oversight

VA Health Care: Estimating Resources Needed to Provide Community Care

Published by the Government Accountability Office on 2019-06-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States Government Accountability Office
             Report to Congressional Requesters




             VA HEALTH CARE
June 2019




             Estimating Resources
             Needed to Provide
             Community Care




GAO-19-478
                                               June 2019

                                               VA HEALTH CARE
                                               Estimating Resources Needed to Provide Community
                                               Care
Highlights of GAO-19-478, a report to
congressional requesters




Why GAO Did This Study                         What GAO Found
VA continues to focus on the use of            To help ensure that veterans are provided timely and accessible health care
community care to address challenges           services, the Department of Veterans Affairs (VA) may purchase care from non-
with veterans’ access to health care           VA providers, known as community care. VA obligated $14.9 billion for
services at VA medical facilities. In          community care in fiscal year 2018, an increase of $6.7 billion (about 82 percent)
fiscal year 2019, VA plans to                  since fiscal year 2014. The number of veterans authorized to use community
consolidate the Veterans Choice                care increased from 1.3 million to 1.8 million during this period. By fiscal year
Program and several other community            2021, VA estimated obligations to increase to $17.8 billion, and officials estimate
care programs under a single new               at least 1.8 million veterans will continue to use this care.
Veterans Community Care Program.
GAO and others have previously                 VA Health Care Obligations, Fiscal Years 2014 through 2021
reported on past challenges VA has
faced regarding the reliability,
transparency, and consistency of its
budget estimates for health care.
GAO was asked to review VA’s use of
community care and efforts to develop
budget estimates for this care. This
report describes (1) trends in
obligations for and utilization of VA’s
community care programs since fiscal
year 2014, (2) how VA develops its
community care budget estimate and
any subsequent changes made to this
estimate, and (3) how VA’s actual
obligations for community care
compared with estimated obligations
for fiscal years 2017 and 2018.                Note: VA estimated obligations for fiscal year 2019 to reflect $1.8 billion in anticipated savings as a
                                               result of a VA policy change regarding the timing of certain community care obligations.
GAO reviewed actual obligation and
utilization data for fiscal years 2014         VA uses a projection model to estimate the majority of resources needed to
through 2018, as well as estimated             provide health care services. Beginning with the President’s fiscal year 2018
obligations for fiscal years 2019              budget request, VA updated its model to estimate the resources needed to
through 2021. GAO also reviewed                purchase over 40 community care services accounting for over 75 percent of
available VA documentation on the              VA’s community care budget estimate. These services include outpatient and
methods and data used to develop               inpatient care, among others. For the remainder of its community care budget
VA’s community care budget estimate            estimate, which includes nursing care in state-operated homes, VA uses other
that informed the President’s budget           methods based on historical utilization. VA’s budget estimate is successively
request for fiscal years 2017 through          reviewed at VA and the Office of Management and Budget (OMB) to inform the
2019. GAO also interviewed VA                  President’s budget request. VA identified several changes made during the
officials and contractors responsible for      review process to its budget estimate for fiscal years 2018 and 2019 to reflect
developing these estimates, and OMB            more current information related to utilization and costs, among other factors.
staff responsible for the federal budget.
VA and OMB reviewed a draft of this            VA’s actual obligations for community care for fiscal years 2017 and 2018 were
report. VA’s technical comments were           $1.2 billion and $2.2 billion higher, respectively, than originally estimated.
incorporated as appropriate.                   According to VA officials, this occurred for several reasons, including policy
                                               changes and increased costs for the Veterans Choice Program. To support
View GAO-19-478. For more information,         higher obligations, VA requested and received additional funding for the Veterans
contact Sharon M. Silas at (202) 512-7114 or
silass@gao.gov.
                                               Choice Program outside the annual appropriations process and used other
                                               funding sources, such as unobligated amounts from prior fiscal years.


                                                                                                  United States Government Accountability Office
Contents


Letter                                                                                            1
                       Background                                                                 6
                       VA Obligations for and Number of Veterans Authorized to Use
                         Community Care Have Grown from Fiscal Year 2014 through
                         Fiscal Year 2018                                                       12
                       VA Updated Its Projection Model to Develop Most of Its
                         Community Care Budget Estimate; Subsequent Changes
                         Reflect More Current Information and Other Factors                     19
                       VA’s Actual Obligations for Community Care in Fiscal Years 2017
                         and 2018 Were Higher than Estimated and Included Additional
                         Funding Received for the Choice Program                                27
                       Agency Comments                                                          33

Appendix I             The Department of Veterans Affairs’ Community Care Programs for
                       Veterans and Other Eligible Beneficiaries                                35



Appendix II            Budget Formulation Process for the State Home Per Diem Program
                       and Non-Veteran Community Care Programs                                  39



Appendix III           Health Care Services included in the Enrollee Health Care Projection
                       Model for Fiscal Year 2019                                           41



Appendix IV            Community Care Data Sources in the Department of Veterans Affairs’
                       Enrollee Health Care Projection Model                              44



Appendix V             GAO Contact and Staff Acknowledgments                                    47



Related GAO Products                                                                            48




                       Page i                          GAO-19-478 VA Community Care Budget Estimates
Tables
          Table 1: Description of Four Department of Veterans Affairs
                  Community Care Programs Expected to be Consolidated
                  under the Veterans Community Care Program, beginning
                  June 2019                                                           7
          Table 2: Review Process Resulting in the President’s Budget
                  Request for the Department of Veterans Affairs                    10
          Table 3: Department of Veterans Affairs’ Actual and Estimated
                  Community Care Obligations, Fiscal Years 2017 and
                  2018                                                              29
          Table 4: Comparison of Department of Veterans Affairs’ Actual
                  and Estimated Obligations for Selected Community Care
                  Service Types, Fiscal Year 2017                                   30
          Table 5: Comparison of Department of Veterans Affairs’ Actual
                  and Estimated Obligations for Selected Community Care
                  Service Types, Fiscal Year 2018                                   30
          Table 6: Department of Veterans Affairs’ Veterans Choice
                  Program Budget Timeline, Fiscal Years 2017 and 2018               32
          Table 7: Health Care Services Included in the Department of
                  Veterans Affairs’ Enrollee Health Care Projection Model,
                  Fiscal Year 2019                                                  41

Figures
          Figure 1: Basic Components of VA’s Enrollee Health Care
                   Projection Model (EHCPM)                                           9
          Figure 2: Department of Veterans Affairs’ Obligations for
                   Community Care as a Share of Total Obligations for VA
                   Health Care Services, Fiscal Years 2014 through 2021             13
          Figure 3: Department of Veterans Affairs’ Actual Community Care
                   Obligations for the Veterans Choice Program and Other
                   Community Care Programs, Fiscal Years 2014 through
                   2018                                                             15
          Figure 4: Department of Veterans Affairs’ Actual Community Care
                   Obligations by Service Type in Billions, Fiscal Year 2018        16
          Figure 5: Number of Veterans Authorized to Use Community
                   Care, Fiscal Years 2014 through 2018                             18
          Figure 6: Proportion of Department of Veterans Affairs (VA)
                   Community Care Budget Estimate Developed Using VA’s
                   Enrollee Health Care Projection Model (EHCPM), by
                   Service Type, Fiscal Year 2019                                   22



          Page ii                          GAO-19-478 VA Community Care Budget Estimates
Figure 7: Data Sources for the Department of Veterans Affairs’
         2017 Enrollee Health Care Projection Model                                       46




Abbreviations

CHAMPVA                    Civilian Health and Medical Program of the
                           Department of Veterans Affairs
EHCPM                      Enrollee Health Care Projection Model
OMB                        Office of Management and Budget
VA                         Department of Veterans Affairs
VHA                        Veterans Health Administration


This is a work of the U.S. government and is not subject to copyright protection in the
United States. The published product may be reproduced and distributed in its entirety
without further permission from GAO. However, because this work may contain
copyrighted images or other material, permission from the copyright holder may be
necessary if you wish to reproduce this material separately.




Page iii                                 GAO-19-478 VA Community Care Budget Estimates
                       Letter




441 G St. N.W.
Washington, DC 20548




                       June 12, 2019

                       The Honorable Jon Tester
                       Ranking Member
                       Committee on Veterans’ Affairs
                       United States Senate

                       The Honorable Mark Takano
                       Chairman
                       The Honorable Phil Roe
                       Ranking Member
                       Committee on Veterans’ Affairs
                       House of Representative

                       The Department of Veterans Affairs (VA) operates one of the nation’s
                       largest health care delivery systems. In fiscal year 2018, VA provided
                       care to over 6.9 million patients—mostly, veterans—and obligated about
                       $78 billion for that care. 1 The majority of veterans utilizing VA health care
                       services receive care in VA-operated medical facilities, including 170 VA
                       medical centers and over 1,000 outpatient facilities. However, veterans
                       may also obtain services from non-VA providers in the community—
                       known as community care—through one of several community care
                       programs aimed at helping ensure veterans receive timely and accessible
                       care. 2

                       In the last 5 years, Congress has taken steps to expand the availability of
                       community care for veterans. The Veterans Access, Choice, and
                       Accountability Act of 2014 created the temporary Veterans Choice
                       Program (Choice Program) and provided $10 billion in funding for

                       1
                        Veterans account for around 6.2 million of the 6.9 million VA patients. Patients are
                       individuals treated at a VA medical facility or whose treatment is paid for by VA. Patients
                       include veterans and their beneficiaries; active duty military; reserve personnel; and VA
                       employees.
                       2
                        For the purposes of this report, unless otherwise indicated, the terms “community care”
                       and “community providers” refer, respectively, to the services the department purchases
                       outside VA medical facilities for veterans and other eligible beneficiaries, and the non-VA
                       providers who deliver the services. Other eligible beneficiaries include veterans’ spouses
                       and dependent children that receive care from community providers under certain VA
                       health care programs. Additionally, for the purposes of this report, “community care
                       programs” includes programs and activities that provide community care whether under
                       statutory or under contractual authority.




                       Page 1                                    GAO-19-478 VA Community Care Budget Estimates
veterans to obtain health care services from community providers when
veterans faced long wait times or travel distances, or had other
challenges accessing care at VA medical facilities. 3 Implemented in fiscal
year 2015, the temporary authority and funding of the Choice Program
was separate from that of other previously existing programs through
which VA has the option to purchase care from community providers. 4 In
2018, the VA MISSION Act was enacted requiring VA to implement within
one year a permanent community care program—the Veterans
Community Care Program—that consolidates the Choice Program along
with several other community care programs. 5 The act, among other
things, requires VA to ensure veterans can receive timely and accessible
community care when certain criteria are met. The act also requires VA to
issue regulations—including defining certain eligibility criteria—to carry
out the Veterans Community Care Program. 6

The amount of funding VA receives for community care and other health
care services is predominately determined as part of the annual
appropriations process. In preparation, VA must annually develop an
estimate of the resources needed to provide community care and other
health care services for two fiscal years—known as its health care budget
estimate. 7 This budget estimate is one step in a complex, multistep
budget formulation process that culminates in an appropriations request
for VA health care in the President’s annual budget request to Congress.
Developing this estimate is inherently complex, as assumptions and
imperfect information are used to project the likely quantity and cost of the
health care services VA expects to provide. These projections are made 3
and 4 years into the future using data from the most recently completed
fiscal year. As such, VA’s budget estimate is prepared in the context of

3
Pub. L. No. 113-146, §§ 101, 802, 128 Stat. 1754, 1755-1765, 1802-1803 (2014).
4
VA implemented the Choice Program in November 2014.
5
 John S. McCain III, Daniel K. Akaka, and Samuel R. Johnson VA Maintaining Internal
Systems and Strengthening Integrated Outside Networks Act of 2018. Pub. L.No. 115-
182, tit. I, 132 Stat. 1393 (2018) (VA MISSION Act).
6
 For example, in February 2019, VA proposed new access standards based on average
drive times and wait times. For primary and mental health care services, VA is proposing a
30-minute average drive time standard and wait-time standard of 20 days. For specialty
care, VA is proposing a 60-minute average drive time standard and wait-time standard of
28 days. 84 Fed. Reg. 5629 (Feb. 22, 2019).
7
 VA’s annual appropriations for health care include advance appropriations that become
available one fiscal year after the fiscal year for which the appropriations act was enacted.




