zin islands just as we would defend tokyo. >> thank you, senator. on behalf of the chairman can, thank you for your testify, your service, your continued service. let e me adjourn the hearing. . thank you. >> thank you, sir. >> thank you, sir.

wednesday morning a house subcommittee hears from attorney general loretta lynch on the justice department's 2017 budget request. that's live at 10:30 a.m. on c-span 3. homeland security secretary jeh johnson returns to capitol hill to talk about his department's budget proposal for the 2017 year and the senate homeland security subcommittee hearing live tomorrow on c-span 3 at 2:15 p.m. eastern.

i am trying still to decide which candidate to support. i'm trying to decide between the governors who have executive experience or some of the other candidates like ted cruz and marco rubio. >> the most important issue to me is national service. there are more than 5 million young americans that are ready to step forward and serve t country for a year with americans like the peace corps and youth build. >> veterans affair secretary robert mcdonald will testify outcan loined the budget request for his department. he was followed by a panel of veteran services organization representatives with their take on the va's budget. this is just over o two hours.ñi

>> thank you for being here today, mr. secretary. thank you for coming today. bringing you cast of thousands. you've got a lot of support here today. big budget, big support. we're proud to have secretary mcdonald be here today. we were proud to have in order danny, doctor, thanks. ronald waters. laverne counsel. ed murray. we appreciate all of you. with all that support, mr. secretary, i'm sure you're going to do a great job. i'll make my opening statement and then turn to blumenthal then to your testimony. i don't want you to feel compelled by any five-minute light. i want you to say what you've got to say. i understand the average ñr attention span of the united states senator is about nine

minutes. after that we all start blinking. speaking for myself. that's self-imposed limitation. thank you very much, mr. secretary, for being here today. we're looking forward to discussing the $182 billion budgetary appropriation. it would be an 8.9% increase. should it be adopted, medical funding would increase by $3.8 billion or 6.3%. i.t. would be increased by $145 million. i'm very encouraged that you've braced the program to merge the programs. we look forward to that. your testimony also talks a little bit about accountability. in fact, i read the information. accountability as a word is used one time but it's probably most important thing this committee is really interested in doing. you and i had a great meeting at your office last week mr. secretary and i want to acknowledge publicly with the members and thanks blumenthal and murray's staff for the work they're doing. i've stated publicly and i'm doing it again now publicly my goal is to see to it by the end march we have an accountability bill for veterans administration

employees that's right for veterans and right for those employees and we look to the future to see to it if we have problems in the future, that we have a defensible accountability system within the department to correct a wrong and not let it happen again. most of them, in fact, if not at all of them, pre your service, mr. secretary. lack of accountability implementations that's impossible to understand. we want to put that behind us. and build a platform that's good for the employees, good for the management. most importantly, good for the veterans themselves so they know they're getting quality services and quality accountability. it's very important we do that. that's the most important thing we can do. lastly, you talked about the appeals process. i hope you'll address that in your remarks. that's something we talked about many times. have not done. something we rightfully need to do.

i'd love to know what you're going to recommend. we're glad you're here today. appreciate your service to the country. it's time to introduce the ranking member senator blumenthal. >> thanks, mr. chairman. i want to second your remarks about the need for an accountability bill which is i think making progress with very close by partisan cooperation between our staffs and ourselves. i want to thank the secretary and the president for a very robust and profoundly significant budget the va's going through major changes as it looks toward the future. and prepared for an even more challenging future so far as the needs of our veterans are concerned. in areas of not only health care but also jobs and job training and skill preparation and of

course homelessness. in connecticut, i am very delighted to say is at the forefront of that effort. in fact, announced just last week that we have ended homelessness for veterans in connecticut. and of course that's a continuing effort. it's a milestone, not a finish line. we need to continue to provide permanent housing for all of our veterans, not just a temporary or transition form of housing. this budget request focuses fortunately on a number of areas i think are important. breakthrough priorities such as community health care, accountability, the appeals process. i also think that in terms of our medical care, the challenges of post traumatic stress and the research and outreach that needs to be done need to be given priority. i hope this hearing will be an opportunity to hear from you about more of the details of

this proposal, but i also think the vision for the future is tremendously important not only this year but looking beyond this year just as you would at a company like procter & gamble, beyond this quart, beyond this year, to think about what this enterprise is going to look like in five years, in ten years. because now is the time to build for the veterans who will be coming out of the service and they'll be more and more of them over the next few years as we downside our active force. so i thank you for being here and i'm looking forward to hearing from you and from the veterans service organizations that perform such an important and vital role in keeping us informed about veterans needs and making sure that all of us are held accountable. thank you. >> thank you, senator. mr. secretary, it's all yours.

>> chairman isakson, ranking member, and members of the committee, thank you for the opportunity to present the president's 2017 budget and 2018 advance appropriations request for the department of veterans affairs. i have a written statement that i ask be submitted for the record, mr. chairman. mr. chairman, the president's proposal is another strong tangible sign of his devotion to veterans and their families. it proposes $182.3 billion for the department and fiscal year 2017 which include $78.7 billion in discretionary funding, a 4.9% increase above the 2016 enacted level largely for health care. it includes $12.2 billion for care in the community and a new medical community care budget account consistent with the va budget and choice improvement act. it includes $103.6 billion in mandatory funding for veterans benefit programs and $103.9

billion in advanced appropriations for our three major mandatory veterans benefits accounts. it supports va's four agency priority goals and our five my va transformational objectives to modernize va and improve the veteran experience, improve the employee experience, improve internal support services, establish a culture of continuous improvement and expand strategic partnerships. those five transformational objectives are about growing va into the high performance organization veterans deserve and taxpayers expect. i learned over three decades in the private sector procter & gamble what makes a high performance organization. it takes a clear purpose, strong values, enduring principles and technical competence.

high performance organizations depend on sound strategies. they thrive with passionate leaders who are willing to take tough decisions and make bold changes to improve. and high performance organizations require responsive systems and processes designed and managed in a high performing culture. well, va has a clear purpose in our most noble mission to care for those who have born the battle. we have strong core values, integrity, commitment, advocacy, respect and excellent. our strategic plan makes clear we're a customer service organization. we serve veterans. our five my va transformational objectives and our 12 breakthrough priorities for 2016 are about accomplishing that strategy. ten of our top 16 executives are new since i became secretary. they're part of a growing team of talented enthusiastic former

business leaders and experienced government and health care professionals. and they're making innovative changes and creating opportunities for even greater progress. we're making the sweeping changes necessary for va to be a high performing organization and we'll know we're getting there when by design veterans needs shape our systems, our processes and our culture. for example, a responsive health care system for veterans means veterans have 24/7 access to va systems and know where to get accurate answers. whether that's their veteran contact center or the veterans crisis line. veterans calling or visiting primary care facilities and medical centers have their clinical needs addressed the very same day. veterans calling for new mental health appointments receive suicide risk assessments and immediate care if needed.

