STATEMENT OF
THOMAS L. GARTHWAITE, MD
UNDER SECRETARY FOR HEALTH
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES SENATE

July 19, 2001

Mr. Chairman and Members of the Committee:

I am pleased to be here to present the Department's views on six different bills being considered by the Committee. They cover a wide range of subjects related to personnel matters and VA's provision of health care services to veterans. We support many provisions in the bills before the Committee, however there are some on which we recommend modifications, and others which we cannot support at this time.

S. 739
Mr. Chairman, I will begin by offering comments on S. 739, a bill entitled the Heather French Henry Homeless Veterans Assistance Act. The bill is an ambitious and comprehensive piece of legislation that seeks to improve the services and benefits furnished to homeless veterans. We strongly support the objectives of the bill and generally support many of its provisions. However, we are unable to support some of the provisions largely because they duplicate long-standing activities and programs conducted by the Department for homeless veterans or more recent initiatives begun in Fiscal Year 2000. Today I will briefly comment on each of the sections of the bill.

Section 2 articulates Congress' findings regarding the magnitude and scope of homelessness among veterans, the inadequacy of current programs to provide them needed services, the levels of funding needed to provide beds to homeless veterans, and the commitment of the Congress to end homelessness among the Nation's veterans. Other findings articulate statistical information obtained from VA's report on activities conducted under the Community Homelessness Assessment, Local Education and Networking Groups ( CHALENG) program for veterans. Section 2 also defines various terms used in the bill.

It is important to note that in light of more recent information from our CHALENG program the number of homeless veterans, as well as the number of additional beds needed for homeless veterans, are likely to be somewhat lower than the numbers cited in section 2.

Section 3 would declare a national goal of ending homelessness among veterans within a decade and encourage all governmental components, quasi-governmental departments, agencies, and private and public sector entities to work cooperatively in reaching this goal. We strongly support section 3.

Section 4 would establish a 15-member Advisory Committee on Homeless Veterans within the Department of Veterans Affairs, articulate the functions and responsibility of the committee, and establish the pay, allowances and terms for members. It would also establish various reporting requirements. We share the view that an advisory committee would be beneficial, but a statutorily-created Committee is not needed. The Secretary has already announced his intention to establish an Advisory Committee on Homeless Veterans with many of the same functions and objectives.

Section 5 would amend the McKinney-Vento Homeless Assistance Act to require that the Interagency Council on Homeless ( ICH) meet at the call of its Chairperson or a majority of its members and that the ICH meet at least annually. We support this provision.

Section 6 is concerned with evaluation of our programs for homeless veterans and calls for reporting to Congress on those programs. It would require the Secretary to support the continuation of at least one Department center for evaluation to monitor the structure, process, and outcome of VA's programs for homeless veterans. It would further require the Secretary to annually provide Congress with a detailed report on the health care needs of homeless veterans including information on our Health Care for Homeless Veterans Program ( HCHV) and Homeless Providers Grant and Per Diem Program. Section 6 would also require that we carry out our CHALENG assessment program on an annual basis and report to Congress on the findings and conclusions of the CHALENG report.

We support the objective of the requirement for maintenance of an evaluation center, as called for in section 6, but we believe the objective can be achieved without legislation by expanding the mission of our Northeast Program Evaluation Center ( NEPEC). We currently rely on NEPEC to monitor and evaluate the services provided to homeless veterans. Its current efforts are comprehensive with respect to the health care related services that are available and furnished to homeless veterans. However, we capture limited information on outreach activities and monetary benefits administered by the Veterans Benefits Administration ( VBA) in connection with homeless veterans. Recognizing that our current efforts in this area are fragmented and incomplete, we plan to take steps to improve and strengthen the reporting of all programs and benefits to fully and effectively monitor and evaluate all of the Department's programs for homeless veterans.

We do not support the requirements of section 6 that would statutorily require additional reporting and assessment activities. We are essentially already performing these assessment activities and reporting on them. Through the NEPEC, we provide ongoing monitoring and evaluation of our health care programs for homeless veterans. NEPEC provides detailed reports on structure, process, and outcomes for all specially funded homeless veterans programs as well as evaluation support for a wide range of other mental health programs that are not exclusively targeted to homeless veterans but are utilized by homeless veterans such as the Compensated Work Therapy (CWT) Program, and the Compensated Work Therapy/Transitional Residence (CWT/TR) Program. In addition, the CHALENG program achieves the objectives of the proposed requirements.

