program Management, Veterans Affairs and
Rehabilitation Commission, American Legion
Mr. Chairman and Members of the Subcommittee:
Thank you for the opportunity to submit The American Legion's views
on H.R. 4241, to amend Chapter 17 of title 38, United States Code
(USC), to allow for increased flexibility in payments for State
Veterans Homes. Thank you Mr. Chairman for introducing this much needed
and greatly appreciated proposal to improve the Department of Veterans
Affairs' (VA's) per diem payments to State Veterans Homes for providing
quality nursing home care to service-connected disabled veterans.
When enacted this legislation would improve per diem payments from
the Department of Veterans Affairs (VA) to State Veterans Homes which
reflects the actual geographic cost of care furnished in a non-VA
nursing home made payable at the prevailing rate.
Title 38, United States Code (USC) authorizes VA to pay per diems
for care in State Veterans Homes for the care of service-connected
disabled veterans awarded a VA disability rating of 70 percent or
greater. Currently, VA pays State Veterans Homes a per diem that covers
approximately one-third of the cost of providing nursing home care for
eligible veterans.
Public Law (PL) 109-461, the Veterans Benefits, Health Care, and
Information Technology Act of 2006, authorized VA to pay State Veterans
Homes to provide nursing home care to veterans with service-connected
disabilities. This program commonly was referred to as ``the 70-Percent
Program'' within the State Veterans Home community. The original intent
of the program was to amend PL 106-117, the Veterans Millennium Health
Care and Benefits Act of 1999, to permit State Veterans Homes to
provide the same no-cost care to veterans as provided under the VA's
Veterans Health Administration's Community Nursing Home Provider
Agreements. Eligibility for ``the 70-Percent Program'' was expanded to
any veteran who has a service-connected disability needing nursing home
care for their disability.
Regrettably, the final VA regulation actually resulted in
significantly lower payments and fails to cover the actual cost of
nursing home care because the calculations of ``the daily cost of
care'' cannot include any medically-necessary services provided outside
of the State Veterans Homes, which covers the spectrum from
chemotherapy to dialysis to specialized care to just x-rays. Therefore,
the State Veterans Homes must forfeit any allowable Centers for
Medicare and Medicaid Services (CMS) reimbursements for these medical
treatment and services, to include those covered under Medicaid,
Medicare Part A, Part B or Part D.
Because of this fiscal discrepancy, the National Association of
State Veterans Homes (NASDVA), which represents the 137 state veterans
homes throughout our nation, approved a resolution requesting Congress
pass a clarification amendment to Section 211, Title II of the Veterans
Benefits, Health Care and Information Technology Act of 2006 (PL 109-
461) postponing the mandatory implementation of the program.
The American Legion supports legislation to amend Subchapter V,
Chapter 17, title 38, USC to provide clarification of CMS and VA per
diem reimbursements to State Veterans Homes for nursing home care. The
American Legion supports legislation to increase VA's per diem payments
to a rate of 50 percent of the national average cost of providing care
in a State Veterans Home to more closely align with the CMS rate.
Historically, VA has had a long and beneficial relationship with
State Veterans Homes and was able to negotiate nursing home care costs
at a much lower rate than other local community providers or VA Nursing
Home Units. The American Legion recommends Congress treat the full
needs of veterans within State Veterans Homes and not rely on state
budgets to offset costs of eligible veterans.
The American Legion believes that under the provisions of ``the 70-
Percent Program,'' enrollment for nursing home care in State Veterans
Homes will result in significant budgetary shortfall for each eligible
veteran admitted. The unintended consequences could very well deter or
severely limit State Veterans Homes' willingness to accept eligible
service-connected disabled veterans. This unfortunate scenario would
require VA to consider more costly alternatives.
The American Legion appreciates the congressional intent in the
original VA per diem program, which expanded eligibility for any
veteran with a VA disability rating equal to or greater than 10
percent; however, the reimbursed costs of care must reflect the full
continuum of care for services delivered while residing in State
Veterans Homes. These same costs are routinely applied to veterans
utilizing VA Domiciliaries or private Nursing Homes in the community.
The American Legion urges Congress to conduct a thorough review of
``the 70-Percent Program'' and to authorize VA to pay State Veterans
Homes for the ancillary costs needed by service-connected disabled
veterans.
Mr. Chairman and Members of the Subcommittee, The American Legion
sincerely appreciates the opportunity to submit testimony. Thank you.
Statement of Raymond C. Kelley, National
Legislative Director, American Veterans (AMVETS)
Chairman Michaud, Ranking Member Brown, and Members of the
Subcommittee, thank you for the opportunity to submit for the record
AMVETS' views regarding the ``Increased Flexibility in Payments for
State Veterans Homes,'' H.R. 4241.
In 2006, Congress approved payment of differing per diem rates to
State Veterans Homes that provide nursing home care for service-
connected veterans through the ``Veterans Benefits, Health Care, and
Information Act of 2006.'' The intent of the act was to pay higher per
diem rates, however, once enacted the payments to many of the State
Veterans Homes did not cover the cost to care for these veterans.
Without immediate intervention, the current rate could threaten the
ability of many State Veterans Homes to function financially.
Without implementing H.R. 4241, inadequate funding will continue to
cause states to not take additional veterans into their facilities
because of funding shortages as well as provide only 70 percent of the
funding needed to care for the veterans who are already in these homes.
Our veterans have earned and deserve only the highest quality of
care, and under the current regulation they do not. AMVETS wholly
supports H.R. 4241 and its effort to fix the unintended funding
shortage to so many State Veterans Homes.
Mr. Chairman, this concludes my testimony and I will be happy to
answer any questions you might have.
Statement of Hon. Henry E. Brown, Jr., Ranking Republican
Member, Subcommittee on Health, and a Representative in
Congress from the State of South Carolina
I want to thank Chairman Michaud for holding this hearing to
discuss H.R. 4241, a bill he introduced to allow for an increase in
flexibility regarding payments to State veterans homes.
The partnership between the Federal Government and States to
provide nursing home care to a broad range of veterans is a long-
standing and honored tradition of cost sharing.
To my understanding, the intent of H.R. 4241 is to provide a remedy
for problems certain State homes are experiencing with the
implementation of what is known as ``the 70-Percent Program.'' The
program, established under Public Law 109-461, requires VA to reimburse
State homes at a higher rate for the cost of care provided to veterans
with a 70 percent or higher service-connected condition.
The 70-Percent Program was meant to provide equity of access to VA
resources for service-connected veterans residing in State Homes.
However, despite our best intentions, this initiative has regrettably
resulted in unintentional consequences.
The 70-Percent Program was meant to assist State Veterans Homes in
providing the highest quality nursing home care to veterans. And, if
the 70-Percent Program is in fact doing the opposite and making it
harder to meet that worthiest of goals, then it is a problem I am
anxious to correct.
I look forward to hearing from our panelists as we examine this
issue and am very hopeful that as a result of this hearing, we will be
able to find a way to resolve this issue without the need of a
legislative remedy.
I thank our witnesses for their time and participation.
Statement of Adrian M. Atizado, Assistant
National Legislative Director, Disabled American Veterans
Mr. Chairman and Members of the Subcommittee:
On behalf of the more than 1.3 million members of the Disabled
American Veterans (DAV) and its Auxiliary, I wish to express my
appreciation for this opportunity to present the Subcommittee our views
for the record on legislation pending before the Subcommittee. Mr.
