House Veterans’ Affairs Committee Issues Report on Modernization of VA Facilities (Part 2 of 3)

WASHINGTON, Nov. 22 -- The House Veterans' Affairs Committee issued a report (H.Rpt. 115-1036) on legislation (H.R. 4243) to establish a commission for the purpose of making recommendations regarding the modernization or realignment of facilities of the Veterans Health Administration, to improve construction and management leases of the Department of Veterans Affairs, to amend and appropriate funds for the Veterans Choice Program. The report was advanced by Rep. Phil Roe, R-Tennessee, on Nov. 16.

Spending subject to appropriation

CBO estimates that implementing H.R. 4243 would increase the amounts VA pays for awards and bonuses, leases of medical facilities, and construction projects by a total of $720 million over the 2018-2022 period, subject to appropriation of the necessary amounts (see Table 3).

Limitation on Bonuses. Section 301 would increase the amount that VA is authorized to pay its employees for awards and bonuses. Under current law, the amount VA may spend for such payments is capped at $230 million in fiscal year 2018, $225 million a year in 2019 through 2021, and $360 million in 2022. By removing from the list of capped payments those amounts provided for recruitment, relocation, and retention incentives (3R incentives), this provision would increase the amount VA can spend for those incentives as well as make room under the caps to increase the amounts paid for all other awards and bonuses.

TABLE 3.--ESTIMATE OF THE EFFECTS ON SPENDING SUBJECT TO APPROPRIATIONS OF H.R. 4243, THE ASSET AND INFRASTRUCTURE REVIEW ACT OF 2017

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In 2013, before the cap on such payments was first imposed, VA spent $81 million for 3R incentives. CBO expects that under this provision, VA would gradually return to that level of spending, adjusted to account for the increased number of VA employees and past and future cost-of-living increases. At the same time, we expect that VA also would take advantage of the extra room available under the caps to gradually increase the amount it spends on other awards and bonuses. On that basis, CBO estimates that implementing section 301 would cost $399 million over the 2018-2022 period.

Expanded Authority to Construct and Lease Medical Facilities. Sections 201 and 204 would expand the authority of VA to construct and lease medical facilities. In total, CBO estimates that implementing those provisions would cost $310 million over the 2018-2022 period for additional construction and lease projects.

Shared Medical Facilities. Section 204 would allow VA to enter into sharing agreements with other federal departments to construct medical facilities. Implementing this section could reduce VA's share of the cost of some construction projects, such that some such projects would no longer require legislative authorization. On the basis of information from VA, CBO estimates the total cost for such major construction projects would average about $100 million each year. On that basis, CBO estimates costs of $225 million over the 2018-2022 period for additional construction projects.

Furthermore, as discussed above under the heading "Direct Spending," this section also would expand VA's authority to enter into leases for medical facilities. CBO estimates that VA would enter into one additional lease each year with a total annual rent payment of $3 million. For those leases, we expect that VA would record obligations of $7 million each year as it enters those contracts, from available appropriations. On that basis, we estimate costs of $13 million over the 2021-2022 period for additional leases.

In total, CBO estimates implementing section 204 would cost $238 million over the 2018-2022 period.

Modify Threshold for Major Medical Facilities. Section 201 would allow VA to construct medical facilities with total costs of up to $20 million without legislative authorization. Under current law, VA is required to receive legislative authorization to construct medical facilities with total expenses above $10 million.

Based on an analysis of information on planned construction projects in VA's 2018 budget submission, CBO estimates that implementing this section would authorize one additional construction project each year with an average cost of $16 million. On that basis, CBO estimates costs of $36 million over the 2018-2022 period.

In addition, as discussed above under Direct Spending, this section would also expand VA's authority to enter into leases for medical facilities. CBO estimates that VA would enter into 6 additional leases each year with a total annual rent payment of $7 million. For those leases, we expect that VA would record obligations of $20 million each year as it enters those contracts, from available appropriations. On that basis, we estimate costs of $36 million over the 2021-2022 period for additional leases.

In total, CBO estimates implementing section 201 would cost $72 million over the 2018-2022 period for additional leases.

Procedures for Recommendations. By February 1, 2021, section 103 would require VA, in consultation with Veterans Service Organizations, to publish the criteria for assessing and making recommendations for modernizing, realigning and closing VA medical facilities. In making recommendations VA must hold public field hearings with local stakeholders. The final criteria must be published by May 1, 2021, after receiving comments from the public. In addition, VA would be required to conduct capacity and commercial market assessments. On the basis of costs for nationwide assessments, CBO estimates that an equivalent of 20 full time employees (with average annual compensation of $150,000) would be necessary. Thus, CBO estimates implementing this provision would cost $10 million over the 2018-2022 period.

Training for Construction Personnel. Section 203 would require VA to offer job training (in person, online or by another federal agency) for all construction employees. CBO estimates that implementing this section would cost $1 million to develop the training materials over the 2018-2022 period.

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table.