Page 2                                    GAO-19-478 VA Community Care Budget Estimates
uncertainties about the future—not only about program and veterans’
needs, but also about future economic conditions, presidential policies,
and congressional actions that may affect the funding needs in the year
for which the request is made. As a result of these uncertainties, the
amount of resources VA obligates during a fiscal year for health care
services may be different than the amount it estimates it will obligate in its
annual budget estimate. 8

We and others have previously identified challenges VA has faced
regarding the reliability, transparency, and consistency of its budget
estimates for medical services used to support the President’s budget
request. For example, in February 2012, we reported that VA’s estimated
savings from operational improvements for providing medical services—
used to support both the President’s budget request for fiscal year 2012
and VA’s advance appropriations request for fiscal year 2013—lacked
analytical support or were flawed, raising questions regarding the
reliability of the estimated savings. 9 Due to these issues and other
concerns related to veterans receiving timely care, we concluded that VA
health care is a high-risk area and added it to our High Risk List in 2015. 10

In light of these challenges and as VA looks to implement the VA
MISSION Act to consolidate a number of its community care programs for
veterans into a single program, you asked us to review VA’s use of


8
 An obligation is “a definite commitment that creates a legal liability of the government for
the payment of goods and services ordered or received, or a legal duty on the part of the
United States that could mature into a legal liability by virtue of actions on the part of the
other party beyond the control of the United States.” See GAO, A Glossary of Terms Used
in the Federal Budget Process, GAO-05-734SP (Washington, D.C.: Sept. 1, 2005).
9
 See GAO, VA Health Care: Challenges in Budget Formulation and Execution,
GAO-09-459T (Washington, D.C.: March 12, 2009); VA Health Care: Methodology for
Estimating and Process for Tracking Savings Need Improvement, GAO-12-305
(Washington, D.C.: Feb. 27, 2012); and VA’s Health Care Budget: In Response to a
Projected Funding Gap in Fiscal Year 2015, VA Has Made Efforts to Better Manage
Future Budgets, GAO-16-584 (Washington, D.C.: June 3, 2016). See also VA Office of
Inspector General, Veterans Health Administration: Audit of Non-VA Medical Care
Obligations (Washington, D.C.: Jan. 12, 2016).
10
  GAO maintains a high-risk program to focus attention on government operations that it
identifies as high risk due to their greater vulnerabilities to fraud, waste, abuse, and
mismanagement or the need for transformation to address economy, efficiency, or
effectiveness challenges. See GAO, High-Risk Series: Substantial Efforts Needed to
Achieve Greater Progress on High Risk Areas, GAO-19-157SP (Washington, D.C.: March
6, 2019).




Page 3                                    GAO-19-478 VA Community Care Budget Estimates
community care, as well as its efforts to develop a budget estimate for
this care. In this report, we describe

1. trends in obligations for and utilization of VA’s community care
   programs since fiscal year 2014,
2. how VA develops its estimate of the resources needed for community
   care and any subsequent changes made to this estimate, and
3. how VA’s actual obligations for community care compared to its
   estimated obligations for fiscal years 2017 and 2018.

To describe trends in obligations for VA’s community care programs since
fiscal year 2014, we reviewed data from VA’s budget justifications and
other data provided by VA on actual obligations for fiscal years 2014
through 2018—the most recently completed fiscal year for which these
data were available. 11 We also reviewed the budget justification data on
estimated obligations for fiscal years 2019 through 2021. 12 The
community care data we reviewed reflected obligations for all VA
community care programs for veterans and other eligible beneficiaries,
such as spouses and dependent children. For comparison purposes, we
reviewed data on VA’s total obligations for health care services, including
care provided in VA medical facilities and community care. We also
reviewed data on actual obligations by service type—such as dental care,
inpatient care, long-term care, outpatient care, and prosthetics. 13 To
describe trends in utilization of community care programs, we reviewed
VA data on the number of veterans authorized to use community care
services, and the types and number of community care services those


11
  The budget justification provides Congress with estimates and other information that
support the policies and spending decisions represented in the President’s budget
request, including information on what VA plans to achieve with the resources requested.
In particular, VA’s budget justification includes detailed information on estimates of funding
needed for ongoing health care services and health-care-related initiatives proposed by
the Secretary of Veterans Affairs and the President. As such, VA’s budget justification is
used to provide Congress with important information about agency priorities, as well as
the implications of the requested amounts for VA’s provision of health care services to
veterans.
12
  Estimated obligations for fiscal year 2021 informed the advance appropriation request
for that fiscal year.
13
   According to VA officials, the actual obligation amounts for certain service types for
fiscal years 2016 through 2018 were understated due to the way certain adjustments were
accounted for in VA’s financial management system.




Page 4                                    GAO-19-478 VA Community Care Budget Estimates
veterans actually used from fiscal years 2014 through 2018. 14 We also
reviewed data on the actual utilization of community care by other eligible
beneficiaries from fiscal years 2014 through 2018.

To describe how VA develops its estimate of the resources needed for
community care and any subsequent changes made to this estimate, we
reviewed and analyzed the VA’s budget justifications for the President’s
budget requests for fiscal years 2017 through 2019, which was the latest
fiscal year for which complete information were available to support the
President’s budget request. 15 VA documents we reviewed included those
that describe the methods and types of data used to develop VA’s
community care budget estimates. VA data we reviewed included the
community care budget estimates projected by those methodologies and
changes made to those estimates that informed the President’s budget
request.

To describe how VA’s actual obligations for community care compared to
its estimated obligations for fiscal years 2017 and 2018, we reviewed data
from VA’s budget justifications and other data provided by VA on
estimated and actual obligations for community care for those years. We
chose this period because 2017 was the first fiscal year estimates of
obligations for community care were reported separately in VA’s budget
justifications, and 2018 was the most recently completed fiscal year for
which data were available. The community care data we reviewed
reflected obligations for all VA community care programs for veterans and
other eligible beneficiaries, including data by service type.

For all objectives, we spoke with officials from the Veterans Health
Administration’s (VHA) Office of Finance, Office of Community Care, and
the Office of Enrollment and Forecasting within the Office of the Assistant
Deputy Under Secretary for Health for Policy & Planning; VA’s actuarial
consultant for developing health care budget estimates; and the Office of
Management and Budget (OMB). Additionally, we assessed the reliability

14
  Except for certain emergency and pharmacy care, all community care services for
veterans must be authorized in advance of when veterans access the care in order for
claims to be paid. Data we reviewed on veterans represents the number of individuals
who had at least one authorization to receive community care during the fiscal year. Each
authorization may result in multiple appointments, and a single veteran may have multiple
authorizations under different community care programs.
15
 The President’s budget request for fiscal year 2020 and advance appropriation for 2021
was released on March 11, 2019.




Page 5                                  GAO-19-478 VA Community Care Budget Estimates
                       of the VA data, including data on obligations for and utilization of health
                       care services, by checking for missing values and outliers, and
                       interviewed relevant VA officials who are knowledgeable about these
                       data. As a result of these steps, we determined that the data were
                       sufficiently reliable for the purpose of our reporting objectives.

                       We conducted this performance audit from April 2018 through June 2019
                       in accordance with generally accepted government auditing standards.
                       Those standards require that we plan and perform our work to obtain
                       sufficient, appropriate evidence to provide a reasonable basis for our
                       findings and conclusions based on our audit objectives. We believe that
                       the evidence obtained provides a reasonable basis for our findings and
                       conclusions based on our audit objectives.



Background
VA’s Community Care    VA has purchased health care services from community providers since
Programs and Planned   as early as 1945. In general, veterans may be eligible for community care
                       when they are faced with long wait times or travel long distances for
Consolidation
                       appointments at VA medical facilities, or when a VA medical facility is
                       unable to provide certain specialty care services, such as cardiology or
                       orthopedics. In general, community care services must be authorized in
                       advance of when veterans access the care. 16

                       Currently, there are several community care programs through which VA
                       purchases hospital care and medical services for veterans, including the
                       Choice Program. In implementing the VA MISSION Act, VA plans to
                       consolidate four of its community care programs for veterans under the
                       Veterans Community Care Program, which is expected to go into effect
                       by June 2019. (See table 1.)




                       16
                         Except for certain emergency and pharmacy care, all community care services for
                       veterans must be authorized in advance of when veterans access the care in order for
                       claims to be paid. Among other things, the authorization informs the community provider
                       of the veteran’s medical needs and the specific services that will be covered, as well as
                       the period of validity (i.e., beginning and ending dates) for the episode of care. Each
                       authorization may result in multiple appointments, and a single veteran may have multiple
                       authorizations under different community care programs.




                       Page 6                                  GAO-19-478 VA Community Care Budget Estimates
Table 1: Description of Four Department of Veterans Affairs Community Care Programs Expected to be Consolidated under
the Veterans Community Care Program, beginning June 2019

 VA Community Care Program                                Program description
 Dialysis contracts                                       In June 2013, VA awarded contracts to numerous community providers nationwide to deliver
                                                          dialysis—a life-saving medical procedure for patients with end-stage renal disease
                                                          (permanent kidney failure). When dialysis services are not feasibly available at VA medical
                                                          facilities, veterans may be referred to one of VA’s contracted dialysis providers, and veterans
                                                          may receive dialysis at local clinics on an outpatient basis, or at home (if the contractors offer
                                                          home-based dialysis services).
 Individually authorized care                             Started in 1945, the program is the primary means by which VA has traditionally purchased
                                                                           a
                                                          community care. Local VA medical center staff determine veteran eligibility, create
                                                          authorizations, and assist veterans in arranging care with community providers that are willing
                                                          to accept VA payment.
 Patient-Centered Community Care                          Created in 2013 under existing statutory authority and fully implemented in April 2014. VA
                                                          awarded contracts to two, third-party administrators in September 2013 to develop regional
                                                          networks of community providers to deliver specialty care, mental health care, limited
                                                          emergency care, and maternity and limited newborn care when such care is not feasibly
                                                          available from a VA medical facility.
 Veterans Choice Program                                  Created by the Veterans Access, Choice, and Accountability Act of 2014, introduced in
                                                                                                                           b
                                                          November 2014, and expanded in April 2015 and December 2015. VA modified its contracts
                                                          with the two Patient-Centered Community Care third-party administrators to establish
                                                          networks of community providers, schedule appointments with community providers for
                                                          veterans, and pay community providers for their services.
Source: GAO analysis of Department of Veterans Affairs (VA) information. | GAO-19-478

                                                                Note: In this table, “community care programs” includes programs and activities that provide
                                                                community care whether under statutory or under contractual authority.
                                                                a
                                                                 38 U.S.C. § 1703.
                                                                b
                                                                 Pub. L. No. 113-146, 128 Stat. 1754 (2014).




                                                                VA also provides health care services to veterans and other eligible
                                                                beneficiaries through community providers under additional benefit
                                                                programs. These benefit programs include the Civilian Health and
                                                                Medical Program of the Department of Veterans Affairs (CHAMPVA) and
                                                                the Camp Lejeune Family Member Program, among others. 17 After
                                                                implementing the VA MISSION Act, VA will continue to operate the
                                                                community care programs for other eligible beneficiaries, such as
                                                                CHAMPVA and others, as it has historically done. Appendix I contains
                                                                more information about VA’s community care programs.

                                                                17
                                                                  CHAMPVA is a comprehensive health care program that provides health care coverage
                                                                for spouses and children of veterans who were permanently and totally disabled, or died,
                                                                from a service-connected disability, or of those veterans who died in the line of duty.
                                                                Camp Lejeune Family Member Program provides reimbursement to family members of
                                                                certain veterans for health care costs associated with specific medical conditions.




                                                                Page 7                                         GAO-19-478 VA Community Care Budget Estimates
Developing a Budget      The amount of funding VA receives to provide its health care services is
Estimate for VA Health   determined during the annual appropriations process. In preparation for
                         the process, VA develops an estimate of the resources needed to provide
Care
                         its health care services—known as its health care budget estimate—for
                         two fiscal years. 18 This budget estimate is one step in a complex,
                         multistep budget formulation process, which culminates in an
                         appropriation request for VA health care that updates the earlier, advance
                         appropriation request for the upcoming fiscal year and an advance
                         appropriation request for the next fiscal year in the President’s annual
                         budget request to Congress.

                         VA’s health care budget estimate includes the total cost of providing
                         health care services, including direct patient costs, as well as costs
                         associated with management, administration, and maintenance of
                         facilities. VA uses its Enrollee Health Care Projection Model (EHCPM) to
                         estimate the majority of resources needed to meet the expected demand
                         for health care services, and uses other methods for the remaining
                         services. 19 VA uses the EHCPM to make projections 3 and 4 years into
                         the future for budget purposes based on data from the most recent fiscal
                         year. For example, in 2017, VA used data from fiscal year 2016 to
                         develop its health care budget estimate for the fiscal year 2019 request
                         and advance appropriation request for fiscal year 2020. 20 The EHCPM’s
                         estimates are based on three basic components: (1) the projected
                         number of veterans who will be enrolled in VA health care, (2) the
                         projected quantity of health care services enrollees are expected to use,
                         and (3) the projected unit cost of providing these services. 21 Each
                         component is subject to a number of complex adjustments to account for
                         the characteristics of VA health care and the veterans who access VA’s
                         health care services. (See fig. 1.)


                         18
                           VA’s annual appropriations for health care include advance appropriations that become
                         available one fiscal year after the fiscal year for which the appropriations act was enacted.
                         19
                           The EHCPM was developed in 1998 by VA and its actuarial consultant. For the fiscal
                         year 2019 request, the EHCPM estimated resources for 79 health care services available
                         in VA medical facilities or through community care, which accounted for nearly 95 percent
                         of VA’s total health care budget estimate.
                         20
                           Similarly, VA used data from fiscal year 2015 to develop its health care budget estimate
                         for the fiscal year 2018 request and advance appropriation request for fiscal year 2019.
                         21
                           Unit costs are the costs to VA of providing a unit of service, such as a 30-day supply of a
                         prescription or a day of care at a medical facility.