and veterans already engaged in mental health care who need urgent attention speak to a provider the very same day. for employees serving veterans, it means a high her forming culture where continuous improvement drives responsive forward thinking and innovative change. it means training our workforce on advance business techniques. it means responsive performance management systems that resonate with employees and encourage rather than discourage continuous improvement in excellence. it means proper employee placement. clear performance expectations. continuous feedback and employees equipped with the tools to achieve excellent. it means executive performance ratings and bonuses that reflect actual performance and take into account relative inputs like veteran outcomes, results of employee surveys. it means modern systems in place of antiquated costly paper

processes. these are a few characteristics of high her forming systems, processes and culture and we're advancing along these lines in many others. we launched our cascading leaders developing leaders training last year with 450 senior field leaders. it's not a single event. it's a continuous enterprisewide process of leaders teaching leaders teaching leaders in order to inculcate lasting change. we'll have trained over 12,000 senior leaders empowering teams to dramatically improve care and service delivery to veterans and creating better work environments for employees. private sector leadership experts are developing va teams in new ways with cutting edge business skills like human centered design. we're using human centered design and lean right now to redesign the compensation and pension progress because veterans find it confusing and burdensome. we're looking at industry best practices in planning for an automated performance management solution for general scheduled employees.

we can streamline that process, improve accuracy and interface with opm. all of this is focused on moving va into the ranks of high performing organizations. that goal is in reach. we'll need your continued support to achieve it. i appreciate our extensive discussion at the end of january on our my va 12 breakthrough priorities for 2016. the proposed budget continues support of this priorities into 2017. it provides $65 billion for veterans medical care, 6.3% increase over 2016. it provides $66.4 billion in advanced appropriations for the va medical care programs in 2018. it provides $7.8 billion for mental health, funds veterans in the field and crisis line modernization. enhances health programs for womens veterans and provides an incredibly effective hepatitis c

treatment to an expected 35,000 veterans. to help integrate all the my va initiatives across the enterprises provides $2.6 million for the my va program office. to continue training field employees on advance business skills and establishing high customer service standards, it increases funding for our veteran experience office by 47%. we'll continue doing all we can to squeeze as much as possible out of every single budget dollar. our pharmacy benefits management program afforded $4.2 billion in unnecessary drug expenditures next year. exceeding goals of the president's campaign to cut waste. and we've reducing bonuses 64% between 2011 and 2015 by

rigorously linking awards to performance. we've saved $16 million using more efficient training and meeting methods. we're already saving $10 million annually. we've saved approximately $5.5 million from 2011 to 2015 by strengthening controls over permanent change of station moves. now that we've implemented electronic claims processing we'll save millions of dollars each year in paper storage. we're committed to doing everything we can with everything we're given. many important priorities for meaningful change require substantial congressional action. there are more than 100 legislators proposals in the budget. over 40 of them are new this year. some are critical just to maintain our current ability to

purchase nonva care. it's critical va's competitive with private sectors so we can attract top talent. nowhere is that more important than in health care.xd personal authority adjustments, we're proposing flexibility on the maximum 80 hour pay period requirement for certain medical professionals. it will help improve hospital operations and attract the best hospital staff who prefer more flexible schedules. we're proposing critical compensation reforms for network and hospital directors. likewise, the title 38 ses proposal we're working on is about being competitive with the private sector in recruiting. it's not just about finding people. it's about treating va career executives more like their private sector counterparts.

va needs that flexibility too. we need your help to transform va's care in the community to best serve. we need your help modernizing va's purchase care authorities. to maintain veterans access to care everywhere in the country. addressing this challenge more than nine months ago, and i've r consistently identified it as a top legislative priority. this needs to get done in this congress to ensure that strong foundation for access to community care. we're proposing a general transfer authority that allows me some measured flexible spending. to respond to the veteran's emerging needs. the process is not serving veterans well. the budget proposal's simplified, streamlined, so that five years from now, veterans have appealed resolved within

one year of filing. while requiring short-term staffing increases to contend with the 445,000 pending appeals legislating the appeals process can save more than $139 billion, i'm association million dollars annually beginning in 2022. we need congressional authorization of 18 leases submitted in va's 2015/2016 budget request. as well as authorization of eight major construction projects included in the fiscal year 2016 budget. we need your support for six additional replacement major medical facility leases, two major construction projects and four cemetery projects in the 2017 budget. in passing special legislation for va's west campus will give us positive results for veterans in the community most in need it

i've joust lined a few opportunities for change here. this congress, with today's va leadership, can make these changes and more for all veterans and for veterans in the future. then we can look back on this year as the year we turn the corner. i appreciate the support you've shown veterans, the department and the my va transformation. on behalf of veterans and the va employees serving them every single day, thank you for this opportunity. we look forward to your questions. thank you, mr. chairman. >> thank you, mr. secretary. we're delighted to have you here

today. i'll start the questioning and we'll go republican/democrat after we go to the ranking member, all the way through. your proposal has a unique system for senior executive employment within the veterans administration which would create a unique pay schedule and discipline system around title 38. accountability is the single most important thing we must accomplish on my judgment within this committee and the va itself. you detail for the committee the justification for the proposal. >> yes, mr. chairman. as you know, we run a health care business. we run an organization that, if it were a company, would be fortune 6 on the fortune 500. we compete with health care professionals from the best health care systems in the country, whether they be medical centers that we're affiliated with like duke medical center or whether they be large health care companies like mayo or cleveland. we believe the best way to treat

va employees is as a health care professional also they are and the title 38 provision would give us that ability. we can pay them more competitively. right now, our average medical center director is paid, at best, half what they can earn in the private sector and we've lost several recently, and we're paying them the best we can with the scs system. separately, we can also recruit and appoint people more quickly. because title 38 would give us direct hiring authority. so we believe that moving the title 38 for all ses employees in va would be a big step forward, make us competitive with the private sector and would improve care for veterans. >> in the case of disciplinary action, how does title 38 differ? >> would make me the appealing -- the appeal authority. so people would an peel to me. it would put appellate authority within the department rather than in some external organization that looks across government. >> so in a hypothetical example that's really not so

hypothetical, in the pennsylvania case that's just been adjudicated on appeal, that would have been appealed to you and not msrp? >> that's correct, sir. >> okay. secondly, we talked about the 440,000 pending appeals at the veterans administration. you made a administration in the house committee meeting the other day that the straw man or something like that. do you have specific proposals in this budget proposal you're offering? >> yes, sir, we have offered a specific proposal but also as we are talking right now, we have members of the committee and other members of congress, and are making progress in getting an alignment as to what that proposal should look like. so i suspect while the proposal we've submitted is a good one, that we can make even further enhancements to us to create a greater consensus moving forward. as we talk, we expect to have

all that done by the end of march so we can get something done with this. >> are you moving away from the fully developed claim process? >> no, sir. we think the fully developed claim is a good step on the way to a totally new appeals process, about you but it doesn the process to the degree we think it needs changed. >> and using the word of the day, accountability, i think it's important for our veterans, to make sure if they have an p.m. -- appeal, that it's justified and heard. and make sure that a handful of appeals doesn't make a slow response for others. one of the things i've seen from talking with those at the v.a., there are a handful of appeals that over and over and over again, over a series of years are still active in the process. every time one of those takes place, it takes time away from a claim that's recently filed by a veteran who deserves meritorious

treatment. i personally am very supportive of finding way to ensure the veterans get accountability, but also have some accountability to cut that off so it's not an ongoing process. >> yes, sir, you're right. as you know, 10 to 11% of veterans appeal the decisions. of those 10% to 11%, it's about two percentage points, 2% of all veterans that when they appeal drive multiple appeals and their appeals comprise about 45% of all appeals. so you're right, about 2% of veterans are creating about half of the work. that is an unacceptable situation and one we should resolve to the benefit of all veterans. as we've committed in our 2016 end of year outcomes, we would like by the end of this year to be able to have a process in place that would eventually lead to one year for veteran appeal. >> just one last comment. in your prepared remarks, you