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 4243, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON VETERANS' AFFAIRS ON NOVEMBER 8, 2017

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Increase in long-term direct spending and deficits: CBO estimates that enacting H.R. 4243 would increase direct spending by more than $2.5 billion and would increase on-budget deficits by more than $5 billion in at least one of the four consecutive 10-year periods beginning in 2028.

Mandates: H.R. 4243 contains no intergovernmental or private-sector mandates as defined in UMRA.

Estimate prepared by: Federal costs: Ann E. Futrell; Mandates: Zach Byrum.

Estimate approved by: H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal mandates regarding H.R. 4243, as amended, prepared by the Director of the Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b) of the Federal Advisory Committee Act would be created by H.R. 4243, as amended.

Statement of Constitutional Authority

Pursuant to Article I, section 8 of the United States Constitution, H.R. 4243, as amended, is authorized by Congress' power to "provide for the common Defense and general Welfare of the United States."

Applicability to Legislative Branch

The Committee finds that H.R. 4243, as amended, does not relate to the terms and conditions of employment or access to public services or accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.

Statement on Duplication of Federal Programs

Pursuant to section 3(g) of H. Res. 5, 115th Cong. (2017), the Committee finds that no provision of H.R. 4243, as amended, establishes or reauthorizes a program of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111-139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance.

Disclosure of Directed Rulemaking

Pursuant to section 3(i) of H. Res. 5, 115th Cong. (2017), the Committee estimates that H.R. 4243, as amended, would require VA to prescribe regulations.

Section-by-Section Analysis of the Legislation

TITLE I--ASSET AND INFRASTRUCTURE REVIEW

Section 101. Short title

Section 101 of the bill would establish a short title of the "Department of Veterans Affairs (VA) Asset and Infrastructure Review (AIR) Act of 2017."

Section 102. The Commission

Section 102(a) of the bill would establish an independent "VA Asset and Infrastructure Review (AIR) Commission."

Section 102(b) of the bill would require the Commission to carry out the duties described in this title.

Section 102(c)(1) of the bill would require the President, with the advice and consent of the Senate, to appoint nine AIR Commissioners and to transmit nominations to the Senate by May 31, 2021.

Section 102(c)(2) of the bill would require the President to consult with the Speaker and minority leader of the House of Representatives and the majority and minority leader of the Senate in selecting individuals for Commission nomination and congressionally chartered, membership-based veterans service organizations (VSOs) specifically concerning the appointment of three members.

Section 102(c)(3) of the bill would require the President to nominate one person to serve as the Chair of the Commission and one person to serve as the Vice Chair of the Commission.

Section 102(c)(4) of the bill would require the President, in nominating individuals for appointment to the Commission, to ensure: that veterans (reflecting current demographics of veterans enrolled in the VA health care system) are adequately represented in the membership of the Commission; that at least one member of the Commission has experience with a private integrated health care system that has annual gross revenue of more than $50 million; that at least one member has experience as a senior manager for a Federally-qualified health center, the Department of Defense, or the Indian Health Service; that at least one member has experience with capital asset management for the Federal government and is familiar with trades related to building and real property (including construction, engineering, architecture, leasing, and strategic partnerships); and, that at least three members represent congressionally-chartered, membership-based VSOs.

Section 102(d) of the bill would require the Commission to meet only during calendar years 2022 and 2023, and requires that each meeting of the Commission be open and all proceedings, information, and deliberations of the Commission to be available for review by the public.

Section 102(e) of the bill would require a vacancy in the Commission to be filled in the same manner as the original appointment, but the individual appointed to fill the vacancy to serve only for the unexpired portion of the term for which the individual's predecessor was appointed.

Section 102(f) of the bill would require Commissioners to serve without pay, requires each member of the Commission who is an officer/employee of the United States to only receive compensation for their services as an officer/employee of the U.S, and allows Commissioners to receive travel expenses, including per diem.

Section 102(g) of the bill would require the Commission to appoint a staff director who has not served as a VA employee during the one-year period preceding the date of appointment and who is not otherwise barred or prohibited from serving as a Director under Federal ethics law and regulations by reason of post-employment conflict of interest and requires the Director to be paid at the rate of basic pay payable for level IV of the Executive Schedule.

Section 102(h)(1) and (2) of the bill would require the Director, with the approval of the Commission, to appoint and fix the pay of additional personnel, to make such appointments without regard to the provisions of title 5 U.S.C. governing appointments in the competitive service, and any personnel so appointed to be paid without regard to provisions relating to the classification and General Schedule pay rates except that an individual so appointed may not receive pay in excess of the annual rate of basic pay payable for GS-15.

Section 102(h)(3) of the bill would allow not more than two-thirds of the personnel employed by or detailed to the Commission to be on detail from VA and not more half of the professional analysts to be detailed from VA. This section also prohibits a person from being detailed to the Commission from VA if, within 6 months before the detail is set to begin, the person participated personally or substantially in any matter concerning the preparation of recommendations regarding Veterans Health Administration (VHA) facilities.

