VA Health Care
Long-Term Care Strategic Planning and Budgeting Need Improvement
Gao ID: GAO-09-145 January 23, 2009
In fiscal year 2007, the Department of Veterans Affairs (VA) spent about $4.1 billion on long-term care for veterans. VA provides--through VA or other providers--institutional care in nursing homes and noninstitutional care in veterans' homes or the community. In response to a statute, VA published in 2007 a long-term care strategic plan through fiscal year 2013. VA includes long-term care spending estimates in its annual budget justifications for Congress. These estimates are based on workload projections--the amount of care to be provided--and cost assumptions. VA has discretion in allocating appropriated funds among its medical services, such as long-term care. GAO examined (1) VA's reporting of planned workload in its 2007 long-term care strategic plan and (2) VA's long-term care spending estimates, including its cost assumptions and workload projections, in VA's fiscal year 2009 budget justification. GAO analyzed budget and planning documents and interviewed VA officials.
In its 2007 long-term care strategic plan, VA reported planned increases for some long-term care workload, but the workload information VA provided for both nursing home and noninstitutional care was incomplete. With respect to nursing home care, VA reported plans to increase workload for certain veterans for whom VA is required to provide such care. However, VA did not report its nursing home workload plans for most veterans VA currently serves--veterans who receive such care from VA on a discretionary basis and who accounted for over three-fourths of VA's nursing home workload in fiscal year 2007. Although not reported in its strategic plan, VA's intention is to keep its total nursing home workload stable. Doing so while increasing workload for veterans VA is required to serve would reduce care provided on a discretionary basis. For noninstitutional care, VA reported plans to increase workload to close gaps in services--previously identified by GAO--for enrolled veterans, for whom those services are to be available. But VA's plan did not report the magnitude of this planned increase--167 percent between fiscal years 2007 and 2013--or VA's time frame for achieving this planned increase. Currently, VA is developing its next long-term care strategic plan. In its fiscal year 2009 budget justification, VA estimated that it will increase its long-term care spending over its fiscal year 2008 level, but this estimate is based on cost assumptions and a workload projection that appear unrealistic. VA estimated that spending for both nursing home and noninstitutional care will increase in fiscal year 2009 by about $108 million and $165 million, respectively. However, VA may have underestimated its nursing home spending because it assumed nursing home costs would increase about 2.5 percent, an amount that appears unrealistically low compared to VA's recent experience and other indicators. For noninstitutional care, VA proposed a spending increase in order to partially reduce gaps in services. However, VA's estimated noninstitutional spending for fiscal year 2009 appears to be unreliable, because it is based on a cost assumption that appears unrealistically low and a workload projection that appears unrealistically high, given recent VA experience. The net effect of these two factors on VA's fiscal year 2009 noninstitutional spending estimate is unknown. VA's fiscal year 2009 budget justification did not explain the rationale behind its nursing home and noninstitutional cost assumptions or its plans for how it will increase noninstitutional workload. Because the workload information reported in VA's long-term care strategic plan is incomplete, the plan is of limited usefulness to Congress and stakeholders for determining VA's strategic direction, the extent to which VA's priorities are consistent with congressional priorities, and the level of resources VA may need to achieve its strategic plan goals. In addition, in its fiscal year 2009 budget justification, VA's use, without explanation, of cost assumptions and a workload projection that appear to be unrealistic raises questions about both the reliability of VA's spending estimates and the extent to which VA is closing gaps in noninstitutional long-term care services.
Recommendations
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GAO-09-145, VA Health Care: Long-Term Care Strategic Planning and Budgeting Need Improvement
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Report to the Chairman, Committee on Veterans' Affairs, House of
Representatives:
United States Government Accountability Office:
GAO:
January 2009:
VA Health Care:
Long-Term Care Strategic Planning and Budgeting Need Improvement:
VA Long-Term Care:
GAO-09-145:
GAO Highlights:
Highlights of GAO-09-145, a report to the Chairman, Committee on
Veterans‘ Affairs, House of Representatives.
Why GAO Did This Study:
In fiscal year 2007, the Department of Veterans Affairs (VA) spent
about $4.1 billion on long-term care for veterans. VA provides”through
VA or other providers”institutional care in nursing homes and
noninstitutional care in veterans‘ homes or the community. In response
to a statute, VA published in 2007 a long-term care strategic plan
through fiscal year 2013. VA includes long-term care spending estimates
in its annual budget justifications for Congress. These estimates are
based on workload projections”the amount of care to be provided”and
cost assumptions. VA has discretion in allocating appropriated funds
among its medical services, such as long-term care. GAO examined (1)
VA‘s reporting of planned workload in its 2007 long-term care strategic
plan and (2) VA‘s long-term care spending estimates, including its cost
assumptions and workload projections, in VA‘s fiscal year 2009 budget
justification. GAO analyzed budget and planning documents and
interviewed VA officials.
What GAO Found:
In its 2007 long-term care strategic plan, VA reported planned
increases for some long-term care workload, but the workload
information VA provided for both nursing home and noninstitutional care
was incomplete. With respect to nursing home care, VA reported plans to
increase workload for certain veterans for whom VA is required to
provide such care. However, VA did not report its nursing home workload
plans for most veterans VA currently serves”veterans who receive such
care from VA on a discretionary basis and who accounted for over three-
fourths of VA‘s nursing home workload in fiscal year 2007. Although not
reported in its strategic plan, VA‘s intention is to keep its total
nursing home workload stable. Doing so while increasing workload for
veterans VA is required to serve would reduce care provided on a
discretionary basis. For noninstitutional care, VA reported plans to
increase workload to close gaps in services”previously identified by
GAO”for enrolled veterans, for whom those services are to be available.
But VA‘s plan did not report the magnitude of this planned increase”167
percent between fiscal years 2007 and 2013”or VA‘s time frame for
achieving this planned increase. Currently, VA is developing its next
long-term care strategic plan.
In its fiscal year 2009 budget justification, VA estimated that it will
increase its long-term care spending over its fiscal year 2008 level,
but this estimate is based on cost assumptions and a workload
projection that appear unrealistic. VA estimated that spending for both
nursing home and noninstitutional care will increase in fiscal year
2009 by about $108 million and $165 million, respectively. However, VA
may have underestimated its nursing home spending because it assumed
nursing home costs would increase about 2.5 percent, an amount that
appears unrealistically low compared to VA‘s recent experience and
other indicators. For noninstitutional care, VA proposed a spending
increase in order to partially reduce gaps in services. However, VA‘s
estimated noninstitutional spending for fiscal year 2009 appears to be
unreliable, because it is based on a cost assumption that appears
unrealistically low and a workload projection that appears
unrealistically high, given recent VA experience. The net effect of
these two factors on VA‘s fiscal year 2009 noninstitutional spending
estimate is unknown. VA‘s fiscal year 2009 budget justification did not
explain the rationale behind its nursing home and noninstitutional cost
assumptions or its plans for how it will increase noninstitutional
workload.
Because the workload information reported in VA‘s long-term care
strategic plan is incomplete, the plan is of limited usefulness to
Congress and stakeholders for determining VA‘s strategic direction, the
extent to which VA‘s priorities are consistent with congressional
priorities, and the level of resources VA may need to achieve its
strategic plan goals. In addition, in its fiscal year 2009 budget
justification, VA‘s use, without explanation, of cost assumptions and a
workload projection that appear to be unrealistic raises questions
about both the reliability of VA‘s spending estimates and the extent to
which VA is closing gaps in noninstitutional long-term care services.
What GAO Recommends:
GAO recommends that VA add certain workload information to its next
long-term care strategic plan, and use, in its budget justifications,
assumptions and projections in line with recent experience, or report
why not. VA supports GAO‘s conclusion that its long-term care strategic
planning and budgeting should be clarified. VA did not comment on the
recommendations, but said it will provide an action plan in response to
the final report.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-145]. For more
information, contact Randall B. Williamson at (202) 512-7114 or
williamsonr@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
VA Reported Plans to Increase Some of Its Long-Term Care Workload, but
Incomplete Information Limited Plan's Usefulness for Stakeholders:
In Estimating Increases in Long-Term Care Spending, VA Used Cost
Assumptions and a Workload Projection That Appear Unrealistic:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Description of the Department of Veterans Affairs' (VA)
Nursing Home and Noninstitutional Long-Term Care Services:
Appendix II: Comments from the Department of Veterans Affairs:
Appendix III: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Estimated Increase in Fiscal Year 2009 Spending for Nursing
Home and Noninstitutional Long-Term Care:
Figures:
Figure 1: Projected Veteran Population Age 65 and Older, Fiscal Year
2007 through Fiscal Year 2036:
Figure 2: Calculation of Estimated Annual Spending for Long-Term Care:
Figure 3: VA Noninstitutional Long-Term Care: Estimated Demand and
Recent Workload:
Figure 4: VA Noninstitutional Long-Term Care: Recent and Planned
Workload:
Figure 5: VA Actual and Estimated Noninstitutional Workload, Fiscal
Year 2006 through Fiscal Year 2009:
Abbreviations:
CCHT: Care Coordination/Home Telehealth:
CCT: care coordination/telehealth:
CMS: Centers for Medicare & Medicaid Services:
OEF: Operation Enduring Freedom:
OIF: Operation Iraqi Freedom:
OMB: Office of Management and Budget:
VA: Department of Veterans Affairs:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
January 23, 2009:
The Honorable Bob Filner:
Chairman:
Committee on Veterans' Affairs:
House of Representatives:
Dear Mr. Chairman:
The Department of Veterans Affairs (VA) operates one of the largest
health care delivery systems in the nation. VA provides a range of
health care services to veterans, including long-term care. In fiscal
year 2007, VA spent about $4.1 billion--about 12 percent of its total
health care spending--to provide for veterans' long-term care needs. VA
provides two types of long-term care: institutional long-term care,
which is provided almost exclusively in nursing homes, and
noninstitutional long-term care, which is provided in veterans' own
homes and in other locations in the community. Most of VA's spending on
long-term care is for nursing home care, which accounted for
approximately 87 percent of VA's total long-term care spending in
fiscal year 2007. VA is required by law to provide nursing home care to
certain veterans needing such care.[Footnote 1] However, VA provides
the majority of its nursing home care to other veterans on a
discretionary basis, as resources permit.[Footnote 2] Many of those
veterans require postacute short-stay care after being discharged from
a VA hospital. In addition, VA provides nine noninstitutional long-term
care services to veterans who need those services, two of which are
required by law.[Footnote 3]
VA's budgeting for long-term care has received increased scrutiny by
Congress and others. The increased scrutiny has occurred, in part,
because, as we have reported, VA underestimated its long-term care
spending for fiscal years 2005 and 2006 due to unrealistic assumptions
and projections.[Footnote 4],[Footnote 5] The underestimation was a key
factor that led to the President requesting additional funding during
those years. In June 2005, the President requested a $975 million
supplemental appropriation for fiscal year 2005, of which VA planned to
use $226 million for long-term care.[Footnote 6] Further, in July 2005,
the President submitted a $1.977 billion budget amendment for the
fiscal year 2006 appropriation, of which VA planned to use $600 million
for long-term care. According to VA, $445 million of this $600 million
was needed because VA underestimated both the workload--the amount of
care provided--and the cost of providing nursing home care that year.