Section 7 would require the Secretary to designate care and services provided to certain specified veterans as "complex care" for purposes of the Veterans Equitable Resource Allocation system ( VERA). Veterans receiving the following types of care would be covered: (1) veterans enrolled in the Mental Health Intensive Community Case Management program; (2) continuous care in homeless chronically mentally ill veterans programs; (3) continuous care within specialized programs provided to veterans who have been diagnosed with both serious chronic mental illness and substance abuse disorders; (4) continuous therapy combined with sheltered housing provided to veterans in specialized treatment for substance use disorders; and (5) specialized therapies provided to veterans with post-traumatic stress disorders (PTSD ), including specialized outpatient PTSD programs; PTSD clinical teams; women veterans stress disorder treatment teams; and substance abuse disorder PTSD teams. Finally, section 7 would require that we ensure that funds for any new program for homeless veterans carried out through a Department health care facility are designated as special purpose program funds (not VERA funds) for the first three years of the program's operation.

We do not support section 7 of the bill. The complex reimbursement rate under the VERA system is currently reserved for reimbursing VISNs for providing the most complex and expensive care, and should not be based on diagnosis or type of disorder being treated. Section 7 directs complex reimbursement based on broad and general diagnosis and does not consider whether the care is costly. For example, VA now treats some 2,800 veterans in its Mental Health Intensive Community Case management ( MHICM) Program. If a veteran in that program receives at least 41 visits per year, the VERA model will reimburse at the complex rate because that veteran is receiving costly care. Many others in the program have far fewer visits and are far less costly to treat. Section 7 of this bill would require complex reimbursement for all of 2,800 veterans in the program regardless of how many visits they have.

The proposal could add more than 200,000 additional veterans into the category of patients for whom Veterans Integrated Service Networks ( VISNs) receive complex reimbursement. This would require VHA to either set aside a greater percentage of the medical care appropriation for the care of veterans identified in this section, or significantly reduce the complex reimbursement rate per veteran treated. Neither option is acceptable. The first reduces funding for the standard care of veterans, and the second dilutes the reimbursement for complex care so that there is little incentive to provide services to these veterans. In addition, this approach provides a perverse incentive for clinicians to provide more treatment than is needed in order to qualify for the complex reimbursement rate. The effect of this provision would be to reduce the availability to veterans, including many who are homeless, of care not identified in the complex reimbursement category.

Section 8 would require that per diem payments paid to grantees of our Homeless Providers Grant and Per Diem Program be calculated at the same rate that currently applies to VA per diem payments to State homes providing domiciliary care to veterans. Under current law, the homeless provider per diem rates are based on each grant recipient's costs. In short, we pay per diem that amounts to not more than 50% of the recipient's total costs up to a cap. To calculate the per diem rate for each grantee, we must document each recipient's costs. This is an extremely labor intensive and complex process.

We support simplification of program management in the manner proposed. However, since domiciliary care and care under the Homeless Providers Grant and Per Diem Program vary in types of services and intensity, we support a per diem rate of 85 percent of the domiciliary care per diem rate. That would equate more closely with the actual cost of services provided under the Homeless Providers Grant and Per Diem Program.

Section 9 would require that we carry out a new grant program for VA health care facilities and grantees of VA's Homeless Grant and Per Diem Payment Program. The new program would encourage the development of programs targeted at meeting special needs of homeless veterans, including those who are women, who are age 50 or older, who are substance abusers, who suffer from PTSD, a terminal illness, or a chronic mental illness; or who have care of minor dependents or other family members. The measure would also require a report that includes a detailed comparison of the results of the new grant program with those obtained for similar veterans in VA programs or in programs operated by grantees of VA's Homeless Providers Grant and Per Diem Program.

