February 2006

February 10, 2006

Tricare Management Activity began a new Tricare Dental Program (TDP) contract with United Concordia Companies Inc. Feb. 1. United Concordia will continue to furnish worldwide, comprehensive dental coverage to include preventive, diagnostic, restorative and maintenance services to all eligible uniformed services active duty family members and to National Guard and Reserve members and their eligible family members. Benefits added are dental implants and related prosthetics, and extended restorative services to teeth affected by attrition, erosion, abrasion, and congenital or developmental defects. Cost shares will continue to be reduced for active-duty service members in pay grades E-1 to E-4 for some dental services. For more information, visit www.TRICAREdentalprogram.com, or call toll-free (800) 866-8499. If residing outside the continental U.S., dial your country code followed by (888) 418-0466 toll-free. Beneficiaries may also access the 
Tricare Web site at www.tricare.osd.mil. 

February 10, 2006

The Government Accountability Office has made an initial report of an investigation requested by House Committee on Veterans' Affairs Chairman Steve Buyer, R-Ind., and members of the Senate. GAO blamed unrealistic assumptions, errors in estimates, insufficient data, and an unresponsive budget model for health care funding shortfalls at the Department of Veterans Affairs in fiscal years 2005 and 2006. GAO declared that the federal budgeting process itself, which uses information up to three or more years old, had contributed to shortfalls. Projections were understated for a number of reasons, including returning Operation Enduring Freedom and Operation Iraqi Freedom soldiers and requirements for long-term care. The funding shortages, which were discovered by VA officials in the spring of 2005, were ultimately filled by supplemental funding. The GAO will continue its review of the process used by the administration 
to formulate the VA budget. (See next item.) 


Lane Evans, ranking Democratic member, House Committee on Veterans Affairs, says the Department of Veterans Affairs used "phantom claims to offset VA budget requests for health care. Basing his comments on a Government Accountability Office report issued Feb. 1 (previous item), he added that "while calling for the establishment of user fees and increased copayments for veterans seeking health care, and altogether barring at least 260,000 veterans from the (VA) health care system," the administration falsely claimed billions of dollars in unsubstantiated'management efficiencies.'" Democrat Daniel Akaka, Evans' counterpart on the Senate Committee on Veterans Affairs, said "It is distressing that VA's health care budget over the past three 
years has been built like a house of cards." Evans and Akaka stressed that replacing the Administration's savings claims in the VA budget would have averted the needs for the $1.3 billion supplemental request in 2005 and increases in pharmacy co-payments.

March 17, 2006 

Lawmakers consider seeking review of plans for Tricare fee hike
By Megan Scully, CongressDaily

House Armed Services Personnel Subcommittee Chairman John McHugh, R-N.Y., is considering an independent review of Pentagon plans to raise healthcare premiums and other fees for military retirees under the age of 65.
"My instincts tell me it would probably behoove us to take some kind of dispassionate, third-party view," McHugh said in an interview Thursday. The review, he added, could be conducted by GAO or an outside firm to provide an in-depth look at the proposal, which Pentagon leaders say would save $735 million in fiscal 2007 and $11 billion over the next five years.

Senate Armed Services Personnel Subcommittee Chairman Lindsey Graham, R-S.C., called for a similar review during a hearing Tuesday.

While the fee increases could help offset the military's burgeoning TRICARE healthcare bills, McHugh and other lawmakers are concerned the plan would burden retirees, including veterans returning from Iraq and Afghanistan. "It troubles me somewhat morally," McHugh said.

A strong and vocal coalition of military organizations opposing the plan estimates it could cost some retirees an additional $100 a month. McHugh, who last year was wary of the hefty costs associated with Congress' decision to expand TRICARE benefits, said he recognized the potential for savings in the Pentagon's proposal.

If the defense committees opt to overturn the department's decision, the money might have to come from somewhere else in the defense budget, he said. As a compromise, McHugh said he might favor incremental fee boosts for retirees over the next several years.

Administration officials say TRICARE cost shares and fees have not been adjusted in 11 years, while most other healthcare programs have substantially increased.