To create its annual long-term care spending estimates, which are used
for budgeting purposes, VA multiplies its projected long-term care
workload by its assumed cost of providing long-term care. VA's most
recent spending estimates for long-term care and all of its other
medical services are in VA's 2009 budget justification.[Footnote 7]
While VA includes spending estimates for long-term care in its budget
justifications for planning purposes, VA typically receives
appropriations that support all its medical services rather than one
specifically for long-term care services. As a result, VA has
considerable discretion in how it allocates appropriated funds between
its various medical services, which have competing demands for
resources.
Over the last decade, concerns have also been raised about VA's
provision of and planning for its long-term care services. In 1998, a
federal advisory committee reviewing VA's long-term care services
expressed concern that VA was not prepared to meet an increasing demand
for long-term care services and recommended that VA develop plans to
change its long-term care services, in part by increasing the
availability of noninstitutional services.[Footnote 8] Since that time,
VA has increased the availability of noninstitutional services and made
other changes. However, despite VA's efforts, it has not provided the
noninstitutional long-term care services it offers to all veterans who
seek them from VA. In 2003, we reported that veterans' access to
noninstitutional services was limited by service gaps and restrictions
in several ways. For example, we found that some VA facilities did not
offer two required noninstitutional services--adult day health care and
respite care. We also found that some facilities had limits on the
amount of particular services they offered and that these facilities
used different criteria to determine which of the veterans enrolled in
VA's health care system[Footnote 9] were served and what volume of
services veterans could receive.[Footnote 10] In 2006, VA's Office of
Inspector General reported similar findings.[Footnote 11] In addition,
we also reported, in 2004 and 2006, our concerns that VA cannot
strategically plan how to best provide nursing home services without
incorporating information on its current nursing home workload--and
that not doing so hampers congressional oversight.[Footnote 12]
Incorporating workload for strategic planning projections includes
taking into account nursing home workload for veterans whom VA is
required to serve and nursing home workload for veterans to whom VA
provides such care on a discretionary basis.
In the context of these concerns about VA's long-term care, the
Veterans Benefits, Health Care, and Information Technology Act of 2006
required VA to publish a long-term care strategic plan.[Footnote 13] In
August 2007, VA published a long-term care strategic plan, which covers
the period through fiscal year 2013, and submitted it to
Congress.[Footnote 14] VA is in the process of developing its next long-
term care strategic plan, but as of November 2008 had not yet provided
a release date. VA considers its long-term care strategic plan to be
linked to VA's overall strategic plan for the department.[Footnote 15]
A strategic plan can serve two purposes. First, a strategic plan is a
tool an agency can use internally to set priorities and to guide the
formulation and execution of the agency's budget.[Footnote 16] For
example, an agency's requests made during budget formulation are
expected to support an agency's strategic priorities. Second, a
strategic plan is a formal means through which an agency can
communicate its priorities and intended use of resources to Congress
and outside stakeholders such as agency beneficiaries, the public, and
others.[Footnote 17] For example, VA's long-term care strategic plan
can inform Congress of VA's planned level of workload for its nursing
home and noninstitutional long-term care services-- thereby providing
information on which veterans VA will serve and which long-term care
services it will provide.
Given the concerns about VA's provision of and planning for long-term
care services, it is especially important that VA's long-term care
strategic plan provides Congress with comprehensive and reliable
information. By providing such information VA can better inform
Congress of VA's strategic direction, assist in its determination of
whether VA's plans are aligned with congressional priorities, and
enhance decisionmaking regarding the short-and longer-term levels of
appropriations that may be required to meet VA's planned long-term care
workload.
You expressed interest in VA's strategic planning and budgeting for
long-term care, given developments on these issues in recent years. In
this report, we examine (1) VA's reporting of planned long-term care
workload in its 2007 long-term care strategic plan and (2) VA's long-
term care spending estimates, including underlying cost assumptions and
workload projections, in VA's fiscal year 2009 budget justification.
To examine VA's reporting of long-term care workload in its 2007 long-
term care strategic plan, we reviewed the strategic plan and related
documents and interviewed VA officials. Specifically, we reviewed the
2007 strategic plan and the workload projections reported in the plan
to determine if the information was sufficiently comprehensive for use
by Congress and stakeholders for assessing VA's strategic direction,
determining if VA's plans are aligned with congressional priorities,
and understanding whether planned workload will require significant
changes in levels of appropriations. We compared planned workload
information in the strategic plan to actual workload information in
recent VA budget justifications and examined the extent to which VA's
planned nursing home workload included both required care and care VA
provides on a discretionary basis.[Footnote 18] To better understand
the workload information reported in the strategic plan and to obtain
information on workload not reported in the strategic plan, we
interviewed officials in the Veterans Health Administration's Offices
of Geriatrics and Extended Care, the Chief Financial Officer, and
Policy and Planning.
To examine VA's long-term care spending estimates in VA's fiscal year
2009 budget justification, we reviewed the fiscal year 2009 budget
justification and related documents, including VA's budget
justifications for fiscal years 2007 and 2008, additional documents
obtained from VA, and VA's Fiscal Year 2007 Performance and
Accountability Report.[Footnote 19] To obtain information on the
reasons for which particular cost assumptions and workload projections
were used to develop the spending estimates in VA's fiscal year 2009
budget justification, we interviewed VA officials from the same offices
as for our review of VA's long-term care strategic plan. In addition,
we relied on our past work on VA's budgeting and long-term care service
provision.[Footnote 20] To examine VA's long-term care spending
estimates, we compared fiscal year 2009 estimates to spending in prior
years to determine the extent to which VA expected spending for these
services to increase. To examine whether the cost assumptions VA used
to develop spending estimates were realistic, we compared these
assumptions to actual changes in the cost of providing a day of long-
term care that VA has experienced in recent years. We also compared
VA's cost assumptions to other assumptions of health care costs. To
examine whether the workload projections that VA used to develop
spending estimates were realistic, we compared VA workload projections
in VA's fiscal year 2009 budget justification with VA's actual workload
in recent years and examined the extent to which budget workload
projections from recent years have been achieved.
In our work we examined VA's planning and budgeting for long-term care
services for all veterans in general. We did not specifically review
VA's long-term care services for the Operation Enduring Freedom and
Operation Iraqi Freedom (OEF/OIF) veteran population, many of whom have
unique care needs. According to VA, the number of seriously disabled
OEF/OIF veterans needing long-term care is small compared to the total
number of veterans requiring long-term care services.
We assessed the reliability of the information we obtained about VA's
spending estimates, cost assumptions, and workload projections in
several ways. First, we checked the internal consistency of VA
documents detailing VA's actual and estimated long-term care spending,
workload, and cost data for fiscal years 2005 through fiscal year 2009.
Second, we interviewed agency officials knowledgeable about the data
and assumptions used to create VA's estimates and the reporting of
these estimates in VA's 2009 budget justification and its long-term
care strategic plan. Third, we relied on our prior work to identify
potential issues about data reliability. For example, we have
previously reported that VA's reported workload estimate for one
noninstitutional program--home-based primary care--does not necessarily
reflect care veterans receive.[Footnote 21] We determined that the data
we used in our analyses were sufficiently reliable for the purposes of
this report.
We conducted our work from November 2007 through January 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Results in Brief:
In its 2007 long-term care strategic plan, VA reported planned
increases for some of its long-term care workload, but the workload
information that VA's plan provided for both nursing home and
noninstitutional care was incomplete. With respect to nursing home
care, VA reported plans to increase its workload for certain veterans
for whom VA is required to provide such care. However, VA did not
report its nursing home workload plans for most of the veterans VA
currently serves--veterans who receive such care on a discretionary
basis, as resources permit. These veterans accounted for about three-
fourths of VA's total nursing home workload in fiscal year 2007.
According to VA officials, VA intends to keep its total nursing home
workload relatively stable, but VA did not report this information in
its long-term care strategic plan. To keep its total nursing home
workload stable and also achieve its planned workload increase for
certain veterans for whom VA is required to provide such care, VA would
have to reduce its workload for veterans who receive VA nursing home
care on a discretionary basis. For noninstitutional long-term care
services, VA reported plans to increase its workload to close
previously identified gaps in services for enrolled veterans, for whom
noninstitutional services are to be available. However, VA's plan did
not report the magnitude of VA's planned noninstitutional workload
increase or VA's time frame for achieving this increase. Although not
reported in the strategic plan, VA officials told us that when VA
completed its strategic plan, its goal was to increase its
noninstitutional workload in order to meet the estimated demand for
noninstitutional services by fiscal year 2013. In order to meet its
goal, VA would have to increase noninstitutional workload by 167
percent between fiscal years 2007 and 2013. According to VA officials,
VA now plans to meet the full demand for noninstitutional services by
fiscal year 2011.