Section 102(h)(4) would allow any Federal department or agency to detail personnel to the Commission upon request.

Section 102(h)(5) of the bill would allow the Commission to secure necessary information from Federal agencies and Federal agencies to furnish such information upon request.

Section 102(i) of the bill would allow the Commission to procure, by contract to the extent funds are available, the temporary or intermittent services or experts of consultants and to lease real property and acquire personal property either of its own accord or in consultation with the General Services Administration (GSA).

Section 102(j) of the bill would terminate the Commission on December 31, 2023.

Section 102(k) of the bill would prohibit the restriction of lawful communication from a VA employee to the Commission.

Section 103. Procedure for making recommendations

Section 103(a)(1) of the bill would require VA--not later than February 1, 2021, and after consulting with VSOs--to publish in the Federal Register and transmit to the Committees on Veterans' Affairs of the House of Representatives and the Senate (HVAC/SVAC) the criteria proposed by VA to be used in assessment and making recommendations regarding the modernization or realignment of VHA facilities and require such criteria to include the veterans preference regarding access to VA health care.

Section 103(a)(2) of the bill would require a 90-day public comment period for VA's proposed criteria.

Section 103(a)(3) of the bill would require VA--not later than May 31, 2021--to publish in the Federal Register and transmit to HVAC/SVAC, the final criteria to be used in making recommendations regarding the modernization or realignment of VHA facilities.

Section 103(b)(1) of the bill would require VA--not later than January 31, 2022, and after consulting with VSOs--to publish in the Federal Register and transmit to HVAC/SVAC a report detailing recommendations regarding the modernization or realignment of VHA facilities.

Section 103(b)(2) of the bill would require VA to consider the following factors in making recommendations regarding the modernization or realignment of VHA facilities: the degree to which health care delivery or other site for providing services to veterans reflect VA's metrics regarding market area health system planning; the provision of effective and efficient access to high-quality health care and services to veterans; the extent to which real property that no longer meets the needs of the Federal Government could be reconfigured, repurposed, consolidated, realigned, exchanged, outleased, repurposed, replaced, sold, or disposed; VHA's need to acquire infrastructure or facilities that will be used for the provision of health care and service to veterans; the extent to which operation and maintenance costs are reduced through consolidating, collocating, and reconfiguring space and through realizing other operational efficiencies; the extent and timing of potential costs and savings, including the number of years such costs and savings will be incurred, beginning with the date of completion of the proposed recommendation; the extent to which the real property aligns with VA's mission; the extent to which any action would impact other VA missions including education, research, or emergency preparedness; local stakeholder inputs and any factors identified through public field hearings; capacity and commercial market assessments; and, any other factors VA determines appropriate.

Section 103(b)(3)(A) of the bill would require VA to assess the capacity of each Veterans Integrated Service Network (VISN) and VA medical facility to furnish hospital care or medical services to veterans and require each assessment to:

Identify existing deficiencies in the furnishing of care and services to veterans and how such deficiencies may be filled by entering into contracts or agreements with community health care providers or other entities under other provisions of law and changing the way care and services are furnished at such VISNs or VA medical facilities (including through extending hours of operation, adding personnel, and expanding treatment space through construction, leasing, or sharing of health care facilities);

Forecast, based on future projections and historical trends, both the short-term and long term demand in furnishing care and services at such VISN or VA medical facility;

Consider how demand affects the need to enter into contracts or agreements;

Consider the commercial health care market of designated catchment areas conducted by a non- governmental entity; and,

Consider the unique ability of the Federal government to retain a presence in a rural area otherwise devoid of commercial health care providers or from which such providers are at risk of leaving.

Section 103(b)(3)(B) of the bill would require the Secretary to consult with VSOs and veterans served by each VISN and medical facility affected by the assessments.

Section 103(b)(3)(C) of the bill would require VA to submit the local capacity and commercial market assessments to HVAC/ SVAC with the recommendations regarding the modernization or realignment of VHA facilities and to make the assessments publicly available.

Section 103(b)(4) of the bill would require VA to include with the recommendations regarding the modernization or realignment of VHA facilities a summary of the selection process that resulted in the recommendation for each VHA facility and a justification for each recommendation and to transmit the summaries and justifications not later than 7 days after the date of transmittal to HVAC/SVAC.

Section 103(b)(5) of the bill would require VA to consider all facilities equally without regard to whether the facility has been previously considered or proposed for reuse, modernization, or realignment.

Section 103(b)(6) of the bill would require VA to make all information used by VA to prepare a recommendation available to Congress, the Commission and the Comptroller General.

Section 103(b)(7) of the bill would require each VA Under Secretary, VISN director, VA medical center director, VA program office director, and each person who is in a position of duties which includes personal and substantial involvement in the preparation and submission of information and recommendations concerning the modernization or realignment of VHA facilities to certify that information submitted to VA or to the Commission concerning the modernization or realignment of VHA facilities is accurate and complete to the best of that person's knowledge and belief.