said 10 of the 16 top leaders in the va are new hires you've brought in, people from hospitals, is dr. shul kin and miss counsel, 2 of those 10? >> yes. >> if the other 8 of those 10 are doing as good a job as though two are, we're going to be in much better shape at the va. i want to acknowledge the dr. shul kin's help in the private meeting -- not private, but the meetings we've been having at the va to deal with the accountability issue and some of the other things going on. they're doing a great job. i appreciate the fact they've been very responsive to us. on the i.t. situation as well so thank you very much. >> mr. chairman, as you know, we have an ig nom inee who we all think very highly of. we would love that to get passed on the senate floor. >> for the record, i'm meeting individually with the people i think need to be met with to try to see if we can't get that to a vote on the floor. we're not there yet but we're making progress. senator blumenthal. >> thanks, mr. chairman. i want to first just mention the

elephant in the room. which is the potential hurdles and obstacles to approve this budget in the potential gridlock and paralysis in the budget process overall. the va illustrates to me the urgency of putting aside partisan differences, putting aside extraneous issues and proceeding to a budget, regardless of what our colleagues in the house of representatives may think about the budgeting process and regardless of other issues relating to the supreme court or any other kinds of challenges that we face here. and i think that you've come here in good faith to argue for some really urgent priorities that must be met and they are commendably a part of this budget. earlier this year, the hartford,

they reached out to me because they were informed there were no additional hearing dates. travel board or teleconference dates for hartford and the remainder of the fiscal year in terms of the appeals process. after my inquiry, the additional teleconference date has been added which i appreciate but i think that that experience illustrates the importance of reforming the appeals process -- the bsos have focused on it and i assume you agree, it should be a priority? >> absolutely. i also agree on the budget. i would tell you this is my second budget at the va, but i feel better this year than i have ever before about connecting our strategies with the budget, with resources, with the legislation required and

with the six -- the 12 priorities that we have listed for 2016. this is more than just a budget. this is the delivering of outcome for veterans. we need this budget in order to do that. but we also need the legislation and the other things we've talked about as a group. >> focusing for the moment on delivery of services to women veterans. there's a request for a 515 million for gender specific health care for women and nearly $5.3 million in total care for women, which recognizes the need to consider the growing female veteran population in our country and provide care that is both welcoming and efficient and proficient to meet their needs. i'm still concerned that the culture of the va and the ability to welcome veterans, female veterans and provide health care services to them in

a sensitive and tailored manner may not berf+uñ>5ñ keeping pacee number and the needs of those veterans. could you please tell us how you intend to use the requested funding for women's health care to address frankly the pervasive feeling of many female veterans that the va remains a male focused culture and organization. >> i'm really glad you raised this, senator blumenthal. this is such an important topic to us. i think this will be one of the seminal issues of transformation that we will be held responsible for as people look back years from now. as you know, since 2000, the number of women veterans seeking va health care services has doubled, from 160,000, to over 447,000 in fiscal year 2015. so this is a major focus for us.

we have enhanced care for women. we have designated women's health providers at every site where women access va health care. currently 100% of our medical centers and 94% of our community-based outpatient clinics have at least one designated women's health provider. we need to get that to 100%. we've trained over 2,400 providers in women's health to ensure that every woman veteran has the opportunity to receive her primary care from a women's health provider. we have women veteran program managers, maternity care coordinators at every health care facility. we provide gynecological care, including maternity care, and seven days of new born care to all veterans on site, through 130 health care systems, or through care in the community. this is, this is really a very important point to us and we have to continue to make this

transition over time. because as you said, it's going to continue. >> thank you, very much. my time is expired. i have other questions i may submit for the record. but thank you. to your team for being here today. thank you. >> senator rounds? >> thank you, mr. chairman. let me just begin by saying i have appreciated the bipartisan approach by both the chairman and ranking member blumenthal as we move through the different and challenging issues before us. including the budget itself. i'm optimistic that this committee will work very favorably in moving forward in this particular budget process. i've only been here a year but i've been encouraged by the way this group here has worked on these issues. one of the major challenges that has hampered the choice program has been the va's shift of cost for care for the veterans who have been utilizing the choice program. veterans are paying far more for

their care under choice than they traditionally paid under va facility care or non-va care, typically as a result of deductible and co--pay calculations that are different than when they're seen in the private sector. as you consolidate the care and the community programs, do you envision veterans continuing to pay more out of pocket to be seen in the private sector? >> senator rounds, it's a great point. we would like when we consolidate care to go to one payment system, one reimbursement system, so we eliminate the complexity. you are right that when the choice act was created, veterans were forced to pay higher co--pays to use the choice act service in order to keep the cost down of the total choice act. if they use a va service, there's no co-pay.

if they use a choice act, there is a co-pay. we do think that change needs to be made. >> the primary difference is the way the choice legislation was written is that in choice, va is the secondary payer. a veteran has to use the primary insurance and they have to use their co-pays. what we have suggested in our legislative proposals is to make choice -- is to make va the primary payer and to consolidate all the care in the community. that would eliminate this disparity that veterans see today. >> in south dakota, we continue to hear that timely provider payment under the choice program is a continuing issue. recently i heard from a private sector provider that has over $3.3 million in payments that have been outstanding for more than 90 days. what specific initiatives are you putting in place to accomplish your 2016 breakthrough priority of getting 85% of the claims paid within 30

days. it looks to me that you have quite a hill to climb. >> first of all, please give us the name of that provider. we'll go back and make sure they get paid. secondly, the systemic change we need is to follow the best practices in the private sector, which is to pay the provider based on them providing the service. not waiting for the paper documents which has been our past practice. dr. shul kin has put that change in place. we have another week or so until we actually activate it. but that means providers will get payments virtually as soon as they provide the service. >> yesterday, we delivered to the two tpas a proposal for them to sign that would decouple documentation from payment so we can make faster payments to providers. >> i've heard that in my state, vha has made the conscious decision to shift certain health care services over to the choice program and away from vha facilities. yesterday, we saw a similar story out of cincinnati that

contained allegations of services being switched to choice and the community in order to make hospital finances look better. whether that's the case or not, how do you reconcile shifting services over to the choice program? and in the process, eliminating capability to perform those services when choice is clearly a temporary program designed to supplement va care and its authorization expires next year? >> the most important thing in making any of these decisions is what's best for the veteran. nothing else should be a consideration. unfortunately -- and i'm not saying this is happening, because we have to investigate the allegation you describe. unfortunately, because of the fact we have 70 line items of budget where we can't move money from one to the other. you may recall last year, i had to come to this committee and ask for the ability to move money from the choice budget that was for care in the community, to the va budget that was for care in the community.

same purpose but we had to ask your permission to move that money. what we've put in our '17 budget proposal is a proposal to give us flexibility on only 2% of our funding so that we can move money between accounts. again, with the idea that we got to get the best care for the veteran. >> thank you. my time has expired. thank you, mr. chairman. >> thank you, senator. senator tester? >> thank you, mr. chairman. i want to go back to title 38. could you tell me, mr. secretary, how many medical center directors were either acting or without a position, or you, david? >> i'd be glad to. today we have 34 medical centers without a permanent medical center director. i will tell you, being responsible for the health care organization, there's no way i can assure we're doing the best for veterans with 34 open positions. >> and how many are acting? or does that include acting?