                         Page 8                                    GAO-19-478 VA Community Care Budget Estimates
Figure 1: Basic Components of VA’s Enrollee Health Care Projection Model
(EHCPM)




Notes: The EHCPM makes a number of complex adjustments to projections for VA’s health care
services to account for the characteristics of VA health care and enrolled veterans. For example, the
EHCPM includes adjustments to account for reliance on VA health care, that is, the extent to which
enrolled veterans will choose to access health care services through VA as opposed to other health
care programs or insurers. Additionally, the EHCPM includes adjustments to incorporate the age,
gender, priority level, and geographic location of enrolled veterans.
a
 VA calculates the cost of providing a unit of service in different ways depending on the type of
service provided. For example, unit costs for some pharmacy services reflect the cost of a 30-day
supply of a prescription, and unit costs for inpatient services reflect the cost of a day of care at an
inpatient facility.




VA uses other methods to estimate resources needed for the remaining
portion of its budget estimate. This portion of the budget includes the
state home per diem program, CHAMPVA, and other health care
programs for veterans and other eligible beneficiaries, as well as health-
care-related initiatives proposed by the Secretary of Veterans Affairs or
the President. 22 (See app. II for more information about the other methods
VA uses in developing its health care budget estimate.)

VHA generally starts to develop a health care budget estimate
approximately 10 months before the President submits the budget to
Congress, which should occur no later than the first Monday in
February. 23 The budget estimate changes during the 10-month budget
formulation process, in part, due to successively higher levels of review in

22
   Under the state home per diem program, veterans may receive nursing home,
domiciliary, or adult day care in state veterans homes. These facilities are owned and
operated by state governments. Each state establishes eligibility and admission criteria for
its homes and VA provides payment on a per diem basis for eligible veterans.
23
  31 U.S.C. § 1105(a). VHA administers VA’s health care system. VHA is one of three
administrations that comprise VA and are included in the President’s budget request for
VA: VHA, the Veterans Benefits Administration, and the National Cemetery
Administration.




Page 9                                          GAO-19-478 VA Community Care Budget Estimates
                                                               VA and OMB before the President’s budget request is submitted to
                                                               Congress. (See table 2.) The Secretary of Veterans Affairs considers the
                                                               health care budget estimate developed by VHA when assessing resource
                                                               requirements among competing interests within VA, and OMB considers
                                                               overall resource needs and competing priorities of other agencies when
                                                               deciding the level of funding requested for VA’s health care services.
                                                               OMB passes back decisions, known as a “passback,” to VA and other
                                                               agencies on their budget estimate, along with funding and policy
                                                               proposals to be included in the President’s budget request. VA has an
                                                               opportunity to appeal the passback decisions before OMB finalizes the
                                                               President’s budget request. Concurrently, VA prepares a congressional
                                                               budget justification that provides details supporting the policy and funding
                                                               decisions in the President’s budget request.

Table 2: Review Process Resulting in the President’s Budget Request for the Department of Veterans Affairs

Date                                         Budget formulation event
Year one
       April-September                       VA’s Office of Budget issues guidance, on behalf of the Secretary of Veterans Affairs, for preparing a
                                             budget submission.
                                             The Veterans Health Administration (VHA) develops most of its health care budget estimate using the
                                             Enrollee Health Care Projection Model based on data from the most recently completed fiscal year.
                                             VHA develops the remainder of its health care budget estimate using other methods.
                                             VHA uses the budget estimate to inform its budget submission for health care, which is subsequently
                                             reviewed by the VHA Undersecretary for Health.
                                             The Secretary reviews and approves the budget submission for health care along with the
                                             submissions from other components of VA.
       September                             VA delivers the budget submission to the Office of Management and Budget (OMB).
       October-December                      OMB reviews VA’s budget submission and issues a decision on funding and policy priorities for VA.
                                             VA may appeal this decision.
Year two
       January                               OMB prepares the President’s budget request, and VA concurrently prepares its budget justification,
                                             which supports the policies and funding decisions in the President’s budget request.
       Early February                        The President submits the budget request, which includes requested resources for VA health care, to
                                             Congress.
       October 1                             The fiscal year begins.
Source: GAO analysis and presentation of Department of Veterans Affairs (VA) and OMB information | GAO-19-478

                                                               Note: VHA administers VA’s health care system. VHA is one of three administrations that comprise
                                                               VA and are included in the President’s budget request for VA: VHA, the Veterans Benefits
                                                               Administration, and the National Cemetery Administration.




                                                               As of fiscal year 2017, VA primarily receives funding for all health care it
                                                               provides or purchases through the following appropriation accounts:


                                                               Page 10                                          GAO-19-478 VA Community Care Budget Estimates
•     Medical Services: health care services provided to eligible veterans
      and other beneficiaries in VA facilities and non-VA facilities, among
      other things.
•     Medical Community Care: health care services that VA authorizes for
      veterans and other beneficiaries to receive from community
      providers. 24
•     Medical Support and Compliance: the administration of the medical,
      hospital, nursing home, domiciliary, supply, and research activities
      authorized under VA’s health care system, among other things.
•     Medical Facilities: the operation and maintenance of VHA’s capital
      infrastructure, such as the costs associated with nonrecurring
      maintenance, leases, utilities, facility repair, laundry services, and
      groundskeeping, among other things. 25

Separate from VA’s health care appropriation accounts, the Veterans
Access, Choice, and Accountability Act of 2014 provided $10 billion in
funding for the Choice Program, which was implemented in early fiscal
year 2015 and authorized until funds were exhausted or through August
7, 2017, whichever occurred first. 26 However, VA received additional
authority and funding to maintain the Choice Program through June 6,
2019, when the new Veterans Community Care Program is expected to
go into effect. 27 VA expects that the new Veterans Community Care
24
  The VA Budget and Choice Improvement Act required the inclusion of an appropriation
account specifically for community care starting with the President’s fiscal year 2017
budget request. Pub. L. No. 114-41, tit. IV, § 4003, 129 Stat. 443, 462-463 (2015).
25
  Nonrecurring maintenance is designed to correct, replace, upgrade, and modernize
existing infrastructure and utility systems.
26
    Pub. L. No. 113-146, §§ 101(p), 802, 128 Stat. 1754, 1755-1765, 1802-1803 (2014).
27
  Additional funding for the Choice Program was provided on three separate occasions.
Legislation enacted in August and December of 2017 provided an additional $4.2 billion
for the Veterans Choice Fund. VA Choice and Quality Employment Act of 2017, Pub. L.
No. 115-46, § 101, 131 Stat. 958, 959 (2017) (providing an additional $2.1 billion for the
Veterans Choice Fund); An Act to amend the Homeland Security Act of 2002 to require
the Secretary of Homeland Security to issue Department of Homeland Security-wide
guidance and develop training programs as part of the Department of Homeland Security
Blue Campaign, and for other purposes, Pub. L. No. 115-96. Div. D, § 4001, 131 Stat.
2044, 2052-53 (2017) (providing an additional $2.1 billion for the Veterans Choice Fund).
In addition, the VA MISSION Act provided an additional $5.2 billion for the Veterans
Choice Fund and authorized VA, beginning March 1, 2019, to use remaining amounts in
the Fund for the Community Care Program, along with any other available amounts in
other appropriation accounts for such purposes. Pub. L. No. 115-182, §§142, 510, 132
Stat. 1393, ** (2018).




Page 11                                  GAO-19-478 VA Community Care Budget Estimates
                             Program will be primarily funded through the Medical Community Care
                             appropriation account.



VA Obligations for
and Number of
Veterans Authorized
to Use Community
Care Have Grown
from Fiscal Year 2014
through Fiscal Year
2018
VA’s Obligations for         Our analysis of VA budget justification data shows that from fiscal year
Community Care               2014 through fiscal year 2018, the total amount VA actually obligated for
                             community care increased 82 percent, from $8.2 billion to $14.9 billion. 28
Increased by Over 80
                             Since VA implemented the Choice Program in fiscal year 2015, the share
Percent from Fiscal Years    of VA’s obligations for community care relative to VA’s total obligations for
2014 through 2018, and       health care services increased through fiscal year 2018, from about 14 to
VA Estimates Obligations     19 percent of VA’s total obligations for health care services. By fiscal year
Will Grow an Additional 20   2021, VA estimates that the total amount obligated for community care
                             will increase to $17.8 billion, an increase of about 20 percent from the
Percent through 2021         $14.9 billion in actual obligations for fiscal year 2018. 29 (See fig. 2.)




                             28
                               For fiscal years 2014, 2015, and 2016, we examined data for community care
                             obligations for the Veterans Choice Fund and the Medical Services Appropriation account.
                             For fiscal years 2017 and 2018, we examined data for community care obligations for the
                             Veterans Choice Fund and the Medical Community Care appropriation account.
                             29
                               For fiscal year 2019, we examined data for community care obligations for the Veterans
                             Choice Fund and the Medical Community Care appropriation account. For fiscal years
                             2020 and 2021, we examined data for community care obligations for the Medical
                             Community Care appropriation account.




                             Page 12                                 GAO-19-478 VA Community Care Budget Estimates
Figure 2: Department of Veterans Affairs’ Obligations for Community Care as a
Share of Total Obligations for VA Health Care Services, Fiscal Years 2014 through
2021




Notes: Numbers may not sum to totals due to rounding. Community care services refer to the
services that VA purchases outside VA medical facilities for veterans and other eligible beneficiaries.
Data reflect actual obligations from fiscal years 2014 through 2018, and estimated obligations from
fiscal years 2019 through 2021. VA estimated obligations for fiscal year 2019 to reflect $1.8 billion in
anticipated savings as a result of a VA policy change regarding the timing of certain community care
obligations.




As figure 2 shows, the largest increase in actual obligations for
community care occurred from fiscal years 2015 through 2016, when they
increased by $3.4 billion, from $8.9 billion to $12.3 billion. According to
VA officials, this increase in obligations during this period reflected
veterans’ expanded use of community care through the Choice Program,
as more providers participated in the provider networks established by
third-party administrators or entered into provider agreements with VA




Page 13                                        GAO-19-478 VA Community Care Budget Estimates
facilities. 30 (Fig. 3 provides information on VA’s obligations for community
care by the Choice Program and by other community care programs.)
The increase in actual obligations for community care from fiscal year
2016 through fiscal year 2017 was also largely due to expanded use of
community care through the Choice Program. VA officials attributed this
increase to efforts to obligate as much of the available Choice Program
funding as possible before the anticipated end of the Choice Program in
August of 2017. From fiscal years 2017 through 2018, obligations for
community care continued to increase, but the increase was partially due
to greater use of other community care programs, according to VA
officials.




30
  Provider agreements are agreements with community providers to provide health care
services to veterans eligible under the Veterans Choice Program. VA establishes provider
agreements, schedules veterans’ appointments, and reimburses the providers directly
(using Choice Program funds) when the third party administrators fail to schedule
veterans’ appointments within the time frames required by VA policy. See GAO, Veterans’
Choice Program: Improvements Needed to Address Access-Related Challenges as VA
Plans Consolidation of its Community Care Programs, GAO-18-281 (Washington, D.C.:
June 4, 2018).




Page 14                                 GAO-19-478 VA Community Care Budget Estimates
Figure 3: Department of Veterans Affairs’ Actual Community Care Obligations for
the Veterans Choice Program and Other Community Care Programs, Fiscal Years
2014 through 2018




Notes: Amounts may not add up due to rounding. The Veterans Choice Program that was established
to provide care in the community for veterans began in fiscal year 2015. “Other community care
programs” include the Civilian Health and Medical Program of the Department of Veterans Affairs and
other benefit programs under which VA provides care for veterans and other eligible beneficiaries,
such as spouses and dependent children, through community providers. VA estimates that
obligations for community care will total $13.7 billion in fiscal year 2019, which reflects $1.8 billion of
anticipated savings as a result of a VA policy change regarding the timing of certain community care
obligations.
a
 This amount includes $739 million in Veterans Choice Program funds obligated by VA between May
1, 2015, and September 30, 2015, for other VA community care programs. Congress granted VA
authority to use Veteran Choice Program funds for this purpose in July 2015. See Pub. L. No. 114-41,
§ 4004(a), 129 Stat. 443, 463 (2015).




From fiscal years 2014 through 2018, the increases in total actual
obligations for VA community care were driven largely by increases in
obligations for outpatient and inpatient services. 31 Over this time period,

31
  Outpatient services include services such as immunizations and vision exams, and
inpatient services include services such as surgeries.




Page 15                                         GAO-19-478 VA Community Care Budget Estimates
VA’s actual obligations for outpatient services increased by $2 billion,
from $2.3 billion to $4.3 billion, and actual obligations for inpatient
services increased by $818 million, from $1.8 billion to $2.7 billion. 32
Figure 4 illustrates how outpatient and inpatient services accounted for
most of VA’s total community care obligations for fiscal year 2018.

Figure 4: Department of Veterans Affairs’ Actual Community Care Obligations by
Service Type in Billions, Fiscal Year 2018




Note: According to VA officials, the actual obligation amounts for certain service types were
understated due to the way certain adjustments were accounted for in VA’s financial management
system. These adjustments were $2.2 billion for fiscal year 2018.
a
 Includes the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)
and other benefit programs under which VA provides care for veterans and other eligible
beneficiaries, such as spouses and dependent children, through community providers.
b
 Long-term care includes community nursing home care, community non-institutional care, state adult
day care, state home domiciliary care, and state home nursing care.