We appreciate the intent of this provision, but we do not support the section because it appears to be unnecessary. We currently operate and/or support successful programs that are specifically targeted at meeting the special needs of these particularly vulnerable groups of homeless veterans. We undertook several special program initiatives in 2000 that were specifically targeted at the special needs of homeless veterans, including women veterans. A study of the effectiveness of the initiative related to homeless programs for women veterans is underway. Finally, we have been successful in establishing and cultivating relations with non-profits in the community to ensure a continuum of services for homeless veterans. We are concerned that this proposal may have a disruptive effect on those relationships by requiring our community partners to compete with VA facilities for these limited grant funds.

Section 10 would require that appropriate officials of our Mental Health Service and Readjustment Counseling Service initiate a coordinated plan for joint outreach on behalf of veterans at risk of homelessness, expressly including those who are being discharged from institutions such as inpatient psychiatric care units, substance abuse treatment programs, and penal institutions. The section sets out a detailed list of items and factors to be included or provided for in the plan.

We support this provision in concept but suggest that it may be duplicative of our current outreach authority and statutory requirement to coordinate with other governmental and non-governmental agencies and organizations. However, we recognize the need for continuing to expand and improve our coordination efforts on behalf of homeless veterans and those at risk for homelessness and the concomitant need to report adequately on these efforts. We will work towards these ends.

As to the issue of coordination between VHA and Vet Centers, our Health Care for Homeless Veterans ( HCHV) Programs staff, who primarily serve under mental health service lines at VA medical centers, currently collaborate with Vet Centers staff regarding the needs of homeless veterans. (Vet Centers estimate that approximately 10% of veterans served in Vet Centers are homeless.) Referrals are regularly made between VA's specialized homeless programs and Vet Centers for appropriate services for veterans who are homeless or at risk for homelessness. In addition, Vet Centers staff are invited to attend and participate in CHALENG meetings. Further, HCHV staff and Vet Centers staff already collaborate with non- VA community-based service providers and with other government sponsored programs.

Section 11 would require that we conduct two treatment trials in integrated mental health services delivery. The bill defines "integrated mental health services delivery" as "a coordinated and standardized approach to evaluation for enrollment, treatment, and follow-up with patients who have both mental health disorders (to include substance use disorders) and medical conditions between mental health and primary health care professionals." One of the treatment trials would have to use a model incorporating mental health primary care teams and the other would have to use a model using patient assignment to a mental health primary care team that is linked with the patient's medical primary care team. We would also have to compare treatment outcomes obtained from the two treatment trials with those for similar chronically mentally ill veterans who receive treatment through traditionally consultative relationships. The VA Inspector General would have to review the medical records of participants and controls for both trials to ensure that the results are accurate.

We share an interest in this area of clinical research and have decided to carry out the project contemplated by section 11 using mechanisms and special programs already in place, i.e. VA's Health Services Research and Development Service and the Department's MIRECCs program. In pursuing this endeavor, we welcome the opportunity to work with Committee staff to ensure the language of the request for research proposals satisfies the objectives of section 11. However, this particular research study (including the final analysis and report to Congress) would likely require more than the amount of time permitted under section 11. Additionally, VA program officials and evaluators will be expected to manage and report on the results of a project of this size without immediate and direct oversight from the Office of the Inspector General (OIG). If there is a need for human subject protection review, the Office of Research and Compliance Assurance (ORCA) should conduct it and OIG involvement should consist only of their current oversight of the activities of ORCA.

Section 12 would effectively extend eligibility for outpatient dental services, treatment, and appliances to certain veterans when such services, treatment, and appliances are needed to successfully gain or regain employment, to alleviate pain, or to treat moderate, severe, or severe and complicated gingival and periodontal pathology. The new authority would extend benefits to enrolled veterans who are receiving care in an array of VA settings, and community programs supported by VA.

Although we recognize that these veterans need dental care and services, we do not support this provision because it would result in a disparity in access to needed outpatient dental care and services among equally deserving veterans. As an alternative, we will heighten and expand our current efforts to obtain dental care and services for homeless veterans through pro bono providers, dental schools and related teaching programs, and service providers receiving grants under VA's Homeless Providers Grant and Per Diem Program.

Section 13 contains several varied provisions. The first would require the Secretary to develop standards to ensure that mental health services are available to veterans in a manner similar to that in which primary care is made available to veterans by requiring every VA primary care health care facility to have mental health treatment capacity. We certainly believe in equitable availability of mental health services and we have included such services in our basic benefits package. We are also already working to assure that all sites of care can either directly provide, contract for, or refer patients to other VA facilities for mental health care.