>> that includes acting. those are ones that we need to fill. >> can you tell me how long it takes to recruit a p.a. or a nurse or md? >> approximately -- they differ a little bit but i'm going to say on average six months. >> six months. okay. now, if we do the changes that you've recommended, how long would it take you to recruit and appoint? >> well, i think the change to title 38 is going to help us get more candidates and better candidates. we have many medical centers that frankly have been open for years and years because we don't have candidates. i think it's going to increase the pool. we have to -- one of the secretary's 12 priorities is to streamline the hiring process, because we have to get where the private sector is. match or beat where the private sector is to get the best candidates. >> but the title 38 recruiting and hiring process is more streamlined than the ses process. >> yes. >> so your hope is to get it

down to what kind of a timeline? >> i'd like to break it in half. >> okay. >> i think we can do it. >> okay. you put a number of legislative requests forward. is it accurate to say that veterans access to care has been impeded by the federal acquisition regulations? >> when you say legal, the complexity of the system, absolutely, that's correct. >> okay. i believe we have a bill, maybe not in total what you want, but a bill to get that done. i think it's come out of this committee. is it accurate to say that the va's efforts to improve the quality and delivery of care have been impeded by the number of vacancies? >> yes. >> is it also fair to say that from a medical personnel standpoint, the appeals process has not been working like it should? >> we would agree with that. >> is it more important to say you need flexibility in your budget? >> yes, sir, we do. >> to move money around.

in july 2014, mr. secretary, you were confirmed by a 97-0 vote. nobody in the senate opposed you. >> i'm still looking for those three who didn't vote. >> they were probably out campaigning for president but at any rate -- [ laughter ] i would just say as a committee, i would be happy to work with the chairman. so it's on a bipartisan basis. we need to push the leadership to get these bills on the floor and hold this man accountable. we can't hold him accountable if his hands are tied. i really think it's important. he came from the private sector. 10 of his 16 folks have come from the private sector. if we want the va to work, we've got to put our trust. if he screws up, gone. the fact is, i trust you. i believe you can get this done. i think we need to give him the tools to get that done. it's going to require some floor action on these bills with a very limited amount of time for

floor action. if it would take a letter, if it would take phone calls. a group meeting with senator mcconnell, i'd be more than happy to join you on that. this may be parochial in nature, but there's an issue with travel pay right now. where the veteran used to get travel pay immediately when they came. now, because of people thinking they were going to try to game the system, they go to a kiosk. now it's a month or longer to get their travel pay. i'm hearing a lot about this. and i'm not sure that it solves any of the problems with pay going to a kiosk because if a guy wants to be a crook, they'll be a crook on a kiosk. just as well as -- and what it's doing, it's stopping some of our veterans from being able to get the care timely. it may be hard to believe but a lot of these guys need that travel pay and they need it quick so if we can do something. >> senator, we will look into that. that is not an intentional delay so we need to fix that. >> the last thing i would say, and i attribute this to the third-party providers, and not

t to the va, and we've got to get this fixed. my staff just gave me a chart. you can take a look at it. 53% of the work we do is veterans work. it used to be a third, okay. it's 53% now. that isn't happening because things are going smoothly. i think you guys know that. we need to get it fixed. this committee needs to do its job to help you fix it and then we need to hold you accountable for that. thank you, mr. chairman. >> in reference to your comment in wi in the beginning about your meeting with leader mcconnell, for your education, information, i appreciate you raising the bills that we haven't gotten through the congress yet. we're working on a -- if you will, omnibus proposal that we hope to by the end of march have finished and acted upon in the house and the senate. that's aggressive game plan. we're trying to get all that done. so your help on that, which i will take as a volunteering to be on my team. we'll make sure we use you to help us do that. it's in a bipartisan way too. >> i will be more than happy.

i think it is important for us to hold the agency accountable. i think it's also important for us to listen to the people at the head of it and make sure we give them the tools they need to be successful and hold them accountable. >> we've got to hold ourselves accountable. >> that's correct. that may be the biggest problem of all. we have to correct that. >> senator moran. >> mr. chairman, thank you very much. mr. secretary, welcome. thank you for the telephone conversation we had recently. just a couple of, aspects i was interested in what senator tester had to say about case work. as you and i have talked. that's been a significant fact in our life. more veterans with more questions i guess and concerns. so i appreciate senator tester raising that question. -- raising that issue. let me talk about a couple of items that are kansas related. the choice act provided for a new cbot in johnson county.

johnon county is the kansas city  the missouri/kansas line is kansas city, our fastest growing part of our state. and the requirement, as i understand it, is for those proposed medical facility leases to be submitted to gsa. and the time frame is seemingly extraordinary long, like five years, once the decision is made to begin that lease process. is there something we can do to help speed that process up? we have the same issue in junction city. junction city is a bedroom community of fort riley. lots and lots of veterans. cbot there is needing to move out of the current facility and they're looking for space which to my knowledge they have not found. but if you would bring me up to date on both of those. and then the broader question is, is there something we can do to help to speed up the process? >> the process does take too long. we have i think is it 16 or 18 leases right now. we're waiting -- 16. we're waiting for authorization

from you all to move forward on. >> 18. >> 18. if you could authorize those, we really appreciate it. >> in the case of at least johnson county that i'm talking about, it's authorized. >> okay. >> and then having been authorized, i'm told it's at least five years before -- >> no. well, it shouldn't be. we have worked with gsa to streamline that process. but i'm happy to -- we'll come over and sit down with your staff and go through a streamlined timeline of how long it should take. it should not take five years. >> there are two if we can talk about the one in junction city and johnson county. and then, mr. secretary, let me raise a topic of construction of a new hospital in leavenworth. again, a military community. the strategic capital investment plan lists leavenworth patient facility as number 13 on the

va's priority list. but there were no funds requested in fy '17. what does that mean? what's the value of that 13th ranking and no funding? >> well, i think what it demonstrates, senator, is we need more money in construction. most of our priority projects are seismic projects or projects that deal with human safety. as i showed in my written testimony, we have had catastrophes happen because we haven't been seismically ready. 60% of our buildings are over 50 years old. we would love to get down through the total list, but that's going to require disproportionate amount of capital to do that. >> in that circumstance, is the va open to public/private partnerships, local entity that would build the facility and then lease it back? does that speed up the process and help the budgetary constraints? >> we are. there's actually two different processes. both of which were looking at. one is something we already have experience with called extended

use leasing. this is a process where, for example, there's a company called core that built a building on our campus in men low park, that we're able to rent from them to house homeless veterans. that's the bill i need passed for los angeles. i can't do that in los angeles right now. that's where we have the majority of the homeless veterans. there's another process called public/private partnership or p-3 which we're currently exploring to move our san francisco campus, which is landlocked and isolated. what we don't know yet is how will cbo and how will omb score that and whether or not because it is an extended use program, they'll score it as if it were a capital project. so we're looking into that. we should have an answer in march. we'll be back to you. because if we can do p-3s it will unlock a lot of capability for va. >> maybe we can have that conversation we talk about the cbots as well because i think

there's an opportunity for this thing to occur in kansas. my final question, how does the cbot issue affect the consolidation choice, community care plan? are cbots any less valuable? is there less emphasis as a result of choice and consolidation or -- >> no, i don't think so. i think what it does, it speaks to something you and i spoke about before, which is when we improved access last year and did the 7.5 million more completed health care appointments, that was in large part because we added over 2 million square feet of new space. so every time you put a building out there, it creates access, advantages you didn't have before. but what we have to do is we have to be more choiceful. i don't mean a pun in that word. but we have to be more choiceful about where we put them.