Section 103(c)(1)(A) and (B) of the bill would require the Commission to conduct public hearings on the Secretary's recommendations regarding the modernization or realignment of VHA facilities, to include required public hearings in regions affected by a VA recommendation for the closure of a facility and, to the greatest extent practicable, public hearings in regions affected by a recommendation for other (non-closure) action by VA.

Section 103(d)(1)(C) of the bill would require each Commission public hearing to include, at a minimum, a local veteran who is enrolled in the VA healthcare system and identified by a local VSO and a local elected official.

Section 103(c)(2)(A) of the bill would require the Commission--not later than January 31, 2023--to transmit to the President a report and analysis of the recommendations made by VA together with the Commission's recommendations for the modernization or realignment of VHA facilities.

Section 103(c)(2)(B) of the bill would authorize the Commission to change a recommendation made by VA for the modernization or realignment of a VHA facility only if the Commission: determines that VA deviated substantially from VA's final criteria in making such recommendation; determines that the change is consistent with the final criteria; publishes a notice of the proposed change in the Federal Register not less than 45 days before transmitting the Commission's recommendations to the President; and, conducts public hearings on the proposed change.

Section 103(c)(3) of the bill would require the Commission to explain and justify any recommendation made by the Commission that is different from the recommendations made by VA in the Commission's report that is transmitted to the President and to transmit the copy of such report to HVAC/SVAC on the same day that it is transmitted to the President.

Section 103(c)(4) of the bill would require the Commission--after January 31, 2023--to promptly provide information used by the Commission in making its recommendations to any Member of Congress upon request.

Section 103(d) of the bill would require the President--not later than February 15, 2023--to transmit to the Commission and to Congress a report containing the President's approval or disapproval of the Commission's recommendations.

If the President approves of the Commission's recommendations, requires the President to transmit a copy of the Commission's recommendations to the Congress together with a certification of approval.

If the President disapproves of the Commission's recommendations in whole or in part, requires the President to transmit to the Commission and the Congress the reasons for that disapproval and require the Commission--not later than March 15, 2023--to transmit a revised list of recommendations to the President.

If the President approves of the Commission's revised recommendations, requires the President to transmit a copy of the revised recommendations to Congress together with a certification of such approval.

Would require the process for modernization or realignment of VHA facilities to be terminated, if the President does not transmit a certification of approval to Congress, by March 30, 2023.

Section 104. Actions regarding infrastructure and facilities of the Veterans Health Administration

Section 104(a) and (b) of the bill would require the Secretary, in the absence of a resolution of Congressional disapproval having been enacted within 45 days of Presidential transmission of the report to Congress or the adjournment of the 117th Congress, to begin implementing the recommendations made in the report under Section 103(d) within 3 years the President having transmitted the report to Congress. Implementation includes the planning of modernizations or realignments. Days on which either House is not in session because of adjournment of more than three days shall be excluded from the computation of the period.

Section 104(c) of the bill would authorize any obligation or expenditure of funds for major medical facility leases or projects made by the report.

Section 105. Implementation

Section 105(a) of the bill would allow the Secretary to take such actions as necessary to implement the modernization or realignment of any VHA facility, perform environmental mitigation, abatement or restoration of facilities being closed or realigned to include compliance with historical preservation requirements, provide outplacement assistance to employees of the Department, reimburse Federal agencies for services, and enter into Enhanced Use Lease contracts.

Section 105(b) of the bill would outline how the Secretary may dispose or transfer surplus properties slated for disposal or realignment under this Act, including consultation with state and local governments for proper disposal of real property and roads.

The Secretary may transfer title to a redevelopment authority for a facility for the purposes of a federal lease for a term not to exceed 50 years. Such lease may not require rental payments by the government.

If the lease involves a substantial portion of the facility, the department or agency may obtain facility services from the redevelopment authority as a provision of the lease. Such services shall not include municipal services, firefighting or security guard functions.

Provisions of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 apply. Nothing in this title shall limit or otherwise affect application of McKinney-Vento Homeless Assistance Act provisions.

Section 105(c) of the bill would exempt the Secretary from the National Environmental Policy Act of 1969 in carrying out the recommendations of this title.

Section 105(d) of the bill would exempt the Secretary from any legal prohibition of closing or realigning VHA facilities included in any appropriation or authorization Act.

Section 105(e) of the bill would provide the authority for the Secretary to transfer a deed of a VHA facility to a party who agrees to perform the environmental compliance activities that are required under federal and state laws. Such transfer may occur if the Secretary certifies to Congress that all costs to be paid by the Department are equal to or greater than market value or if such cost are lower than the recipient of the transfer agrees to pay the difference.

Section 106. Department of Veterans Affairs asset and infrastructure review account

Section 106(a) of the bill would establish a single account in the ledgers of the U.S. Treasury with which the Secretary may carry out this Act.

Section 106(b) of the bill would allow for the credit to the account any funds authorized and appropriated and any proceeds from a lease, transfer, or disposal of property.