House Armed Services Personnel Subcommittee ranking member Vic Snyder, D-Ark., said he had not talked to McHugh about the third-party review but agreed it could be helpful as the committee considers the fiscal 2007 budget request. Like McHugh, he emphasized that the panel must give the matter --including the Pentagon's cost arguments --careful consideration before making a final decision.

This year, the military expects to spend 8 percent of its budget, or $37 billion, on healthcare programs --twice what the department spent five years ago. If premiums and other fees remain unchanged, the military is on track to spend $64 billion on healthcare in fiscal 2015.

Other House lawmakers are attempting to stop the cost hikes outside of the defense appropriations and authorization processes. Earlier this week, Rep. Walter Jones, R-N.C., a House Armed Services member, and House Military Quality of Life Appropriations ranking member Chet Edwards, D-Texas, introduced a bill that would thwart the fiscal 2007 TRICARE proposal.

It also would change current law that allows the Pentagon to alter healthcare fees without the blessing of Capitol Hill. The bill has 77 co-sponsors, including several Republican members of the Armed Services Committee. The Military Officers Association of America, which helped write the House bill, is looking for senators to sponsor similar legislation.

This document is located at http://www.govexec.com/dailyfed/0306/031706cdpm1.htm


February 17, 2006

The administration’s fiscal 2007 budget proposal provides the Department of Veterans Affairs an 8 percent or $2.65 billion increase in discretionary funding for health care. This "gives Congress a much better starting point in the appropriations process than ever before," said Jim Mueller, commander in chief of the Veterans of Foreign Wars. The VFW, along with other veterans organizations, registered concern, however, about the proposal in the budget to raise prescription co-payments and impose an annual enrollment fee of $250 for almost 2 million Category 7 and 8 veterans who have no service-connected disabilities. VFW also is disturbed about the plan to almost double co-payments, from $8 to $15, for each 30-day prescription. If Congress allows those measures, an estimated 200,000 veterans would be discouraged from seeking help from the VA, and 1 million who are currently enrolled could drop out of the VA system, said the VFW. 

February 17, 2006

"The GAO report (concerning VA medical care funding, dated Feb. 1) confirms what everyone has known all along," Legion National Commander Thomas L. Bock said. "VA’s health-care budget has been built on false claims of ‘efficiency’ savings, false actuarial assumptions and an inability to collect third-party reimbursements – money owed them. This budget model has turned our veterans into beggars, forced to beg for the medical care they earned and, by law, deserve. These deceptions are especially unconscionable when American men and women are fighting in Iraq and Afghanistan." Bock said the GAO report amplifies the need for assured funding of VA health care. "VA must be funded on a dollars-per-veteran basis, indexed annually for inflation, with the ability to collect payments from Medicare or any other third-party insurance provider." To view the GAO report online, 
visit www.veterans.house.gov/democratic/press/109th/pdf/gao06-359r.pdf. 

February 17, 2006

The Veterans of Foreign Wars, along with other veterans organizations, have other concerns about the '07 budget request for the Department of Veterans Affairs (previous item). First is the proposal to charge co-payments to veterans who already make co-payments through third-party insurers. This in effect would force them to pay twice for the same coverage, explained the VFW. Such double-billing would impact veterans with disability ratings of 40 percent or less. Not mentioned in the budget, says the VFW, is how the Veterans Benefits Administration would address a VA claims backlog of more than 813,000 cases. Concerned about the quality of claims decisions, the VFW also questioned how the VA is planning to overcome a huge exodus of experience as the baby-boomer generation retires from federal service over the next five years. 

February 17, 2006

VA chief: Budget shortfalls are behind us 
From CongressDaily 

VA chief: Budget shortfalls are behind us 
By Jenny Mandel

Senators and advocacy groups on Thursday questioned the projections behind a fiscal 2007 budget request that would significantly boost spending at the Veterans Affairs Department. But department officials said the proposal is sound and is not subject to the same problems that led to an unexpected shortfall last summer. 