32
   According to VA officials, the actual obligation amounts for certain service types for
fiscal years 2016 through 2018 were understated due to the way certain adjustments were
accounted for in VA’s financial management system. These adjustments were $1.2 billion
for fiscal year 2016; $700 million for fiscal year 2017; and $2.2 billion for fiscal year 2018.




Page 16                                     GAO-19-478 VA Community Care Budget Estimates
                            VA estimated that from fiscal years 2019 through 2021, obligations for
                            community care will increase to $17.8 billion, which VA officials said are
                            attributable to the new eligibility criteria under the VA MISSION Act. 33 The
                            authority for the Choice Program ends June 6, 2019, after which the new
                            Veterans Community Care Program—which consolidates VA’s
                            community care programs under the VA MISSION Act—will be expected
                            to begin. For comparison purposes, the largest increase in obligations for
                            services provided at VA medical facilities is estimated to occur between
                            fiscal years 2020 and 2021. VA officials said this increase is attributable,
                            in part, to efforts related to hiring and telehealth in response to the
                            eligibility criteria under the VA MISSION Act.


The Number of Veterans      Our analysis of VA data on authorizations for community care shows that
Authorized to Use           the number of veterans authorized to use community care increased 41
                            percent from fiscal years 2014 through 2018. 34 (See fig. 5.) The
Community Care
                            approximately 1.8 million veterans authorized to use community care in
Increased about 40          2018 represented about 30 percent of all veterans accessing VA health
Percent from Fiscal Years   care services that year (approximately 6.2 million veterans). 35 By fiscal
2014 through 2018           year 2021, VA officials told us that they estimate that at least 1.8 million
                            veterans will still use community care. 36




                            33
                              For example, in February 2019, VA proposed new access standards based on average
                            drive times and wait times. For primary care, mental health, and non-institutional extended
                            care services, VA is proposing a 30-minute average drive time standard and wait-time
                            standard of 20 days. For specialty care, VA is proposing a 60-minute average drive time
                            standard and wait-time standard of 28 days.
                            34
                              Data we reviewed on veterans represents the number of individuals who had at least
                            one authorization to receive community care during the fiscal year. Among other things,
                            the authorization informs the community provider of the veteran’s medical needs and the
                            specific services that will be covered, as well as the period of validity (i.e., beginning and
                            ending dates) for the episode of care. Each authorization may result in multiple
                            appointments, and a single veteran may have multiple authorizations under different
                            community care programs.
                            35
                              In addition to veterans, we found that the number of other eligible beneficiaries, such as
                            spouses and dependents, that used community care increased from 342,000 to 404,000—
                            an 18 percent increase—from fiscal years 2014 through 2018. Data we reviewed on other
                            eligible beneficiaries represents the number of individuals who received community care
                            through one of the benefits programs during the fiscal year.
                            36
                             VA officials said this estimate does not account for the new eligibility criteria under the
                            VA MISSION Act.




                            Page 17                                    GAO-19-478 VA Community Care Budget Estimates
Figure 5: Number of Veterans Authorized to Use Community Care, Fiscal Years
2014 through 2018




Notes: Data reviewed included veterans who were authorized to use community care at least once in
the fiscal year.




Our analysis of VA data also shows that after being authorized for care,
veterans’ utilization of certain community care services increased from
fiscal years 2014 through 2018. Over this time period, a number of
outpatient services experienced increases of more than 200 percent in
utilization, especially chiropractic visits (418 percent, from 143,000 to
743,000 visits), physical therapy visits (252 percent, from 857,000 to 3
million visits), and non-mental health related office visits (243 percent,
from 651,000 to 2.2 million visits). In comparison, our analysis found
relatively smaller increases in veteran utilization for certain inpatient
services. For example, the utilization for surgical inpatient stays increased
about 39 percent—from 253,000 to 352,000 bed days.




Page 18                                     GAO-19-478 VA Community Care Budget Estimates
                           VA first developed a separate budget estimate for community care to
VA Updated Its             inform the President’s fiscal year 2017 budget request. Beginning with the
Projection Model to        President’s fiscal year 2018 budget request, VA updated its EHCPM to
                           develop over 75 percent of its community care budget estimate and used
Develop Most of Its        other methods to develop the remainder. Subsequent changes were
Community Care             made to the community care budget estimates developed by the EHCPM
                           for fiscal years 2018 and 2019 through successively higher levels of
Budget Estimate;           review in VA and OMB.
Subsequent Changes
Reflect More Current
Information and Other
Factors
VA First Developed a       VA first developed a separate budget estimate of the resources it would
Separate Budget Estimate   need for community care—as distinct from the care provided in VA
                           medical facilities—in order to inform the President’s fiscal year 2017
for Community Care as
                           budget request for VA. Prior to this fiscal year 2017 budget request, VA
Part of the President’s    developed a single budget estimate of the resources needed to provide
Fiscal Year 2017 Budget    all VA health care services, regardless of whether these services were
Request for VA             purchased from community providers or delivered in VA medical facilities,
                           because all these services were to be funded through the same
                           appropriation account. 37 According to VA officials, at the time a separate
                           community care appropriation account and budget estimate were
                           unnecessary, because community care accounted for a relatively small
                           portion of VA’s overall health care budget. However, once the medical
                           community care appropriation account was established in fiscal year
                           2017, VA began developing a separate budget estimate for community
                           care, as required by law. 38

                           To develop its first estimate of the resources needed for community care
                           for fiscal year 2017, VA made adjustments to existing estimates for total
                           demand for care—both in VA medical facilities and community care
                           combined—developed by the EHCPM. At the time, VA used the EHCPM
                           to estimate the resources needed to provide VA health care services to
                           37
                             Community care services were funded, in part, through the Veterans Choice Fund
                           during fiscal years 2015 and 2016. VA’s health care budget estimates for those fiscal
                           years did not include estimates for the Choice Program due to the timing of the
                           implementation of the Choice Program in relation timing to the budget process.
                           38
                            Pub. L. No. 114-41, § 4003, 129 Stat. 443, 462-463 (2015).




                           Page 19                                 GAO-19-478 VA Community Care Budget Estimates
veterans, including inpatient, outpatient, and long-term care. However,
the EHCPM did not make separate estimates for community care and
care provided at VA facilities; according to VA officials, VA adjusted the
EHCPM estimates by assuming that for each service, the share of total
utilization and costs devoted to community care would be the same as
they had been in the most recently completed fiscal year. In addition, after
this adjustment, VA made additional changes to the community care
budget estimate, which resulted in a net increase of $2.5 billion. Nearly all
of this increase reflected an anticipated impact of the expanded access
under the Choice Program, according to VA officials. Overall, this
approach accounted for about 75 percent of the $12.3 billion community
care budget estimate that informed the President’s budget request for
fiscal year 2017.

To develop the remaining portion of its community care budget estimate,
VA used methods other than the EHCPM that, according to VA officials,
were used historically to develop estimates of the resources needed for
the state home per diem program and benefit programs. For example, VA
develops budget estimates for certain services under the state home per
diem program by creating projections of the amount of care to be
provided using information about the size and demographic
characteristics of the enrolled veteran population and projections of the
unit cost of providing one day of care using recent cost experience.
According to VA officials, VA was able to continue using these other
methods, because the services under these programs have been
provided through community providers and not VA medical facilities.
While methods for each program vary, in general, these methods are
based on each program’s historical utilization and costs. (See app. II for
additional information on the methods VA uses to develop the budget
estimates for each of these community care programs.)




Page 20                           GAO-19-478 VA Community Care Budget Estimates
Beginning with the         Beginning with the President’s fiscal year 2018 budget request, VA
President’s Fiscal Year    updated its EHCPM directly to estimate most of the resources needed to
                           purchase community care for veterans. Specifically, VA updated the
2018 Budget Request, VA
                           EHCPM to estimate the amount of resources needed to purchase a set of
Updated Its Projection     more than 40 community care services that have accounted for over 75
Model to Develop over 75   percent of VA’s total community care budget estimates of $12.6 billion for
Percent of Its Community   fiscal year 2018 and $12.4 billion for fiscal year 2019. 39 These health care
Care Budget Estimate       services were grouped into seven service types and include outpatient
                           care, inpatient care, and long-term care. (See app. III for a list of the
                           health care services). Of these services, outpatient services typically
                           accounted for the largest share of VA’s community care budget estimate.
                           For the remainder of community care services—including services
                           provided under the state home per diem program and benefit programs—
                           VA did not use the EHCPM and instead continued to use the other
                           methods it has historically used to develop budget estimates for these
                           services. (See fig. 6.)




                           39
                             According to VA officials, these approximately 40 services were the health care services
                           that were available to veterans in the community.




                           Page 21                                 GAO-19-478 VA Community Care Budget Estimates
Figure 6: Proportion of Department of Veterans Affairs (VA) Community Care Budget Estimate Developed Using VA’s Enrollee
Health Care Projection Model (EHCPM), by Service Type, Fiscal Year 2019




                                        Note: Percentages may not sum to 100 due to rounding.
                                        a
                                         State home per diem program includes adult day care, home domiciliary, and nursing care provided
                                        to veterans through state homes for eligible veterans. Benefit programs include the Civilian Health
                                        and Medical Program of the Department of Veterans Affairs, as well as other benefit programs that
                                        provide care for veterans and other eligible beneficiaries, such as spouses and dependent children,
                                        through community providers.
                                        b
                                         Long-term care includes nursing home care in community nursing homes and home and community-
                                        based care, such as, community adult day care, homemaker/home health aide, home hospice and
                                        palliative care; purchased skilled home care and respite care.




                                        VA made several changes to the EHCPM to develop most of its
                                        community care budget estimate. Historically, the EHCPM estimated
                                        resources needed to meet the total expected demand for VA health
                                        care—a combination of care provided in VA medical facilities and through
                                        community care programs. VA updated the EHCPM to determine the
                                        proportion of demand met by community care by projecting enrolled
                                        veterans’ expected utilization of community care and the expected costs




                                        Page 22                                      GAO-19-478 VA Community Care Budget Estimates
of purchasing these services. 40 In what follows, we describe five major
changes made to the EHCPM allowing VA to estimate the budgetary
resources needed for community care.

1. Reliance on community care services. The EHCPM has historically
   accounted for the extent to which enrolled veterans would be
   projected to obtain health care services through the VA as opposed to
   other health care programs or insurers—referred to as reliance on VA
   health care. 41 VA updated the EHCPM so that it can further account
   for the extent to which enrolled veterans would be expected to use
   VA’s community care programs as opposed to using care in VA’s
   medical facilities. Each year, the EHCPM determines reliance on VA
   community care based on a combination of historical experience—or
   the extent to which community care was used in prior fiscal years—
   and on the projected impact of new VA policies and operational
   guidance. For example, for the fiscal year 2019 budget estimates, the
   EHCPM projected reliance on VA care to be about 38 percent, of
   which 14 percent would be met through community care. Thus, the
   EHCPM projected reliance on VA’s community care programs to be
   about 5.3 percent for all care enrolled veterans are projected to use in
   fiscal year 2019. 42
2. Accounting for difference in community providers’ efficiency
   delivering inpatient services. VA also updated the EHCPM so that
   community care utilization projections account for the fact that
   veterans receiving inpatient care through community providers
   generally have relatively shorter lengths of inpatient stays compared
   with veterans receiving care at VA medical facilities. 43 According to

40
  To estimate likely utilization and costs of community care, the EHCPM relies on several
different data sources, including claims data from the Choice Program and other
community care programs. (See app. IV, which describes the various data sources used.)
41
  VA estimates that at least 80 percent of veterans that have enrolled in VA health care
have some type of public or private health care coverage other than VA. Many enrolled
veterans use VA for some of their health care needs, but choose their other health care
coverage for the rest. Because VA does not provide for 100 percent of the health care
needs of enrolled veterans, this reduces the number of services required from VA.
42
  To project fiscal year 2019 budget estimates, VA used fiscal year 2016 data to
determine reliance on community care. VA’s reliance on community care services may
change once VA finalizes the new access standards under the VA MISSION Act, which
bases eligibility on average drive times and wait times, among other factors.
43
  Historically, EHCPM utilization projections have reflected a combination of the length of
inpatient stays for community providers and VA facilities, according to VA officials.