Chairman, as you know, DAV is an organization devoted to advancing the
interests of service-connected disabled veterans and their dependents
and survivors. For more than eight decades, the DAV has devoted itself
to a single purpose: building better lives for our nation's disabled
veterans and their families.
First, DAV wishes to thank this Subcommittee for establishing and
helping enact what became section 211 of Public Law 109-461, the
Veterans Benefits, Health Care, and Information Technology Act of 2006.
This Act validated and completed the 1999 Congressional decision to
provide seriously disabled service-connected veterans a guaranteed
benefit of Department of Veterans Affairs (VA) nursing home care if
their need for such care was based on a service-connected disability or
for any condition if they were 70 percent or more disabled from
service-connected disabilities. The Act extended that eligibility to
these high-priority veterans in the nation's 137 state veterans homes.
H.R. 4241, a bill introduced by the Chairman, would amend chapter
17 of title 38, United States Code, to allow for increased flexibility
in payments to State veterans homes for the care of service-connected
veterans. DAV has a longstanding resolution, No. 238, adopted by our
membership at our most recent National Convention, as follows: ``[i]n
accordance with Public Law 109-461, VA [must] pay the full cost, on an
equitable basis, for the care of veterans in need of State Home nursing
care for a service-connected disability, and for any disability of a
veteran with a service-connected disability rated at 70 percent or
more.'' Therefore, we support the purposes of this bill, but point out
some concerns that should be addressed before final passage.
Section 1 of the bill would make seven technical changes to
existing statutory language governing VA's authority to reimburse state
veterans homes their cost of care for service-connected veterans
resident in state homes. One primary purpose of the amendment would
give the Secretary a new discretionary authority to employ the
authority of section 1720 of title 38, United States Code, as a basis
for entering into payment agreements with a state home caring for
service-connected veterans. Another purpose of the section would
replace the payment rate determination in existing law, currently
subsiding in subsection 1745(a)(2), with a linkage to the prevailing
geographic rate paid by VA under section 1720 to community nursing
homes under contract with VA for the care of eligible veterans. A final
focus of the amendment would be to circumscribe VA's reimbursement
policy so that some state veterans homes may continue to participate in
Medicare and Medicaid reimbursement programs. Continuation of this
participation was cast into doubt with issuance of VA instructions
under the new reimbursement program for service-connected veterans in
state homes.
Public Law 109-461 was enacted in December 2006, but unfortunately
VA only promulgated regulations to carry out its intent in April 2009.
Since publication of these regulations, Mr. Chairman, we have been
informed by the administrators of some state facilities that the
``full'' reimbursement rates governed by VA regulations will net some
state veterans facilities less than their combined payments (from
veterans, their state governments, the Department of Health and Human
Services, and from VA under the traditional per diem payment subsidy)
received before these regulations were issued. Your bill is intended to
remedy this inequity.
Current law establishes state veterans home reimbursement rates for
service-connected veterans using two formulas: a geographically
adjusted per diem rate established by the Secretary as a corollary to
the rates VA currently pays community nursing homes; or, a rate
determined by the administrator of a state veterans home based on the
calculated daily cost of care at that home. Existing law requires the
Secretary to reimburse state veterans homes for the care of service-
connected veterans at the lesser of these two rates.
As we understand it, these rate choices available to VA and the
state veterans homes have been discovered to be complicated
significantly by the governing financial and accounting policy of the
Office of Management and Budget as expressed in OMB Circular A-87. This
circular establishes principles and standards for determining costs for
federal awards carried out through grants, cost reimbursement
contracts, and other agreements with State and local governments. Under
the rules of this circular, a state home in determining its daily cost
of care, cannot include in that cost structure the depreciation of
buildings that were recipients of VA construction grants. As stated in
the circular, ``[t]he computation of depreciation or use allowances
will exclude: . . . (2) Any portion of the cost of buildings and
equipment borne by or donated by the Federal Government irrespective of
where title was originally vested or where it presently resides.'' This
restriction on counting depreciation as a part of a home's daily cost
of care significantly depresses the payable reimbursement rates. As a
result of the state homes' excluding these significant amounts, the
rates determined by the existing statutory formula will invariably
become the OMB Circular A-87-determined rates. Therefore, in the view
of the National Association of State Veterans Homes and other
observers, the current statutory language in section 1745(a)(2) is
unworkable for the purpose intended by Congress. The unworkability of
these rates has served as a denial of access to nursing home care in
state extended care facilities to the highest priority veterans, those
who need nursing home care for residuals of chronic illnesses and
injuries they incurred in military service to America.
While your bill would appear to us to address the problems in the
current statutory language and VA's current regulations, and would
provide sharper guidance to VA in amending those regulations, we are
concerned that the language of this bill may not alter the impact of
the OMB policy that governs the overall federal-state cost accounting
relationship. We ask that the Subcommittee consider requesting counsel
of VA and OMB to assure the Subcommittee that the proposed language of
your bill to restructure section 1745 will have its intended outcome of
permitting disabled service-connected veterans to be reimbursed
equitably and fully covered by state veterans homes.
Mr. Chairman, this concludes DAV's testimony. Again, we thank the
Subcommittee for its leadership and for requesting our views on this
legislation.
Statement of Linda S. Schwartz, RN, MSN, DrPH, FAAN,
Senior Vice-President, National Association of State Directors of
Veterans
Affairs, and Commissioner, Connecticut Department of Veterans Affairs,
Rocky Hill, CT
NASDVA is an organization with a history dating back to the Second
World War. Our membership is composed of State Directors of Veterans
Affairs and State Department of Veteran Affairs staff. Our members
represent each State as well as the District of Columbia, American
Samoa, Northern Mariana Islands, Puerto Rico and the Virgin Islands.
As you may know each State has a designated ``Office of Prime
Responsibility'' for service to veterans that is uniquely situated to
be a vital resource which augment Federal programs, improve the
identification of needs, coordinate local resources and ultimately
enhance the quality of care and services to America's veterans now and
in the future. NASDVA is a rich resource which had not been fully
recognized nor utilized in caring for America's returning military/
veterans and their families. Collectively State governments commit more
than $4 billion annually, which makes them second only to the Federal
VA, in resource allocations to provide programs, benefits and services
to the men and women who serve and defend our nation.
Unlike ``Veteran Service Organizations'' State Departments are
government agencies not membership organizations. Our members are
tasked by their respective State with the responsibility to address the
needs of all veterans irrespective of time in service, branch of
military or disability status. On a daily basis, State Directors are
confronted with unique situations which could not possibly be addressed
in a timely manner by larger systems like DoD and VA. State Directors
are held accountable by the citizens of their individual State and do
effect changes and solve problems because they know who, where and how
to orchestrate a successful outcome at the local level.
In many respects, all veterans and their needs are our agenda. Over
28,000 Nursing Home beds come directly under the administrative
responsibilities of our members which means the subject of today's
hearing is of major concern to our members because they bear the
consequences of the recently implemented Regulations which are the
focus of this hearing today. We appreciate this opportunity to provide
testimony and comments on today's issues which are extremely important
to our members.