In its fiscal year 2009 budget justification, VA estimated that it will
increase its long-term care spending over its fiscal year 2008 level,
but this estimate is based on cost assumptions and a workload
projection that appear unrealistic. VA estimated that spending for both
nursing home and noninstitutional care will increase in fiscal year
2009 by about $108 million and $165 million, respectively. However, VA
may have underestimated its nursing home spending because it used a
cost assumption that appears unrealistically low compared to recent VA
experience as well as economic forecasts of increases in health care
costs from fiscal year 2008 to fiscal year 2009. For example, VA
assumed that nursing home costs would increase 2.5 percent from fiscal
year 2008 to fiscal year 2009 although these costs increased 5.5
percent from fiscal year 2006 to fiscal year 2007--the most recent year
for which actual cost data are available. For noninstitutional long-
term care, VA proposed a spending increase to reduce previously
identified gaps in services for enrolled veterans seeking such care
from VA. However, VA's estimate of its noninstitutional long-term care
spending for fiscal year 2009 appears to be unreliable, because it is
based on a cost assumption that appears unrealistically low and a
workload projection that appears unrealistically high, given recent VA
experience providing these services. For example, VA assumed that the
costs of providing noninstitutional care would not increase over fiscal
year 2008 levels, despite the fact that these costs increased 19
percent from fiscal year 2006 to fiscal year 2007. In addition, in an
effort to move toward partially meeting veterans' demand for
noninstitutional services, VA projected that it would increase its
noninstitutional workload 38 percent from fiscal year 2008 to fiscal
year 2009, despite the fact that VA's actual workload for these
services decreased about 5 percent from fiscal year 2006 to fiscal year
2007. The net effect of an apparently unrealistically low cost
assumption and an apparently unrealistically high workload projection
on VA's fiscal year 2009 noninstitutional spending estimate is unknown.
In its fiscal year 2009 budget justification, VA did not provide
information regarding its nursing home or noninstitutional cost
assumptions or its plans for how it will increase noninstitutional
workload.
Because the workload information VA reported in its long-term care
strategic plan is incomplete, the plan is of limited usefulness to
Congress and stakeholders for determining VA's strategic direction, the
extent to which VA's priorities are consistent with congressional
priorities, and the level of resources VA may need to achieve plan
goals. Regarding both nursing home and noninstitutional services, VA
had additional information about its planned workload that it did not
report in its plan. VA officials told us that VA's plan did not report
nursing home workload for all veterans because VA is not required to
provide nursing home care to all veterans. VA officials also said that
VA did not report additional information on noninstitutional workload
in its plan because of ongoing VA deliberations about budgeting
workload targets that were occurring as the plan was finalized. VA is
currently developing its next long-term care strategic plan, but has
not yet determined a release date. In addition, in its fiscal year 2009
budget justification, VA's use, without explanation, of cost
assumptions and a workload projection that appear unrealistic raises
questions about both the reliability of VA's spending estimates and the
extent to which VA is closing previously identified gaps in
noninstitutional long-term care services. To improve VA's strategic
planning, we are recommending that VA's next long-term care strategic
plan include additional workload information. To improve VA's
budgeting, we are recommending that VA use, in future budget
justifications, assumptions and projections that are in line with VA's
recent experience, or report the rationale for not doing so.
In its written comments on a draft of this report, VA stated that VA
supports our overall conclusion that VA's long-term care strategic
planning and budget justification process should be clarified so that
the priorities of VA's long-term care program can be clearly understood
by all stakeholders, including Congress. VA did not provide specific
comments on the draft report or recommendations, including whether VA
agrees with the recommendations. VA noted it would evaluate the final
report and complete an action plan that responds to our
recommendations.
Background:
VA long-term care includes a continuum of services for veterans needing
assistance due to chronic illness or physical or mental disability.
VA's long-term care services include nursing home care, which is
provided in three settings: VA-operated nursing homes, community
nursing homes, and state veterans' nursing homes.[Footnote 22] In
addition, VA provides noninstitutional long-term care services, which
are in-home services and services provided in community-based settings,
such as adult day care.[Footnote 23] VA provides nine noninstitutional
long-term care services (see app. I). VA provides these services using
both VA providers and other providers it pays for the provision of such
services. Veterans may prefer noninstitutional long-term care services
because such services allow them to remain in their homes or in other
settings that are less restrictive than nursing homes. For example,
some veterans receive assistance with bathing and dressing in their
homes by home health aides.
VA is required by law to provide nursing home care and some types of
noninstitutional long-term care to certain veterans.[Footnote 24] VA is
required by law to provide nursing home care to veterans needing such
care and who have a service-connected disability rating of 70 percent
or greater--referred to as Priority 1A veterans.[Footnote 25] However,
VA provides most of its nursing home care to veterans who receive it on
a discretionary basis.[Footnote 26] Many of those veterans require
postacute short-stay care--care less than 90 days--such as
rehabilitation care following hospitalization in a VA hospital. For
example, VA may provide short-stay nursing home care to a veteran who
has had a stroke and needs intensive, short-term rehabilitative
services, once the veteran is medically stable. According to VA
officials, VA's usual clinical practice is to try to provide short-stay
care to all veterans who need such care following discharge from a VA
hospital, regardless of the veterans' priority category.
By statute or the regulation defining VA's medical benefits package,
noninstitutional long-term care services are to be provided to enrolled
veterans.[Footnote 27],[Footnote 28] VA is required by law to provide
two of its nine noninstitutional long-term care services: adult day
health care and respite care.[Footnote 29] Most of VA's other
noninstitutional long-term care services--six of the other seven
services[Footnote 30]--are provided as part of VA's medical benefits
package, which is a uniform set of services that are to be available to
all enrolled veterans. VA's policy is to provide the services required
by law and the services provided as part of the medical benefits
package to all enrolled veterans who need and seek these services from
VA.
Veterans of all ages may need VA long-term care, but the need for long-
term care increases with age. Long-term care is particularly important
to VA, in part, because the veteran population is older than the
general population. It is estimated that in 2007 about forty percent of
the veteran population was age 65 or older, compared to about 13
percent of the general population. Moreover, the number of elderly
veterans is expected to increase through 2014. However, the number of
elderly veterans is expected to decline thereafter. (See fig. 1.)
Figure 1: Projected Veteran Population Age 65 and Older, Fiscal Year
2007 through Fiscal Year 2036:
This figure is a line graph showing the following data (numbers
rounded):
[Refer to PDF for image]
Year: 2007;
Veterans age 65 or older (in millions): 9.
Year: 2008;
Veterans age 65 or older (in millions): 9.
Year: 2009;
Veterans age 65 or older (in millions): 9.
Year: 2010;
Veterans age 65 or older (in millions): 9.
Year: 2011;
Veterans age 65 or older (in millions): 9.
Year: 2012;
Veterans age 65 or older (in millions): 10.
Year: 2013;
Veterans age 65 or older (in millions): 10.
Year: 2014;
Veterans age 65 or older (in millions): 10.
Year: 2015;
Veterans age 65 or older (in millions): 10.
Year: 2016;
Veterans age 65 or older (in millions): 9.
Year: 2017;
Veterans age 65 or older (in millions): 9.
Year: 2018;
Veterans age 65 or older (in millions): 9.
Year: 2019;
Veterans age 65 or older (in millions): 9.
Year: 2020;
Veterans age 65 or older (in millions): 9.
Year: 2021;
Veterans age 65 or older (in millions): 9.
Year: 2022;
Veterans age 65 or older (in millions): 8.
Year: 2023;
Veterans age 65 or older (in millions): 8.
Year: 2024;
Veterans age 65 or older (in millions): 8.
Year: 2025;
Veterans age 65 or older (in millions): 9.
Year: 2026;
Veterans age 65 or older (in millions): 8.
Year: 2027;
Veterans age 65 or older (in millions): 8.
Year: 2028;
Veterans age 65 or older (in millions): 8.
Year: 2029;
Veterans age 65 or older (in millions): 7.
Year: 2030;
Veterans age 65 or older (in millions): 7.
Year: 2031;
Veterans age 65 or older (in millions): 7.
Year: 2032;
Veterans age 65 or older (in millions): 7.
Year: 2033;
Veterans age 65 or older (in millions): 7.
Year: 2034;
Veterans age 65 or older (in millions): 7.
Year: 2035;
Veterans age 65 or older (in millions): 7.
Year: 2036;
Veterans age 65 or older (in millions): 6.
[See PDF for image]
Source: GAO analysis of VA data.
Note: This figure includes all veterans 65 and older whether they
receive health care from VA or non-VA providers. It is based on VA's
VetPop2007 data.
[End of figure]
Many veterans who need long-term care do not receive it from VA but
instead receive care from other providers that is financed by programs
such as Medicaid, Medicare, private health or long-term care insurance,
or self-financing by the patients.[Footnote 31] As a result, in VA's
long-term care strategic planning, determining future workload is a
multistep process. This process requires estimating the number of
veterans who will need long-term care, the number of those veterans
needing long-term care who will seek it from VA, and the number of
veterans seeking such care that VA will serve.
VA funds its long-term care services with annual appropriations. Each
year VA develops its annual budget request, which includes spending
estimates for VA medical services, such as long-term care. VA begins to
formulate its budget request approximately 18 months before the start
of the fiscal year to which the request relates and about 10 months
before transmission of the President's budget request, which usually
occurs in early February.[Footnote 32]
The annual spending estimates VA develops for long-term care, as part
of its annual budget request, are based on two factors: projected long-
term care workload and the assumed cost of providing a day of care.
Long-term care workload is measured in terms of average daily census,
which reflects the average number of veterans in long-term care on any
given day during the course of the year. The product of projected
workload and assumed costs, multiplied by the number of days in the
fiscal year, equates to VA's estimated annual spending for nursing home
and noninstitutional care, respectively. (See fig. 2.)
Figure 2: Calculation of Estimated Annual Spending for Long-Term Care:
This figure is a flowchart of the calculation of estimated annual
spending for long-term care.
[Refer to PDF for image]
Step 1:
Projected nursing home workload x Assumed cost of providing a day of
nursing home care x Number of days in fiscal year = Estimated annual
nursing home spending.