Page 23                                  GAO-19-478 VA Community Care Budget Estimates
     officials from VA and its actuarial consultant, community providers on
     average have historically performed better than VA providers on
     national benchmarks measuring how well providers manage the
     length of inpatient stays, while not affecting quality of care. To account
     for this difference, VA uses an adjustment factor when projecting
     utilization of inpatient services based on potentially avoidable days of
     care for community providers. 44
3. Comparing projected utilization with actual utilization for
   community care services. VA developed an adjustment factor for
   the EHCPM’s utilization estimates to account specifically for the
   differences between projected utilization and actual utilization of
   community care for the most recently completed fiscal year of data. 45
   According to VA officials, the difference typically reflects utilization
   behavior among providers or patients that are difficult to estimate
   based solely on historical data—such as changes in local practice
   patterns (e.g., providers choosing to use magnetic resonance imaging
   versus x-rays). 46 To account for this behavior, VA compares projected
   and actual utilization and creates an “actual-to-expected” adjustment
   factor for each health care service to account for the difference. 47
4. Projecting unit costs for community care services. VA updated
   the EHCPM so that it could estimate what are known as the unit costs
   of purchasing community care services for veterans. 48 In general, the
   unit cost of a community care service comprises the payment made to
   the provider (known as direct patient costs), as well as the indirect
   costs associated with administration and overhead. Indirect costs

44
  For example, if the national benchmark length of stay is 5 days of care for an inpatient
surgery and 30 percent of those 5 days are avoidable, the length of a “well managed” stay
is 3.5 days. The adjustment factor reflects the historical level of performance for
community providers relative to a well-managed stay.
45
  Historically, VA has compared the EHCPM’s projected utilization of all VA health care
services—both delivered in VA facilities and community care—with actual utilization in the
most recently completed fiscal year.
46
  This unexplained utilization is the net impact of a number of factors that often cannot be
identified or quantified, including unique local practice patterns, evolving practice patterns
or programs, coding issues, capacity constraints, and/or limitations in the data used to
measure morbidity and reliance, or other model factors.
47
  For example, if the actual utilization for a service was determined to be 5 percent lower
than the projected, the factor used for the actual-to-expected adjustment would be 0.95.
48
  Unit costs are costs to VA of purchasing a unit of service, such as an outpatient office
visit or a day of care at an inpatient community facility.




Page 24                                   GAO-19-478 VA Community Care Budget Estimates
     include (1) the fees paid to the contractors for administrative
     responsibilities for the Choice Program, (2) VA billing and processing
     costs and care coordination costs associated community care
     programs, and (3) certain costs associated with the VA Central Office
     that support community care (e.g., the salaries for officials from the
     Office of Community Care and other VA Central Office officials). 49
5. Accounting for community care service complexity and inflation.
   VA made other changes to the EHCPM’s unit cost projections for
   community care. For example, VA updated the EHCPM so that it
   accounts for costs associated with changes in the complexity—that is,
   the level of resources required to deliver—of health care services VA
   purchases from community providers. Officials from VA and its
   actuarial consultant noted that more complex services require
   relatively more resources to deliver, such as more expensive
   equipment (e.g., magnetic resonance imaging); more provider time; or
   higher-cost providers, such as surgeons. Officials anticipate that most
   services that VA purchases in the community will increase in
   complexity, leading to higher projected unit-costs for community
   care. 50 VA also updated the EHCPM so that its unit cost estimates for
   community care account for inflation in the cost of labor and
   equipment.




49
  The Agency for Healthcare Research and Quality defines care coordination as the
practice of organizing patient care activities and sharing information among all of the
participants concerned with a patient’s care to achieve safer, more effective care.
Participants may share clinical data using manual methods such as faxing paper records,
but these methods can be time-consuming and costly. Information technology has the
potential to improve the efficiency of care coordination by allowing VA, the Choice
Program third-party administrators, community providers, and veterans to electronically
exchange information for care coordination purposes.
50
  According to officials from VA and its actuarial consultant, changes in the complexity of
care can occur for a variety of reasons including the development of new drug therapies
that replace less effective, less expensive therapies, such as the hepatitis C treatments
that have become available in recent years; and changes in health care practices, such as
greater use of magnetic resonance imaging to diagnose a condition.




Page 25                                  GAO-19-478 VA Community Care Budget Estimates
VA’s Community Care          VA’s community care budget estimates are reviewed at successively
Budget Estimates             higher levels at VA and OMB to inform the President’s budget request for
                             VA. VA identified several changes made during the review process to its
Projected by the Model for
                             estimates projected by the EHCPM for fiscal years 2018 and 2019; these
Fiscal Years 2018 and        changes were due to the availability of more current information related to
2019 Were Subsequently       utilization and costs, among other factors.
Changed to Reflect More
Current Information,         For fiscal year 2018, changes resulted in a budget request for VA
                             community care in the President’s budget request that was approximately
Among Other Factors          $1 billion lower than VA’s original EHCPM budget estimate of $10.7
                             billion. 51 These changes included the following:

                             •     A $996 million decrease reflecting the availability of more current
                                   information showing that an anticipated increase in utilization due to
                                   the Choice Program was too high. 52
                             •     A $600 million decrease reflecting the availability of more current
                                   information showing that overhead costs initially allocated to
                                   community care in the data used in the EHCPM were too high.
                             •     A $180 million decrease accounting for VA’s implementation of a new
                                   law that reduces VHA’s use of community care for examinations
                                   determining veterans’ disability ratings. 53
                             •     A $500 million increase accounting for a court ruling that affected
                                   veteran eligibility for reimbursement of emergency community care,
                                   which was expected to increase utilization. 54
                             •     A $250 million increase reflecting the availability of more current
                                   information that indicated administrative costs for the Choice Program
                                   in the data used in the EHCPM were too low.

                             For fiscal year 2019, changes resulted in a budget request for VA
                             community care in the President’s budget request that was nearly $1



                             51
                                 VA estimated $12.6 billion in total community care obligations for fiscal year 2018.
                             52
                               According to VA officials, the anticipated increase in community care utilization was
                             specifically related to veterans who were eligible for the Choice Program because the next
                             available medical appointment with a VA provider was more than 30 days away.
                             53
                                 See 38 U.S.C. § 5101 note.
                             54
                                 Staab v. McDonald, 28 Vet. App. 50 (2016).




                             Page 26                                    GAO-19-478 VA Community Care Budget Estimates
                       billion higher than VA’s original EHCPM budget estimate of $8.6 billion. 55
                       These changes included the following:

                       •     A $1.7 billion increase reflecting more current information indicating
                             that community care administrative costs and the utilization levels in
                             the data used in the EHCPM were too low.
                       •     A $1 billion increase accounting for a delay in the timing of the
                             implementation of community care network contracts. According to VA
                             officials, this resulted in the continued use of reimbursement rates in
                             community care that were higher than Medicare reimbursement
                             rates. 56
                       •     A $1.8 billion decrease that reflected VA’s implementation of a new
                             policy that changed the timing of community care obligations from
                             when a veteran is authorized to use community care to the when a
                             claim for actual services is paid.



VA’s Actual
Obligations for
Community Care in
Fiscal Years 2017
and 2018 Were
Higher than
Estimated and
Included Additional
Funding Received for
the Choice Program



                       55
                           VA estimated $12.4 billion in total community care obligations for fiscal year 2019.
                       56
                         According to officials, VA included in the EHCPM anticipated savings from VA
                       transitioning to Medicare reimbursement rates.




                       Page 27                                    GAO-19-478 VA Community Care Budget Estimates
VA’s Actual Obligations for   Our analysis of data included in VA’s budget justifications shows that in
Community Care in Fiscal      fiscal years 2017 and 2018, VA obligated $1.2 billion and $2.2 billion
                              more for community care than originally estimated at the time of the
Years 2017 and 2018           President’s budget requests for those years. 57 In both years, VA’s actual
Were $1.2 Billion and $2.2    obligations for both the Choice Program and other community care
Billion Higher than           programs were higher than estimated. (See table 3.) According to VA
Estimated, Respectively       officials, the higher-than-estimated obligations for the Choice Program for
                              fiscal year 2017 were driven, in part, due to changes in Choice Program
                              policies and a large increase in the cost per authorization for care. 58 In the
                              case of other community care programs, VA officials told us that the
                              higher-than-estimated obligations for both fiscal years 2017 and 2018
                              were driven, in part, by local practice patterns (e.g., providers choosing to
                              use magnetic resonance imaging versus x-rays) and the capacity of VA
                              medical facilities to provide services. As discussed later in this report, VA
                              also received and reallocated additional funding to purchase community
                              care in fiscal years 2017 and 2018, which contributed to actual obligations
                              being higher-than-estimated obligations. 59




                              57
                                For fiscal years 2017 and 2018, we examined data for community care obligations for
                              the Veterans Choice Fund and the Medical Community Care appropriation account. For
                              comparison purposes, VA’s budget justifications also show that in fiscal years 2017 and
                              2018, VA obligated $2.5 billion and $1.2 billion less for services provided in VA medical
                              facilities than originally estimated at the time of the President’s budget requests for those
                              years. VA’s actual obligations for these services totaled $59.4 and $62.9 billion for fiscal
                              years 2017 and 2018, respectively.
                              58
                                For example, VA made a policy change in June 2017, by issuing a policy memorandum
                              that directed VA medical facilities to refer veterans to the Choice Program only if they met
                              wait-time, distance, and geographic eligibility criteria, and to instead use other VA medical
                              facilities, other facilities with which VA has sharing agreements, and other community care
                              programs to deliver care to veterans when services were not available at a VA medical
                              facility and veterans did not qualify under the Veterans Access, Choice, and Accountability
                              Act’s eligibility criteria. In August 2017, VA changed its guidance and issued a fact sheet
                              directing VA medical facilities to refer veterans to the Choice Program to the maximum
                              extent possible. See Department of Veterans Affairs, Extension of Veterans Choice
                              Program Funding, VA Fact Sheet (Washington, D.C.: August 2017).
                              59
                                In future work, we plan to review VA’s development of its community care budget
                              estimate, including how the department is incorporating lessons learned from its 2017 and
                              2018 estimates as it continues using the EHCPM for that purpose.




                              Page 28                                   GAO-19-478 VA Community Care Budget Estimates
Table 3: Department of Veterans Affairs’ Actual and Estimated Community Care Obligations, Fiscal Years 2017 and 2018

 Obligations (dollars in billions)
 Program                                                          Fiscal year 2017                                             Fiscal year 2018
                                                  Actual                 Estimated                   Difference      Actual        Estimated           Difference
 Veterans Choice                                        5.5                         4.8                      0.7         4.5              3.5                        1
 Program
 Other community care                                   8.1                         7.5                      0.6        10.3              9.1                   1.2
 programs
 Total community care                                 13.6                        12.3                       1.2        14.9             12.6                   2.2
Source: GAO analysis of Department of Veterans Affairs (VA) budget justification and VA data. | GAO-19-478

                                                                 Notes: Numbers may not sum to totals or differences due to rounding. Estimated obligations are
                                                                 developed months prior to the start of a fiscal year. In addition to services for veterans, other
                                                                 community care programs include the community care services that VA purchases for other eligible
                                                                 beneficiaries, which may include a veteran’s spouse or dependent child.




                                                                 Our analysis of VA’s obligations by service type shows that in fiscal year
                                                                 2017, VA’s higher-than-estimated obligations for community care were
                                                                 primarily for outpatient and inpatient services, as shown in table 4. 60 In
                                                                 fiscal year 2018, the higher-than-estimated obligations for community
                                                                 care were primarily for outpatient services, while there was an overall
                                                                 decrease in obligations for inpatient services. (See table 5.) Additionally,
                                                                 for some service types, VA’s actual obligations were lower than estimated
                                                                 in fiscal years 2017 and 2018. 61




                                                                 60
                                                                    According to VA officials, the actual obligation amounts for certain service types for
                                                                 fiscal years 2017 and 2018 were understated due to the way adjustments were accounted
                                                                 for in VA’s financial management system. These adjustments were $700 million for fiscal
                                                                 year 2017 and $2.2 billion for fiscal year 2018. VA stated that they anticipate these
                                                                 adjustments to decrease starting in fiscal year 2019 as a result of a VA policy change
                                                                 regarding the timing of certain community care obligations.
                                                                 61
                                                                   For fiscal years 2017 and 2018, we examined data for community care obligations for
                                                                 the Veterans Choice Fund and the Medical Community Care appropriation account.




                                                                 Page 29                                           GAO-19-478 VA Community Care Budget Estimates
Table 4: Comparison of Department of Veterans Affairs’ Actual and Estimated Obligations for Selected Community Care
Service Types, Fiscal Year 2017

 Obligations (dollars in millions)
 Selected service type                                                                                             Fiscal year 2017
                                                                                                               a
                                                                                                     Actual                   Estimated                       Difference
 Outpatient care                                                                                        4,658                         3,782                            875
 Inpatient care                                                                                         3,016                         2,656                            360
                                                                       b
 CHAMPVA and other benefit programs’ services                                                           1,290                         1,697                          (407)
                               c
 Non-institutional care                                                                                 1,248                         1,436                          (188)
 Community nursing home                                                                                      870                      1,012                          (143)
Source: GAO analysis of Department of Veterans Affairs (VA) budget justification and VA data. | GAO-19-478

                                                                 Notes: This table includes service types that had a difference of $90 million or more between actual
                                                                 and estimated obligations. Differences reflect rounding. Estimated obligations are developed months
                                                                 prior to the start of a fiscal year. For fiscal year 2017, data reflect community care obligations for the
                                                                 Veterans Choice Fund and the Medical Community Care appropriation account.
                                                                 a
                                                                  According to VA officials, the actual obligation amounts for certain service types for fiscal year 2017
                                                                 were understated due to the way adjustments were accounted for in VA’s financial management
                                                                 system. The adjustment was $700 million in fiscal year 2017.
                                                                 b
                                                                  The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), as well
                                                                 as other benefit programs provide care for veterans and other eligible beneficiaries, such as spouses
                                                                 and dependent children, through community providers.
                                                                 c
                                                                  Non-institutional care includes home and community-based long-term care programs, such as
                                                                 community adult day care, homemaker/home health aide programs, home hospice and palliative
                                                                 care, purchased skilled home care, and respite care.