Per Diem Reimbursement in State Veterans Homes
Under the Millennium Health Care Act of 1999, Congress, in the name
of the American people, directed the Department of Veteran Affairs (VA)
to pay for nursing home care for veterans with a service connected
disability rating of 70 percent or more and veterans who have sustained
service-connected disabilities that require nursing home care. While VA
provides full cost of care in either a VA or community contracted
nursing home this has not been the case for State Veterans Homes. Not
only is this a costly disparity in applying the per diem payments based
on the facility in which a veteran receives their care, it penalizes
veterans in State Homes. Despite the intent of Congress, over ten years
have passed and the uniform application of this benefit has not been
implemented.
For years, NASDVA has consistently supported equity in the per diem
payment system to veterans regardless of where they receive their care.
We believe that Congress authorized the benefit to the veteran, not the
facility in which they receive their care. The leadership and members
of NASDVA have come, year after year both in testimony to the Congress
and advocacy with VA seeking a fair and equitable solution to the
inconsistency and inequality of these policies. This issue has also
caught the attention of National Governors Association which has issued
statements in support of full cost of care reimbursement for State
Homes each year since 2002.
In some jurisdictions, VA case managers routinely send veterans to
contract homes because the full cost of care is absorbed by VA which
prevents veterans from having to meet the stringent financial
requirements of Title 19 Medicaid. Hundreds, probably thousands, of
veterans meeting the criteria originally set forth in the 1999
Millennium Act, did not receive this relief, or the benefits Congress
intended. During this time lapse, veterans who served this nation
honorably and incurred severe disabilities, injuries and illnesses have
lost assets, personal savings and pride in order to meet the costs of
care levied on them. Additionally State Directors have struggled to
meet their fiduciary responsibilities and maintain the quality of care
these veterans earned and deserve,
With the enactment of the 2006 ``Veterans Benefits, Health Care,
and Information Technology Act of 2006'' (Pub. L. No. 109-461,
Sec. 211(a), codified at 38 U.S.C. Sec. 1745(a)), Congress approved
payments by the VA to State Veterans Homes which meet the rigorous
requirements required to qualify for per diem reimbursement and
authorized VA to place severely disabled service-connected veterans
directly in State homes and stipulated that VA was required to
reimburse State homes for the full cost of such care.'' NASDVA as well
as many veterans and the National Governors Association believed that
the situation had been resolved.
The notice of ``Regulations'' required for the implementation of
this legislation languished for years. Despite the need and the urgency
for these rules, Congress, providers and veterans had to wait while the
cost of care continued to increase. All parties expected the statute to
take effect 90 days after its enactment (March 21, 2007); but VA did
not issue regulations to implement the program until April 29, 2009
(effective May 29, 2009). This 2\1/2\-year delay in issuing regulations
to implement the new per diem program has caused enormous difficulties
and hardships not only with recordkeeping and administrative problems,
veterans and their families did not receive the financial relief they
were promised.
Even as these Regulations finally became public in November of
2008, VA restricted the ``comment period'' to only 30 days instead of
the usual 60 days. On first read of the proposed Regulations, it was
clear that the spirit and intent of this process was a casualty of time
and bureaucracy. How ironic that Congressional legislation to update
the basic per diem rates for veterans in State Homes was enacted in
2006, consumed over 2 years of VA time to develop and publish the
Regulations and resulted in only 30 days over the Christmas Holiday for
comment. Despite the economic realities of the times, VA presented a
very convoluted, confusing and disappointing proposal for the
implementation of this landmark legislation.
The program did not provide State Veterans Homes with the actual
cost of care for disabled veterans, despite the intent of Congress. In
fact in many States that had Medicare and/or Medicaid-certified
Veterans Homes, the stipulation that any funding from these sources had
to be repaid after 2 years was pejorative and naive on VA's part. How
do you return the lost assets, homes, cars and savings to veterans who
did spend down to qualify for Medicaid? How do you ``regulate'' and
disqualify the use of Medicare to veterans who had contributed to that
fund throughout their lifetime? How do you square these new policies
for veterans who died waiting for these benefits.
NASDVA worked for and expected that the new ``per diem'' rate for
veterans, who meet the mandatory eligibility, would be equal to the
same rate paid to VA Contracted Nursing Homes. The Regulations that
went into effect in 2009 failed to adequately reimburse State Homes and
State governments for the level of care required by VA. More
importantly unintended consequences of the present reimbursement rates
threatens the continued financial viability of many State Veterans
Homes systems and raises questions about the future viability of the
entire State Nursing Home Program, The specifications and the
limitations required by the present Regulations are not in keeping with
the original intent of Congress.
2009 GAO Report on VA Long-Term Care
Information published in the 2009 GAO Report ``VA HEALTH CARE Long-
Term Care Strategic Planning and Budgeting Need Improvement''
identified a considerable difference in estimates of long term care
demands and gaps in service with VA budget estimates and strategic
planning. GAO found that VA's estimates were based on cost assumptions
and workload projections that appeared to be low and unrealistic for
both nursing home and non-institutional care. VA's model was flawed and
underestimated its own nursing home spending because the projected
increase in cost was estimated at 2.5 percent which is considerably
lower than market costs. GAO reported that VA had plans to increase
workload for certain veterans for who they are required to provide care
but did not include nursing home workload plans for most veterans
already on VA roles.
GAO found that VA used cost assumptions which seriously
underestimated the actual cost of care, minimized workload estimates
and miscalculated the number of veterans using this system. Not only
did this cast a great deal of doubt on the ``Strategic Plan'', these
major discrepancies also raised questions about the reliability of VA's
spending estimates and the extent to which VA was actually closing the
gaps in the long-term system of care for America's veterans. These
findings strongly suggest that present problems in VA reimbursement
policies may be linked to the faulty budget projections and unrealistic
data used in the development of the Strategic Plan reviewed by GAO.
NASDVA has and continues to support changes to the present program
that would insure that:
VA develop a strategic plan for long-term care
services that maximizes the role of State veterans homes in
providing care and minimizes VA cost of Long Term Care for our
Nation's Veterans.
VA provides veterans in State Nursing Homes meeting
the mandatory eligibility requirements the same ``per diem
rates'' paid to VA or community contracted nursing homes.
Congress authorize sufficient funding to keep the
existing backlog of projects in the State Extended Care
Facilities Construction Grant Program at a manageable level to
assure life safety upgrades and new construction are timely.
A implement measures to assure that States are paid a
more equitable per diem rate representing the 50 percent of the
States' average costs, as allowed by law, and that the policies
governing the program be amended to allow new State veterans
homes up to 50 percent of the total cost of care paid
retroactively from the date of the first veteran's admission to
the new home.
Conclusion
States are the second largest providers of service to veterans in
the America and commit over $4 billion dollars annually to provide
direct services and support to veterans and their families. We augment
and enhance VA programs and initiatives at the local level. We provide
vital services and support to veterans and their families through State
Benefit Offices, Cemetery and Memorial Affairs, Domiciles, Homeless
programs, Substance Abuse and Skilled Nursing care. As of the beginning
of this fiscal year 2009, there were nearly 28,000 State Veteran
Nursing Home beds, more than 6,000 veterans domiciliary beds in 135
State veterans' facilities throughout the Nation. In fact, States
provide the majority of VA Authorized long-term and nursing home care.