Step 2:
Projected noninstitutional workload x Assumed cost of providing a day
of noninstitutional care x Number of days in fiscal year = Estimated
annual noninstitutional spending.
Step 3:
Estimated annual nursing home spending + Estimated annual
noninstitutional spending = Long-term care spending.
Source: GAO analysis of VA information.
Notes: Workload is measured in terms of average daily census or the
average number of veterans in VA long-term care on any given day during
the course of a year. For noninstitutional long-term care, the "number
of days in fiscal year" varies by noninstitutional service.
Nursing home care accounted for almost all of VA's institutional long-
term care workload in fiscal year 2007--the most recent year for which
workload data are available. This figure does not reflect the
institutional long-term workload from VA's other institutional long-
term care services--state home domiciliary care and inpatient geriatric
evaluation and management.
[End of figure]
VA has considerable discretion in how it allocates the resources that
have been appropriated for its medical services. In general, VA is not
required to allocate a specific level of funding for long-term care
services. VA presents its plan for providing long-term care services
and the resources required to implement this plan, along with similar
information for other medical services, in its annual budget
justification. However, the actual amount of long-term care services
provided and resources spent may be different than planned. VA may, for
example, spend more for long-term care services than planned in the
budget justification by using resources originally planned for other
medical services. Conversely, VA may spend less for long-term care
services than originally planned by using resources planned for long-
term care services for other medical services.
VA Reported Plans to Increase Some of Its Long-Term Care Workload, but
Incomplete Information Limited Plan's Usefulness for Stakeholders:
In its 2007 long-term care strategic plan, VA reported planned
increases in some of its long-term care workload. However, VA's plan
provided incomplete information on its planned long-term care workload,
which limited the plan's usefulness for stakeholders. In particular, VA
reported plans to increase its nursing home workload for certain
veterans for whom VA is required to provide nursing home services, but
did not report planned workload for veterans who receive VA nursing
home care on a discretionary basis and account for the majority of care
VA's nursing home program provides. For noninstitutional services, VA
reported plans to increase its workload to close previously identified
gaps in services for enrolled veterans, for whom noninstitutional
services are to be available. However, VA's plan did not report the
magnitude of the planned increase or VA's time frame for achieving the
increase in noninstitutional workload. As a result, VA's plan does not
provide information to Congress and stakeholders on VA's priorities and
intended use of resources.
VA Reported Planned Nursing Home Workload Increases for Some Veterans
VA Is Required to Serve, but Did Not Report Planned Discretionary
Nursing Home Workload for Most Veterans VA Currently Serves:
In its long-term care strategic plan, VA reported plans to increase the
amount of nursing home care it provides for some veterans, but did not
report the amount of care VA would provide for most of the veteran
population VA currently serves. VA reported plans to increase its
nursing home workload for a certain group of veterans for whom VA must
provide nursing home care--a group known as Priority 1A
veterans.[Footnote 33] According to VA's long-term care strategic plan,
VA plans to increase its nursing home workload for these veterans from
9,300[Footnote 34] in fiscal year 2007 to 11,000 in fiscal year 2013 to
meet an estimated increase in demand for nursing home services by
Priority 1A veterans.[Footnote 35],[Footnote 36] However, VA's long-
term care strategic plan did not report the amount of nursing home care
VA plans to provide to veterans who receive VA nursing home care on a
discretionary basis. These veterans account for the majority of care
VA's nursing home program provides. In contrast to Priority 1A
veterans, who accounted for only about one-quarter of VA's nursing home
workload in fiscal year 2007 (9,300 of 34,579), veterans who receive VA
nursing home care on a discretionary basis accounted for about three-
fourths of VA's nursing home workload that year. These veterans also
accounted for the majority--roughly 65 percent--of VA's total spending
on long-term care that fiscal year.
Although not reported in VA's long-term care strategic plan, VA has
plans for the total amount of nursing home care it intends to provide
in future years. VA officials told us that VA plans to keep its total
nursing home workload relatively stable between fiscal years 2007 and
2013. To keep its total nursing home workload stable and also achieve
its planned workload for Priority 1A veterans, VA would have to reduce
its workload for veterans who receive VA nursing home care on a
discretionary basis. VA officials told us that the long-term care
strategic plan did not report VA's planned workload for all veterans
receiving VA nursing home care because VA is not required to provide
nursing home services to all veterans. These officials stated that the
plan reported on planned workload for Priority 1A veterans because VA
must ensure that it has adequate resources to provide nursing home care
to this population.
Because VA's long-term care strategic plan does not report the total
amount of nursing home care VA plans to provide in the future,
including the care it will provide to veterans on a discretionary
basis, the plan does not provide key information about VA's strategic
direction and priorities for its nursing home program, and how VA
intends to use its resources. In particular, VA's plan does not provide
Congress with sufficient information about VA's strategic direction for
the veterans who account for most of VA's long-term care spending--
veterans who receive VA nursing home care on a discretionary basis--and
whether VA will increase or decrease nursing home workload for these
veterans. Furthermore, VA's plan provides limited information for
Congress to determine (1) whether VA's plans for its nursing home
program are aligned with congressional priorities and (2) the level of
appropriations VA may need to achieve its nursing home workload plans
in the short and longer term.
VA Reported a Planned Increase in Noninstitutional Workload to Close
Gaps in Service, but Did Not Report the Magnitude or Time Frame of the
Planned Increase:
In its long-term care strategic plan, VA reported plans to increase
noninstitutional workload to close gaps in service, but did not report
the magnitude of VA's planned noninstitutional workload increase or
VA's time frame for achieving this increase. VA's plan reported that it
planned to increase its noninstitutional workload in order to continue
closing previously identified gaps between the number of enrolled
veterans who need and seek such services from VA--known as demand--and
the amount of services VA provides. As noted in the plan, closing these
gaps has been a key element of VA long-term care policy, particularly
in the context of growing demand for long-term care among veterans and
the desire to serve veterans in home and community-based settings,
instead of caring for them in nursing homes. According to VA's plan,
the demand for VA's noninstitutional long-term care services will
increase an estimated 14 percent between fiscal years 2005 and
2013.[Footnote 37]
While VA's long-term care strategic plan reported that VA intended to
increase its noninstitutional workload in the face of growing demand
for such services, it did not specify how much VA would increase this
workload. In fact, VA's plan did not report VA's noninstitutional
workload plans for each of the years through fiscal year 2013, the last
year covered by VA's long-term care strategic plan. Moreover, although
VA's plan reported a 14 percent increase in estimated demand for
noninstitutional care, it did not specify the estimates of demand that
were used to calculate this estimated increase, compare VA's
noninstitutional workload in recent years to the estimated demand for
those services, or report the extent to which VA planned on meeting the
estimated demand for those services. As a result, VA's plan did not
provide information on the extent to which VA would have to increase
its workload to meet the estimated demand for noninstitutional
services.
Although not reported in VA's long-term care strategic plan, VA has
specific estimates of the demand for its noninstitutional services.
According to VA officials, the estimates of demand for noninstitutional
services that were used to calculate the reported 14 percent increase
in demand were 96,255 and 109,362 in fiscal years 2005 and 2013,
respectively. Comparing these estimates of demand with VA's
noninstitutional workload in recent years shows that there have been
significant gaps between the estimated number of veterans who needed
and sought noninstitutional services from VA and the amount of
noninstitutional services that VA has provided. (See fig. 3.)
Figure 3: VA Noninstitutional Long-Term Care: Estimated Demand and
Recent Workload:
This figure is a combination line and bar graph showing VA
noninstitutional long-term care, estimated demand and recent workload.
The line shows the estimated demand, and the bar represents the recent
worload. The graph shows the following data:
[Refer to PDF for image]
The gaps between estimated demand and amount of services provided by VA
in recent years.
Bar:
Fiscal year: 2005;
Worload in thousands: 27,469.
Fiscal year: 2006;
Worload in thousands: 43,325.
Fiscal year: 2007;
Worload in thousands: 41,022.
Line:
Fiscal year: 2005;
Worload in thousands: 96,255.
Fiscal year: 2013;
Worload in thousands: 109,362.
Source: GAO analysis of VA data.
Notes: According to VA officials, VA estimated the demand for
noninstitutional services using data on enrolled veterans' use of
noninstitutional services.
Data on VA's recent noninstitutional workload are from VA budget
submissions. Workload is measured in average daily census. Average
daily census reflects the average number of veterans in VA
noninstitutional long-term care services on any given day during the
course of a year.
[End of figure]
VA also did not report in its long-term care strategic plan that VA has
a specific time frame for increasing noninstitutional workload in order
to meet the estimated demand for noninstitutional services. VA
officials told us that when VA completed its strategic plan, VA's goal
was to increase its noninstitutional workload in order to meet the
estimated demand for those services by fiscal year 2013. VA's planned
noninstitutional workload for fiscal year 2013 of 109,362--as reported
to us by VA officials--would represent a significant increase compared
with VA's recent noninstitutional workload. Specifically, it would
represent a 167 percent increase over VA's noninstitutional workload of
41,022 in fiscal year 2007, the most recent year for which information
on the amount of noninstitutional services provided by VA is available.
(See fig. 4.) According to VA officials, after VA issued its long-term
care strategic plan, VA accelerated its timeline for increasing
noninstitutional workload and now plans to begin meeting the estimated
demand for those services by fiscal year 2011. VA officials told us
that VA did not compare estimated demand to recent workload or report
information on planned noninstitutional workload in the strategic plan
because VA did not want to publish those figures at the time the
strategic plan was finalized. VA officials said this was because of
ongoing VA deliberations about budgeting workload targets. Also, VA
officials told us that achieving the planned increase in
noninstitutional workload will be challenging because of the magnitude
of the expanded capacity that VA would need to create to provide this
level of increased services.
Figure 4: VA Noninstitutional Long-Term Care: Recent and Planned
Workload:
This figure is a bar graph showing VA noninstitutional long-term care,
recent care and planned worload. One bar represents recent workload,
and the other represents planned worload based on estimated demand. The
graph represents the following data:
[Refer to PDF for image]
Fiscal years: 2005;
Recent worload: 27,469.