Section 106(c) of the bill would allow the Secretary to use the account for the purposes of carrying out this title, to cover property management and disposal costs, to cover costs of supervision, inspection, overhead, engineering, and design, or for any other purposes in support of the Departments mission and operations.

Section 106(d) of the bill would require the Secretary to establish a consolidated budget display detailing the amount and nature of the credits to and expenditures from, separately details environmental remediation costs, specifies and details any transfers. This information shall be submitted to Congress as part of the Presidential budget submission.

Section 106(e) of the bill would require that upon closure of the account any unobligated funds, upon submission of an accounting report to HVAC/SVAC and the Committees on Appropriations of the House of Representatives and the Senate, shall be transferred to the Secretary.

Section 107. Congressional consideration of commission report

Section 107(a) of the bill would describe the term "joint resolution" as a resolution introduced within the 45-day period beginning on the date on which the President transmits the report to congress which does not include a preamble and contains specific language as to the resolving clause and title.

Section 107(b) of the bill would outline the means by which the House of Representatives shall consider such resolution to include reporting and discharge, proceeding to consideration, and consideration.

Section 107(c) of the bill outlines the means by which the Senate shall consider such resolution to include referral, reporting and discharge, and floor consideration to include consideration, vote on passage, and ruling of the chair on procedure.

Section 107(d) of the bill would prohibit any amendment to a joint resolution of disapproval.

Section 107(e) of the bill would define the coordination between either House upon receipt of companion measures.

Section 107(f) of the bill would state that this section is applicable only with respect to the procedure followed in that House in the case of a joint resolution and supersedes other rules only to the extent that it is inconsistent with such rules, with the recognition of the constitutional right of either House to change the rules.

Section 108. Other matters

Section 108(a) of the bill would require the online publication of all communications, within 24 hours, between the Secretary, the Commission and the President with regards to this title.

Section 108(b) of the bill would prohibit the VA from pausing or stopping any scheduled construction, leasing, long- term planning project activities, or budgetary processes with regards to the construction during the activities of the Commission, President, or Congress in carrying out this title.

Section 109. Definitions

Section 109 of the bill would define:

"Account" as the VA AIR Account established by section 106.

"Commission" as the AIR Commission established by section 102.

"date of approval" with respect to a modernization or realignment of a VHA facility as the date on which the authority of Congress to disapprove a recommendation of under this title expires.

"VHA facility" as: (1) any land, building, structure, or infrastructure (including any medical center, nursing home, domiciliary facility, outpatient clinic, center that provides readjustment counseling, or leased facility) that is under VA's jurisdiction, under VHA's control, and not under GSA's control; and, (2) with respect to a collocated VA facility, includes any land, building, or structure that is under VA's jurisdiction, under control of another VA administration, and not under GSA's control.

"infrastructure" as improvements to land other than buildings or structures.

"modernization" as any action required to align the form and function of a VHA facility to the provision of modern day health care (including utilities and environmental control systems), the closure, construction purchase, lease, or sharing of a VHA facility, and realignments, disposals, exchanges, collaborations, between VA and other Federal entities and strategic collaborations between VA and non-Federal entities.

"realignment" with respect to a VHA facility to include any action that changes the number of or relocates services, functions, and personnel positions; disposals or exchanges between VA and other Federal entities including DOD; and, strategic collaborations between VA and non-Federal entities.

"Secretary" to mean the Secretary of Veterans Affairs.

"redevelopment authority" to mean, in the case of a VHA facility closed or modernized under this title, any entity (including an entity established by a State or local government) recognized by VA as the entity responsible for developing the redevelopment plan with respect to the facility or for directing the implementation of such a plan.

"redevelopment plan" in the case of a VHA facility to be closed or realigned to mean a plan that is agreed to by the local redevelopment authority with respect to the facility and provides for the reuse or redevelopment of the real property and personal property of the facility that is available for such reuse and redevelopment as a result of the closure or realignment of a facility.

TITLE II--IMPROVEMENTS TO CONSTRUCTION MANAGEMENT AND LEASES

Section 201. Modification of thresholds for major medical facility projects and major medical facility leases

Section 201(a) of the bill would change the definition of a major medical facility project to that of one involving a total expenditure of more than $20,000,000. The term does not include acquisitions by exchange, non-recurring maintenance, or in the case of a shared facility, when the Departments estimated share is below $200,000,000. The definition of a major medical facility lease is changed to reflect an average annual rent that is equal to or greater than the amount specified by GSA.

Section 201(b) of the bill would establish an effective date on or after enactment of this Act.

Section 202. Submission of prospectuses of proposed minor medical facility projects

Section 202 of the bill would require the VA to include the prospectus of facility projects presented to Congress under Section 8104(b) of Title 38, USC that require a total expenditure of more than $10,000,000 and less than $20,000,000.

Section 203. Improvement to training of construction personnel

Section 203 of the bill would require that the Secretary implement a covered training, curriculum and covered certification program that models existing training curricula and certification programs as established under Chapter 87 of Title 10.