Another provision in section 13 would require that we expend not less than $55 million from Medical Care funds for our Homeless Providers Grant and Per Diem Program. The amounts to be expended would also have to be increased for any fiscal year by the overall percentage increase in the Medical Care account for that fiscal year from the preceding fiscal year. We don't concur with this provision. We have offered grant funds each year for the past seven years. Grant fund availability has ranged from a low of $3.3 million in acronym title="Fiscal Year">FY 1996 to a high of $15.3 million in acronym title="Fiscal Year">FY 1998. Of the $32.4 million identified for the Grant and Per Diem Program in acronym title="Fiscal Year">FY 2001, approximately $22 million is expected to be spent on per diem payments, leaving $10 million available for the eighth round of grants. We believe that making $10 million available for grants is a reasonable funding level for any given year. Grant awards of $10 million assist with the development of approximately 1,000 community-based beds. It often takes grant recipients two years or longer to complete construction or renovation and to bring the program to full operation. During the development phase, VA staff at the national, VISN and VAMC level are available to assist grant recipients with any problems they might encounter. We believe this personal attention and assistance are partially responsible for the relatively high success rate of grant program implementation. Steady and reasonable growth in the Homeless Providers Grant and Per Diem Program appears to be one of the keys to the success of this program. It is likely that the Grant and Per Diem Program will reach a spending level of $55 million in the next five years.

Moreover, a requirement to spend not less than $55 million next year and in future years may actually be counter-productive to achieving the goals of this program because it would require VA to fund programs that would otherwise not merit grant assistance based on competitive scoring criteria. Past experience has shown VA that not all grant applicants are able to propose viable projects. Indeed, less than 50 applications received in any given year satisfy scoring criteria. This is not indicative of a program weakness; rather, it reflects the requirement that we award grants under the program only to those providers that demonstrate their viability and ability to succeed in meeting their grant applications' stated purpose(s).

A third part of section 13 would require that we establish centers to provide comprehensive services to homeless veterans in at least each of the 20 largest metropolitan statistical areas. Currently, we must have eight such centers.

We support this provision, but defining what services would constitute a comprehensive homeless services program for each of the 20 largest metropolitan statistical areas is a particularly complex task, which depends on the specific demographics of, and the services available in, each particular area. We would like to work with the Congress in defining what specific programs and services are envisioned by this provision.

A fourth aspect of Section 13 would require us to ensure that opioid substitution therapy is available at each VA medical center. We don't support this provision on the basis that a determination to provide opioid substitution therapy is medical in nature (not legislative) and, as such, is dependent on the individual clinical facts of each case. The size and location of medical programs should be determined by veterans' medical needs. However, we recognize the clinical value of this particular treatment. Indeed, we have established 36 opioid substitution programs in VA medical centers across the country and we are evaluating our substance abuse treatment needs to determine whether additional programs may be needed. If deemed to be medically necessary and appropriate, we will not hesitate to establish more programs where needed.

Finally, the last part of section 13 would extend, through December 31, 2006, both our authority to treat veterans who are suffering from serious mental illness, including veterans who are homeless and VA's authority to provide benefits and services to homeless veterans through VA's Comprehensive Homeless Centers. The authority for each of those programs will expire on December 31, 2001 and we support both extensions.

Section 14 would permit homeless veterans receiving care through vocational rehabilitation programs to participate in the Compensated Work Therapy program. It would also allow homeless veterans in VHA's Compensated Work Therapy program to receive housing through the therapeutic residence program or through grantees of VA's Homeless Providers Grant and Per Diem Program. We support both of those provisions.

Section 14 would also require that we ensure that each Regional Office assign at least one employee to oversee and coordinate homeless veterans programs in that region, and that any regional office with at least 140 employees have at least one full-time employee assigned to the above-stated functions.