Fiscal years: 2006;
Recent worload: 43,325.
Fiscal years: 2007;
Recent worload: 41,022.
VA would need to increase noninstitutional workload by 167%.
Fiscal years: 2013;
Planned worload based on estimated demand: 109,362.
Source: GAO analysis of VA data.
Notes: Although not reported in the long-term care strategic plan,
according to VA officials, when VA issued the plan in August 2007, VA
intended to increase noninstitutional workload in order to meet the
estimated demand for those services by fiscal year 2013. According to
VA officials, after VA issued the plan, VA accelerated its timeline and
now plans to begin meeting estimated demand for noninstitutional
services by fiscal year 2011.
Data on VA's recent noninstitutional workload are from VA budget
submissions. Workload is measured in average daily census. Average
daily census reflects the average number of veterans in VA
noninstitutional long-term care services on any given day during the
course of a year.
[End of figure]
The lack of information in VA's plan on how its noninstitutional
workload will change in the future when compared to VA's recent
workload limits the plan's usefulness to stakeholders in understanding
VA's priorities and how VA plans to use its resources. In particular,
the plan does not inform Congress about whether VA plans a substantial
or modest increase in noninstitutional workload during the time period
covered by the plan--and thus to what extent VA will close gaps in the
noninstitutional services that are to be available for all enrolled
veterans. Moreover, the lack of such workload information limits the
plan's usefulness to Congress for considering the level of
appropriations VA may need in the short or longer term to close such
service gaps.
In Estimating Increases in Long-Term Care Spending, VA Used Cost
Assumptions and a Workload Projection That Appear Unrealistic:
In its fiscal year 2009 budget justification, VA estimated that it will
increase its long-term care spending for both nursing home and
noninstitutional care over its fiscal year 2008 level, but this
estimate is based on cost assumptions and a workload projection that
appear unrealistic. For nursing home care, VA may have underestimated
the amount its nursing home spending will increase from fiscal year
2008 to fiscal year 2009, because it used a cost assumption that
appears unrealistically low. Similarly, VA's estimated increase in
noninstitutional long-term care spending for this period appears to be
unreliable because it is based on a cost assumption that appears
unrealistically low and a projected increase in workload that appears
unrealistically high. The net effect of these two factors on VA's
noninstitutional spending estimate is unknown.
VA Estimated an Increase in Long-Term Care Spending for Fiscal Year
2009:
In its fiscal year 2009 budget justification, VA estimated a $273
million increase in long-term care spending, from about $4.5 billion in
fiscal year 2008 to about $4.8 billion in fiscal year 2009. Of this
increase, approximately $108 million is for increased spending on
nursing home care and approximately $165 million is for increased
spending on noninstitutional long-term care (see table 1). VA's
estimated increase in spending for nursing home care is based on (1)
the assumption that the cost of providing a day of nursing home care
will increase about 2.5 percent from its fiscal year 2008 level, and
(2) a projection that workload will remain fairly stable during this
period, increasing from 34,633 to 34,970.
Table 1: Estimated Increase in Fiscal Year 2009 Spending for Nursing
Home and Noninstitutional Long-Term Care:
Dollars in millions.
Nursing home care;
Fiscal year 2008 estimated spending[A]: 3,895;
Fiscal year 2009 estimated spending: 4,003;
Estimated increase in spending from fiscal year 2008: 108.
Noninstitutional long-term care;
Fiscal year 2008 estimated spending[A]: 597;
Fiscal year 2009 estimated spending: 762;
Estimated increase in spending from fiscal year 2008: 165.
Total long-term care[B];
Fiscal year 2008 estimated spending[A]: 4,492;
Fiscal year 2009 estimated spending: 4,766[C];
Estimated increase in spending from fiscal year 2008: 273.
Source: VA.
Notes: Data are from VA, FY 2009 Budget Submission, Medical Programs
and Information Technology Programs, Volume 2 of 4 (Washington, D.C.:
February 2008).
[A] In its fiscal year 2009 budget justification, VA included an
updated estimate of fiscal year 2008 spending, based on the most recent
long-term care spending data available at the time of the creation of
the fiscal year 2009 budget justification.
[B] Total of nursing home and noninstitutional long-term care. VA
provides other types of institutional long-term care but for the
purposes of this report we refer to nursing home and noninstitutional
services as long-term care because they comprise about 99 percent of
VA's estimated long-term care spending for fiscal year 2009.
[C] Numbers do not add due to rounding.
[End of table]
VA's estimated increase in spending for noninstitutional long-term care
for fiscal year 2009 reflects VA's effort to partially close previously
identified gaps in its provision of noninstitutional services.[Footnote
38] VA's estimated increase in spending for this care is based on (1)
the assumption that the cost of providing a day of noninstitutional
care would remain at the same level it was in fiscal year 2008, and (2)
that VA's noninstitutional workload will increase a projected 38
percent from fiscal year 2008. As a result, VA's estimated spending
increase for noninstitutional long-term care is driven solely by VA's
projected increase in noninstitutional workload. VA officials told us
that in developing noninstitutional spending estimates for fiscal year
2009, VA focused on increasing workload in order to make progress
towards accomplishing its plan of meeting all enrolled veterans' demand
for these services by fiscal year 2011.
VA May Have Underestimated Its Nursing Home Spending Because the Cost
Assumption Used Appears Unrealistically Low:
VA's fiscal year 2009 spending estimate for nursing home care may be
underestimated because its assumption that the cost of providing a day
of nursing home care will increase approximately 2.5 percent from its
fiscal year 2008 level is substantially less than the increases in
nursing home costs that VA has recently experienced. For example, from
fiscal year 2006 to fiscal year 2007--the most recent year for which
actual cost data are available--VA's cost of providing a day of nursing
home care increased approximately 5.5 percent. Similarly, VA estimated
that its nursing home costs from fiscal year 2007 to fiscal year 2008
will increase approximately 11 percent.[Footnote 39] In addition to
VA's recent experience, economic forecasts also predict increases in
the cost of providing medical services that are greater than 2.5
percent. Office of Management and Budget (OMB) guidance provided to VA
to help with its budget estimates forecasted a rate of inflation for
medical services of 3.8 percent from fiscal year 2008 to fiscal year
2009. Similarly, in its annual estimate of national health care
spending, the Centers for Medicare & Medicaid Services (CMS) predicted
that this spending would increase about 6.7 percent from fiscal year
2008 to fiscal year 2009.[Footnote 40] We determined that if VA had
assumed a 5.5 percent increase in the cost of providing a day of
nursing home care, which is consistent with VA's recent experience,
VA's estimated nursing home spending for fiscal year 2009 would have
increased approximately $112 million more than VA reported in its
budget justification.
In its fiscal year 2009 budget justification, VA did not report or
explain the rationale behind its nursing home cost assumption. VA
officials told us that information on this cost assumption was not
included in the budget justification because VA wanted to keep the
budget submission concise. VA officials also told us that VA made the
decision to assume a 2.5 percent increase in the cost of providing a
day of nursing home care to be conservative in its fiscal year 2009
appropriations request. The officials offered no further explanation as
to why VA's assumption was lower than VA's previous experience and that
recommended by OMB guidance. Without additional information, VA's 2.5
percent cost increase appears to be unrealistic.
VA's Estimate of Noninstitutional Spending Is Based on a Cost
Assumption and Workload Projection That Appear Unrealistic, and Overall
Effect Is Unknown:
VA's estimate of noninstitutional long-term care spending for fiscal
year 2009 is based on a cost assumption that appears unrealistically
low and a workload projection that appears unrealistically high. The
net effect of these two factors on VA's noninstitutional spending
estimate for fiscal year 2009 is unknown. VA's assumption that the cost
of providing a day of noninstitutional care will not increase from its
fiscal year 2008 level appears unrealistically low, given both VA's
recent experience and economic forecasts of increases in health care
costs. From fiscal year 2006 to fiscal year 2007--the most recent year
for which actual cost data are available--the cost of providing a day
of noninstitutional care increased by 19 percent. VA's cost assumption
for noninstitutional services for fiscal year 2009 is also inconsistent
with OMB guidance, which forecasts inflation of 3.8 percent for medical
services from fiscal year 2008, and with the 6.7 percent increase
forecasted by CMS. If VA's costs for providing noninstitutional care
increase from fiscal year 2008 to fiscal year 2009--and its workload
projection is accurate--VA's estimates of fiscal year 2009 spending
will be underestimated. For example, we determined that if VA had
assumed a 19 percent increase in the cost of providing a day of
noninstitutional care from fiscal year 2008 to fiscal year 2009--an
amount consistent with VA's recent experience--and if VA achieved its
projected workload, VA's estimated noninstitutional spending for fiscal
year 2009 would be approximately $144 million more than the amount VA
reported in its fiscal year 2009 budget justification.
In its fiscal year 2009 budget justification, VA did not report or
explain why it assumed that costs for providing a day of
noninstitutional long-term care would not increase. As in the case for
VA's nursing home cost assumption, VA officials told us that the reason
VA did not provide information on its cost assumption for
noninstitutional services was because VA wanted to keep its budget
submission concise. While not reported in VA's 2009 budget submission,
VA officials told us that to be conservative in VA's fiscal year 2009
budget estimates, they made the decision to base VA's spending
estimates for noninstitutional long-term care on the assumption that
costs would not rise. These officials also explained that VA's fiscal
year 2009 budgeting priority was to increase noninstitutional workload
to improve VA's ability to meet the needs of all enrolled veterans who
need and seek such care, as envisioned in VA's long-term care strategic
plan. In order to do this and stay within anticipated budgetary
constraints, VA assumed that the cost of providing a day of
noninstitutional care would not change from the fiscal year 2008 level.