so we make sure we're taking advantage of all our affiliates. like indian health service, medical school affiliates and others and we're putting those only where they're required. being good stewards of taxpayer money. >> i appreciate this conversation, look forward to having future ones. >> me too, sir. >> senator brown. >> thank you, mr. chairman. welcome, mr. secretary and all of you, thanks for your public service to our veterans, to our countries, all of you. want to address the very serious allegations senator rounds mentioned of cincinnati, of mismanagement. you and i have talked a number of times for months and months about some of these allegations and issues, nepotism, lack of cleanliness, mismanagement, staffing shortages, fear of whistle-blower retaliation. first it's about quality of care as you have assured us and i know how much you care when you

took this job about that. i need your assurances first, while this investigation is going on, and the issues and problems are being fixed, that you will ensure that veterans receive better quality, good quality care throughout. i know you believe that i just want your assurances, and at the same time restoring faith in cincinnati that veterans and their families feel compromised and that i'm glad that you've agreed to visit the va as soon as our schedules permit it, for both of us to go together. thank you for that. i want to talk about whistle-blowers for a minute. for more than a year, a number of whistle-blowers have talked to my cincinnati office, talked to me personally, talked to a number of people in my office and others. the atmosphere is some workers will say toxic. where workers fear they'll be punished for doing their jobs well. i'm concerned that when va employees come forward to voice concerns regarding improper medical care or other issues, i'm concerned that in too many cases va management has

retaliated against them. i want your commitment for a couple of things, mr. secretary. one, that no employee at cincinnati va who did the right thing and advocated for our veterans will be retaliated against for their actions. and i want your commitment that if any va employee is retaliated against for speaking up on behalf of veterans, and patients, that you will hold those people accountable. >> first of all, relative to cincinnati, as you noted, senator, the investigation is ongoing. cincinnati facility has been a five-star facility historically in va. one of our very best. i visited it a couple of times myself. over the last two years. so it is, it is an important facility. it is has been historically a good facility. we need to dig into this and find out whether or not these allegations are, are supported. and then take actions as quick

as possible to remediate them, if they are. relative to whistle-blowing, you know we were the first department certified by the office of special counsel, to have done the training on whistle-blowing. we take it very seriously. in fact we ask all of our employees to give us negative feedback, as well as positive feedback so we can change. that's why we're training them in things like lean 6 sigma, so they can create change themselves. we do not tolerate retaliation and will deal with it if we see it, and we just don't tolerate it. we work very closely with the office of special counsel to make sure whistle-blowers are protected, that they're given good jobs moving forward, and that people who do retaliation are held accountable. >> that's what you say and i believe you. >> that's what i say. that's what i do. >> that's not what some people apparently some people in cincinnati, that work at va have done. so i do want that commitment

that if proven that people who have retaliated against whistle-blowers will be held accountable. >> they will. anybody who retaliates against a whistleblower will be held accountable. but what we're describing are allegations. >> i understand. >> let's do the investigation before we commit people -- >> i don't want to convict anybody. i didn't mention names. i said if proven, i just wanted your commitment. >> just know we get a lot of whistleblower -- >> i understand. i see that when i was a member of the house, i heard it in brecksville and wade park, sometimes it was accurate. sometimes it wasn't. i want to echo what chairman mcdonald's and isaacson's remarks about confirming the ig. when i wrote to the va about cincinnati, unfortunately the letter went to linda halladay,

the deputy inspector general, instead of the inspector general. let me close with a bit about staffing directly connected to senator rounds' comments. that report recommended the veterans, that required section 301 report on staffing, recommended the 61 full-time equivalents be hired for the cincinnati va to properly meet the needs of veterans. there are reports at leadership that cincinnati va may be using it to actual cut staff. can you tell me about any of that specific now at this point? or is that something you need to share later once you know more? >> we immediately sent the offices of medical inspection to cincinnati. we do have a preliminary report from them. so we can, i'm fine with updating you on that now. >> the other thing, senator, that we did immediately was we removed the management authority from the director away from the cincinnati va to make sure there

was no ability to influence or to keep people from raising issues. so we want this to be a very transparent and we will be glad as soon as we get this final report to review that with you. >> how long will it take for these whatever the number. up to, up to, including the number 61, if there's 40 or 60 or 20, how long will it take to bring in and train new providers? >> well, it will depend on the type of providers that are there. obviously physicians and nurses take longer because they're -- because of their orientation and credentialing period than staff, front-line staff. so there will be a spectrum along that line. but the vizn and the medical center have been given their budget and do the ability to hire the most critical positions they need to hire right now. >> okay. thank you. >> senator brown, just so you're clear on the record, i consider accountability to apply in two ways.

employee to supervisor and supervisor to employee as well. we have got to have accountability on both sides and that's what we're pushing for so hard, so i appreciate your comment on that. senator tillis? >> thank you, mr. chair, thank you all for being here and secretary mcdonald and a lot of the folks at the panel, thank you so much for the time you've invested coming to my office and working with me. i want to emphasize what you've said. that is critically important. that of the breakthrough priorities, there's very clearly instances where congress sits in the critical path. if we don't take action to move forward on these legislative priorities, then it will either impede or prevent completely your ability to achieve the goals you've set out. and i'll continue to mention that and stand up for it. miss counsel i want to talk to you a minute about i.t. it's fantastic to have somebody

with your professional experience in the role that you're in. and i'm glad to have you there. can you give me an idea of what your instincts are telling you as you look at this enormous i.t. base, you and i have talked about application portfolio and we can talk in acronyms most people think would be a second language. can you tell me what your gut tells you the i.t. platform looks like five years from now versus today in terms of off-the-shelf solutions, integrated platforms, those sorts of things, that i think are at least according to the secretary and others, are huge enablers to what you all are trying to accomplish? >> yes. senator tillis, it's great to talk to you as well. i won't use any acronyms this time. as we sort of look out into the future, one of the things that's become very clear, not just on

intuition, but on fact is that we have a very complex architecture and a variety of different things in our midst. and so figuring out how to manage those today and move off of them and move into the future is critical. one of the critical areas that i think that will look very different in the future is how we manage and use data and how we leverage the data in support of the veteran. we, i believe have a primary -- prime opportunity with putting in a data management function. by putting in something that is very different than anyone has seen at this point. that will move us forward to have much more agility. related to our operations. related to what the veteran will need, increasing our ability to be much more mobile. to have mobility, being used by the veteran in our access to information as well as our ability to speak and engage with them. and i think also when we look at

our infrastructure, having a much more solid supply chain capability, a financial system that will enable much more visibility into the environment. but also ensuring that we have some best of breed capabilities wrapped around our health care, as well as in our benefits area. >> one thing i want to try to get a lot in, in the last couple of minutes, but one thing i would like to see out of all of the things you need to do to transform the i.t. operation, is something that would give me some sense that these duplicative platforms, there are very clear patterns that i can view when i take a look at these transition plans, and i'd like to see that. so that i know that we're making the operational changes and the systems changes to make a lot of these things that are falling