We support the need for continued effective outreach to homeless veterans, but we have concerns about the proposed staffing requirements. Homeless Veterans Outreach Coordinators are already assigned at each VBA regional office. In most instances, this assignment is a collateral duty and not a full-time assignment. There are, however, some regional offices at which a full-time coordinator is assigned as necessitated by the size of the homeless veteran population and homeless support programs within its jurisdictional area. In addition, we have eight full-time homeless outreach coordinators assigned as members of our Health Care for Homeless Veterans Program and DCHV programs. We also have two offices that have a part-time employee on the homeless program. These positions are reimbursed by VHA. The staffing requirement in this measure would therefore be an unfunded mandate for which employees would have to be re-assigned from other key duties such as claims processing, rating functions, etc. In addition, we believe the veteran population and its particular needs, not the organizational structure of an office, should determine the number and type of outreach coordinators assigned.

Finally, the last part of section 14 would require disabled veterans' outreach program specialists and local veterans' employment representatives where available to also coordinate training assistance benefits provided to veterans by entities receiving financial assistance under section 738 of the McKinney-Vento Homeless Assistance Act. We support this provision.

Section 15 would require that, with a limited exception, real property of grantees under our Homeless Providers Grant and Per Diem Program meet fire and safety requirements applicable under the Life Safety Code of the NFPA.

We strongly support this requirement. The fire and safety requirements under the Life Safety Code of the National Fire Protection Association (NFPA) have been developed through consensus of experts across the country. They assure a consistent level of safety for homeless veterans living in transitional housing or receiving services in supportive service centers developed under the Grant and Per Diem Program. Entities that have received grants in recent years have been aware of VA's preference for structures to meet the fire and safety requirements under the Life Safety Code of NFPA and have developed their grant applications to cover the costs associated with meeting those requirements. There are, however, some organizations that received grant awards and their buildings do not meet the fire and safety requirements under the Life Safety Code of NFPA. It is therefore particularly valuable that this measure would permit VA to award grant assistance to these entities to enable them to upgrade their facilities to meet the Life Safety Code of NFPA.

Section 16 would establish a three-year pilot program to provide transitional assistance grants to up to 600 eligible homeless veterans at not less than three but not more than six regional offices. The sites for the pilot must include at least one regional office located in a large urban area and at least one serving primarily rural veterans. To be eligible, a veteran would have to live in the area of the regional office, be a war veteran or meet minimum service requirements, be recently released, or in the process of being released from an institution, be homeless and have less then marginal income.

Grants under the program would be limited to three months with an exception for any veteran who, while receiving such transitional assistance, has a claim pending for service-connected disability compensation or non-service-connected pension. Such veterans could continue to receive transitional assistance under this section until the earlier of (A) the date on which a decision on the claim is made by the regional office, or (B) the end of the six-month period beginning on the date of expiration of eligibility under subsection (c). The measure would also require the Department to expedite its consideration of pending claims of veterans. VA would have to pay the grants monthly and in the same amount as that which VA would be obligated to pay under chapter 15 of title 38, United States Code, if the veteran had a permanent and total non-service-connected disability. VA would have to determine the amount of the grant without regard to the income of the veteran, once it is determined the veteran meets the eligibility criteria. Finally it would require the Department to offset the amount of retroactive disability or pension benefits paid to a veteran by the amount of transitional assistance provided to the veteran for the same monthly period.

We cannot support section 16, as it appears to be at odds with the inherent interest of our attempts at rehabilitation. The provision lacks safeguards or limitations on the receipt and use of the grant funds, notwithstanding the strong likelihood that many of the grant recipients would be veterans suffering from mental illnesses and/or substance abuse disorders. Awarding funds to these veterans without also requiring them to participate in simultaneous clinical intervention or oversight would result in many of them not seeking the care and treatment necessary to overcome their disorders. This, in turn, could keep those veterans in a condition of homelessness. Simply awarding grant funds, as proposed, is not, in our view, an appropriate means for making these vulnerable veterans self-sufficient.

Section 17 would require that we conduct a technical assistance grants program to assist non-profit groups, which are experienced in providing services to homeless veterans, to apply for grants related to addressing problems of homeless veterans. The measure would authorize $750,000 to be appropriated for each of fiscal years 2001 through 2005 to carry out the program. We do not support this section as we already provide extensive information about the Homeless Providers Grant and Per Diem Program through the Internet, participation in national, state and some local conferences and one-on-one discussions between interested applicants and VA program managers.