Like its cost assumption, VA's noninstitutional workload projection for
fiscal year 2009 appears unrealistic. Specifically, VA's projected 38
percent increase in noninstitutional workload appears unrealistically
high given VA's recent experience providing this type of care. From
fiscal year 2006 to fiscal year 2007--the most recent year for which
workload data are available--VA's noninstitutional workload decreased
about 5 percent, from 43,325 to 41,022, rather than increasing as
projected.[Footnote 41] (See fig. 5.) VA officials told us that the
reason workload decreased during this time period was because VA chose
to focus on offering other medical services VA is required to provide
veterans. VA officials also stated that increasing noninstitutional
workload is challenging. Because many of VA's noninstitutional services
are provided by VA personnel, VA must hire and train more personnel
before it has the capacity to serve an increased workload. In its
budget justification, VA did not explain how it plans to increase
workload 38 percent from fiscal year 2008 to fiscal year 2009. If, as
recent VA experience indicates, VA's actual workload for
noninstitutional long-term care in fiscal year 2009 is less than VA
projects--and if VA's noninstitutional costs remain at fiscal year 2008
levels as VA assumes--then VA's estimates of its fiscal year 2009
noninstitutional spending will be overestimated.
Figure 5: VA Actual and Estimated Noninstitutional Workload, Fiscal
Year 2006 through Fiscal Year 2009:
This figure is a combination bar graph showing VA actual and estimated
noninstitutional worload, fiscal year 2006 through fiscal year 2009.
The bars represent estimated worload, and actual workload, and the
graph represents the following data:
Fiscal year: 2006;
Actual workload: 43,325.
Fiscal year: 2007;
Actual workload: 41,022.
Decrease of about 5%.
Fiscal year: 2008;
Estimated worload: 44,192.
Fiscal year: 2009;
Estimated worload: 61,029.
[Refer to PDF for image]
Source: GAO analysis of VA data.
Note: Workload is measured in average daily census. Average daily
census reflects the average number of veterans in VA noninstitutional
long-term care services on any given day during the course of a year.
[End of figure]
Although VA's workload projection appears unrealistically high and its
cost assumption appears unrealistically low, the net effect of these
two factors on VA's noninstitutional spending estimate for fiscal year
2009 is unknown. This is because these two factors have opposite
effects on spending and could potentially offset each other. For
example, it is possible that the effects of an unrealistically high
workload estimate could be balanced out by the effects of an
unrealistically low cost estimate, causing VA's actual spending in
fiscal year 2009 to be close to its spending estimate. However, even if
VA's spending estimate for fiscal year 2009 is accurate--due to VA's
actual workload being lower than projected--VA would be serving fewer
veterans than it budgeted for. As a result, VA would be further away
from meeting its planned goal of meeting the total demand for
noninstitutional services by fiscal year 2011.
During the course of our work, we identified another factor that could
raise questions regarding VA's noninstitutional workload projection for
fiscal year 2009. In addition to VA's workload projection appearing to
be unrealistically high, the projection may also overstate the amount
of care veterans will receive. This is because the workload measure VA
uses for home-based primary care[Footnote 42] does not accurately
reflect the quantity of care veterans receive. VA projects that this
service will account for about one-third of its noninstitutional
workload increase from fiscal year 2008 to fiscal year 2009. Unlike the
workload for most noninstitutional long-term care services--which VA
measures by the number of individual visits from a care provider a
veteran receives--VA measures workload for home-based primary care by
the number of days a veteran is enrolled in the service, regardless of
the number of visits from a care provider or other services that the
veteran actually receives.[Footnote 43] For example, if over a 2-week
period a veteran was in home-based primary care and received two home
visits, VA would calculate the workload as 14, based on the veteran's
days of enrollment in the program, even though the veteran received two
visits from a care provider. In contrast, if the veteran was in
homemaker/home health aide care[Footnote 44] and received four visits
during the 2-week period, VA would calculate the workload as 4, based
on the number of care provider visits the veteran received.
Consequently, for home-based primary care, a reported increase in
workload may reflect an increase in the number of veterans enrolled in
these services, but does not necessarily reflect an increase in the
quantity of care veterans receive.
VA did not indicate or explain, in its fiscal year 2009 budget
justification, why it had calculated workload differently for home-
based primary care than it had for most other noninstitutional long-
term care services. According to VA officials, although VA for other
purposes measures the amount of care veterans receive in home-based
primary care by the number of visits veterans receive, VA does not
report this information in the budget justification. Instead, according
to VA officials, VA reports workload based on enrolled days of care
because this is the community standard used by CMS when reporting
workload for similar services provided through Medicare's home health
program.
The lack of disclosure regarding VA's different workload measure for
home-based primary care limits the usefulness of the workload
information in VA's budget justification for Congress and others. The
information, as presented, hinders their ability to consider the extent
to which VA's reported workload increase will result in additional
services for veterans and to know the amount of care veterans are
receiving with the resources VA is expending.
Conclusions:
VA's strategic planning and budgeting for its long-term care programs
have received considerable attention in recent years from Congress and
stakeholders as VA has continued its efforts to provide these services
to an aging veteran population in a continuum of long-term care
services, from nursing home care to various noninstitutional services
that provide care in veterans' homes or in the community. As part of
VA's efforts to serve an aging veteran population and as required by
law, VA developed a long-term care strategic plan. In this plan, VA
stated its commitment to meeting the demand for noninstitutional long-
term care services and the demand for nursing home services among
veterans VA is required to serve. In addition, for a number of years VA
has been implementing initiatives to make noninstitutional services
available to all enrolled veterans who need and seek such care from VA-
-and for whom those services are to be available. However, as VA has
acknowledged, VA has not yet provided a sufficient amount of these
services to meet this demand.
In light of these ongoing challenges, VA's long-term care strategic
plan is an important mechanism for providing Congress and stakeholders
information on VA's strategic direction for its long-term care,
including the level of resources VA may need to achieve its strategic
priorities. However, VA's plan did not report key information on (1)
whether VA intends to maintain, reduce, or increase its nursing home
workload for all the veterans VA serves and (2) how much VA intends to
increase the amount of noninstitutional long-term care services VA
provides. In both cases, VA had more information about the strategic
direction it intended to take with these services than it reported in
its strategic plan. Such incomplete information in VA's strategic long-
term care plan limits the usefulness of the plan to Congress and
stakeholders for determining VA's strategic direction, the extent to
which VA's priorities are consistent with congressional priorities, and
the level of resources required to achieve plan goals in the shorter
and longer term.
Our work also shows that concerns about VA's long-term care spending
estimates are still warranted. VA's fiscal year 2009 long-term care
spending estimates justify continued concern because the estimates are
based on cost assumptions that appear to be unrealistically low and on
a noninstitutional workload projection that appears to be
unrealistically high. Without further explanation, VA's use of the cost
assumptions and workload projection raises questions about the
reliability of VA's fiscal year 2009 spending estimate. Moreover,
determining the net effect of these two apparently unrealistic factors
on VA's spending estimate is not possible, because they tend to offset
each other to an unknown degree. VA's budget justification also suffers
from a lack of transparency in its reporting of workload information,
as VA did not report its use of different measures of its
noninstitutional long-term care services. These differences call into
question the extent to which VA's reported increases in
noninstitutional long-term care services result in commensurate
increases in services veterans receive.
As a result of the apparently unrealistic cost assumptions and workload
projection, as well as workload measures, that VA used in its fiscal
year 2009 budget justification, VA's long-term care spending estimates
are questionable benchmarks for congressional budget deliberations.
Furthermore, the extent to which VA's proposed budget initiative to
increase noninstitutional service workload will close service gaps is
less clear than it could be. Given VA's past difficulties with long-
term care services spending estimates, costs, and workload, it is
especially important that VA strengthen the credibility of such
estimates in its budget justification to inform congressional
deliberations.
Recommendations for Executive Action:
To make available more complete information for congressional oversight
and use by stakeholders regarding VA's plans for the provision of long-
term care, we recommend that the Secretary of Veterans Affairs direct
the Under Secretary for Health to include three types of workload
information in VA's forthcoming long-term care strategic plan:
* planned total nursing home workload, including care provided to
veterans on a discretionary basis;
* estimated demand for noninstitutional services and VA's time frame
for meeting this demand; and:
* a comparison of planned noninstitutional workload with recent
noninstitutional workload to show the magnitude of the expected change
in services provided.
To strengthen the credibility of VA's estimates of spending for its
long-term care services budgeting proposals and increase transparency
for Congress and stakeholders, we recommend that the Secretary of
Veterans Affairs take the following four actions in future budget
justifications:
* use cost assumptions for estimating nursing home spending that are
consistent with VA's recent experience or report the rationale for
using cost assumptions that are not;
* use cost assumptions for estimating noninstitutional long-term care
spending that are consistent with VA's recent experience or report the
rationale for using cost assumptions that are not;
* use workload projections for estimating noninstitutional long-term
care spending that are consistent with VA's recent experience or report
the rationale for using projections that are not; and:
* if VA uses different measures of workload for noninstitutional long-
term care services for estimating spending, report which measures are
used for each service and how these measures reflect the volume of
services received by veterans.
Agency Comments:
We provided a draft of this report to VA for comment. In its written
comments, VA stated that VA supports our overall conclusion that VA's
long-term care strategic planning and budget justification process
should be clarified so that the priorities of VA's long-term care
program can be clearly understood by all stakeholders, including
Congress. VA noted that the department was unable to provide specific
comments on the draft report or recommendations, and did not indicate
whether it agreed with the recommendations. However, VA stated that VA
officials will evaluate the final report carefully. VA expects to
complete its assessment of the final report--as well as a detailed
action plan that responds to our recommendations--within 60 days of
publication of the final report, and will share the assessment and
action plan with us. VA's written comments are provided in appendix II.
VA also provided technical comments, which we incorporated as
appropriate.
We are sending copies of this report to the Secretary of Veterans
Affairs, appropriate congressional committees, and other interested
parties. In addition, this report will be available at no charge on
GAO's Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-7114 or at williamsonr@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix III.
Sincerely,
Signed by:
Randall B. Williamson Director, Health Care:
[End of section]
Appendix I: Description of the Department of Veterans Affairs' (VA)
Nursing Home and Noninstitutional Long-Term Care Services:
Table 2:
VA long-term care services: Nursing home settings: VA-operated nursing
homes;
Description: Facilities owned and operated by VA and usually attached
to or in close proximity to a VA medical center. Generally,
rehabilitation and medically complex patients are placed in these
homes.