through the cracks, the probably the root cause for a lot of the problems that we have, so i appreciate the opportunity to maybe get briefed up with you as you've gotten your legs there and appreciate it. i want to go into a lightning round real quick, i just want to try to stick to my time first. i want to echo the sentiments here. we need to confirm the ig and do everything we can to get the inspector general there, it's a vital role and we need somebody in that position. mr. mcdonald, this organization chart seems to me to be an optimized state. it's a pyramid, it looks like you got the right distribution with you know that really being but today it seems like it's an obelisk. one thing we haven't talked about here is the organizational change and over time you don't, unless you have data here, i'd like to find out what we're doing in the middle to reorganize, and either eliminate those resources or free up the resources to provide care out in the communities. can you give me some idea, we

haven't talked much about that track. can you give me some idea of what that looks like? >> the middle is the most important part as you well know of any organization. number one, training. as i talk, we're training the leadership team, that training is now cascading through the organization, 12,000 senior leaders will have been trained. we're training leadership, we're training process mapping. we're training lean 6 sigma, value, mission, all the important things, three days of training. number two is structure, spans and layers, we have to reduce in the number of spans, and reduce the number of layers. we talked about moving from 21 vizns to 18, that was in my testimony. but with so many open positions, is an opportunity to reduce even more. with every open position we question, david and i question and sloan, whether or not we

should fill it. we want to reduce spans and we want to reduce layers. we can share that plan with you -- >> just because my time is short that i'm cutting you off. but i think seeing a measurable instinctively this organization looks like it's heavy in the middle. with that comes cost and complexity and breakdowns and handoffs. i'd like to see where that transformation looks like over time. both in terms of its structure but in terms of the people. and to your point, many of them may be open, so it maybe means you no longer have a need for that position. i think that would be helpful. so that people understand there's an organizational transformation that's going on. last thing. to follow up. when a veteran calls for help, let's say it's a distress call for a veteran who may be worried that they're thinking about suicide. how are these calls tracked? in other words if i get reports as i have in north carolina recently, that a veteran called and was told to call back, how can i track that down, either

make sure that person has been trained, that hasn't done their job, therefore, they should be fired, or that their supervisor hasn't gotten them the appropriate training to make sure that that is never an appropriate disposition, if in fact it's happening. what i want to do is at least go in and be proactive, and say maybe i don't have the facts straight based on what i've been reported on the ground but if those facts are right, then i want to go after that person for doing the wrong thing for a vet and i'd like your advice on that either in the committee or afterwards. >> it's a very complex issue. let me give you a headline and we'll come over and talk about our veterans crisis line. as you know, one of our priorities for this year is to fix the outreach to veterans and the veterans crisis line. when all of us came, new people to this organization, what we discovered was the veterans crisis line recent ig report, which was written starting on

-- investigations started may of 2014, so before i was confirmed, found that we had a third-party, that we contracted with that was using voicemail. well you don't use voicemail for a crisis line. we have put new leaders in place, we hired a person with experience on philadelphia 311. they've come in. we've got new technology in place, new training in place. but we've got to get out of the potential for a veteran being put on hold, having to call different number, we still have some medical centers and we're trying to discover which those are and eradicate them. where if they call the medical center and there's an emergency, it says please call this number. rather than immediately shifting that call. we're trying to identify where those are. and then shift the call automatically rather than having them call back. so this is a work in progress, we're happy to brief you on it. it's taking us longer than we'd like. but it is one of our goals for this year and we do need the

budget to do it. >> senator sullivan? >> thank you, mr. chairman and appreciate the witness's focus on these very important issues,d mr. secretary. good to see you again dr. shulkin. i wanted to follow up again on a couple of things. i sent you a letter dated january 4, 2016, on the ongoing issue, a bit of a minor issue in some ways, but it's a huge issue. i think you and i have seen this. we've been talking about it for a while now. but that veterans who are hounded by collection agencies for unpaid bills, the services were approved by the va and now somehow our veterans are getting saddled with that. and the letter had a number of actually, pages of cases that last time we spoke, last time you testified, you mentioned to me to get you those specific examples. i did.

can you give me an update on where we are on that? this is something that i think we should just -- nip in the bud, kill. it's outrageous that we should have patients going through that kind of stress. >> absolutely agree and i heard this directly from you and from veterans when we were together in alaska as well. this is a short-term problem and a little bit longer-term problem. fortunately i think we have solutions for both. the short-term issue, we do not want veterans put in the middle. and so we have established a toll-free number. i wish i had the number memorized, but i will get it to your office. where if a veteran lets us know about that situation, we will intervene immediately. we've done over 400 interventions in the last three weeks since we've put that number up. >> great. >> we want to know from all your offices, because we want to help. >> is there something legislatively we need to do to fix this? >> no. >> just let them know if that's

an issue they should call you guys and you'll take care of it. >> what has happened is because we have had a problem in paying on time, the veteran has been put in the middle. those are the ones we want to stop. so right before you came in, we talked about we now actually have delivered to the tpas yesterday, the contract for them to sign that will decouple medical documentation from payment. so we can get much better at payments and avoid these situations from happening. >> and if you can follow up on the specific ones in a letter -- >> yes. >> that would be very useful. >> i want to next go to the issue with regard to the appeals process. and mr. secretary, i noted that the budget certainly focuses on this. it's an issue, you know the numbers, but 400,000 veterans have appeals pending. 80,000 of those are older than

five years old. 5,000 of those are older than ten years old. i put forward a bill s-2473, very strong bipartisan support on this committee. i won't go through all the elements of it, but we certainly want to work with you. i think my staff has been working with your staff. i think you're supportive of the bill. but can you talk a little bit about how we get our arms around this appeals issue. it does relate of course to the backlog issue. what we don't want to have happen is the backlog then have the appeals become the problem. we think there's some good things in the bill, a number of us have co-sponsored. but i'd like your view on that, particularly because you do seem to be focused on it in the budget. >> we do think moving forward with the fully-developed appeals process makes sense, we are support of that, but we don't think it goes far enough to get to what we think is a breakthrough, one of our 12

breakthrough objectives, which is to be able to decide an appeal in a year. to do that what we put together is a plan where we add more people in the short-term in order to knock the backlog down as much as we can. but at the same time we redesign the appeal law which is over 80 years old. so we can get to that point later. where we deal with each appeal in a year. and then that will actually save us money. that will save the government money and save taxpayers money. to do that, we're going to have to deal with the fact, as i said earlier. that there's only a small group of veterans that are gumming up the system for everyone else. 10 to 11% of veterans appeal. 2% of veterans create about 45% of the appeals. some have appealed 25 times. 50 times. the majority of those appealing, the majority are already receiving some form of compensation. maybe the wrong amount, but

they're already receiving some form of disability compensation. many of them appealing are already rated 100% disabled. so you know, you want to get to the point, where you can freeze the form 9 as we call it. and cause the person to have to resubmit. rather than having the same person appeal over and over again. recognizing that there's no recourse that we have to stop them from doing that. >> we would like to work with you. i appreciate the update, how you're laying that out more strategically. we'll continue to work with your staff s-2473, which we think is, it's a pilot program, you may have seen the legislation. we think it offers a good opportunity, similar to the pilot program that the va is instituting in alaska. and for the record, mr. chairman i'll submit for the record, an update on where we are on the

alaska pilot plan as well. thank you, mr. chair. >> mr. secretary. thank you for being here. i have a kind of smattering of questions all over the place. what is the va currently paying for the cost of hepatitis c treatment, for a regimen of hepatitis c treatment? >> less than we were -- >> got that. >> our drug pricing is proprietary, so unfortunately, i can't say exactly what it is. i can tell you by far, it's the best on the market. that's why it's proprietary. >> we'd be happy to tell you privately. >> okay. i was thinking about it, if 54,000 is what the latest regimen cost lists and you're average 25 to 30% less, it seems like we should be able to treat more veterans for the $1.5 billion that we're giving. if you ballpark you're paying $30,000 per. it seems like we should be treating 50,000 veterans as opposed to 30,000.