In testimony at a Senate Veterans Affairs Committee hearing, VA Secretary James Nicholson discussed the details of a 2007 budget proposal that would give the department $80.6 billion, a 12.2 percent increase over the spending level enacted for this year. 

"We're confident; we've spent a lot of time on this," Nicholson told committee chairman Sen. Larry Craig, R-Idaho. Last June, lawmakers were informed of an unanticipated $1 billion shortfall in the VA's fiscal 2005 budget that the department attributed to errors in forecasting health care system needs. 

A budget amendment signed by the president in August 2005 gave the VA an additional $1.5 billion to tide it over to the end of the fiscal year. At the time, Craig described the situation as "extremely frustrating." 

At Thursday's hearing, Nicholson said last summer's shortfall resulted from the long timeframe for budget development. The fiscal 2005 budget was based on 2002 data that did not reflect operations in Iraq, he said, whereas the 2007 budget is based on 2004 data that reflects the increased rate of veterans applying for benefits following combat service. 

"We did go back to the model the VA has used for years," Nicholson said. "We've been over it many times back at the department, and we think we're on top of it." 

As a result of last summer's problems, the VA has started reporting quarterly to its Senate oversight committee, and officials say they are seeking closer coordination with the Defense Department to get early notice of discharge rates. 

VA spokesman Terry Jemison said the department has made "significant improvements" to its actuarial model that supports budget requests, including enhancements to how it estimates illness rates and veterans' reliance on other medical providers. Accuracy in veterans' assignment to income-based priority groups also has improved, as have projections of the needs of veterans returning from the Middle East, he said. 

In questioning, senators raised concerns over several other aspects of the proposed budget, including a projected 38 percent increase in fee collections attributed in part to a controversial proposal to charge annual fees and co-pays to certain non-service-disabled veterans. Other questions addressed the accuracy of the VA's estimates for health care spending for veterans returning from Iraq and Afghanistan, and increased applications for benefits by eligible seniors steered toward VA by enrollment assistants with the Medicare drug program. 

Signaling concern for looming budget problems, Craig urged committee members to work together to find lasting solutions -- such as the proposed user fees -- to the VA's overall rising costs. Craig said VA medical care appropriations have increased 69 percent since 2001, a rise that VA's Jemison said "roughly tracks" medical inflation rates. 

"If the president's proposals are not acceptable, then let's discuss other options," Craig urged committee members. "What will occur in the near future . . . is that VA spending will collide with spending demands made in other areas of government." 

"VA's budget," he said, "presents mathematical realities that Congress will be forced to address." 

This document is located at http://www.govexec.com/dailyfed/0206/021706m1.htm


February 17, 2006

The Independent Budget (IB), coauthored by the Disabled American Veterans, AMVETS, the Paralyzed Veterans of America, and Veterans of Foreign Wars, recommends that Congress appropriate $26 billion for veterans’ medical services in fiscal year (FY) 2007 just to maintain current service levels. The Administration’s budget for FY 2007 seeks $24.7 billion in appropriations for veterans’ medical services, which falls $1.3 billion short of the IB’s recommendation. The President’s FY 2007 medical care budget slightly increases the mental health services capacity; however, it continues the hiring freeze of all other direct health care providers at a time when an influx of new veterans from the wars in Iraq and Afghanistan will place substantial new demands upon a system already struggling to meet its mission. This budget proposal estimates that only 109,191 veterans of the Iraq and Afghanistan wars will seek treatment in 2007. This reflects a decrease of 1,375 below the number of these new war veterans the VA estimates it will treat in 2006. 

VA would bridge the gap between the resources needed and the appropriations requested by shifting $2.8 billion of the costs of VA medical care from the Government onto sick and disabled veterans themselves and by maintaining a freeze on new enrollments of Priority Group 8 veterans. To shift costs to veterans, The President proposes a $250 annual enrollment fee, increase pharmacy copayments for more than a million veterans seeking medical care, and establish a new collection authority. Such proposals would drive away approximately 200,000 veterans who are needed to maintain the clinical skills of medical providers and ensure VA’s high quality comprehensive medical care. 