VA long-term care services: Nursing home settings: State veterans'
homes;
Description: Nursing homes owned and operated by individual states,
which establish admission criteria. These homes allow delivery of
nursing home care to a wider population of veterans who require care
for life. VA pays states for these services based on a per diem amount
that covers approximately one-third of the cost of providing these
services to eligible veterans.
VA long-term care services: Nursing home settings: Community nursing
home program;
Description: VA contracts with local non-VA nursing homes and typically
uses these facilities for veterans with less intensive needs or for
those who like to be located closer to home and family. VA covers the
full cost of these services.
VA long-term care services: Noninstitutional services: Adult day health
care[A];
Description: Adult day health care consists of health maintenance and
rehabilitative services provided in a congregate outpatient setting by
VA providers or other providers. VA pays for the provision of such
services. Care is provided during part of a 24-hour day. Individualized
programs of care are delivered by health professionals and support
staff, with an emphasis on helping participants and their caregivers
develop the knowledge and skills necessary to manage the patient's care
requirements in the home. Therapy is the program's primary focus.
VA long-term care services: Noninstitutional services: Care
coordination/telehealth[A];
Description: Care coordination/telehealth (CCT) involves the use of
health informatics, telehealth, and disease management technologies to
expand and enhance care and care management activities. Care
Coordination/Home Telehealth (CCHT) is one of the Veterans Health
Administration's enterprise-level CCT programs that supports the care
of patients with chronic conditions in their home or place of
residence. CCHT uses home telehealth and disease management
technologies to monitor patients with chronic conditions each day,
encourage self-management and initiate active care/care management,
when this is required to prevent avoidable hospital admission/
institutional care.
VA long-term care services: Noninstitutional services: Community
residential care;
Description: Community residential care is a form of enriched housing
that provides health care supervision to eligible veterans not in need
of hospital or nursing home care, but who, because of medical,
psychiatric and/or psychosocial limitations as determined through a
statement of needed care, are not able to live independently and have
no suitable family or significant others to provide the needed
supervision and supportive care. The veteran pays for the cost of this
living arrangement. VA's contribution is limited to the cost of program
administration and clinical services, which include inspection of the
home and periodic visits to the veteran by VA health care
professionals. Medical care is provided to the veteran primarily on an
outpatient basis at VA facilities.
VA long-term care services: Noninstitutional services: Home-based
primary care[A];
Description: A VA-operated home care service in which VA staff provide
comprehensive longitudinal, interdisciplinary primary care in the homes
of veterans with complex medical, behavioral, and psychosocial
conditions who would be candidates for nursing home care in the absence
of this program.
VA long-term care services: Noninstitutional services: Homemaker/home
health aide program[A];
Description: Personal care and related support services provided in
veterans' homes, which may include assistance with activities of daily
living that are essential for maintaining a safe and sanitary
environment in the areas of the home used by the patient. Only trained
personnel who have successfully completed a competency evaluation and
are employed by an agency may provide these services under the general
supervision of a nurse.
VA long-term care services: Noninstitutional services: Hospice and
palliative care[A, B];
Description: Hospice is the final state of the care continuum in which
the primary goals of treatment are comfort rather than cure for
patients with advanced life-limiting disease. Community hospice
agencies provide these services to patients in their homes through
comprehensive management of the needs of the patient through state-VA
partnership programs. The hospice program also provides support for the
patient's caregivers including bereavement support. Hospice services
are also available on an inpatient basis in several VA facilities.
VA long-term care services: Noninstitutional services: Purchased
skilled home health care[A, B];
Description: Skilled home health care services are in-home services
provided by qualified, contracted non-VA personnel that include skilled
nursing, physical therapy, occupational therapy, speech therapy, and
social work services. Care includes clinical assessment, treatment
planning, treatment provision, patient and family education, health
status monitoring, reassessment, referral, and follow-up. A VA primary
care provider prescribes skilled home health care services when
medically necessary and appropriate for enrolled veterans. Veterans
with a spinal cord injury requiring home care services may employ a
relative or other home health attendant when trained and certified as
competent by VA personnel.
VA long-term care services: Noninstitutional services: Spinal cord
injury home care[A];
Description: This program strives to maximize veterans' independence
and ability to reside where they desire after discharge.
Noninstitutional extended care options within VA include home health
care (including bowel and bladder care), homemaker/home health aide,
respite care services, medical foster homes, and community residential
centers.
VA long-term care services: Noninstitutional services: Respite care[A,
C];
Description: Respite care services are personal care and supportive
services delivered in the home, nursing home adult day care center, or
assisted-living facility for the purpose of temporarily relieving the
unpaid caregiver of their duties. Respite care services may include
various VA-provided services and non-VA purchased services. Respite
care services are generally limited to 30 days per year from all
settings in which respite is provided.
Source: GAO summary of VA information.
[A] These services are part of VA's medical benefits package, which is
a uniform set of services that are to be available to all enrolled
veterans.
[B] In its fiscal year 2009 budget justification, VA provided spending
estimates and workload projections for hospice and palliative care and
purchased skilled home health care under the heading "other home based
programs."
[C] In its fiscal year 2009 budget justification, VA included spending
estimates and workload projections for respite care in the estimates
and projections it provided for the homemaker/home health aide program.
[End of table]
[End of section]
Appendix II: Comments from the Department of Veterans Affairs:
The Secretary Of Veterans Affairs:
Washington:
January 5, 2009:
Mr. Randall Williamson:
Director:
Health Care:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Williamson:
The Department of Veterans Affairs (VA) has reviewed the Government
Accountability Office's (GAO) draft report, VA Health Care: Long-Term
Care Strategic Planning and Budgeting Need improvement (GAO-09-145). VA
supports GAO's overarching conclusion that the long-term care strategic
planning and budgeting justification process should be clarified so
that the service priorities of our long-term care program are clearly
understood by all stakeholders, including Congress.
At this time, the Department will be unable to provide specific
comments to GAO's draft report and the seven recommendations (as
currently structured). The program managers in the Offices of Patient
Care Services, Policy and Planning, and the Veterans Health
Administration's Office of Finance will evaluate GAO's final report
carefully. The effort will be coordinated through the Office of the
Principal Deputy Under Secretary for Health. The Department anticipates
that the assessment and a detailed action plan that responds to GAO's
recommendations will be completed within 60 days of the publication of
the final report . At that point, we will provide this assessment and
action plan to appropriate staff at GAO.
GAO's observations have been very beneficial to us and will form the
basis of discussion and action. Enclosed are technical comments
suggested by VA to provide clarification for the report's overall
accuracy.
Sincerely yours,
Signed by:
James B. Peake, M.D.
Enclosure:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Randall B. Williamson, (202) 512-7114 or williamsonr@gao.gov:
Staff Acknowledgments:
James C. Musselwhite, Assistant Director; Susannah Bloch; Deirdre
Brown; Robin Burke; Denise M. Fantone; Krister Friday; and Grace
Materon made key contributions to this report.
[End of section]
Related GAO Products:
VA Health Care: Budget Formulation and Reporting on Budget Execution
Need Improvement. GAO-06-958. Washington, D.C.:
September 20, 2006.
VA Long-Term Care: Data Gaps Impede Strategic Planning for and
Oversight of State Veterans' Nursing Homes. GAO-06-264. Washington,
D.C.: March 31, 2006.
VA Health Care: Preliminary Findings on the Department of Veterans
Affairs Health Care Budget Formulation for Fiscal Years 2005 and 2006.
GAO-06-430R. Washington, D.C.: February 6, 2006.
VA Long-Term Care: Trends and Planning Challenges in Providing Nursing
Home Care to Veterans. GAO-06-333T. Washington, D.C.: January 9, 2006.
VA Long-Term Care: Oversight of Nursing Home Program Impeded by Data
Gaps. GAO-05-65. Washington, D.C.: November 10, 2004.
VA Long-Term Care: More Accurate Measure of Home-Based Primary Care
Workload Is Needed. GAO-04-913. Washington, D.C.: September 8, 2004.
VA Long-Term Care: Changes in Service Delivery Raise Important
Questions. GAO-04-425T. Washington, D.C.: January 28, 2004.
VA Long-Term Care: Veterans' Access to Noninstitutional Care Is Limited
by Service Gaps and Facility Restrictions. GAO-03-815T. Washington,
D.C.: May 22, 2003.
VA Long-Term Care: Service Gaps and Facility Restrictions Limit
Veterans' Access to Noninstitutional Care. GAO-03-487. Washington,
D.C.: May 9, 2003.
VA Long-Term Care: The Availability of Noninstitutional Services Is
Uneven. GAO-02-652T. Washington, D.C.: April 25, 2002.
VA Long-Term Care: Implementation of Certain Millennium Act Provisions
Is Incomplete, and Availability of Noninstitutional Services Is Uneven.
GAO-02-510R. Washington, D.C.: March 29, 2002.
[End of section]
Footnotes:
[1] VA is required by law to provide nursing home care that the
Secretary of VA determines is needed to any veteran in need of such
care for a service-connected disability and to any veteran who is in
need of such care and who has a service-connected disability rated at
70 percent or greater. 38 U.S.C. § 1710A(a). These requirements will
terminate on December 31, 2013. 38 U.S.C. § 1710A(d) (amended by the
Veterans' Mental Health and Other Care Improvements Act of 2008, Pub.
L. No. 110-387, § 805, 122 Stat. 4110, 4141). The statute states that
these requirements may not be construed as authorizing or requiring
that a veteran who was receiving nursing home care in a department
nursing home on November 30, 1999, be displaced, transferred, or
discharged from the facility. 38 U.S.C. § 1710A(b)(2).
[2] See 38 U.S.C. § 1710(a)(2), (3).
[3] The two services that VA is required by law to provide are adult
day health care and respite care. 38 U.S.C. § 1710B.