>> that's the idea. we had a five-year plan. we're now looking at with lower costs, how do we compress that plan forward and get everyone treated. >> so the 1.5 billion you mentioned and i think 35,000 plan to be treated, you hope that's the last tick on the upside? >> there's no doubt that's the case. 35,000 is what we submitted in the budget we believe we can do many more now. >> thank you. in the new regimen of folks having a new pay scale, government benefits are typically more generous than private-sector benefits. if you increase, i don't know if that's true for executive compensation. >> i would argue that. >> no, no, no, i'm talking about retirement benefits. i'm talking about -- so the retirement benefits, would be roughly equivalent as well. >> yes, sir. >> so there's not a tail on this that's going to come back and bite us that would be greater than we would otherwise anticipate? >> no, sir.

>> when industry decides to downsize, a lot of middle management and top management also goes. but our current civil service restricts the ability to release folks even when they're no longer needed. great for the individual, terrible for the taxpayer and arguably bad for the veteran. under the new authority if you downsize, if you no longer need this facility for example, can you immediately release the person without having to go through a complicated process? >> title 38 gives us more flexibility to do that. >> but much more flexibility, would it be as flexible as the private sector? >> virtually as flexible as the private sector. i'm trying to think, david, some private sector differs. some people have extended contracts, others are at-will. and the title 38 is going to be somewhere in between. >> got you. okay. now you mentioned in your testimony regarding the closing unsustainable facilities. and we're actually interested in

this. we sent a poorly worded request and now we have a better worded request, trying to figure out where are these facilities. you attempted to close one in massachusetts, but you ran into environmental issues. but i think i heard you say it before, but just for the record, tell me, if you have all these vacant facilities underutilized, what are the three top obstacles in closing them, may i ask? >> number one, would be congressional opposition, and congressional opposition borne by perhaps veteran opposition. if you're a veteran and the hospital where you go, is in a remote area, and that hospital only serves five patients a day, it obviously is very expensive to serve -- to run a hospital serving five patients a day. but if you're one of the patients being served, you obviously want it to stay open. >> you mentioned that you have

370 facilities at this, that are less than 50% occupied. which presumably would not have to be completely shut down. but rather, this wing we're no longer using sort of thing. of those that are fully vacant, what is the obstacle to closing those which are fully vacant? >> again, congressional opposition. >> even for something fully vacant? >> yes, sir. veteran opposition. some are on the historic register of buildings. because remember, 60% of our buildings are over 50 years old. we have to come up with an alternate use for those historic structures, unless there's some way to obviate that law. >> that could include boarding up and putting a fence around it i presume? >> yes, sir. >> for the taxpayer, it runs an incredible deficit, we've got $26 million not being used for patient care, which is basically being used to not mothball buildings which should be mothballed. >> yes. >> i would be an advocate for putting a fence around it until something can be done or sold or

developed or something. other reasons -- i'm sorry, i interrupted you. >> no, that's -- those are the primary reasons. >> the downsizing from 50% use to closing off a wing, what is the obstacle there? >> again it depends on the historic structure of the building, what it's used for. >> yeah, we do. we do close off wings in bigger buildings. but they still are very expensive for us to maintain. you still have to maintain the pipes and heating and other types of things. what we normally refer to is the 10 or 11 million square feet that costs us the 25 or $26 million a year. i think in some cases, we are being short sighted in not putting in the capital investments to make the upgrades when 50% of our buildings -- or 60% of our buildingser more than 50 years old, you know that we're maintaining systems that

are very, very expensive to maintain. using today's technology, we'd be able to do a much better job by investing some money right now. >> typically they rebuild a new hospital, they tear it down. you get grandfathered in until you break a wall then you have to institute the whole code. i can see why it would be cost effective just to cut your losses. i yield back, thank you. >> senator bozeman? >> thank you, mr. chairman. thank you all for being here. we do appreciate your hard work. also, i very much appreciate the ability to get in touch with you and you all being very accessible. you mentioned several accomplishments that you all have made, rightfully so. that's one of those. -- that's one of those that people don't think about, but the accessibility really is important to members of congress. in going along with that you also said the systemic problems couldn't be fixed overnight. can you talk a little bit about some of the biggest obstacles

that you face in that regard. and is there a need for additional legislation to help you in that regard? >> senator bozeman, thank you so much for the question and thank you for the time we spent together. to me, job one of any leader is to get the right leadership team in place. and frankly it's taken me too long to get the 10 of 16 leaders in place since i came on board. i wish the nomination and confirmation process were more quick. and we talked about the i.g. as an example of that. but i will tell you also within the organization getting new leaders in place, is job one. and that's why we've recommended taking scss from title 5 to title 38. we are in the process of revamping the recruiting process as well. but for me, that's job one. we've got to get the right leaders in place. >> the latest decision by the

merit systems protection board to overturn disciplinary action, i think we have a situation now where they've overturned more than they've upheld. >> they're batting 1,000. they've overturned every one. >> which is sad. you were blessed and worked hard and got in a situation where you headed one of the biggest, most respected corporations in america. as we visited, you pointed out the va were a business, you would be the sixth largest in the country. >> yes, sir, that's correct. >> can you talk a little bit about how impossible it is to run an efficient entity where you simply don't have the ability to discipline people when they need to be disciplined. with that size, the reality is, that there are going to be situations where people need to be disciplined, need to be held accountable. talk to us about how we can help you in that regard and we'll see

if we can get this straight. >> start with the last question. first, we think the right approach is this proposal that we're all working on together -- the white house and congress, in going from title 5 to title 38 for the scs employees. as i was sharing with the chairman and i think we talked this when we were together, we have worked hard to connect performance with outcome. i talked in my testimony about how bonuses, rewards, are down in the va. we have a ranking -- >> so the old days of handing out a check are over. >> over. >> the ranking of our performance by performance level, is i would argue best in government and fully equal to best in the private sector. so for example, the top ranking one, which would be considered the most outstanding in 2012, over 25% of the people were rated that way. today it's around 10%.

and the steps that we're taking are giving people a good -- a good knowledge of what they have to accomplish, holding them responsible for doing that, and then making the reward matches that. that's part of the training that we're doing. that's part of the leaders train -- training leaders, it's all about the accountability and responsibility. we think again changing the scss from title 5 to title 38 would be a big help. >> that's so important. you mentioned the vet link program. i think about 3% were dissatisfied. that's a low number. what do we do about the 3%? how do we follow up on -- >> we are putting in place -- just in general, we are putting in place, a standard veteran satisfaction measure across the enterprise. this will be the first time ever

that va has had this, believe it or not. and we will follow up with all the veterans that demonstrate some level of dissatisfaction by getting their verbatim comments and acting to remediate what their comments are and that's what we're trying to do with vet link. to make sure we take those comments in and the medical center director has got to react to them and make changes right on the spot. >> thank you for being here. appreciate your service. thank you, mr. chairman. >> thank you for bringing up the part about the accountability. earlier in the hearing, the secretary in his testimony addressed that subject and a number of members have as well and i think that you independently brought that up as your first comment, we're in a situation where you have a toolbox that doesn't have all the tools in it to run the agency the way you would like to and the way it should be. i commend you on the things you have done. let's stick to our goal by the end of march, getting a new tool box and giving you the tools you need to have accountability as a mechanism that works in the va. >> thank you, senator bozeman. thank you mr. secretary. we have a second panel to come forward and we appreciate your

time this morning. the second panel, move forward.

i'd like to welcome our second panel and appreciate the secretary staying for the second panel. we have veterans service organizations which are critically important to us on the va committee and we have the american legion in town today. i was with them earlier and appreciate their support for the veterans administration and for this committee. we have mr. carl blake, the associate executive director of the government relations, paralyzed veterans of america. paul varela, legislative director of the disabled american veterans. ray kelley, director of national legislative service, veterans of foreign wars and the national director of veterans affairs and rehabilitation, for the american legion. mr. blake, we'll begin with you.

