Bollinger, John C., Deputy Executive Director; Paralyzed Veterans of Prepared statement of Mr. Bollinger, with attachments Burns, Chuck, National Service Director, AMVETS Prepared statement of Mr. Burns Cullinan, Dennis M., Deputy Director, National Legislative Service, Veterans of Foreign Wars of the United States Prepared statement of Mr. Cullinan, with attachment Kizer, Kenneth W., M.D., M.P.H., Under Secretary for Health, Veterans Health Administration, Department of Veterans Affairs; accompanied by Gregg Pane, Chief Policy, Planning, and Performance Officer, Department of Veterans Affairs, and Walter Hall, Assistant General Counsel, Depart- 42 132 40 119 Prepared statement of Colonel Partridge, with attachments Rhea, Larry D., Deputy Director of Legislative Affairs, Non Commissioned Prepared statement of Dr. Spagnolo, with attachment Van de Water, Paul N., Assistant Director for Budget Analysis, Congressional 4 Prepared statement of Mr. Van de Water 62 Vitikacs, John R., Assistant Director, National Veterans Affairs and Rehabili- tation Commission, The American Legion 26 Prepared statement of Mr. Vitikacs 86 H.R. 1362 AND DRAFT BILLS REGARDING THIRD PARTY REIMBURSEMENT AND PHYSICIANS' SPECIAL PAY PROVISIONS THURSDAY, MAY 8, 1997 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HEALTH, COMMITTEE ON VETERANS' AFFAIRS, Washington, DC. The subcommittee met, pursuant to call, at 9:30 a.m., in room 340, Cannon House Office Building, Hon. Cliff Stearns (chairman of the subcommittee) presiding. Present: Representatives Stearns, Cooksey, Gutierrez, Evans, Kennedy, Doyle, and Peterson. Also Present: Representative Snyder. OPENING STATEMENT OF CHAIRMAN STEARNS Mr. STEARNS. Good morning everybody. The Veterans' Health Subcommittee hearing on legislative proposals will convene. And to start off, I have an opening statement, and then I'll call on my colleagues. In meeting recently with representatives of major veterans organizations, the number one concern I heard was VA health care funding. That concern also comes across loud and clear in our committee's report to the Budget Committee on the VA fiscal year 1998 medical care budget. Our expression of concern, of course, was based largely on the Administration's unprecedented reliance on the so-called thirdparty collections to meet its budget needs for fiscal year 1998. There are many problems with this concept, not the least is that it asks for an appropriation of some $600 million less than the Department acknowledges is needed. I know many of my colleagues share my frustration with that budget and the Administration's implicit message that Congress will be to blame if it does not pass legislation to allow VA to retain third-party collections. Our committee is on record as recommending that the VA medical care funding needs in the amount of $17.6 billion be met through appropriations. Nothing has caused us to change that position. We are also on record as supporting retention of medical care cost recoveries as a mechanism to provide the VA with a new revenue stream. With those considerations as our framework, we take up a draft bill today to allow VA to retain third-party collections. The Department has set a goal of developing sufficient new revenues so that 10 percent of its funding would come from non-appropriated funds. In that connection, we will also take testimony today on H.R. 1362-a bill which many of our members have co-sponsored. That bill would establish a demonstration program to test Medicare reimbursement for VA care provided to certain Medicare eligible veterans. Veterans have long advocated such a reimbursement plan, and it is time that this concept get a fair test. We welcome testimony on this important measure. As we develop legislation to help address critical VA funding issues, we take note of the many changes underway in the VA health care system today. Among these changes we're seeing VA shift from a hospital-based system to one which relies increasingly on outpatient care. With that, we're also seeing some very real and disruptive downsizing. This raises some serious personnel issues, and we also look forward to testimony on a draft bill to address one of those issues. We have three panels of witnesses this morning to offer views on these bills. But before we go on to our first panel, I'd like to recognize my friend, Mr. Gutierrez, the ranking member, for an opening statement. OPENING STATEMENT OF HON. LUIS V. GUTIERREZ Mr. GUTIERREZ. Thank you so much, Mr. Chairman. Thank you, Chairman Stearns, for convening this hearing to discuss Medicare and third-party reimbursements, and VA physicians' special pay legislation. The importance of these issues for the future of veterans' health care in our Nation cannot be overstated. As the members of this committee know, the Department of Veterans Affairs has identified the collection of Medicare and thirdparty reimbursements as an important source of income to meet the future needs of veterans throughout America. It is part of their 30-20-10 plan. The VA intends to make up 10 percent of this funding from non-appropriated sources such as Medicare and thirdparty payments. I was pleased that this committee agreed that fiscal year 1998 was too soon to depend on these reimbursements to make up for decreasing appropriations. However, the support of this committee, the Committee on Ways and Means, and both houses of Congress, is required for the VA to gain the authority to collect these nonappropriated resources. Prompt action is needed on the legislation we will discuss today. The Chairman and I have discussed-are both original co-sponsors of H.R. 1362, the Veterans' Medicare Reimbursement Demonstration Act. H.R. 1362 is designed to enable the VA to provide care to Medicare eligible veterans without further burdening the existing VA health care infrastructure. I am particularly pleased that this legislation will establish a fee for service structure instead of a managed care system. VA outpatient clinics are already extended beyond their designated capacity. Managed care may only contribute to more strains on the VA's outpatient system. The fee for service approach prevents this possibility while ensuring that Medicare eligible veterans may still use their benefits at a VA medical facility. In addition, this legislation may also save the Medicare Trust Fund 5 percent per year for services performed by the VA during the life of this demonstration project. This is a fact seemingly overlooked by CВО. While I recognize the complexities inherent to Medicare subvention, the need to find additional resources for the VA to meet its obligations to veterans mandates that we make this option work. The best way to gauge the effects of subvention is by implementing this demonstration project. Third-party reimbursements are vital as well. Currently, the VA has the authority to collect these payments, but is unable to retain a majority of these premiums. Instead, they are returned to the U.S. Treasury for deficit reduction under pay as you go restrictions. I am hopeful that this committee and the 105th Congress will realize the need to allow the VA to keep these precious dollars. If we are truly committed to a more efficient, cost effective, and user friendly VA, then we must adequately fund the system throughout this period of transition. This is the most important and most responsible step we can take for the men and women who served and sacrificed in the Nation's armed forces. I look forward to hearing from the panelists today addressing these issues. Thank you, Mr. Chairman. Mr. STEARNS. Thank you. Dr. Cooksey, would you have an opening statement? Mr. STEARNS. Okay. We also welcome Dr. Snyder, if he has some opening comments. He is not a member, as I understand, of the panel, but he is certainly welcome to participate. Mr. SNYDER. I wanted to thank you, Mr. Chairman, for letting me sit in on this hearing. You even have my name here and decaf coffee. I'm ready to roll. Thank you very much. Mr. STEARNS. Thanks for your interest, and we welcome your participation. With that, we'll start with panel number 1. We have Paul Van de Water, Assistant Director for Budget Analysis, Congressional Budget Office. Paul, we'll start with you first. |