Section 18 would authorize the Secretary to waive any requirement that a veteran purchasing a manufactured home with the assistance of a VA guaranteed loan own or purchase a lot to which the manufactured home is permanently affixed.

We do not favor this provision. Rather than address the specifics of this section of the bill, we have concluded the manufactured home loan program no longer provides a viable benefit to veterans, homeless or otherwise. Accordingly, VA recommends that the manufactured home loan program, which for all intents and purposes is dormant, be terminated.

The number of veterans obtaining manufactured housing loans has significantly declined over the years since Fiscal Year 1983 when VA guaranteed 15,725 such loans. No manufactured housing loans have been guaranteed since Fiscal Year 1996.

The cumulative foreclosure rate on VA manufactured home loans is 39.2 percent, which is significantly higher than the 5.6 percent rate for loans for conventionally-built homes. This foreclosure rate has greatly increased the cost to the taxpayers of the VA housing loan program and resulted in substantial debts being established against veterans.

Therefore, VA does not believe the manufactured home loan program has any role in the effort to assist homeless veterans.

Section 19 would increase from $20 million to $50 million the amount authorized to be appropriated for the Homeless Veterans' Reintegration Programs for Fiscal Year 2002 and Fiscal Year 2003. It would also authorize that same amount to be appropriated for purposes of this program for Fiscal Years 2004, 2005, and 2006. VA defers to the Secretary of Labor, who administers the Homeless Veterans' Reintegration Programs.

Section 20 would require the Secretary, before disposing of real property as excess, to determine that the property is not suitable for use for the provision of services to homeless veterans by the Department or by another entity under an enhanced-use lease. Although we agree with the purpose of section 20, this provision appears to be redundant with existing authorities. Under the Department's enhanced-use leasing authority, we now have the ability to lease available lands and facilities for compatible uses including those that provide services to homeless veterans. We have, in fact, recently used this authority to obtain a 120-unit "Single Room Occupancy" ( SRO) housing complex in Vancouver, Washington, and a 63-unit SRO in Roseburg, Oregon. We are examining similar initiatives nationwide. In addition, pursuant to the Stewart B. McKinney Act, the Department surveys its property holdings and provides quarterly reports to the Department of Housing and Urban Development on the availability of excess or underutilized properties for housing for the homeless. In general terms, the provisions of the McKinney Act related to surplus federal property require each Department, in deeming property under its jurisdiction to be unutilized, under-utilized, or excess, to state that the property cannot be made available for use to assist the homeless. Before ultimately disposing of such property, the McKinney Act requires the Government to again give priority of consideration to uses to assist the homeless. Given that VA has active programs in place that strive to achieve the objective reflected in section 20, establishing a duplicate requirement would only lend confusion to the process.

S. 1188
Mr. Chairman I will next present our views on S. 1188, a bill designed to improve the recruitment and retention of VA nurses. Our nurses are critical front-line components of the VA health care team. Our health care providers are our most important resource in delivering high-quality, compassionate care to our Nation's veterans. We must maintain the ability to recruit and retain well-qualified nurses in order to continue that care. Compensation, employment benefits and workplace factors affect that ability, particularly in highly competitive labor markets and for hard-to-fill specialty assignments. Thanks to the efforts of this Committee and the House Veterans' Affairs Committee, we have been able to offer generally competitive pay in most markets. We continuously monitor the recruitment and retention of health care providers, particularly nurses, and trends in private sector employment and workforce projections. As we noted in testimony before this committee last month, VA nurse staffing is generally stable overall, but there are increasing difficulties in filling positions in some locations, and filling some specialty assignments is extremely difficult. However, I am not prepared to give the Administration's views on this bill without further study. We will provide our views on this measure as soon as possible.

S. 1160
Mr. Chairman, I now turn to S. 1160, a bill that would authorize us to furnish a "service dog" to any veteran with a compensable service-connected disability who is hearing impaired or who has a spinal cord injury or dysfunction. Service dogs can assist a disabled person in his or her daily life and can assist that person during medical emergencies. They can be trained in many tasks, including, but not limited to, pulling a wheelchair, carrying a back-pack, opening and closing doors, helping with dressing and undressing, picking up things one drops, picking up the phone, and hitting a distress button on the phone. Such dogs can also notice when the disabled individual is in distress and can find help. Dogs can also assist the hearing impaired by alerting them to doorbells, ringing phones, smoke detectors, crying babies, and emergency sirens on vehicles.