[4] Each year, VA develops annual spending estimates for its medical
services, such as long-term care, and includes these estimates and
supporting information in the budget justification that VA submits to
Congress as part of the annual appropriations process.
[5] See GAO, VA Health Care: Budget Formulation and Reporting on Budget
Execution Need Improvement, [hyperlink, http://www.gao.gov/products/GAO-
06-958] (Washington, D.C.: Sept. 20, 2006).
[6] VA received a $1.5 billion supplemental appropriation in fiscal
year 2005. Department of the Interior, Environment, and Related
Agencies Appropriations Act, 2006, Pub. L. No. 109-54, 119 Stat. 499,
563-64 (2005).
[7] In its fiscal year 2009 budget justification, VA included actual
data on long-term care costs and workload for fiscal year 2007 and
estimates of long-term care costs and workload for fiscal year 2008,
based on the most recent data available at the time of the creation of
its fiscal year 2009 budget justification. Department of Veterans
Affairs, FY 2009 Budget Submission, Medical Programs and Information
Technology Programs, Volume 2 of 4 (Washington, D.C.: February 2008).
[8] Department of Veterans Affairs, VA Long-Term Care at the
Crossroads: Report of the Federal Advisory Committee on the Future of
VA Long-Term Care (Washington, D.C.: June 1998).
[9] In general, veterans must enroll in VA's health care system in
order to receive most of VA's medical services.
[10] See GAO, VA Long-Term Care: Service Gaps and Facility Restrictions
Limit Veterans' Access to Noninstitutional Care, [hyperlink,
http://www.gao.gov/products/GAO-03-487] (Washington, D.C.: May 9,
2003).
[11] VA Office of Inspector General, Review of Access to Care in the
Veterans Health Administration, Report Number 05-03-028-145
(Washington, D.C.: May 17, 2006).
[12] See GAO, VA Long-Term Care: Data Gaps Impede Strategic Planning
for and Oversight of State Veterans' Nursing Homes, GAO-06-264
(Washington, D.C.: Mar. 31, 2006). GAO, VA Long-Term Care: Oversight of
Nursing Home Program Impeded by Data Gaps, [hyperlink,
http://www.gao.gov/products/GAO-05-65] (Washington, D.C.: Nov. 10,
2004).
[13] Pub. L. No. 109-461, § 206, 120 Stat. 3403, 3412.
[14] Department of Veterans Affairs, Long-Term Care Strategic Plan,
Response to Public Law 109-461, The Veterans Benefits, Health Care, and
Information Technology Act of 2006 (Washington, D.C.: August 2007).
[15] Department of Veterans Affairs, Strategic Plan FY 2006-2011
(Washington, D.C.: October 2006).
[16] Office of Management and Budget, Circular No. A-11: Preparation,
Submission, and Execution of the Budget (Washington, D.C.: June 2008).
[17] See GAO, Agencies' Strategic Plans Under GPRA: Key Questions to
Facilitate Congressional Review, [hyperlink,
http://www.gao.gov/products/GAO/GGD-10.1.16] (Washington, D.C.: May
1997).
[18] During our work we focused on VA's planning and budgeting for
nursing home care. We did not examine other types of institutional long-
term care VA provides--state home domiciliary care and inpatient
geriatric evaluation and management. Nursing home care accounted for
almost all of VA's institutional long-term care workload in fiscal year
2007--the most recent year for which actual workload data is available.
[19] Department of Veterans Affairs, Fiscal Year 2007 Performance and
Accountability Report (Washington, D.C.: Nov. 15, 2007).
[20] See the list of related GAO products at the end of this report.
[21] See GAO, VA Long-Term Care: More Accurate Measure of Home-Based
Primary Care Workload Is Needed, [hyperlink,
http://www.gao.gov/products/GAO-04-913] (Washington, D.C.: Sept. 8,
2004).
[22] 38 U.S.C. §§ 1710B, 1745.
[23] VA also refers to noninstitutional long-term care services as
"home and community based care" services.
[24] Requirements for VA long-term care services--like other VA health
care services--are effective in any fiscal year only to the extent and
in the amount provided in advance in appropriations acts for such
purposes. 38 U.S.C. § 1710(a)(4).
[25] In addition to Priority 1A veterans, VA is also required to
provide nursing home care that the Secretary of VA determines is needed
for veterans in need of such care for a service-connected disability.
38 U.S.C. § 1710A(a). These requirements will terminate on December 31,
2013. 38 U.S.C. § 1710A(d) (amended by the Veterans' Mental Health and
Other Care Improvements Act of 2008, Pub. L. No. 110-387, § 805, 122
Stat. 4110, 4141). The statute states that these requirements may not
be construed as authorizing or requiring that a veteran who was
receiving nursing home care in a department nursing home on November
30, 1999, be displaced, transferred, or discharged from the facility.
38 U.S.C. § 1710A(b)(2).
[26] See 38 U.S.C. § 1710(a)(2), (3).
[27] In general, veterans must enroll in VA's health care system in
order to receive VA's medical benefits package, which covers most of
VA's medical services. VA's enrollment system includes eight categories
for enrollment, with priority generally based on service-connected
disability, low income, and other recognized statuses such as former
prisoners of war. 38 U.S.C. § 1705; 38 C.F.R. § 17.36 (2008). Veterans
do not have to be enrolled in VA's health care system to receive VA
nursing home care. 38 C.F.R. § 17.37(i) (2008).
[28] VA is required to provide "medical services"--including adult day
health care and respite care--to groups of veterans specified by law.
38 U.S.C. §§ 1710(a)(1), (2), 1701(6) (amended by the Veterans' Mental
Health and Other Care Improvements Act of 2008, Pub. L. No. 110-387, §
801, 122 Stat. 4110, 4140-41). VA is authorized to provide medical
services to other veterans not identified in these groups. 38 U.S.C. §
1710(a)(3). The groups of veterans to whom VA is required to provide
medical services coincide with most of VA's enrollment categories. See
38 U.S.C. § 1705.
[29] 38 U.S.C. § 1710B.
[30] These six services are care coordination/telehealth; home-based
primary care; homemaker/home health aide services; hospice and
palliative care; purchased skilled home health care; and spinal cord
injury home care. VA also provides community residential care to
veterans, but not as part of its medical benefits package.
[31] VA is not authorized, in most cases, to bill and collect payments
from Medicaid and Medicare, nor can VA bill other insurers for health
care services that are related to a service-connected disability.
However, a veteran's eligibility to participate in VA's nursing home
program does not prohibit him or her from using these financing sources
for nursing home care outside of VA's health care system, if eligible.
[32] Due to the timing of the budget preparation, VA's spending
estimates are not based on VA's actual spending from the prior year
since these data are not yet available.
[33] VA is also required to provide nursing home care that the
Secretary of VA determines is needed for veterans in need of such care
for a service-connected disability. 38 U.S.C. § 1710A(a). These
requirements will terminate on December 31, 2013. 38 U.S.C. § 1710A(d)
(amended by the Veterans' Mental Health and Other Care Improvements Act
of 2008, Pub. L. No. 110-387, § 805, 122 Stat. 4110, 4141). The statute
states that these requirements may not be construed as authorizing or
requiring that a veteran who was receiving nursing home care in a
department nursing home on November 30, 1999, be displaced,
transferred, or discharged from the facility. 38 U.S.C. § 1710A(b)(2).
According to VA officials, these two groups--veterans receiving nursing
home care for a service-connected disability and veterans who were
receiving nursing home care in a VA nursing home on November 30, 1999-
-are very small in relation to the number of Priority 1A veterans.
[34] VA measures workload in terms of average daily census.
[35] VA estimates of demand for its long-term care services--for both
nursing home and noninstitutional services--are estimates of the number
of veterans who are expected to seek long-term care from VA rather than
seek such care through Medicare, Medicaid, private insurance, or
TRICARE--the Department of Defense health care program for active-duty
personnel, retirees, and their dependents. VA officials told us that VA
expects to be able to meet the rising demand for nursing home services
for Priority 1A veterans because VA's planned workload for this
population--11,000--is less than the capacity available in VA-operated
nursing homes, one of the three settings through which VA provides
nursing home care.
[36] VA estimated the increase in demand for nursing home services by
Priority 1A veterans using information on actual Priority 1A nursing
home workload.
[37] VA estimated the increase in demand for noninstitutional services
by making projections based on data on enrolled veterans' utilization
of noninstitutional services.
[38] See [hyperlink, http://www.gao.gov/products/GAO-03-487].
[39] In its fiscal year 2009 budget justification, VA included fiscal
year 2007 actual data and an estimate of fiscal year 2008 data, based
on the most recent nursing home data available at the time of the
creation of its fiscal year 2009 budget justification.
[40] Department of Health and Human Services, Centers for Medicare &
Medicaid Services, Office of the Actuary, National Health Expenditures
Projections 2007-2017 (Washington, D.C.: January 2008).
[41] In its fiscal year 2007 budget justification, VA projected
workload to increase about 14 percent from fiscal year 2006 to fiscal
year 2007. Department of Veterans Affairs, FY 2007 Budget Submission,
Medical Programs, Volume 1 of 4 (Washington, D.C.: February 2006).
[42] Home-based primary care provides primary care, delivered by a
physician-directed interdisciplinary team of staff including nurses, in
the homes of veterans with complex medical, behavioral, and
psychosocial conditions who would be candidates for nursing home care
in the absence of this service.
[43] VA uses enrolled days to measure workload for three other
noninstitutional services: (1) care coordination/telehealth, (2)
community residential care, and (3) hospice and palliative care. We did
not focus on these three services for several reasons. First, veterans
have contact with VA each day they are enrolled in care coordination/
telehealth services. Also, VA's contribution for community residential
care services is limited to the cost of program administration and
clinical services. Finally, VA projects that hospice and palliative
care will account for less than 2 percent of its noninstitutional
workload increase from fiscal year 2008 to fiscal year 2009.
[44] Homemaker/home health aide services are personal care and related
support services that may include assistance with activities of daily
living that are essential for maintaining a safe and sanitary
environment in the areas of the home used by the patient.
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441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548: