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VA’s 2021 Budget and Legislative Proposals

July 11, 2020

How VA’s Budget Process Works

VA’s proposed budget determines where VA would like funding to go and what their priorities are for the upcoming year.  Even though it is only 2020, budget planning starts early as the 2021 fiscal year (FY) will start on October 1st of this year.  Right now, VA’s budget proposal is strictly that: a proposal.  It is not the final budget yet.  In the coming months, VA must go through the budget approval process as set forth by the United States government.  Specifically, the budget is going to need to be reviewed by both chambers of Congress (i.e., the House and the Senate) and essentially vote on it.  Prior to the vote, legislators will be allowed to talk to VA about amendments, revisions, changes, and cuts they want to make.  Generally speaking, VA wants to allocate their funds for 2021 into three primary areas: (1) technology modernization; (2) the Veterans Benefits Administration (VBA); and (3) medical care.  Overall, the proposed total budget requests for 2021 is about $243 billion.

VA’s Technology Modernization

VA Appeals Software

Of the $243 billion budget, VA is calling for $4.9 billion to be focused on technology modernization.  Importantly, this allocation represents a 12.4 percent increase from last year’s budget.  Many of the technology updates are geared towards phasing out older technology that was used in the former appeals system (i.e., the Legacy appeals system).  One of the main projects VA will direct this funding towards is Caseflow – a suite of web-based tools that will allow VA to manage and track appeals that are pending at the Board of Veterans’ Appeals.  Caseflow replaces the Veteran’s Appeals Control and Locator System (VACOLS), which was created 40 years ago.

Blue Water Navy

The technology modernization funds will also be applied towards creating software to process Blue Water Navy claims.  As a reminder, the Blue Water Navy Act went into effect on January 1, 2020.  VA is currently in the process of creating a “ship locator tool,” which will make it easier for VA adjudicators to determine whether a veteran served within 12 nautical miles of Vietnam (i.e., the requirement for the presumption of exposure to Agent Orange).

VA Mission Act

Finally, the push for updated technology will also include software to complement new programs rolling out under the VA Mission Act.  For example, technology such as telehealth will be delivered in conjunction with the expansion of VA’s caregiver program.

What VA’s Budget Percentage Increase Tells Us and How the Budget Has Changed Over the Years

Oftentimes, it can be very telling and reassuring to see that VA is planning to spend more money in certain areas than it has in the past.  As such, it is important to note that the total budget has increased this year as compared to previous years.  Specifically, there is a $60 billion increase in the proposed 2021 budget as compared to 2017, and VA is one of the only agencies that will be receiving an increase in funding.

VA’s Electronic Health Record (EHR) System with DoD & Implementation Plan

VA’s initiative to modernize electronic health records (EHR) is receiving $2.6 billion of the proposed budget for FY 2021.  The EHR modernization initiative is essentially an effort to establish an interagency medical record tracking system where veterans will enter service and subsequently have an electronic medical record that follows them through the course of their active duty service and throughout their lifetime following discharge.  The idea is to have one centralized area with all records from the time period a veteran served, as well as records from after service, that can be more readily shared and communicated with other agencies.  In theory, VA would have access to and be able to share information with the Department of Defense who may have additional records related to the veteran.  Up until this point, it has been difficult for veterans to access those records from different federal agencies.

This initiative would begin at two VA Medical Centers and then slowly expand over the next 10 years.  The program was set to begin in March of this year; however, it has experienced multiple delays.  Such delays have been due to problems integrating the old technology with the new technology.  As a result, these two VA Medical Centers are not up and running with EHR, but the proposed budget assumes that these two facilities will be ready at some point in 2021.  Again, the plan is to have this program slowly expand over the next 10 years to allow veterans located at facilities across the country to access and utilize this interagency medical record system.

Veterans Benefits Administration (VBA) Proposed Funding

About $5.6 billion has been allocated for the Veterans Benefits Administration (VBA); however, this is not the amount that will be used to pay compensation benefits.  There are over 5.7 million veterans and their family members or dependents that are receiving VA disability benefits.  The number that is allocated for those monthly compensation benefits is somewhere around $130 billion.  Importantly, this $5.6 billion is not meant to overlap with that funding process or that fund allocation.  The $5.6 billion that has been proposed for the VBA speaks to VA’s goal of handling new compensation claims.  Specifically, the Appeals Modernization Act (AMA) has changed the whole landscape of filing claims and appeals.  Under this appeals system, VA is aiming to process 1.4 million compensation claims and 3.8 million education claims in the coming year.  These funds will go towards establishing the resources that are necessary to meeting those goals.

VA also wants to allocate about $137 million to the efforts to adjudicate the Blue Water Navy claims (e.g., workforce, personnel, technology).

Veterans’ Average Combined Disability Ratings are Increasing: What this Means for VA

It is worth noting that the average combined disability rating for veterans is  increasing every year.  Each year since 2013, the average combined disability rating for veterans receiving benefits increases by about 2 percent.  Right now, the average is about 54 percent for the combined disability rate, and that is what determines veterans’ amount of monthly compensation.  It is probably going to be necessary for VA to set aside more funding to address the fact that more veterans receiving disability benefits are being paid at a higher rate.