Section 204. Authority to plan, design, construct, or lease shared medical facilities.

Section 204 of the bill would grant the Secretary the authority to plan, design, construct, or lease a medical facility with other federal departments or agencies. Funds may be transferred from Construction, Major or Construction, Minor accounts based on the amount of the estimated costs to be shared by the Department.

Section 205. Enhanced use lease authority

Section 205 of the bill would grant the Secretary the authority to enter into enhanced-use leases for purposes other than supportive housing.

TITLE III--OTHER MATTERS

Section 301. Exception of limitations on awards and bonuses for recruitment, relocation, and retention

Section 301 of the bill would amend the restriction imposed on bonuses and awards included in the Veteran Access, Choice, and Accountability Act of 2014 by exempting bonuses and awards for the purposes of incentives for the recruitment, relocation and retention of VA employees.

Section 302. Appropriation of amounts

Section 302(a) of the bill would authorize and appropriate $2,100,000,000 for the Veterans Choice Program.

Section 302(b) of the bill would authorize and appropriate $500,000,000 for minor construction and nonrecurring maintenance of VHA medical facilities and requires the Secretary to notify HVAC/SVAC of the projects for which these funds shall be allocated.

Section 303. Assessment of health care furnished by the Department to veterans who live in the territories

Section 303 of the bill would require the Secretary to submit to HVAC/SVAC a report regarding the health care furnished by VA to veterans who live in the territories of American Samoa, Guam, Northern Mariana Island, Puerto Rico and the Virgin Islands. The report shall assess the ability of the Department to provide hospital care, medical, mental health, and geriatric services, as well as assess the feasibility of establishing a medical facility in any territory that does not contain such a facility.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, and existing law in which no change is proposed is shown in roman):

TITLE 38, UNITED STATES CODE

DISSENTING VIEWS

We have serious concerns about H.R. 4243, the VA Asset and Infrastructure Review (AIR) Act outlined below in three parts. Title I of this bill seeks to dramatically alter how and where the Department of Veterans. Affairs (VA) delivers health care to veterans before fully understanding not only how a new consolidated community care program will function but who would be eligible to use it (Part 1). Moreover, the process laid out in Title I for how the Commission is selected and operates in addition to the erosion of Congressional authority causes major consternation (Part 2). Furthermore, Section 302(a) in Title III, which provides an additional $2.1 billion in emergency funding for the Veterans Choice Program (VCP)--a program that was established as temporary measure to deal with an access to care crisis--suggests the Majority is happy to continue kicking the proverbial can down the road (Part 3). Taken together, the contents of Title I and III, without corresponding legislation moving out of Committee to address the future of community care, one might view the Committee's activities as a pathway towards the privatization of veterans' care--facilities around the country would potentially be closed while Congress continues to haphazardly fund a flawed short-term program, the Veterans Choice Program.

PART I

While the Commission on Care recommended a Base Realignment and Closure (BRAC)-like review was needed for VA, declaring it would, "offer a level of rigor far beyond what currently exists for repurposing and selling capital assets",1 we are not convinced such a model is entirely appropriate in the case of VA. That being said, the Minority is not opposed to the concept of realigning VA's capital assets to right-size the agency. To the contrary. We believe that process is long overdue.

1Commission on Care, page 60, June 30, 2016, "Commission on Care Final Report," https://s3.amazonaws.com/sitesusa/wp-content/uploads/ sites/912/2016/07/Commission-on-Care_Final-Report_063016_FOR-WEB.pdf.

We are, however, unequivocally opposed to the BRAC-like process elements of the Commission on Care outlined in what became known as the "Strawman Document." In March 2016, seven Commissioners (Blom, Cosgrove, Hickey, Johnson, Selnick, Steele and Webster) produced a document which was meant to serve as a basis for discussions. The document stated:

. . . VA facilities that are under-utilized will be dispensed with. No new facility construction or major renovations will occur. A BRAC-like process will begin to close the other facilities. Over time, the VA will become primarily a payor . . .2

2Commission on Care, March 18, 2016, "Strawman Document," http://s3.amazonaws.com/sitesusa/wp-content/uploads/sites/912/2016/03/ 2016.3.18-Proposed-Strawman-Assessment-and-Recommendation.pdf.

For more than a decade the Committee has heard from The Independent Budget veterans service organizations (IBVSOs)-- comprised of The Veterans of Foreign Wars (VFW), Disabled American Veterans (DAV) and Paralyzed Veterans of America (PVA)--that VA has not been provided the resources it needs to meet veteran demand for services. In its FY 2018 budget book, the IBVSOs stated:

In 2004, VA's facilities were utilized at about 80 percent of their planned capacity. Today they are utilized at 109 percent of capacity, even though based on the actual conditions of the facilities they should be operating at just under 80 percent. Over the past few years, the VA budget request and the Congress's VA construction appropriation has fallen far short of the actual need . . . A VA budget that does not adequately fund facility maintenance and construction will continue to negatively impact the quality and timeliness of veterans' health care.3

3The Independent Budget, FY 2018: Critical Issues, pg. 26, http:/ /www.independentbudget.org/2018/FY18_ci.pdf.