In essence we are ``where the rubber meets the road.'' More importantly
we are accountable to our Governors and the citizens of our State for
the quality and responsiveness of our activities. Partnerships with
States Departments of Veterans Affairs and State Veterans Homes are
both cost-efficient and effective in utilization of resources and the
creation of a quality continuum of care for all of America's Veterans.
We must all work together in real partnership to assure veterans now
and in the future receive the services and programs the need and
deserve.
Statement of Paralyzed Veterans of America
Chairman Michaud, Ranking Member Brown, and members of the
Subcommittee, Paralyzed Veterans of America (PVA) would like to thank
you for the opportunity to submit our views on H.R. 4241, to allow for
increased flexibility in payments for State veterans homes. This
subject is covered in depth in the recently released version of The
Independent Budget regarding the funding requirements for the VA health
care system for FY 2011.
PVA generally supports H.R. 4241 to allow for increased flexibility
in payments for State veterans homes, but believes greater
understanding of the problem is needed.
The Department of Veterans Affairs (VA) State Veterans Home Program
currently encompasses 137 nursing homes in 50 States and Puerto Rico,
with more than 28,000 nursing home and domiciliary beds for veterans
and their dependents. State veterans homes provide the bulk of
institutional long-term care to the nation's veterans. The GAO has
reported that State homes provide 52 percent of VA's overall patient
workload in nursing homes, while consuming just 12 percent of VA's
long-term care budget. VA's authorized ADC for State veterans homes was
19,208 for FY 2008.
VA holds State homes to the same standards applied to the nursing
home care units it operates. State homes are inspected annually by
teams of VA examiners, and VA's Office of Inspector General (OIG) also
audits and inspects them when determined necessary. State homes that
are authorized to receive Medicaid and Medicare payments also are
subject to unannounced inspections by the CMS and announced and
unannounced inspections by the OIG of the Department of Health and
Human Services.
VA pays a small per diem for each veteran residing in a State home,
currently at a rate of $77.53 per day. This is less than one-third of
the average cost of that veteran's care. The remaining two-thirds is
made up of a mix of funding, including State support, Medicaid,
Medicare, and other public and private sources. In contrast, VA pays
Community Nursing Homes over $200 per day with the cost of care in VA
Community Living Centers (VACLC) at almost $800 per day.
Service-connected veterans should be the top priority for admission
to State veterans homes, but traditionally they have not considered
State homes an option for nursing home services because of lack of VA
financial support. To remedy this disincentive, Congress provided
authority for full VA payment.
Unfortunately, veterans with severe disabilities may be put at a
disadvantage in gaining access to State veterans homes. As part of P.L.
109-461, the ``Veterans Benefits, Health Care, and Information
Technology Act of 2006,'' Congress approved payment of different per
diem amounts by VA to State veterans homes which provide nursing home
care to veterans with service-connected disabilities, a program dubbed
``the 70-Percent Program.'' VA issued regulations for this program in
April 2009 and granted a higher per diem rate for veterans with
service-connected disabilities. Unfortunately, PVA is hearing reports
that these rates have resulted in lower payments to many State veterans
homes and in some cases are less than the actual cost of care.
PVA believes VA made a good faith effort in establishing the
original rates, but may not have taken into consideration the
significantly greater cost of care for those with severe disabilities,
in particular those service connected veterans with 70 percent or
greater ratings. As a result, we are concerned that many severely
disabled veterans who would choose to use the State veterans homes will
be denied access simply because the veterans home can not afford the
cost of their care. This will cause a significant impact on our
veterans most in need at a time when VA is continuing to reduce their
capacity to provide long-term care facilities.
PVA has been informed by representatives of the National
Association of State Veterans Homes (NASVH) that VA seems resistant to
modifications of the per diem rate or alternatives that may provide
greater reimbursement rates. There is a sense that the VA believes the
lower rate is appropriate because VA shoulders a great financial burden
when it helps cover the cost of construction, rehabilitation, and
repair of State veterans homes, providing up to 65 percent of the cost,
with the State providing at least 35 percent. If true, PVA believes
this argument is invalid.
In FY 2007 the construction grant program was funded at only $85
million, the same amount Congress had provided in FY 2006. Based on a
current backlog of nearly $1 billion in grant proposals, and with
thousands of veterans on waiting lists for State beds, The Independent
Budget for FY 2008 recommended no less than $150 million for this
program and Congress responded with $165 million for FY 2008 in the
Omnibus Appropriations Act. For FY 2009, the IB recommended $200
million for the State veterans home construction grant program, and
Congress provided $175 million. Also in FY 2009 Congress provided State
home construction $100 million in the Stimulus Act, giving VA a total
of $265 million in availability for its construction grant program. For
FY 2011, The Independent Budget recommends the construction grant
program be funded at $275 million.
The VA is using this grant program as an incentive to build more
capacity to avoid the greater cost of building it themselves. PVA
firmly believes that construction costs should not be mixed with health
care costs. The per diem rate should be independent of any quid pro quo
VA may believe exists with the State veterans homes due to construction
funding. State veterans homes can provide high quality care at a rate
cheaper than VA and should be rewarded for doing so, not punished.
Mr. Chairman, PVA believes H.R. 4241 may help remedy this problem.
But we believe the Subcommittee should go further. Currently there is
only anecdotal information on perceived widespread, but individual,
challenges facing State veterans homes due to this problem. With the
challenges facing future VA budgets, abstract information is
insufficient to make the critical decisions needed to support our
veterans. PVA would recommend a study to determine what impact these
funding shortfalls are having on State veterans homes. Also, due to the
immediate impact of these financial shortfalls, we believe this report
should be completed as soon as possible, but no later than September
30, 2010. As the report is being conducted, one option might be for VA
to raise their reimbursement rate to State veterans homes to be
commensurate with the rate paid to Community Nursing Homes for similar
services for 70 percent and greater service-connected disabled
veterans.
VA and Congress must continue to provide the construction grant and
per diem funding necessary to support State veterans homes. Even though
Congress has approved full long-term care funding for certain service
connected veterans in State veterans homes, under P.L. 109-461 it must
continue to provide resources to support other veteran residents in
these facilities and to maintain the infrastructure. To that end,
Congress should provide State veterans homes $275 million in
construction grant funds for FY 2011.
PVA would like to thank this Subcommittee for the opportunity to
express our views relating to these important benefits for veterans. We
look forward to working with this committee as they continue addressing
the issues that effect America's veterans.
Veterans of Foreign Wars of the United States
Washington, DC.
February 18, 2010
The Honorable Michael Michaud
United States House of Representatives
1724 Longworth House Office Building
Washington, DC 20515
Dear Representative Michaud,
On behalf of the 2.1 million members of the Veterans of Foreign
Wars and our Auxiliaries, I would like to thank you for the invitation
to testify on legislation H.R. 4241, to allow for increased flexibility
in payments for State veterans homes. The VFW supports H.R. 4241, to
correct the inadequate financing of long-term care for the most
disabled veterans in State Veterans Homes.