The Administration declares that it will achieve $1.1 billion in savings through new management efficiencies, which VA officials have regarded as a savings goal used to reduce requests for a higher level of annual appropriations in order to fill the gap between the cost associated with VA’s projected demand for health care services and the amount the President requested.

DAV opposes, and Congress has consistently rejected, the Administration’s proposals to place more of the burden of health care costs onto veterans. Higher medical care copayments and proposed user fees are nothing more than taxation upon the benefits of disabled veterans. Such fees depart from the fundamental principle that those benefits are provided to veterans by a grateful nation in partial compensation for their service and sacrifices. Assuming Congress agrees to impose these taxes on disabled veterans, assuming the projected savings from the unconscionable scheme to drive veterans away from the system created for them, and assuming all of the savings from the attainment of new efficiencies, the total budget authority would still fall short of what is needed to maintain services. 

The proposed budget would also make further personnel reductions in VA’s Veterans Benefits Administration at a time when benefit claims are expected to increase and when unacceptable delays already are occurring due to inadequate staffing. Based on the adverse and long-standing problems from chronic understaffing in VBA’s Compensation and Pension Service (C&P), compounded by anticipated increased claims volumes, The Independent Budget recommends 10,820 FTE for C&P Service. The President’s budget requests 9,445 FTE, which would reduce direct program FTE for handling compensation claims by 149 in 2007. The budget request concedes that the already unacceptable claims backlog would grow even larger in 2006 and 2007, and to knowingly request resource levels that will only make an intolerable situation worse, is indefensible.

• Congress should provide $26 billion in appropriations for veterans’ direct medical services in FY 2007

• Congress should reject recommendations to impose additional charges upon veterans for medical care

• Congress should authorize 10,820 total FTEs for C&P Service for FY 2007


One of the hottest and most visible topics debated in Congress this past year was federal funding shortages in the Department of Veterans Affairs (VA) health care system. From the start of the year DAV and the nation’s other leading veterans service organizations warned of a serious shortfall in funding—that VA’s problems were growing and that a crisis was brewing. Unfortunately, the crisis was blatantly ignored by officials of the Administration and Congressional leadership, who apparently hoped this problem would simply go away. 

In June 2005, VA was forced to acknowledge a nearly $3 billion shortfall for fiscal year (FY) 2005/2006. The VA admitted it had miscalculated and underestimated the demand growth and other factors straining and stressing the health care system. The Independent Budget was right on target. Congress addressed the shortfall for 2005 by adding $1.5 billion in emergency supplemental funding in late August. Later, Congress provided an “emergency designation” supplemental budget of $1.22 billion to VA to cover admitted fiscal year 2006 shortages. 

Each year DAV, as part of the Independent Budget, fights for sufficient funding for veterans health care. Each year the level of appropriated dollars falls short of what is necessary to meet the needs of sick and disabled veterans. The current discretionary funding method, coupled with continued inadequate and frequently late budgets, has created structural under-funding that jeopardizes quality of care to America’s sick and disabled veterans. 

We believe funding reform for veterans’ benefits and health care services should be a top priority for any Congress and Administration as a continuing cost of national defense. As a nation, we must be willing to bear the costs of providing special benefits to this unique group—those men and women who were willing, on behalf of all Americans, to stand the watch to secure our nation in peacetime and be prepared to fight our wars to preserve our cherished freedoms and democratic values. To assure the VA health care system is maintained as a top government priority, its funding should be made through a guaranteed mechanism to remove it from competition with other politically popular but lower priority federal programs.

Senators Tim Johnson (D-SD) and John Thune (R-SD) have both sponsored important bills, S. 331, the Assured Funding for Veterans Health Care Act, and S. 963, the Veterans Health Care and Equitable Access Act, which would assure VA health care funding. DAV, along with other members of the Partnership for Veterans Health Care Budget Reform, recently urged Chairman Larry Craig (R-ID) and Ranking Member Daniel Akaka (D-HI) of the Senate Veterans’ Affairs Committee, to hold hearings in this session of Congress on the funding problems we reported above and to discuss a long-term funding solution. Senators Thune and Johnson made a similar request to the Veterans Committee. Chairman Craig left only a small ray of hope for the potential scheduling of this topic before the end of the year. In this regard, the same request for a hearing on health care budget reform has been made to the Chairman of the House Veterans' Affairs Committee, Steve Buyer (R-IN), to no avail. The Ranking Member of the House Committee, Representative Lane Evans (D-IL) introduced H.R. 515 in the House, the Assured Funding for Veterans Health Care Act.

DAV believes that the efforts by Congress so far, as reported above, to prop up VA health care funding have only been band-aid solutions when the VA health care system is hemorrhaging with a variety of pent-up shortages, hiring freezes, and growing waiting lists. What could be more important for Congress at a time of war than to assure the American people that our soldiers, sailors, airmen and Marines in harm’s way overseas can depend on timely access to VA health care if they need it? 

Our nation’s veterans deserve to be a priority in the budget. They also deserve to have their concerns about the way veterans health care is funded addressed in an official forum. Our nation’s sick and disabled veterans deserve a strong and viable health care system dedicated to their needs, especially those who have suffered catastrophic disabilities as a result of military service and will need and depend on the VA health care system and its specialized services for the rest of their lives.

Please Contact your elected officials to request a hearing on veterans health care budget reform be scheduled as a top priority in the Senate and House Veterans’ Affairs Committees.

Encourage House members to support H.R. 515, the Assured Funding for Veterans Health Care Act. 

Encourage Senate members to support S. 331, the Assured Funding for Veterans Health Care Act, and the budget reform provisions in S. 963, the Veterans Health Care and Equitable Access Act. 


For nearly two decades, disabled military retirees have fought to end the unfair law that requires forfeiture of career retirement pay in order to receive veterans’ disability compensation. 

Finally, measures have been taken to incrementally eliminate the unfair law that bans concurrent receipt, but only for career retirees who are at least 50 percent disabled. The DAV believes an unfair law should also be repealed for everyone affected by it; there should be no eligibility criteria, based on a veteran’s level of disability, to determine entitlement to justice. Something unfair to a veteran who is 50 percent disabled, is equally unfair to a veteran with a 40 percent disability. 

The attempt to partially and incrementally correct the unfair offset has also led to the creation of a hodge-podge of programs with different eligibility criteria. Besides giving rise to much confusion, each new program has created unforeseen inequities that required further corrective actions. The complexity and vagueness of these programs have undoubtedly added to the costs of administration. 

Congress and the President must take steps to immediately and completely rectify the unjust offset between career military retirement pay and VA disability compensation.

Ask your elected officials to support a full repeal of the unfair prohibition on the concurrent receipt of military retired pay and VA disability compensation for all disabled career military retirees.


On Monday, November 7, 2005, Representative Steve Buyer, Chairman of the House Veterans' Affairs Committee, announced a new hearing schedule for the Committee, eliminating the long-standing tradition of joint hearings to present the legislative agendas of veterans service organizations.

For several decades now, these joint hearings have been held each year to allow the elected leaders of veterans groups to discuss their organization’s legislative agenda and foremost concerns with the lawmakers who have jurisdiction over federal veterans programs. Senators and Representatives who serve on those committees also get the rare opportunity to address the hundreds of constituent members from these organizations who make the annual pilgrimage to Capitol Hill. 

The right to fully participate in the democratic process is a cornerstone of our nation. Eliminating these joint hearings is an insult to the men and women who have fought, sacrificed and died to protect our Constitutional rights, including the right to petition the government.

This important dialog between veterans and their elected representatives is crucial to the democratic process and a unique opportunity for the men and women who’ve put their lives on the line for America. Many of the veterans who take part in the hearings view it as their patriotic duty, as well as a fundamental right.

The new hearing schedule established by Representative Buyer fails to provide veterans with any new meaningful input into the Congressional process.

Please ask your elected member of the House of Representatives to urge Chairman Buyer to restore these crucial hearings before the next Congressional session.