The IBVSO's long held sentiment was echoed and even underscored in the Independent Assessment, a congressionally mandated report to review 12 areas of VA's health care delivery systems and management processes following the access to care crisis in 2014. Authors noted, "The capital requirement for VHA to maintain facilities and meet projected growth needs over the next decade is two to three times higher than anticipated funding levels, and the gap between capital need and resources could continue to widen."4

4CMS Alliance to Modernize Healthcare Federally Funded Research and Development Center, September 1, 2015, "Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of Veterans Affairs," pg K-1, https://www.va.gov/opa/ choiceact/documents/assessments/Integrated_Report.pdf.

While the Committee understands the need for VA to realign its facilities, the Committee believes that this realignment will likely, and should likely, result in the need for additional construction and leasing endeavors. In its FY 2018 budget submission, VA data illustrated every VISN across the country has greater demand for outpatient care than capacity to provide it.5 Providing increased access to care in the community will not be the answer in all instances. HCA also explained in testimony to the Subcommittee on Health that a lack of facility space for use by providers significantly affected VA provider's ability to meet national standards of productivity.6 The Committee agrees that any realignment of VA's assets and infrastructure should be based on sound data and the expected demand of veterans on VA-based services. However, absent a permanent VA health care program, the future demand on VA's services is impossible to assess.

5VA FY 2018 Budget Submission--Vol. 4, Pg. 8.3-3 https:// www.va.gov/budget/docs/summary/ fy2018VAbudgetVolumeIVconstructionLongRangeCapitalPlanAndAppendix.pdf.

6United States Cong. House Committee on Veterans' Affairs, Subcommittee on Health Oversight Hearing--"Clinical Productivity and Efficiency in the Department of Veterans' Affairs Healthcare System." July 13, 2017. 115th Cong. 1st sess. Washington: GPO, 2017 (statement from Jonathan B. Perlin, President of the Clinical Services Group and Chief Medical Officer at HCA Heatlhcare, Inc.).

As written, H.R. 4243 currently presents a static, one-off event. If VA is to be successful in delivering health care in the 21st century, a process that in and of itself is rapidly changing due to advances in medicine, to an evolving veteran population, the Department needs a dynamic process to both assess and address its future capital asset needs. In its 2015 review of veteran demographics as a part of the Independent Assessment, the RAND Corporation noted while the overall veteran population would decrease by 19 percent over the next 10 years, it did envision a substantial geographical shift in where veterans reside.7 In addition, in its FY 2018 budget submission, VA highlighted the fact female veterans are the fastest growing cohort, expected to grow from 8% in 2016 to 10% by 2026,8 and how it is also expecting a bubble of aging veterans requiring long-term care and services over the coming decades (the number of 85-year-old enrollees will almost double over the next 20 years).9

7CMS Alliance to Modernize Healthcare Federally Funded Research and Development Center, September 1, 2015, "Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of Veterans Affairs," https://www.va.gov/opa/choiceact/ documents/assessments/Integrated_Report.pdf.

8VA FY 2018 Budget Submission--Vol. 2, pg. VHA 373 https:// www.va.gov/budget/docs/summary/ fy2018VAbudgetVolumeIImedicalProgramsAndInformationTechnology.pdf.

9Ibid.

While a commission could help to make some initial recommendations about realigning capital assets within VA's system, how are future decisions meant to be made under this legislation? A one-time event serves only as a brief snapshot in time and might take upwards of a decade to complete all of the recommendations. By that point, due to the factors outlined above, the recommendations made could be obsolete. It is our belief, H.R. 4243 would be greatly enhanced if it had included language that would establish a quadrennial veterans review, modeled after the Defense Department's long-term planning document that was established in 1997, as a means of better projecting the needs of veterans programs in the future. Such a review would not only look at capital infrastructure needs, but identify gaps in internal capacity within VA and how to address them in the immediate and long-term, such as offering veterans access to care in the community and reforming the overly burdensome hiring process.

The Majority contends the AIR Commission process would be "data-driven". Unfortunately, VA's track record on data integrity and reliability is poor. For years, this Committee has struggled with this issue as have the other stakeholders that review the Agency such as the Office of Inspector General and GAO. In fact, in its October 12, 2017, written testimony to the Committee, GAO recommended we include the audit community in the process early on to promote confidence in data accuracy noting "DoD Inspector General and military department audit agencies played key roles in identifying data limitations, pointing out the need corrections, and improving the accuracy of the data used in the process," adding, "In their oversight roles, the audit organizations, which had access to relevant information and officials as the process evolved, helped to improve the accuracy of the data used in the BRAC process and thus strengthened the quality and integrity of the data used to develop closure and realignment recommendations."10 Once again, a critical issue that is not addressed in H.R. 4243.