We support this bill, and any new costs will be handled under existing resources within the acronym title="Fiscal Year">FY 2002 President's Budget. Having said that, however if it were to become law, we would promulgate prescription criteria and guidelines for provision of such dogs to insure that we provide animals only to those veterans who can most benefit from them.

Draft Bill - Means Test Threshold
Mr. Chairman, also on the agenda is a draft bill that would establish new geographically based income thresholds for VA to use in determining a nonservice-connected veteran's priority for receiving VA care and whether the veteran must agree to pay copayments in order to receive that care. As you know, Mr. Chairman, the law now requires that most veterans enroll in our health care system in order to receive care. Enrollees are placed in an enrollment priority group that is based, in many instances, on their level of income and net worth. Although we currently provide care to veterans in all enrollment priority groups, if there were funding shortages in the future, it might be necessary to determine that those with relatively higher incomes must be disenrolled, meaning they could no longer receive VA care. Current law establishes, on a National basis, the specific income thresholds that we must use to determine the priority group of any given enrollee with no service-connected disability or other special status. We place higher income veterans in priority group 7 and lower income veterans in priority group 5. This draft bill would establish new geographically based income thresholds that VA could use for placing veterans in those priority groups.

The draft bill would use a specific statutorily based poverty index used by the Department of Housing and Urban Development that is established for Metropolitan Statistical Areas,Primary Metropolitan Statistical Areas and counties. The index defines a family as low income if family income does not exceed 80% of the median family income for the area in which the family resides. If we determined that a veteran's income was below the threshold for the specific area where the veteran lived, and his net worth was below our threshold, we would place that veteran in enrollment priority category 5. In many instances, particularly in urban areas, this new income threshold is greater then the current statutory income threshold that we use for determining whether a veteran should be placed in priority group 5. The draft bill would provide that if the new geographically based income threshold is lower then the current threshold, VA would use the old threshold as that would benefit the veteran.

We in VA are very interested in examining the use of geographically based income thresholds for placing nonservice-connected veterans in different enrollment priority groups. We recognize that the cost of living in large urban areas is much greater then in many more rural parts of the country. What might be considered a reasonably high income in some locations may be totally inadequate in other higher cost locations. However, at this time we cannot support the methodology proposed in the draft bill. There are many poverty indexes that are established in various ways. However, there are serious issues about what these indexes really measure. We believe further study is needed to determine the most appropriate method for tackling this problem.

S. 1042
Mr. Chairman, I next turn to S. 1042, a bill introduced by Senator Inouye aimed at improving benefits for Filipino veteran of World War II. Entitled the "Filipino Veterans' Benefits Improvements Act of 2001" the bill contains provisions affecting both monetary and health care benefits.

While many U.S. and foreign groups have sought wartime benefits over the years, Filipino veterans are a unique group. During World War II ( WWII), the Philippine Islands was a U.S. territory, and its troops fought under the U.S. command. There has been no other similar arrangement in recent American history.

The special circumstances of Filipino veterans have been recognized in law. Soon after World War II, legislation was enacted making disabled Filipino veterans and their survivors eligible for compensation - at half the rate paid to U.S. veterans and survivors. More recently, the Veterans Benefits and Health Care Improvement Act of 2000 (P.L. 106-419) and the Veterans Affairs, Housing and Urban Development and Other Independent Agency Appropriations Act for acronym title="Fiscal Year">FY 2001 (P.L. 106-377) increased the rate of compensation for certain Filipino veterans, and expanded access to health care and burial services.

Any expansion of benefits to Filipino veterans brings with it scrutiny and invites comparison from other Pacific Island groups and many U.S. groups who have regularly petitioned the government for veterans benefits because as civilians they were working next to and exposed to the same hazards as military members. Given the far-reaching implications of expanding benefits to Filipino veterans, I am not prepared to give the Administration's views on the bill without further study. We will provide our views on this measure as soon as possible.

S. Res. 61
The last provision I will address today is S. Res. 61. S. Res. 61 would express the Sense of the Senate that the Secretary of Veterans Affairs recognizes American Association of Physician Specialists ( AAPS) board certifications for the purpose of VHA payment of special pay.