Table 5: Comparison of Department of Veterans Affairs’ Actual and Estimated Obligations for Selected Community Care
Service Types, Fiscal Year 2018

 Obligations (dollars in millions)
 Selected service type                                                                                             Fiscal year 2018
                                                                                                               a
                                                                                                     Actual                   Estimated                       Difference
 Outpatient care                                                                                        4,287                         3,545                            742
 Dental care                                                                                                 238                       146                              91
 Inpatient care                                                                                         2,649                         3,104                          (455)
                                                                       b
 CHAMPVA and other benefit programs’ services                                                           1,345                         1,649                          (305)
 Community nursing home                                                                                      937                      1,032                           (96)
Source: GAO analysis of Department of Veterans Affairs (VA) budget justification and VA data. | GAO-19-478

                                                                 Notes: This table includes service types that had a difference of $90 million or more between actual
                                                                 and estimated obligations. Differences reflect rounding. Estimated obligations are developed months
                                                                 prior to the start of a fiscal year. For fiscal year 2018, data reflect community care obligations for the
                                                                 Veterans Choice Fund and the Medical Community Care appropriation account.
                                                                 a
                                                                  According to VA officials, the actual obligation amounts for certain service types for fiscal year 2018
                                                                 were understated due to the way adjustments were accounted for in VA’s financial management
                                                                 system. These adjustments were $2.2 billion for fiscal year 2018.




                                                                 Page 30                                            GAO-19-478 VA Community Care Budget Estimates
                            b
                             The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) as well
                            as other benefit programs provide care for veterans and other eligible beneficiaries, such as spouses
                            and dependent children, through community providers.




VA’s Higher-Than-           To obligate $13.6 billion for community care in fiscal year 2017 and $14.9
Estimated Obligations for   billion in fiscal year 2018—amounts that were $1.2 billion and $2.2 billion
                            higher, respectively, than what VA originally estimated for its budget
Community Care Included
                            request, and what VA received in its annual appropriation—VA requested
Additional Funding VA       and received additional Choice Program funding outside of the annual
Received for the Choice     appropriations process. VA also reallocated funding from other sources,
Program Outside of the      including unobligated funding from a prior fiscal year and collections, to
Annual Appropriations       pay for the other community care programs. 62
Process                     Specifically, the $13.6 billion and $14.9 billion VA obligated for community
                            care in fiscal years 2017 and 2018, respectively, came from the following
                            sources:

                            •    Choice Program. For both fiscal years, VA obligated from its
                                 remaining funding and prior-year recoveries from the previous fiscal
                                 years, and requested and received additional funding three times
                                 outside of the annual appropriations process. 63 (Table 6 below
                                 summarizes the time frames during which VA requested and received
                                 additional appropriations for the Choice Program outside of the annual
                                 appropriations process for fiscal years 2017 and 2018.)
                            •    Other community care programs. For both fiscal years, VA
                                 obligated from its annual appropriation and transferred a portion of its
                                 overall collections from its Medical Care Collections Fund to the




                            62
                              Due to the nature of VA’s multi-year authority in some of its appropriations, budget
                            authority may be available from unobligated balances, which remain available for a fixed
                            period of time in excess of one fiscal year. Collections refers to the resources VA expects
                            to collect from health insurers of veterans who receive VA care for nonservice-connected
                            conditions and other sources, such as veterans’ copayments.
                            63
                              Prior-year recoveries refers to obligations that were estimated for authorizations for the
                            previous fiscal year, but were never liquidated. For fiscal year 2017, VA de-obligated
                            around $700 million in Choice Program funds from fiscal year 2017 authorizations for use
                            in 2018. For fiscal year 2018, this amount was around $295 million.




                            Page 31                                       GAO-19-478 VA Community Care Budget Estimates
                                              medical community care account. 64 In addition, for fiscal year 2018,
                                              VA used unobligated funding and prior-year recoveries from fiscal
                                              year 2017. 65

Table 6: Department of Veterans Affairs’ Veterans Choice Program Budget Timeline, Fiscal Years 2017 and 2018

Date                        Budget event
2016:
    February                The President submitted the fiscal year 2017 budget request to Congress, which included requested
                            resources for VA health care. As the Veterans Choice Program (Choice Program) was expected to
                            end in August 2017, VA estimated it would use its remaining $4.8 billion in Choice Program funding
                                                                                                                    a
                            from fiscal year 2016. The Choice Program originally began with $10 billion in funding.
                                                                              b
    September               Fiscal year 2017 appropriations for VA enacted.
2017:
    April                   Legislation enacted allowing the Choice Program to continue until funding for the program is
                                                          c
                            exhausted regardless of time.
    May                     The President submitted the fiscal year 2018 budget request to Congress. VA estimated it would use
                            its remaining $626 million in available Choice Program funding from fiscal year 2017, and requested
                            $2.9 billion in new Choice Program appropriations for fiscal year 2018.
    June                    The Secretary of Veterans Affairs testified at a congressional subcommittee hearing regarding VA’s
                            fiscal year 2018 budget request. During the testimony, the Secretary informed Congress that due to an
                            increase in utilization, Choice Program funding would run out prior to September, the end of fiscal year
                            2017.
                                                                                                             d
    August                  Legislation enacted that provided $2.1 billion in funding for the Choice Program. According to VA, this
                            amount was needed to maintain the program while the department worked to secure funding for the
                            remainder of fiscal year 2018.
    December                The Secretary informed Congress on December 12 that Choice Program funding would be exhausted
                            in 3-to-5 weeks.
                                                                                                                           e
                            Legislation enacted on December 22 provided $2.1 billion in funding for the Choice Program.




                                         64
                                           For fiscal years 2017 and 2018, VA was appropriated $7.2 billion and $419 million (in
                                         addition to advance appropriations of $9.4 billion), respectively, for its medical community
                                         care account. For fiscal year 2017, VA transferred $1.25 billion in collections from its
                                         Medical Care Collections Fund to its medical community care account, which was $1
                                         billion higher than what VA initially estimated it would transfer at the time of the
                                         President’s budget request. For fiscal year 2018, VA transferred about $272 million in
                                         collections.
                                         65
                                           For fiscal year 2018, VA had $470 million in unobligated funding for its medical
                                         community care account from fiscal year 2017, and $256 million in prior year recoveries
                                         from fiscal year 2017.




                                         Page 32                                   GAO-19-478 VA Community Care Budget Estimates
Date                                 Budget event
2018:
      March                          The Secretary testified at a congressional subcommittee hearing regarding VA’s fiscal year 2019
                                     budget request. During the testimony, the Secretary informed Congress that as of March 16, about
                                     $1.1 billion remained of the $2.1 billion in funds appropriated in December 2017, and that funding
                                     would be exhausted before the end of fiscal year 2018.
                                                                                              f
                                     Fiscal year 2018 appropriations for VA enacted. It did not include any additional appropriations for the
                                     Choice Program.
      May                            The Acting Secretary of Veterans Affairs sent a letter to Congress stating that the Choice Program
                                     would run out of funding by the end of the month.
                                                                                                                                g
      June                           Legislation enacted that provided $5.2 billion in funding for the Choice Program. This funding was
                                     expected to keep the Choice Program operating until VA’s new community care program goes into
                                     effect, which was expected to be by June 2019.
      October                        Start of fiscal year 2019.
Source: GAO analysis. | GAO-19-478
                                                   a
                                                    At the time of the Department of Veterans Affairs’ (VA) fiscal year 2017 budget justification, VA
                                                   estimated there was $4.8 billion in funding for the Choice Program. However, VA’s fiscal year 2019
                                                   budget justification shows only $4.4 billion in Choice Program funding for fiscal year 2017. The
                                                   Veterans Access, Choice, and Accountability Act of 2014 provided $10 billion in funding for the
                                                   Choice Program, which was implemented in early fiscal year 2015 and authorized until funds were
                                                   exhausted or through August 7, 2017, whichever occurred first. Pub. L. No. 113-146, §§ 101(p), 802,
                                                   128 Stat. 1754, 1763, 1802-1803 (2014).
                                                   b
                                                       Pub.L. No. 114-223, tit. II, 130 Stat. 857, 867 (2016).
                                                   c
                                                       Pub.L. No. 115-26, § 1, 131 Stat. 129 (2017).
                                                   d
                                                    See VA Choice and Quality Employment Act of 2017, Pub. L. No. 115-46, § 101, 131 Stat. 958, 959
                                                   (2017).
                                                   e
                                                    An act to amend the Homeland Security Act of 2002 to require the Secretary of Homeland Security
                                                   to issue Department of Homeland Security-wide guidance and develop training programs as part of
                                                   the Department of Homeland Security Blue Campaign, and for other purposes, Pub. L. No. 115-96.
                                                   Div. D, § 4001, 131 Stat. 2044, 2052-53 (2017).
                                                   f
                                                       Pub. L. No. 115-141, 132 Stat. 348 (2018).
                                                   g
                                                       VA MISSION Act of 2018. Pub. L.No. 115-182, tit. I, 132 Stat. 1393 (2018).




                                                   We provided a draft of this product to VA and OMB for comment. VA
Agency Comments                                    provided technical comments, which we incorporated as appropriate.
                                                   OMB had no comments.


                                                   We are sending copies of this report to the Secretary of Veterans Affairs,
                                                   the Director of the Office of Management and Budget, appropriate
                                                   congressional committees, and other interested parties. This report is
                                                   also available at no charge on the GAO Web site at http://www.gao.gov.




                                                   Page 33                                             GAO-19-478 VA Community Care Budget Estimates
If you or your staff have any questions about this report, please contact
me at (202) 512-7114 or silass@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made key contributions to this report
are listed in appendix V.

Sincerely yours,




Sharon M. Silas
Acting Director, Health Care




Page 34                           GAO-19-478 VA Community Care Budget Estimates
Appendix I: The Department of Veterans
                        Appendix I: The Department of Veterans
                        Affairs’ Community Care Programs for
                        Veterans and Other Eligible Beneficiaries


Affairs’ Community Care Programs for
Veterans and Other Eligible Beneficiaries
                        While the majority of veterans utilizing Department of Veterans Affairs’
                        (VA) health care services receive care in VA-operated medical facilities,
                        veterans may also obtain services from non-VA providers in the
                        community—known as community care—through one of several
                        community care programs aimed at helping to ensure that veterans
                        receive timely and accessible care. 1 In implementing the VA MISSION
                        Act, VA plans to consolidate four of its community care programs for
                        veterans—dialysis contracts, individually authorized care, the Patient-
                        Centered Community Care Program, and the Veterans Choice Program—
                        under the Veterans Community Care Program, which is expected to go
                        into effect by June 2019. 2 In addition, VA has several other community
                        care programs that serve veterans and programs that provide health care
                        services to other eligible beneficiaries, including a veteran’s spouse or
                        dependent child.


Community Care          Dialysis contracts. When dialysis services—a life-saving medical
Programs for Veterans   procedure for patients with permanent kidney failure—are not feasibly
                        available at VA medical facilities, veterans may be referred to one of VA’s
that VA Plans to
                        contracted dialysis providers, and veterans may receive dialysis at local
Consolidate             clinics on an outpatient basis, or at home (if the contractors offer home-
                        based dialysis services).

                        Individually authorized care. When a veteran cannot access a particular
                        specialty care service from a VA medical facility—either because the
                        service is not offered, the veteran would have to wait too long for an
                        appointment, or the veteran would have to travel a long distance to a VA
                        medical facility—VA medical facility staff may request an individual
                        authorization for the veteran to obtain the service from a community
                        provider who is willing to accept VA payment.

                        Patient-Centered Community Care. VA contracted with two third-party
                        administrators to develop regional networks of community providers of
                        specialty care, mental health care, limited emergency care, and maternity

                        1
                         Unless otherwise indicated, the terms “community care” and “community providers” refer,
                        respectively, to the services the department purchases outside VA medical facilities.
                        Additionally, “community care programs” includes programs and activities that provide
                        community care whether under statutory or contractual authority.
                        2
                         John S. McCain III, Daniel K. Akaka, and Samuel R. Johnson VA Maintaining Internal
                        Systems and Strengthening Integrated Outside Networks Act of 2018. Pub. L.No. 115-
                        182, tit. I, 132 Stat. 1392 (2018) (VA MISSION Act).




                        Page 35                                     GAO-19-478 VA Community Care Budget Estimates
                        Appendix I: The Department of Veterans
                        Affairs’ Community Care Programs for
                        Veterans and Other Eligible Beneficiaries




                        and limited newborn care when such care is not feasibly available from a
                        VA medical facility. To be eligible to obtain care from Patient-Centered
                        Community Care providers, veterans must meet the same criteria that are
                        required for individually authorized care.

                        Veterans Choice Program. VA modified its Patient-Centered Community
                        Care contracts with the two third-party administrators to implement the
                        Veterans Choice Program. This program allows eligible veterans to obtain
                        health care services from community providers if the veteran meets
                        certain criteria, including when a veteran cannot receive care within 30
                        days from the veteran’s or physician’s preferred date, or face an unusual
                        or excessive burden in traveling to a VA medical center. 3


Other Community Care    Agreements with federal partners and academic affiliates. When
Programs for Veterans   services are not available at VA medical facilities, VA may obtain
                        specialty, inpatient, and outpatient health care services for veterans
                        through different types of sharing agreements—those with other federal
                        facilities (such as those operated by the Department of Defense and the
                        Indian Health Service), those with Tribal Health Programs, and those with
                        university-affiliated hospitals, medical schools, and practice groups
                        (known as academic affiliates).