This bill seeks to correct the inadequate funding for the long-term
care in a SVH for veterans rated at 70 percent or above for service
connected disabilities. With the passage of PL 109-461, SVH's were
afforded a higher per diem rate of reimbursement from the Department of
Veterans Affairs. VA's regulations, issued April 29, 2009, indicate all
medication and specific outpatient medical care for service-connected
injuries to be provided by SVH's. Further, it bars SVH's from billing
to Medicare and Medicaid for any and all additional costs that exceed
the per diem rate. The current law and VA regulations create a
disincentive for SVH's across the nation to care for the most severely
disabled veterans. Several states indicate the potential loss of
millions of dollars complying with VA regulations; others have limited
or stopped accepting these veterans into their homes.
Your legislation grants the VA Secretary the authority to enter
into a state-by-state per diem arrangement with SVH's. Each state's
rate would be comparable to the geographic area and the reimbursement
rate available to a `non-department nursing home' or a private nursing
home facility. Thus, correcting the existing health care funding
shortfall for America's most disabled veterans.
The VFW is pleased to support your legislation for America's
veterans.
Sincerely,
Robert E. Wallace
Executive Director
MATERIAL SUBMITTED FOR THE RECORD
Committee on Veterans' Affairs
Subcommittee on Health
Washington, DC.
March 9, 2010
Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20240
Dear Secretary Shinseki:
Thank you for the testimony of Dr. James F. Burris, Chief
Consultant for Geriatrics and Extended Care with the Veterans Health
Administration, at the U.S. House of Representatives Committee on
Veterans' Affairs Subcommittee on Health legislative hearing on H.R.
4241 that took place on March 3, 2010.
Please provide answers to the following questions by April 20,
2010, to Jeff Burdette, Legislative Assistant to the Subcommittee on
Health.
1. Prior to the passage of P.L. 109-461, could State Veterans
Homes bill the Department of Veterans Affairs (VA) and Center
for Medicare and Medicaid Services (CMS) for the same care
provided? If so, for what specific services are State Veterans
Homes billing both VA and CMS
2. It is our understanding that VA has been meeting with some
State Veterans Homes to explore non-legislative solutions to
this problem. Please explain the nature of these discussions
and the options that you have explored together. What is
prohibiting VA from moving forward with a non-legislative
solution?
3. VA opposes H.R. 4241 even though Medicaid and Medicare
certified State Veterans Homes have presented initial data
showing the negative financial implications of the new per diem
rate. Given the urgency of this issue, what solution can VA
offer since it opposes H.R. 4241?
4. It appears that one of the key reasons that the new per
diem payments do not work for Medicaid and Medicare certified
State Veterans Homes is that the new payments do not account
for outlier service costs such as dialysis, x-rays, and labs.
What are the pros and cons of mandating VA to include outlier
costs in the development of new per diem rates so that the
State Veterans Homes would not have to bill Medicare and
Medicaid?
5. Does CMS have a role to play in this situation? If yes,
what would it look like?
6. Would a reimbursement schedule that bases payments on the
actual acuity of each patient, such as that used by VA in its
Resource Utilization Group (RUG) scores for community nursing
homes, be an effective mechanism for properly and accurately
reimbursing State Veterans Homes for 70-percent veterans? Could
VA implement such a system for ``mandatory veterans'' under the
current law? If yes, how quickly could such a system be put
into place?
7. Your testimony states that H.R. 4241 will increase VA
costs by $17.5 million next year and $200 million over 10
years. Please describe in detail how you arrived at this cost
estimate. Does this indicate that the current payment system is
underpaying State Veterans Homes under the 70-Percent Program?
In your view, does the current payment system compromise the
quality of nursing care being provided to veterans under the
70-Percent Program? If not, please explain.
8. H.R. 4241 would authorize VA to enter into agreements with
State Homes to provide care for the ``70-Percent Program''
under VA's contract nursing home care authority. What
challenges would this construct create for VA?
9. Might it help alleviate the current situation if State
homes were able to simply opt out of the 70-Percent Program if
they felt they would be better off without it?
10. In your testimony, you stated that ``although a number of
States are satisfied with the new rates VA pays for mandatory
Veterans, several have reported problems.'' Please provide a
list of those states homes that are satisfied and those state
homes that have reported issues.
11. What is VA's long-term strategy to improve the care
provided to women veterans and how does the fiscal year 2011
budget request for women veterans fit into this long term
strategy?
12. The Paralyzed Veterans of America (PVA) provided a
statement for the record. The statement suggests that before
rushing to a legislative solution, a study be conducted ASAP to
determine the immediate impact of the reported financial
shortfalls. Would you support this proposal?
13. Have you received responses from any states regarding your
request for ``documentation that demonstrates how their actual
costs for . . . care . . . exceeds the allowable VA per diem
payment?'' If so, please share those responses.
14. Are there any mechanisms in place to assess the accuracy
of the actual cost of care reported by state homes? If so,
please provide details.
15. What information, if any, are you lacking to gain a
complete understanding of how State homes are currently being
impacted by P.L. 109-461?
In addition, please answer the following question for Congresswoman
Madeleine Bordallo:
Over the past 18 months, I have requested that VA address the
issue of eligibility for Guam to participate in the VA State
Home Grant program. On July 10, 2009, VA published a proposed
rule in the Federal Register that would include Guam and the
other insular areas in the VA State Home Grant program. As of
November 2009, VA anticipated publishing the final rule by the
end of the year. I certainly appreciate the efforts of VA to
correct this oversight. However, please update me on the status
of this final rule and when we can reasonably expect VA to
publish the amended final rule that would include Guam in the
VA State Home Grant program.
Thank you again for taking the time to answer these questions. The
Committee looks forward to receiving your answers by April 20, 2010.
Sincerely,
MICHAEL H. MICHAUD HENRY E. BROWN, Jr.
Chairman Ranking Member
__________
Questions for the Record
The Honorable Michael Michaud, Chairman
The Honorable Henry Brown Jr., Ranking Member
Subcommittee on Health
House Veterans Affairs Committee
Legislative Hearing on H.R. 4241
March 3, 2010
Question 1: Prior to the passage of Public Law 109-461, could State
Veterans Homes bill the Department of Veterans Affairs (VA) and Center
for Medicare and Medicaid Services (CMS) for the same care provided? If
so, for what specific services are State Veterans Homes billing both VA
and CMS?
Response: Yes, prior to the passage of Public Law 109-461, State
Homes could bill both the Department of Veterans Affairs (VA) and the
Centers for Medicare and Medicaid Services (CMS) for the same care.
Under an amendment to 38 USC 1741 made by Public Law 108-422, payments
made by VA under this section cannot be used to offset or reduce any
other payment made to assist Veterans. According to CMS, when State
Veterans Homes charge their residents and patients to the extent of
their ability to pay, or seek payment from available sources other than
Medicare, Medicare benefits are payable for covered items and services
furnished to Medicare beneficiaries. However, the State Home must
charge the Medicare copayment in order to receive Medicare payments.
(See Medicare Benefit Policy Manual, 100-02, Chapter 16, Sec. 50.3.3
for details) VA does not have any information about the services for
which the State Veterans Homes are billing CMS.
Question 2: It is our understanding that VA has been meeting with
some State Veterans Homes to explore non-legislative solutions to this
problem. Please explain the nature of these discussions and the options
that you have explored together. What is prohibiting VA from moving
forward with a non-legislative solution?