10United States Cong. House Committee on Veterans' Affairs Oversight Hearing--"Realignment May Benefit from Adopting Elements of Defense Base Realignment and Closure Process, Provided Process Challenges are Addressed" October 12, 2017. 115th Cong. 1st sess. Washington: GPO, 2017 (statement from David J. Wise, Director of Physical Infrastructure Issues, Government Accountability Office).

Furthermore, attempting to determine VA's future capital asset need and/or footprint without fully appreciating the extent of the new community care network of providers is futile. During the full committee markup of H.R. 4243, on November 8, 2017, Mr. Takano reflected the thoughts of other Minority Members on the Committee when he remarked:

I am afraid we are putting the cart before the horse by moving this legislation forward today. This committee is still grappling with a successor for the Choice program, as I highlighted in my earlier remarks. A new plan that streamlines the eligibility and pathways for veterans to get their care in the community will have a significant effect on the VA's capacity needs. Considering how to realign VA's facilities before we have the program up and running, let alone agreed to in Congress, seems like a recipe for disaster. I believe we need to complete our work on the community care legislation before we consider how best to realign the VA's facilities and infrastructure.11

11United States Cong. House Committee on Veterans' Affairs Markup- "H.R. 4243, the VA Asset and Infrastructure Review (AIR) Act" November 8, 2017. 115th Cong. 1st sess. Washington: GPO, 2017 (comments by The Honorable Mark Takano, Representative from California's 41st District, U.S. House of Representatives).

In addition, given H.R. 4243 is proposing to use a static process, any changes that occur to our Nation's broader health care system, as that debate regarding the future of the Affordable Care Act (ACA) has yet has to reach a conclusion, could have a serious impact on where millions of veterans seek their care. VA could see an influx of new enrollees around the country as benefits under the ACA are repealed. For many non- elderly veterans, VA would become their safety net. In a 2017 report, the RAND Corporation found:

By increasing non-VA health insurance coverage for VA patients, the ACA likely reduced demand for VA care; the authors estimate that, if the gains in insurance coverage that occurred between 2013 and 2015 had not occurred, nonelderly veterans would have used about 1 percent more VA health care in 2015: 125,000 more office visits, 1,500 more inpatient surgeries, and 375,000 more prescriptions. Recent congressional proposals to repeal and replace the ACA would increase the number of uninsured nonelderly veterans and further increase demand for VA health care.12

12Dworsky, Michael, Carrie M. Farmer and Mimi Shen. Veterans' Health Insurance Coverage Under the Affordable Care Act and Implications of Repeal for the Department of Veterans Affairs. Santa Monica, CA: RAND Corporation, 2017. https://www.rand.org/pubs/ research_reports/RR1955.html. Also available in print form.

We are concerned VA does not have appropriate staffing or expertise to carry out both the initial data collection requirements or ensure recommendations that are approved are ultimately implemented. Moreover, given the frequent changes in key leadership positions within VA Central Office (VACO) or the fact many of these positions are frequently held by interim or acting figures, ensuring individuals are in place who are capable of driving the work forward may be a barrier to success. This legislation does nothing to address this issue. In its written testimony to the Committee on October 12, 2017, GAO highlighted not only the importance of establishing an organizational structure within the agency but the need to ensure there is continual senior leadership attention.13 It also recognizes the need for an oversight mechanism to improve accountability for implementation.14 GAO suggests DoD's eventual inclusion of these items improved not only the process but the overall outcomes.15

13United States Cong. House Committee on Veterans' Affairs Oversight Hearing- "Realignment May Benefit from Adopting Elements of Defense Base Realignment and Closure Process, Provided Process Challenges are Addressed" October 12, 2017. 115th Cong. 1st sess. Washington: GPO, 2017 (statement from David J. Wise, Director of Physical Infrastructure Issues, Government Accountability Office).

14Ibid.

15Ibid.

Finally, it is important to note that closing facilities through a BRAC will not yield immediate results. In fact, in his testimony before the Committee on October 12, 2017, Mr. Lepore, the director of Defense Capabilities and Management at GAO, indicated DoD has still not reached the payback period on the 2005 BRAC--it cost $35.1 billion to implement those recommendations.16 Only next year will they start to achieve savings. Congress must not begin this endeavor under the false notion that billions of dollars will be saved. In fact, given a number of the points raised above, the process of rightsizing the Agency could end up costing taxpayers tens of billions of dollars in order to fulfil the promise this nation made to its veterans.

16United States Cong. House Committee on Veterans' Affairs Oversight Hearing--"Realignment May Benefit from Adopting Elements of Defense Base Realignment and Closure Process, Provided Process Challenges Are Addressed." October 12, 2017. 115th Cong. 1st sess. Washington: GPO, 2017 (statement by Brian J. Lepore Director of Defense Capabilities and Management, Government Accountability Office).

Continues with Part 3 of 3

TARGETED NEWS SERVICE: Myron Struck, editor; 703/304-1897; [email protected]; https://targetednews.com