VA does not support this provision. VHA currently provides board certification special pay only to physicians who are board certified by either American Board of Medical Specialties ( ABMS) or the Bureau of Osteopathic Specialists ( BOS), the certifying body of the American Osteopathic Association.

In accordance with quality assurance standards and prudent business practices, every healthcare organization must ensure appropriate credentialing of its healthcare providers. The purpose of board certification is to assure the public that a physician has completed an approved education program and an evaluation process to assess knowledge, skills, and experience required to provide quality of care. ABMS and BOS are considered to be the official certifying approval entities for MD and DO specialties. VA does not set the qualifications standards for the ever-expanding number of certifying organizations for the numerous medical professions employed in VA healthcare facilities. Nor do we seek that role, since we have neither the expertise nor the resources to do so. We recognize the certifications of the leading recognized healthcare organizations.

Today there are an estimated 165 to 180 board-certifying organizations in the United States. These vary from organizations requiring substantive credentials and comprehensive examinations to others who require few, if any, prerequisite qualifications.

As specialty certification developed during the 1960's and 1970's, many specialty boards had "grandfather" clauses permitting established practitioners in a field to become certified by that specialty. Some practitioners either were ineligible for "grandfathering" or chose not to apply. Later, specialty certification became more important for getting hospital privileges and managed care contracts, and practitioners wanted to become certified. When the window to grandfather had passed, the only options available were to retrain, or to create a new specialty board and hope that it would succeed. In addition, there were physicians who were either ineligible to take or unable to pass the ABMS and BOS recognized boards and wanted another option. Other sources of new specialties included areas such as cosmetic surgery. Physicians who become certified by a non- ABMS or non- BOS organization are doing so with full knowledge that this certification might not be recognized by mainstream medical organizations.

ABMS started in 1933. ABMS board certification is recognized throughout the United States as the "gold standard" in board certification. This recognition is based on ABMS' rigorous criteria for approval of new specialty boards and its high standards in developing questions and criteria for qualifying examinations.

All ABMS primary board certifications require educational preparation in approved medical schools and in Accreditation Counsel for Graduate Medical Education ( ACGME)-accredited residency programs. ACGME sets requirements that institutions must meet in order to sponsor graduate medical education. The ABMS uses educational and physician researchers to validate examination procedures and the content of the examinations. Peer validation also provides recognition of ABMS' "gold standard" status. Of the 630,000 board-certified physicians in the United States, ABMS certifies more than 99 percent while AAPS certifies less than 1 percent.

Many of the Residency Review Boards that recommend residency program accreditation to the Accreditation Council for Graduate Medical Education use percent of physicians obtaining ABMS board certification as an important criterion for program evaluation. The Joint Commission on Accreditation of Healthcare Organizations ( JCAHO) and the National Committee for Quality Assurance also use ABMS data as a measure of quality. The American Hospital Association, Association of American Medical Colleges, Federation of State Medical Boards, National Board of Medical Examiners, Council of Medical Specialty Societies, and the American Medical Association are associate members of ABMS. These premier medical organizations in the United States are concerned with goals, standards, and the quality of graduate medical education.

ABMS is integrated into the structures of organized medicine. While any organization can self-proclaim a specialty certification and any organization can claim to recognize and/or approve specialties, these organizations lack the validation from and acceptance by the established medical education structures of this country.

The BOS processes for specialty recognition are analogous to those of ABMS.

In order for VHA to recognize specialties through other than adherence to the American "Gold Standard", a complex review process would be needed whereby VA would itself become a specialty recognition body. This is a role VHA has historically chosen to defer to private sector, established organizations with the requisite expertise. VHA does not believe that such deference is either arbitrary or capricious. The staffing and commitment needed to maintain a genuine certification process would be onerous.

AAPS, in comparison to ABMS and BOS, has not achieved an equivalent level of recognition within the American medical community. VHA does not recognize AAPS due to its lack of endorsement and acceptance by the general medical community, the AAMC, the AHA, the ACGME, JCAHO, etc., which VHA requires and which is the basis of its recognition of ABMS and BOS.

Mr. Chairman, this concludes my testimony.