Response: VA has met on several occasions, and continues to meet
with designated representatives of the National Association of State
Veterans Homes and with the Executive Committee of the National
Association of State Directors of Veterans Affairs. We have discussed
the concerns of the State Homes and the limitations placed on VA by the
current law. VA has explored options for modifying the method of
determining the State Homes' cost of care and clarifying those services
they can bill other payors. VA has done the following:
Sent a memorandum to VA field facilities in October
2009, clarifying that they are to continue providing specialty
services to Veterans residing in State Homes;
Met with the Office of Management and Budget (OMB) to
seek assistance in clarifying the cost accounting rules of OMB
Circular A-87 for the States;
Offered to assist individual State Homes in correctly
determining their costs of care in accordance with OMB Circular
A-87.
Addressing these issues will require detailed actual cost data as
well as other information from State Veterans Homes, which VA requested
on March 29, 2010, and received, in part, just this week. VA continues
to pursue additional data from the States.
Question 3: VA opposes H.R. 4241 even though Medicaid and Medicare
certified State Veterans Homes have presented initial data showing the
negative financial implications of the new per diem rate. Given the
urgency of this issue, what solution can VA offer since it opposes H.R.
4241?
Response: VA believes that non-legislative approaches such as those
described above will mitigate the problems experienced by the states
and that legislation is not necessary at this time. VA has asked the
State Homes to provide additional cost of care data so that we can
better understand the financial implications and challenges they face.
VA has already taken the actions noted above in its response to
Question 2. Without the data from the States, VA has not been able to
sufficiently clarify the scope of the problems being experienced by the
State Homes. We continue to seek their cooperation.
Question 4: It appears that one of the key reasons that the new per
diem payments do not work for Medicaid and Medicare certified State
Veterans Homes is that the new payments do not account for outlier
service costs such as dialysis, x-rays, and labs. What are the pros and
cons of mandating VA to include outlier costs in the development of new
per diem rates so that the State Homes would not have to bill Medicare
and Medicaid?
Response: Public Law (PL) 109-461 specifies that VA is to pay a per
diem payment for nursing home care. Nursing home care services are
identified in VA regulations and do not include dialysis, x-rays, or
other specialized services. Paying those costs would make the State
Homes much more expensive for VA to support.
Question 5: Does CMS have a role to play in this situation? If yes,
what would it look like?
Response: We defer to the CMS to describe their potential role in
this situation.
Question 6: Would a reimbursement schedule that bases payments on
the actual acuity of each patient, such as that used by VA in its
Resource Utilization Group (RUG) scores for community nursing homes, be
an effective mechanism for properly and accurately reimbursing State
Veterans Homes for 70 percent veterans? Could VA implement such a
system for ``mandatory Veterans'' under the current law? If yes, how
quickly could such a system be put into place?
Response: VA would need to revise its regulation to implement such
a system. While such system may be an effective mechanism for
reimbursing State Veterans Homes for mandatory Veterans there are some
limiting factors. For example, only approximately 60 percent of State
Homes presently report RUG scores to VA; therefore, implementing such a
system would require all State Homes to develop the capability to
determine and report RUG scores. In addition, under current law VA is
required to pay the lesser of the prevailing rate (i.e., the rate
determined by the RUG score) or actual costs, so there is no assurance
the State would receive the prevailing rate.
Question 7: Your testimony states that H.R. 4241 will increase VA
cost by $17.5 million next year and $200 million over 10 years. Please
describe in detail how you arrived at this cost estimate. Does this
indicate that the current payment system is underpaying State Veterans
Homes under the 70-Percent Program? In your view, does the current
payment system compromise the quality of nursing care being provided to
Veterans under the 70-Percent Program? If not, please explain.
Response: The State Home representatives have told VA that most
states are receiving the actual cost rather than the prevailing per
diem rate because the actual cost is less in most cases. To determine
the cost estimate, VA multiplied the average daily census of Veterans
residing in State Homes by the average cost of care, and subtracted
that total from the total obtained by multiplying the average daily
census by the average prevailing rate. The figure of $17.5 million
therefore, reflects the additional amount VA would pay if the ``lesser
of'' language were stricken from the law. The $200 million figure was
obtained by adjusting the $17.5 million figure for inflation, and the
anticipated growth in the average daily census over 10 years. The
method of determining actual cost under OMB Circular A-87 is a standard
method for grants to State, local, and Tribal governments. We are
unable to determine whether the current payment system is underpaying
State Veterans Homes under the 70-Percent Program because the States
have not provided comprehensive data on their actual costs. We have not
seen any evidence from our annual inspections of State Veterans Homes
that the quality of nursing care being provided to Veterans has been
compromised.
Question 8: H.R. 4241 would authorize VA to enter into agreements
with State Homes to provide care for the ``70-Percent Program'' under
VA's contract nursing home care authority. What challenges would this
construct create for VA?
Response: A construct that would have two different per diem rates
and a contract rate all in play would make the program more complex to
administer for both VA and State Veterans Homes.
Question 9: Might it help alleviate the current situation if State
Homes were able to simply opt out of the 70-Percent Program if they
felt they would be better off without it?
Response: State Homes are at liberty to opt out of the 70-Percent
Program under current law and bill other payors. However, VA cannot pay
the basic per diem rate for a mandatory Veteran. The state agency
responsible for the State Homes must opt out and not receive a VA per
diem payment, or opt in and accept the higher VA per diem as the full
cost of nursing home care.
Question 10: In your testimony, you stated that ``although a number
of States are satisfied with the new rates VA pays for mandatory
Veterans, several have reported problems.'' Please provide a list of
those State Homes that are satisfied and those State Homes that have
reported issues.
Response: VA does not have a comprehensive listing of each state's
level of satisfaction with the new rates VA pays for mandatory
Veterans. This is because only a few states have chosen to provide
input to VA on this issue. Anecdotally, Maine, New Hampshire, New York,
California, Nevada and Louisiana have specifically indicated they are
dissatisfied. New York and Nebraska have said they would be satisfied
if they could bill CMS for outlier costs. Missouri, Oklahoma, and Texas
have reported they are satisfied with the new rates. The National
Association of State Veterans Homes has reported that ``many'' states
are dissatisfied with the new rates, but has not provided the number or
the names of dissatisfied states. Forty-two states have applied to
receive the new rates.
Question 11: What is the long-term strategy to improve the care
provided to women Veterans and how does the fiscal year (FY) 2011
budget request for women Veterans fit into this long term strategy?
Response: VA has continued long term strategic plans to enhance the
provision of health services to women Veterans. The following elements
are outlined as they relate to the FY 2011 Budget request:
Fully Implement Comprehensive Primary Care for Women Veterans
Staffing: Providers proficient in women's health
Staffing: Support staff for care coordination within
medical home care model in women's health
Facility Resources: Construction enhancements
focusing on dignity, privacy, safety
Equipment, Supplies: Necessary clinical enhancements
to deliver primary care
Training: Retrain providers to care for women
Veterans
Communication: Effective internal and external
communication about women Veterans
Beginning with FY 2010, the New Model of Care Initiative supports
the addition of primary care support staff, training, and some space
configuration for women's health. In the FY 2011 Budget request,
general medical services dollars will continue to support the overall
medical care provision for women Veterans. In addition, the FY2011
Budget line item request for women Veterans specifically increases the
amount needed for gender-specific care such as cervical and breast
cancer screenings.