                        Emergency care. When emergency community care is not
                        preauthorized, VA may reimburse community providers for emergency
                        care for eligible veterans for a condition related to a service-connected




                        3
                         Other criteria for the Veterans Choice Program include if the veteran lives more than 40
                        miles driving distance from the nearest VA medical center with a full-time primary care
                        physician; or would have to travel by air, boat, or ferry to the VA medical center closest to
                        their home; or have specific health care needs that warrant participation (including the
                        nature and frequency of care); or live in a state or territory without a full-service VA
                        medical center.




                        Page 36                                     GAO-19-478 VA Community Care Budget Estimates
                     Appendix I: The Department of Veterans
                     Affairs’ Community Care Programs for
                     Veterans and Other Eligible Beneficiaries




                     disability, and for eligible veterans for a condition not related to a service-
                     connected disability. 4

                     Foreign Medical Program. The Foreign Medical Program is VA’s health
                     care benefits program for eligible veterans who are residing or traveling
                     abroad and have a service-connected disability.

                     State Home Per Diem Program. Under the State Home Per Diem
                     Program, states provide care for eligible veterans in three different types
                     of programs: nursing home, domiciliary, and adult day health care.


Community Care       Camp Lejeune Family Member Program. The Camp Lejeune Family
Programs for Other   Member Program is for family members of veterans that lived or served at
                     U.S. Marine Corps Base Camp Lejeune, North Carolina, for no fewer than
Beneficiaries
                     30 days between January 1, 1957, and December 31, 1987, and were
                     potentially exposed to drinking water contaminated with industrial
                     solvents, benzene, and other chemicals. The program provides health
                     care to veterans who served on active duty at Camp Lejeune and to
                     reimburse eligible Camp Lejeune family members for health care costs
                     related to one or more of 15 specified illnesses or medical conditions
                     specified in law. 5

                     Children of Women Vietnam Veterans Health Care Benefits Program.
                     This program provides health care benefits to female Vietnam veterans’
                     birth children who the Veterans Benefits Administration has determined to
                     have a covered birth defect. This program is not a comprehensive health
                     care plan and only covers those services necessary for the treatment of a
                     covered birth defect and associated medical conditions.

                     4
                      A veteran may access emergency care for a condition related to a service-connected
                     disability when a prudent layperson (1) would classify the condition as an emergency, and
                     (2) would have deemed it unreasonable for the veteran to access the care at a VA or other
                     federal facility. In addition to meeting the previously stated criteria, a veteran may access
                     emergency care for a condition not related to a service-connected disability if services
                     were rendered before they were stable for transfer to a VA or other federal facility; if the
                     veteran was enrolled in and accessed care from a VA clinician in the 24 months preceding
                     the emergency care; if the veteran is financially liable to the community provider; if the
                     veteran has no entitlement under another health plan contract (such as Medicare); and if
                     the veteran has no recourse against a third party that would wholly extinguish liability to
                     the community provider.
                     5
                      Examples of conditions listed in the law include bladder cancer, breast cancer, leukemia,
                     and lung cancer. See Pub. L. No. 112-154, § 102, 126 Stat. 1165 (2012).




                     Page 37                                     GAO-19-478 VA Community Care Budget Estimates
Appendix I: The Department of Veterans
Affairs’ Community Care Programs for
Veterans and Other Eligible Beneficiaries




Civilian Health and Medical Program of the Department of Veterans
Affairs (CHAMPVA). CHAMPVA is a comprehensive health care
program that provides health care coverage for spouses, children and
primary caregivers of veterans who are permanently and totally disabled
from a service-connected disability. 6 CHAMPVA functions similarly to
traditional health insurance, with most care in the program delivered using
non-VA community providers.

Spina Bifida Health Care Benefits Program. This program provides
health care benefits to certain Korea and Vietnam veterans’ birth children
who have been diagnosed with spina bifida. 7




6
 CHAMPVA also provides coverage for spouses and children of those who died in the line
of duty or from a service-connected disability. Eligibility for spouses also includes widowed
spouses. See 38 U.S.C. § 1781.
7
 Spina bifida is a type of birth defect that results from the neural tube (the embryonic
structure that eventually develops into the brain and spinal cord) failing to develop or close
properly in utero, which can cause a range of physical and neurological defects.




Page 38                                     GAO-19-478 VA Community Care Budget Estimates
Appendix II: Budget Formulation Process for
              Appendix II: Budget Formulation Process for
              the State Home Per Diem Program and Non-
              Veteran Community Care Programs


the State Home Per Diem Program and Non-
Veteran Community Care Programs
              The Department of Veterans Affairs (VA) and its actuarial consultant use
              the Enrollee Health Care Projection Model to develop most of the
              department’s estimate of the resources needed to meet the expected
              demand for VA’s health care services. VA uses other methods to estimate
              the remaining resources needed. This remaining portion includes
              community care programs for veterans and other eligible beneficiaries,
              including the State Home Per Diem Program and the Civilian Health and
              Medical Program of the Department of Veterans Affairs (CHAMPVA). 1

              State Home Per Diem Program. This program pays per diem for state-
              provided care for eligible veterans in three different types of programs:
              domiciliary, nursing home, and adult day health care. For state home
              domiciliary and nursing care, categorized as institutional care, VA creates
              budget projections based on historical funding data. For state home adult
              day health care, categorized as non-institutional care, VA’s budget
              estimates are based on projections of the amount of care provided—
              which is known as workload—and the unit cost of providing a day of this
              care. 2 VA projects the demand for non-institutional care services using
              information about the size and demographic characteristics of the
              enrolled veteran population. VA projects unit cost for non-institutional care
              services by calculating unit-cost increases observed from recent
              experience and then using this information to project future unit costs. VA
              multiplies the workload estimates, unit-cost estimates, and the number of
              days in the fiscal year to develop an estimate of the amount of resources
              needed for non-institutional care.

              CHAMPVA. CHAMPVA provides health care coverage for spouses and
              children of veterans who are permanently and totally disabled from a
              service-connected disability. 3 CHAMPVA functions similarly to traditional
              health insurance—most care within CHAMPVA is delivered using non-VA
              community providers. Therefore, developing estimates of the resources
              needed for CHAMPVA requires factoring in utilization patterns and cost
              inflation that are generally outside of VA’s control. Budget estimates for

              1
              Other eligible beneficiaries may include a veteran’s spouse or dependent child.
              2
               Workload for most non-institutional services is measured as the average number of
              people enrolled per day for the number of days in the fiscal year that the service is
              available.
              3
               CHAMPVA also provides coverage for spouses and children of those who died in the line
              of duty or from a service-connected disability. Eligibility for spouses also includes widowed
              spouses. See 38 U.S.C. § 1781.




              Page 39                                   GAO-19-478 VA Community Care Budget Estimates
Appendix II: Budget Formulation Process for
the State Home Per Diem Program and Non-
Veteran Community Care Programs




CHAMPVA are developed using a formula that computes the predicted
number of users and costs per-member per-year. 4 VA works with its
actuarial consultant to generate projections of CHAMPVA users that
incorporate changes related to the population of disabled veterans and
projections of expected increases and decreases in the CHAMPVA-
eligible population. In addition, the actuarial consultant projects the costs
per-member per-year, which is calculated by dividing the most current
fiscal year data on total CHAMPVA expenditures by the number of actual
users. Trends are then incorporated to predict the future costs per-
member per-year, which is multiplied by projections of the number of
CHAMPVA users to develop CHAMPVA budget estimates.




4
VA considers members to be those who access CHAMPVA services.




Page 40                                  GAO-19-478 VA Community Care Budget Estimates
Appendix III: Health Care Services included
                                          Appendix III: Health Care Services included in
                                          the Enrollee Health Care Projection Model for
                                          Fiscal Year 2019


in the Enrollee Health Care Projection Model
for Fiscal Year 2019
                                          Using its Enrollee Health Care Projection Model (EHCPM), the
                                          Department of Veterans Affairs (VA) developed estimates for 79 health
                                          care services—available in VA medical facilities or through community
                                          care—for the fiscal year 2019 President’s budget request. As shown in
                                          table 7, VA developed separate estimates for the 43 services that were
                                          available through community care. Some of these 43 services were only
                                          available through community care. These services were primarily long-
                                          term care, including nursing home care provided at community nursing
                                          homes, home hospice care, home respite care, homemaker or home
                                          health aid programs, and purchased skilled nursing care.

Table 7: Health Care Services Included in the Department of Veterans Affairs’ Enrollee Health Care Projection Model, Fiscal
Year 2019

Service type               Health care service                                     Estimates developed     Estimates developed
                                                                                    for VA facility care   for community care
Dental care
                           Major restorative dental services                                ✔                       ✔
                           Minor restorative dental services                                ✔                       ✔
                           Preventative and basic dental services                           ✔                       ✔
Inpatient care
                           Maternity deliveries                                             ✔                       ✔
                           Maternity non-deliveries                                         ✔                       ✔
                           Medical                                                          ✔                       ✔
                           Surgical                                                         ✔                       ✔
Long-term care
                           Community adult day health care                                                          ✔
                           Community nursing home (long stay)                                                       ✔
                           Community nursing home (short stay)                                                      ✔
                           Community residential care                                       ✔
                           Home-based primary care                                          ✔
                           Home hospice care                                                                        ✔
                           Home respite care                                                                        ✔
                           Homemaker/home health aide programs                                                      ✔
                           Home telehealth                                                  ✔
                           Purchased skilled home care                                                              ✔
                           Spinal cord injury and disorders home care                       ✔
                           VA adult day health care                                         ✔
                           VA community living center (long stay)                           ✔
                           VA community living center (short stay)                          ✔




                                          Page 41                                   GAO-19-478 VA Community Care Budget Estimates
                                       Appendix III: Health Care Services included in
                                       the Enrollee Health Care Projection Model for
                                       Fiscal Year 2019




Service type         Health care service                                        Estimates developed     Estimates developed
                                                                                 for VA facility care   for community care
Mental health care
                     Acute substance abuse                                               ✔                       ✔
                     Compensated work therapy/transitional residence                     ✔
                     Homeless                                                            ✔
                     Inpatient mental health                                             ✔                       ✔
                     Intensive community mental health recovery                          ✔
                     services
                     Mental health residential rehabilitation                            ✔
                     Mental health office visits                                         ✔
                     Mental health residential rehabilitation treatment                  ✔
                     program outpatient encounters
                     Mental health residential rehabilitation treatment                  ✔
                     program residential encounters
                     Outpatient mental health                                            ✔                       ✔
                     Outpatient substance abuse                                          ✔                       ✔
                     Psychosocial rehabilitation and recovery centers                    ✔
                     Psychotherapy (individual or group)                                 ✔                       ✔
                     Sustained treatment and rehabilitation                              ✔                       ✔
                     Work therapy                                                        ✔
Outpatient care
                     Allergy immunotherapy                                               ✔                       ✔
                     Allergy testing                                                     ✔                       ✔
                     Ambulance                                                                                   ✔
                     Cardiovascular                                                      ✔                       ✔
                     Chiropractic                                                        ✔                       ✔
                     Compensation and pension exams                                      ✔
                     Dialysis and related services                                       ✔                       ✔
                     Emergency room visits                                               ✔                       ✔
                     Hearing aid services                                                ✔                       ✔
                     Hearing and speech exams                                            ✔                       ✔
                     Immunizations                                                       ✔                       ✔
                     Maternity                                                           ✔                       ✔
                     Miscellaneous medical                                               ✔                       ✔
                     Nutritional counseling                                              ✔                       ✔
                     Office administered drugs                                           ✔                       ✔
                     Office visits, urgent care, physical exams–non-                     ✔                       ✔
                     mental health
                     Outpatient medication therapy management                            ✔                       ✔




                                       Page 42                                   GAO-19-478 VA Community Care Budget Estimates
                                                                Appendix III: Health Care Services included in
                                                                the Enrollee Health Care Projection Model for
                                                                Fiscal Year 2019




 Service type                             Health care service                                                             Estimates developed     Estimates developed
                                                                                                                           for VA facility care   for community care
                                          Over-the-counter medication                                                                   ✔
                                          Pathology                                                                                     ✔                  ✔
                                          Physical medicine                                                                             ✔                  ✔
                                          Prescription drugs (brand and generic)                                                        ✔
                                          Prescription related supplies                                                                 ✔
                                          Prosthetic and orthotic services                                                              ✔                  ✔
                                          Radiology—computerized tomography, magnetic                                                   ✔                  ✔
                                          resonance imaging, and positron emission
                                          tomography
                                          Radiology—general                                                                             ✔                  ✔
                                          Recreational therapy                                                                          ✔
                                          Surgery                                                                                       ✔                  ✔
                                          Vision exams                                                                                  ✔                  ✔
 Prosthetics
                                          Blind aids                                                                                    ✔
                                          Cardiothoracic surgical implants                                                              ✔
                                          Glasses/contacts                                                                              ✔
                                          Hearing aids                                                                                  ✔
                                          Home telehealth devices                                                                       ✔
                                          Medical equipment and supplies                                                                ✔
                                          Orthotics                                                                                     ✔
                                          Oxygen                                                                                        ✔
                                          Prosthetics-artificial limbs                                                                  ✔
                                          Respiratory equipment                                                                         ✔
                                          Surgical implants                                                                             ✔
                                          VA specialized products and services                                                          ✔
                                          Wheeled mobility devices                                                                      ✔
 Rehabilitation care
                                          Blind rehabilitation                                                                          ✔
                                          Spinal cord injury and disorders                                                              ✔
Source: GAO analysis of Department of Veterans Affairs (VA) data and documentation of the Enrollee Health Care Projection Model. | GAO-19-478




                                                                Page 43                                                    GAO-19-478 VA Community Care Budget Estimates
Appendix IV: Community Care Data Sources
             Appendix IV: Community Care Data Sources in
             the Department of Veterans Affairs’ Enrollee
             Health Care Projection Model


in the Department of Veterans Affairs’
Enrollee Health Care Projection Model
             The Department of Veterans Affairs (VA) and its actuarial consultant use
             the Enrollee Health Care Projection Model (EHCPM) to develop most of
             the department’s budget estimate to meet the expected demand for VA’s
             health care services. 1 This estimate includes the services that VA
             purchases from non-VA community providers through its various
             community care programs, including the Veterans Choice Program
             (Choice Program).