>> on behalf of the core authors of the independent budget, i would like to thank you for the opportunity to testify today. you have a copy of our joint statement that we submitted for the record. i will limit my comments primarily to the medical care section of the va's budget and the recommendations of the ib. let me say first that we believe the va's budget is a good one. think in many ways it mirrors the recommendations the independent budget for this year, when you take into account the amount of money that the va intends to spend. from section 801 and 802 for the choice act particularly. it brings the numbers up pretty close. the one exception would be the infrastructure portion. i'll leave the comments on that to my colleague with the vfw. let me say that we do have some real concerns about this continued escalated growth in funding on community care. this year the va introduced its new medical community account when coupled with the choice act, they project to spend nearly $12.2 billion on care in the community this year. it's fair to say we understand the need to leverage community care as best as possible to expand access. the independent budget framework that we've already discussed with the committee staff outlines some of our ideas in the same way. much as the new va's veterans choice plan addresses the issue.

however we're concerned about what is the potential for uncontrolled growth in this area. while the congress and the administration seem to be keenly focused on expanding access in the community, i don't think we can emphasize enough the need to devote critical resources and focus also on expanding the existing capacity of the va and the staffing levels of the va health care system. particularly in the areas of health care services, spinal cord injury or disease. outsourcing the care into the community, while it might seemingly improve access runs the risk of undermining the larger health care system, which many veterans, particularly those with catastrophic disabilities rely upon. one interesting note i would like to point out is in the va's budget this year they project for fiscal year 2016, to spend about 1.7 billion dollars in section 802 choice funding, the community care portion of choice.

when we asked them about it during their budget briefing, they admitted that they project to spend 2.3 billion or more in choice act funding for community care this year. but their budget doesn't seemingly square those two facts which begs the question, where will the additional money come from? the obvious easy answer would be the remaining balance of the choice act. that would call into question, how does that impact the $4.8 billion in choice funding that they're projected to spend in fiscal year '17 for community care. we have real concerns about how the choice act funding is going to be broken up. certainly last year with the massive budget shortfall. that caused some significant difficulties when figuring out how to manage the choice act funding line. we'll be keeping a close eye on how that impacts care going forward. with these thoughts in mind, we also have some real concerns about the funding level for fiscal year 2017 that was approved in the advanced appropriation in december of last year.

while the i.b. recommends approximately $72.8 billion for medical care for 2017, that advanced appropriation only included about $66.6 billion. that's a lot of money, no matter how you look at it, but the fact is, the va revised its estimate for 2017, necessarily so we believe, to a much higher and much more significant level, we believe, reflective of what the actual need is for 2017. unfortunately, we believe that they were setting up a scenario where the very same shortfall problems we experienced last summer may rear their head again in the coming fiscal or in this fiscal year in 2016 and potentially again in 2017. if this advanced appropriation level is not appropriately addressed. we hoped this committee would take a serious look at that and consider that as you put together your views and estimates. lastly we're concerned about the 2018 advanced appropriation level. when we questioned the va on what we felt like was clearly an

insufficient level for 2018, for all of medical care, they sort of half-heartedly admitted they don't believe it's going to be sufficient, either. which is kind of befuddling to us. if you took as historical perspective, that that's okay, because it will be corrected, that's not a fair way to look at this. while the last two years congress has adjusted the advance appropriation in many appropriate ways, the four previous years to that, congress did not adjust by a single dollar, the advanced appropriation for health care, particularly in medical services. so the track record doesn't lend itself to underestimating now to get it corrected later. i certainly hope that the committee will take a real look at the 2018 advanced appropriation and address it so that funding is not left short when we get to that point two years from now. mr. chairman i would like to thank you for the opportunity to testify. i'd be happy to answer any questions that you may have. >> thank you, mr. blake. mr. varella?

>> good morning, chairman oimpt -- isakson and members of this committee. on behalf of the ibvsos, we thank you for the opportunity to address our fiscal year 2017 budget representations and those proposed within the va's budget request. today i'll focus my remarks on four areas, compensation, vocational service, voc rehab, the board of veterans appeals, the board and the simplified appeals process recommendations. for comp service we recommended an increase of 1700 full-time employee equivalents, the administration requests authorization for just 400. given the significant backlog and workload affecting appeals, we believe that 1,000 of the 1,700 ftee requested by the ibvsos, should be dedicated solely to appeals processing. without adequate resources, appellants seeking redress of

their aid determinations will continue to endorse significant delays in the adjudication of their appeals. we have also recommended 100 additional ftee for the fid -- fiduciary program. and 300 ftee for call centers. -- 300 ftee for nondisability rating activities and 300 ftee for call centers. vba must be resourced properly to meet the needs and expectations of veterans, survivors and dependants seeking va benefits and services. second, voc rehab. the ibvsos have recommended a staffing increase for 2017, 158 new ftees are required. but for a second consecutive year, the administration has not requested a staffing level increase. mr. chairman, voc rehab program participation has increased steadily over the past fiscal years to include receipt of new applications for entitlements determinations which has also increased at roughly the same rate. vocational rehabilitation counselors, vrcs, perform myriad

tasks, ranging from their daily caseload responsibilities to integrated disability evaluation system and veteran success on campus activities. vrcs have one of the most critical roles within va. they ensure that ill and injured veterans have all the help, guidance and resources they need to overcome their employment obstacles to lead to more independent and economically fulfilling lives. the ibvsos recommended a staffing increase that would support a more appropriate client-to-counselor ratio throughout voc rehab so vrcs can devote the appropriate amount of time to each veteran to ensure they're on a path to success. third, the board. we are pleased to see the administration's request for 242 ftees. the ibvsos firmly support this request. the additional personnel are certainly needed, given the exceedingly large inventory of appeals, now estimated at roughly 440,000 appeals pending review at various stages in the appeals process. it's important to note that even if the board is provided with the staffing increase and va's

budget is appropriated on time, the impact of these new employees would not be fully realized until sometime in 2018. regardless of the time it will take to hire, train and orient these new hires to the board, they are desperately needed now. and fy 22017 the board was able to produce 57,000 decisions. this averages out to be 88 decisions per ftee. if the board were to receive their staffing increase, thus increasing their staff size to 922, they could conceivably complete 81,000 appeals each year. however, to end the backlog and keep up with incoming appeals, future staffing increases will likely be needed.