Develop a High-Quality Continuum of Health Care for Women Veterans
The strategic goal is to fully integrate specialty care services
for women Veterans at the facility level. In FY 2011, the requested
budget will support Comprehensive Care Services for women Veterans that
includes:
Mental Health
Specialty Care
Emergency Care
Diagnostic Services
Tele-Health
Geriatric and extended care services
Women's health and wellness screening and prevention
programs
Rehabilitation health (catastrophically injured
women)
VA has made a commitment to the development of health care for
women Veterans and will continue to support and evaluate the
implementation of this plan.
Question 12: The Paralyzed Veterans of America (PVA) provided a
statement for the record. The statement suggests that before rushing to
a legislative solution, a study be conducted ASAP to determine the
immediate impact of the reported financial shortfalls. Would you
support this proposal?
Response: VA concurs that a study to determine the immediate impact
of the reported financial shortfalls and the underlying reasons for the
shortfalls would help VA and Congress to better understand the
financial challenges faced by the state homes and to develop responses
to mitigate those challenges. VA has asked the state homes to provide
additional cost of care data, but recently received some data from more
states. If Congress were to mandate that VA carry out such a study, VA
would request that Congress also mandate that the States provide the
data necessary for VA to conduct the study.
Question 13: Have you received response from any states regarding
your request for ``documentation that demonstrates how their actual
costs for . . . care . . . exceeds the allowable VA per diem payment?''
If so, please share those responses.
Response: VA has received responses from Maine, Idaho, and Hawaii.
(See attachments 1, 2, and 3)
VA recently received data from 10 states, including additional data
from Maine and Idaho, and is in the process of evaluating it.
Question 14: Are there any mechanisms in place to assess the
accuracy of the actual cost of care reported by state homes? If so,
please provide details.
Response: VA has not previously had a mechanism in place to review
cost-reporting by the states at the level of detail required to address
the challenges posed by the new per diem payment mechanism.
Collaboration between the program and fiscal offices will be necessary
to review the data now being reported by the states to VA.
Question 15: What information, if any, are you lacking to gain a
complete understanding of how State Homes are currently being impacted
by P.L. 109-461?
Response: VA has requested that the states provide Medicaid cost
reports for those homes that are certified by the Centers for Medicare
and Medicaid Services (CMS). Medicare cost reports may also be made
available directly through the CMS. This will provide standardized and
audited data on the states' actual costs that can be compared with the
new rates paid by VA to the State Homes under P.L. 109-461. More than
60 of the State Homes are CMS certified, but VA has received Medicaid
cost reports from only 10 states which have a total of 30 State Homes.
VA is seeking additional information from the states and is also
exploring obtaining information directly from CMS.
__________
The Honorable Congresswoman Madeleine Bordallo
Question 1: Over the past 18 months, I have requested that VA
address the issue of eligibility for Guam to participate in the VA
State Home Grant program. On July 10, 2009, VA published a proposed
rule in the Federal Register that would include Guam and the other
insular areas in the VA State Home Grant program. As of November 2009,
VA anticipated publishing the final rule by the end of the year. I
certainly appreciate the efforts of VA to correct this oversight.
However, please update me on the status of this final rule and when we
can reasonably expect VA to publish the amended final rule that would
include Guam in the VA State Home Grant program.
Response: VA anticipates that the final rule will be published
within 30 days after it completes concurrence.
__________
Attachment 1--Response from Maine
OMB A-87 Cost Report
The OMB A-87 rate will almost always be less than the
VA Published Rate.
This is so because OMB Circular A-87 disallows
certain costs that otherwise would be payable to a SVH.
This means that almost all Medicare/Medicaid
certified Homes will be paid less than the published VA Rates
for the Program.
The difference between the VA Published Rate and the
OMB A-87 Rate may be substantial.
Augusta SVH OMB A-87 Report, FY `08
1. Total Allowable Costs $9,141,698
2. Total Income from Other Sources $(5,805,822)
3. Total Allowable Costs Less Income from Other $3,335,876
Sources
4. 1/2 Total Allowable Costs $4,570,849
5. Total Claimed by Home from VA $2,228,789
Detail For Augusta SVH FY '08 OMB A-87 Report
Total Costs $9,424,641
Less Disallowed Costs:
Employee Meals & Lodging $2,649
Donated Services $9,790
Bad Debts $40,220
Disallowed Advertising $5,927
Disallowed Depreciation * $221,372
Other $2,985
Total Disallowed Costs
-----$(282,943)
Total Allowable Costs
--$9,141,698 **
*65% of depreciation expense on items purchased with a VA grant
**$9,141,69842,327 (total actual resident days) = $215.98
Cost Report Settlement under the Program
VA Published Rate for 2008 $267.81
MVH OMB A-87 Rate
$215.98
Difference $51.83
Both are below the actual daily cost of care.
OMB Disallowed Costs (Maine)
Disallowed Costs for MVH Augusta $282,943
Disallowed Costs for MVH Scarborough $328,027
Disallowed Costs for MVH South Paris $117,341
Disallowed Costs for MVH Bangor $252,752
Disallowed Costs for MVH Caribou $80,186
OMB FY '08 TOTAL DISALLOWED COSTS:
------------
The Problem Is Worse Than You Think
For Medicare/Medicaid Certified Homes, both the VA
Published Rate and the OMB A-87 Rate are likely to be less than
a Home's actual cost of care.
This is so because many services (such as physicians,
x-rays, and labs) are currently paid by Medicare Parts B and D
rather than State Veterans Homes.
VA payments under the Program, however, are ``payment
in full to the State Homes,'' and the VA appears to prohibit
billing by State Homes to Medicare Parts B and D for veterans
covered by the Program.
Therefore, State Homes must provide drugs,
physicians, and other services under the Program at their own
cost.
Such costs can be thousands of dollars, per resident,
per month, and such ``Outlier Costs'' Are Not Paid under the
Program outside of the lesser of the VA Published Rates (which
almost nobody will be paid) or the OMB A-87 Rates (which are
below actual costs of care).