             Based on our interviews with various VA officials, VA’s Office of
             Enrollment and Forecasting provided utilization and cost data from fiscal
             year 2016 community care claims from four different sources for use in
             the 2017 EHCPM, which was used to project the fiscal year 2019 budget
             estimate. 2 (See fig. 7.) Specifically, the Office of Enrollment and
             Forecasting—which is responsible for compiling the claims data used in
             the EHCPM—obtained community care claims data, including Choice
             Program claims, from VA’s Fee Basis Claims System. In addition, the
             Office of Enrollment and Forecasting worked with VA’s Allocation
             Resource Center to gather additional utilization and cost data from
             Choice Program claims processed outside the Fee Basis Claims System,
             and other data needed for the 2017 EHCPM. 3 Specifically, the Allocation




             1
              The EHCPM was developed in 1998 by VA and its actuarial consultant. VA uses other
             methods to estimate the remaining resources needed.
             2
              According to VA officials, they conduct risk assessments and review security controls of
             their financial management systems, including a recent review of the Fee Basis Claims
             System, to support the Secretary for Veterans Affairs’ annual attestation of the
             effectiveness of internal control over those systems. In particular, the Secretary is
             responsible for establishing and maintaining effective internal controls and financial
             management systems that meet the objectives of 31 U.S.C. § 3512(c), (d), commonly
             known as the Federal Managers’ Financial Integrity Act of 1982 and the Office of
             Management and Budget (OMB) Circular No. A 123, Management’s Responsibility for
             Enterprise Risk Management and Internal Control. These objectives are to ensure (1)
             effective and efficient operations, (2) compliance with applicable laws and regulations, and
             (3) reliable financial reporting. The Federal Managers’ Financial Integrity Act of 1982 and
             OMB Circular No. A-123 require an annual statement of assurance to Congress attesting
             to the effectiveness of internal controls and identifying material weaknesses. This
             statement is included as part of the VA’s Agency Financial Report, which is published
             annually by November 15.




             Page 44                                  GAO-19-478 VA Community Care Budget Estimates
Appendix IV: Community Care Data Sources in
the Department of Veterans Affairs’ Enrollee
Health Care Projection Model




Resource Center compiled claims data for those Choice Program claims
paid through expedited payments. 4 The Allocation Resource Center also
pulled data on dual eligible veterans, from the Department of Defense’s
Medical Data Repository, and indirect costs associated community care
claims (for example, costs associated with care coordination or claims
processing) from VA’s Managerial Cost Accounting system. 5




3
 According to VA officials, prior to the implementation of the Choice Program in November
2014, staff from the Office of Enrollment and Forecasting were responsible for pulling all
relevant claims data needed by its actuarial consultant for the EHCPM. Because of the
introduction of the Choice Program, and the changing ways through which Choice
Program claims were processed, VA officials stated that the Office of Enrollment and
Forecasting asked for assistance from the Allocation Resource Center to identify and
gather Choice Program claims data. VA officials anticipate that once the Choice Program
ends, staff from the Office of Enrollment and Forecasting will be responsible again for
pulling the relevant claims data needed by its actuarial consultant for the EHCPM.
4
 Since implementation of the Choice Program in November 2014, VA has modified the
way it has processed and paid Choice Program claims. All Choice Program claims were
initially processed through the Fee Basis Claims System. Due to Choice Program claim
processing backlogs, some Choice Program claims were processed in an expedited
manner outside of the Fee Basis Claims System from March 2016 through July 2016.
These claims were aggregated and processed in bulk. Since April 2017, VA has been
processing Choice Program claims through a different claims processing system, Plexis
Claims Manager. However, according to VA officials, a small number of Choice Program
claims continue to be paid through an expedited payment process based on the date of
service of the claim. For more information on changes to how Choice Program claims
have been processed and paid, see Department of Veterans Affairs, Office of Inspector
General, Veterans Health Administration: Audit of the Timeliness and Accuracy of Choice
Payments Processed Through the Fee Basis Claims System, Report No. 15-03036-47
(Washington, D.C.: Dec. 12, 2017), and Department of Veterans Affairs, Office of
Inspector General, Veterans Health Administration: Bulk Payments Made under Patient-
Centered Community Care/Veterans Choice Program Contracts, Report No. 17-02713-
231 (Washington, D.C.: Sept. 6, 2018).
5
 Dual eligible veterans are those veterans that are also eligible for medical benefits from
the Department of Defense.




Page 45                                   GAO-19-478 VA Community Care Budget Estimates
                                         Appendix IV: Community Care Data Sources in
                                         the Department of Veterans Affairs’ Enrollee
                                         Health Care Projection Model




Figure 7: Data Sources for the Department of Veterans Affairs’ 2017 Enrollee Health Care Projection Model




                                         a
                                          When the Veterans Choice Program was implemented in November 2014, all Veterans Choice
                                         Program claims were initially processed through the Fee Basis Claims System. In fiscal year 2016,
                                         due to Veterans Choice Program claim processing backlogs, some Veterans Choice Program claims
                                         were processed in an expedited manner outside of the Fee Basis Claims System from March 2016
                                         through July 2016. These claims were aggregated and processed in bulk
                                         b
                                          The Fee Basis Claims System processes claims for the Department of Veterans Affairs’ (VA)
                                         community care programs nationwide at individual VA medical facilities and consolidated payment
                                         processing centers.
                                         c
                                           The Allocation Resource Center pulled data from the Medical Data Repository on dual eligible
                                         veterans, or those veterans that are also eligible for medical benefits from the Department of
                                         Defense.
                                         d
                                          VA’s Corporate Data Warehouse is a national repository comprising data from several VA clinical
                                         and administrative systems.
                                         e
                                          The Allocation Resource Center pulled indirect costs from VA’s Managerial Cost Accounting system.
                                         Indirect costs include those costs associated with care coordination or claims processing.
                                         f
                                             VA’s Enrollee Health Care Projection Model (EHCPM) is operated by VA’s actuarial consultant.




                                         Page 46                                         GAO-19-478 VA Community Care Budget Estimates
Appendix V: GAO Contact and Staff
                  Appendix V: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Sharon M. Silas, (202) 512-7114 or silass@gao.gov
GAO Contact
                  In addition to the contact named above, Rashmi Agarwal (Assistant
Staff             Director), Aaron Holling (Analyst-in-Charge), Chad Clady, and Kate
Acknowledgments   Tussey made key contributions to this report. Also contributing were
                  Krister Friday, Jacquelyn Hamilton, and Muriel Brown.




                  Page 47                             GAO-19-478 VA Community Care Budget Estimates
Related GAO Products
             Related GAO Products




             Veterans Choice Program: Further Improvements Needed to Help Ensure
             Timely Payments to Community Providers. GAO-18-671. Washington,
             D.C.: September 28, 2018.

             Veterans Choice Program: Improvements Needed to Address Access-
             Related Challenges as VA Plans Consolidation of its Community Care
             Programs. GAO-18-281. Washington, D.C.: June 4, 2018.

             VA’s Health Care Budget: In Response to a Projected Funding Gap in
             Fiscal Year 2015, VA Has Made Efforts to Better Manage Future
             Budgets. GAO-16-584. Washington, D.C.: June 3, 2016.

             Veterans’ Health Care: Proper Plan Needed to Modernize System for
             Paying Community Providers. GAO-16-353. Washington, D.C.: May 11,
             2016.

             Veterans’ Health Care Budget: Improvements Made, but Additional
             Actions Needed to Address Problems Related to Estimates Supporting
             President’s Request. GAO-13-715. Washington, D.C.: August 8, 2013.

             Veterans’ Health Care: Improvements Needed to Ensure That Budget
             Estimates Are Reliable and That Spending for Facility Maintenance Is
             Consistent with Priorities. GAO-13-220. Washington, D.C.: February 22,
             2013.

             Veterans’ Health Care Budget: Better Labeling of Services and More
             Detailed Information Could Improve the Congressional Budget
             Justification. GAO-12-908. Washington, D.C.: September 18, 2012.

             Veterans’ Health Care Budget: Transparency and Reliability of Some
             Estimates Supporting President’s Request Could Be Improved.
             GAO-12-689. Washington, D.C.: June 11, 2012.

             VA Health Care: Estimates of Available Budget Resources Compared
             with Actual Amounts. GAO-12-383R. Washington, D.C.: March 30, 2012.

             VA Health Care: Methodology for Estimating and Process for Tracking
             Savings Need Improvement. GAO-12-305. Washington, D.C.: February
             27, 2012.

             Veterans’ Health Care Budget Estimate: Changes Were Made in
             Developing the President’s Budget Request for Fiscal Years 2012 and
             2013. GAO-11-622. Washington, D.C.: June 14, 2011.


             Page 48                         GAO-19-478 VA Community Care Budget Estimates
           Related GAO Products




           Veterans’ Health Care: VA Uses a Projection Model to Develop Most of
           Its Health Care Budget Estimate to Inform the President’s Budget
           Request. GAO-11-205. Washington, D.C.: January 31, 2011.

           VA Health Care: Challenges in Budget Formulation and Issues
           Surrounding the Proposal for Advance Appropriations. GAO-09-664T.
           Washington, D.C.: April 29, 2009.

           VA Health Care: Challenges in Budget Formulation and Execution.
           GAO-09-459T. Washington, D.C.: March 12, 2009.

           VA Health Care: Long-Term Care Strategic Planning and Budgeting Need
           Improvement. GAO-09-145. Washington, D.C.: January 23, 2009.

           VA Health Care: Budget Formulation and Reporting on Budget Execution
           Need Improvement. GAO-06-958. Washington, D.C.: September 20,
           2006.




(102732)
           Page 49                        GAO-19-478 VA Community Care Budget Estimates
                         The Government Accountability Office, the audit, evaluation, and investigative
GAO’s Mission            arm of Congress, exists to support Congress in meeting its constitutional
                         responsibilities and to help improve the performance and accountability of the
                         federal government for the American people. GAO examines the use of public
                         funds; evaluates federal programs and policies; and provides analyses,
                         recommendations, and other assistance to help Congress make informed
                         oversight, policy, and funding decisions. GAO’s commitment to good government
                         is reflected in its core values of accountability, integrity, and reliability.

                         The fastest and easiest way to obtain copies of GAO documents at no cost is
Obtaining Copies of      through GAO’s website (https://www.gao.gov). Each weekday afternoon, GAO
GAO Reports and          posts on its website newly released reports, testimony, and correspondence. To
                         have GAO e-mail you a list of newly posted products, go to https://www.gao.gov
Testimony                and select “E-mail Updates.”

Order by Phone           The price of each GAO publication reflects GAO’s actual cost of production and
                         distribution and depends on the number of pages in the publication and whether
                         the publication is printed in color or black and white. Pricing and ordering
                         information is posted on GAO’s website, https://www.gao.gov/ordering.htm.
                         Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
                         TDD (202) 512-2537.
                         Orders may be paid for using American Express, Discover Card, MasterCard,
                         Visa, check, or money order. Call for additional information.

                         Connect with GAO on Facebook, Flickr, Twitter, and YouTube.
Connect with GAO         Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.
                         Visit GAO on the web at https://www.gao.gov.

                         Contact FraudNet:
To Report Fraud,
                         Website: https://www.gao.gov/fraudnet/fraudnet.htm
Waste, and Abuse in
                         Automated answering system: (800) 424-5454 or (202) 512-7700
Federal Programs
                         Orice Williams Brown, Managing Director, WilliamsO@gao.gov, (202) 512-4400,
Congressional            U.S. Government Accountability Office, 441 G Street NW, Room 7125,
Relations                Washington, DC 20548

                         Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
Public Affairs           U.S. Government Accountability Office, 441 G Street NW, Room 7149
                         Washington, DC 20548

                         James-Christian Blockwood, Managing Director, spel@gao.gov, (202) 512-4707
Strategic Planning and   U.S. Government Accountability Office, 441 G Street NW, Room 7814,
External Liaison         Washington, DC 20548




                            Please Print on Recycled Paper.