Examples of Outlier Costs That Are Not
Paid Separately by the VA
Dialysis supplies and services $1,200
PET, CT Scans, MRI $4,000
Chemotherapy $1,800
Radiation Therapy $2,000
Customized Prosthetics and Orthotics $500
Emergency Room Treatment $500
Drugs Up to $3,000/month
Attachment 2--Response from Idaho
Idaho Division of Veterans Services Boise Veterans Home
Statement of Expenditures For the Month Ending:
September-09
NURSING CARE DOMICILIARY TOTAL COST
CARE
FISCAL 15,243.59 907.11 16,150.70
SECURITY 18,927.01 3,399.52 22,326.53
FOOD SERVICE 91,408.09 23,535.76 114,943.85
UTILITIES 29,290.11 5,260.85 34,550.96
LAUNDRY 4,422.91 276.14 4,699.05
VOLUNTEERS 6,797.65 1,750.31 8,548.16
RELIGIOUS SERVICES 1,434.28 369.30 1,803.58
SOCIAL SERVICE 18,652.27 1,109.95 19,762.22
HOUSEKEEPING 43,368.04 7,789.42 51,157.46
MED RECORDS 15,014.56 893.48 15,908.04
PHYSICAL THERAPY 57,637.86 0.00 57,637.86
ACTIVITIES 17,704.45 1,053.55 18,758.00
PHARMACY 43,242.21 0.00 43,242.21
ADMINISTRATION 47,461.42 2,824.31 50,285.73
DIRECT CARE COSTS 371,858.40 22,128.33 393,986.73
DIVISION CENTRAL OFFICE COSTS 28,796.56 1,713.61 30,510.17
OVA CENTRAL COST ALLOCATION 3,011.80 179.22 3,191.03
LESS CAPITAL OUTLAY (7,877.20) (2,028.22) (9,905.42)
DEPRECIATION 10,031.22 2,756.67 12,767.69
TOTAL COSTS
$890,344.75
ELIGIBLE DAYS CARE 3,613 938
PER DIEM COST 224.111 78.81
ELIGIBLE DAYS CARE 3,613.00 938.00
LESS: 70% or HIGHER DAYS CARE 351.00 0.00
TOTAL ELIGIBLE DAYS CARE
938.00
PER DIEM @ 74.42 $242,758.04
PER DIEM @ 34.40 $32.267.20
TOTAL PER DIEM $275,025.24
70% HIGHER DAYS CARE 224.11 $78,662.61
TOTAL PER DIEM + 70% or HIGHER DAYS CARE $353,687.85
Attachment 3--Response from Hawaii
The 70 Percent Disabled Veterans Program, Public Law 109-461
The 70 percent Disabled Veterans Program http://www.vagov/ogc/docs/
PLl09-461.pdf has become a controversial program. Initially, the Law
looked good because it allowed state veterans homes (SVH) the option of
providing long-term nursing care services, at no cost, to 70 percent
and more disabled veterans. However, upon closer examination we learned
the law could cause some States to close their doors because of the
additional financial burden placed on them. Under this law, SVH have no
choice in the level or source of payment; if the veteran qualifies for
the Program, the Home must accept the new VA paid per diem--period. The
Program has an enhanced per diem rate ($331.35 v $74.42/day for Hawaii)
which is enticing, but these higher rates generally result in lower
total amounts received for care provided.
The provision originated in legislation introduced by Senator
Daniel Akaka CD-HI), who described the measure as an effort to
``protect and expand'' the State Homes program. ``We need to fortify
the program,'' said Senator Akaka, who described the language that
became section 211(a) as intended to ``authorize VA to place severely
disabled service-connected veterans directly in State homes and . . .
require VA to reimburse State homes for the cost of such care.''
Under Public Law 109-461, Title II, Sec 211 Sec. 1745a(3) the VA
higher Per Diem rate is considered full payment for care. Further, if
the VA pays the higher per diem rate, and accepts retroactively money
for services delivered; the SVH must return moneys to all payers for
the period the VA retroactively paid. Additionally, the VA appears to
prohibit billing by State Homes to Medicare Parts B and D for veterans
covered by the Program. Payments to SVH under the Program are the
lesser of a rate published by VA by the VA for that Veterans Home, or
the daily cost of care for that Veterans Home determined under OMB
Circular A-87. This circular disallows certain costs that otherwise
would be payable to a SVH, i.e., employee meals and lodging, donated
services, bad debts, advertising, certain depreciation, etc. To our
knowledge, every State Home in the Nation has an OMB Circular A-87 rate
which is less than the VA ``published'' rate. It is as likely as not
that SVH costs will rise sharply because state homes must provide and
pay for equipment and services currently paid by Medicare Parts B and
D.
Yukio Okutsu State Veterans Home has experience with four veterans
eligible for the Program, three enhanced Per Diem eligible veterans in
residence--two are relatively low maintenance, the third was in
residence for 13 days; Per Diem reimbursement for his stay was
$4,307.55 his ancillary medical bills totaled $8,383.44. Beginning net
loss of $7 per day room and board then adding costs for Ancillary
Services; Physician Services, Laboratory Work, X-Ray, Rehab Therapy,
Respiratory Therapy, Durable Equipment, Nursing Supplies, Prosthetics,
Orthotics, Dialysis, IV Therapy, and Oxygen; the dollars lost add up.
The following table is a summary of charges for Program eligible
veterans in residence for July 2009; August admissions added to show
accelerating demand.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Resident ID Number 44 131 130 149 * Pending *
----------------------------------------------------------------------------------------------------------------
Admission Date 7/14/08 6/19/2009 7/17/2009 8/13/2009 8/21/2009
----------------------------------------------------------------------------------------------------------------
Age 85 65 93 69 96
----------------------------------------------------------------------------------------------------------------
Number Days in Residency July 2009 31 9 16
----------------------------------------------------------------------------------------------------------------
Room & Board $10,272.00 $2,982.00 $5,302.00
----------------------------------------------------------------------------------------------------------------
Pharmacy $1,640.00 $90.00 $597.00
----------------------------------------------------------------------------------------------------------------
Labs/x ray -- $49.00 --
----------------------------------------------------------------------------------------------------------------
Rehab $2,425.00 -- $1,703.00
----------------------------------------------------------------------------------------------------------------
Central Supply -- $54.00 --
----------------------------------------------------------------------------------------------------------------
IV Therapy -- $2,495.00 --
----------------------------------------------------------------------------------------------------------------
Totals $14,337.00 $5,670.00 $7,602.00
----------------------------------------------------------------------------------------------------------------
Per Day Cost $462.48 $630.00 $475.13
----------------------------------------------------------------------------------------------------------------
VA Reimbursement $(331.35) $(331.35) $(331.35)
----------------------------------------------------------------------------------------------------------------
Daily Excess Costs $131.13 $298.56 $143.78
----------------------------------------------------------------------------------------------------------------
* Cost Per Resident is Rising
* Included To Demonstrate the Rapid Growth of Program Qualified Residents.
Is the 70 Percent Disabled Veterans Program a good deal for the
veteran? For the short term, it may seem to be; but for the long term,
it is a financial disaster. In fact, State Homes on the mainland have
projected losses of as much as $300K per month. The Program is causing
State Homes to profile admission of eligible veterans; the Veterans who
were to be the prime beneficiaries of the Program will be least served
by legislation created to improve the quality of their lives.
Yuba Okutsu State Veterans Home supports the National Association
of State Veterans Homes (NASVH) initiative 4-step solution:
1. Have Congress pass a clarifying amendment to Section 211 of
the Veterans Benefits, Health Care, and Information Technology
Act of 2006 (Pub. L. No. 109-461) (the ``Act'') postponing for
2 years, for Medicare-certified and Medicaid-certified State
Veterans Homes only, the mandatory implementation of the
Program while any adverse economic effects on States operating
Medicare-certified and Medicaid-certified State Veterans Homes
can be studied, using cost data for actual veterans residing in
State Veterans Homes during this period.
2. Allow State Veterans Homes, in interim, to serve service-
connected disabled veterans under the existing VA Provider
Agreement (``Pro VA'') for contract nursing homes.
3. At the end of 18 months, the National Association of State
Veterans Homes shall report to the Committees on Veterans
Affairs of the United States Senate and House of
Representatives with any recommendations that it has to modify
the provisions of the Act.
4. During this time, cost and payment data for residents of
Medicare-certified and Medicaid-certified State Veterans Homes
shall be compared among the Program, existing Medicare and
Medicaid programs, and contracted programs between the VA and
private nursing homes for the care of veterans with service-
connected disabilities.