The Board of Veterans’ Appeals Proposed Funding for 2021

Legacy VA Appeals Backlog

The Board of Veterans’ Appeals (Board) requested $198 million as part of the proposed budget, and much of the money will be allocated to its workforce.  However, the Board also outlined its priorities in terms of adjudicating appeals.  Namely, the Board is going to focus primarily on adjudicating remaining Legacy appeals.  Again, AMA only went into effect last February (2019) and so there are still appeals pending in the Legacy system.  The Board is committed to adjudicating Legacy appeals in order to officially discontinue the old system.

Specifically, VA has said that it plans to focus on non-remand Legacy appeals and get through them by 2022.  Non-remand Legacy appeals are those that are making their way up the ladder to the Board.  For example, there are still a number of cases in which veterans received decisions on initial claims prior to AMA going into effect, and with those decisions, they filed Notices of Disagreement in the Legacy system.  Therefore, all of those appeals are still pending in the Legacy system.  Again, VA is really focusing all of its efforts on working through those first.  VA has actually already decreased the Legacy appeals inventory by 28 percent in 2019 alone (i.e., the first year of AMA being in effect).

Appeals Modernization Act (AMA) and the Board’s Priorities

Initially, AMA set a 125-day goal for processing supplemental claims and higher-level review appeals.  In order to maintain that 125-day goal, VA is setting aside additional funds in its new proposed budget.  In addition, VA is prioritizing the creation of a new quality management system under AMA.  The idea behind this new system is that VA will be able to better assess how higher-level review decisions are being adjudicated.  It is essentially a quality assurance feature that VA is looking to add to ensure that appeals are being adjudicated properly.

Furthermore, there is the interactive decision template, which has been implemented in the past several years at the Board level.  The interactive decision template is an electronic tool that allows Board members to create decisions more easily.  It will automatically plug specific pieces of information from a veteran’s file into a template.  In doing so, the hope is that Board decisions will be more effectively decided and efficiently distributed to veterans.  As such, the new proposed budget includes a few additional changes in funding to expand and improve the interactive decision template program.

Board’s Backlog of Veteran Hearings

The Board is now looking to create a virtual hearing system as well.  Up until now, veterans who requested a hearing at the Board have had to go to Washington, D.C., or their local Regional Office at the very least.  However, the closest Regional Office may still be several hours away from a veteran’s home.  Unfortunately, veterans are not always able to make the trip.  As a result, VA has been looking to implement a virtual hearing system so that veterans can access a hearing before a Board member (i.e., Veterans Law Judge) through their computer, tablet, smartphone, etc.  Having this option would allow more veterans to attend hearings.  The plan is to have this virtual hearing system rolled out over the next year or so.

In 2019, 74 percent of all Board hearings were actually held via video teleconference, which further speaks to the decrease of physical, in-person hearings.  The Board has said that one of its main goals is reducing the Legacy hearing inventory.  In FY 2019, the Board held a record number of hearings, and the department is looking to build upon that in 2021.  The proposed 5 percent increase in budget spending is directed towards that goal.

Unfortunately, if a veteran has requested a hearing under the new, AMA system, they are likely going to be waiting for a significant amount of time.  There are approximately 11,000 hearings pending in the AMA system that will not be addressed until the Board works through the remaining Legacy hearings.  It is estimated that this process will take several years.

Veterans Health Administration (VHA) Funding Proposal

Another substantial part of VA’s proposed budget deals with providing medical care and health care services to veterans.  There are 9.3 million veterans enrolled in the Veterans Health Administration (VHA) program, meaning that 9.3 million veterans get healthcare through VA.  The request for funding in FY 2021 is 12.9 percent higher than what was requested in 2020.  VA appears committed to increasing access to healthcare and improving the quality of services.

Proposed Mental Health Care Funding for Veterans in 2021

VA is particularly committed to expanding and improving access to mental health care services.  About 1.76 million veterans received mental health care services from VA in 2019.  The proposed funding for mental health care services in 2021 is 7.1 percent higher than what was asked for in 2020.  Again, this is consistent with VA announcing the improvement of mental health care and services as a department priority.

There is also a telehealth initiative in which VA is trying to improve its technology in order to offer and provide mental health care services to veterans through a virtual platform.  Furthermore, VA wants to integrate mental health care into primary care.  In doing so, veterans would not need to pursue an entirely separate avenue in order to obtain a doctor’s appointment.  It also normalizes mental health treatment, which is very important among the veteran population.

Veteran Suicide Prevention Proposed Funding

Veteran suicide prevention is another top clinical priority in VA’s proposed budget.  The proposal requested a 32 percent increase in funding as compared to the FY 2020 budget.  This funding will be dispersed to a variety of different programs or areas that are geared towards preventing veteran suicide.  Examples include outreach and national efforts to improve awareness of risk of suicide and care for those veterans who are suicidal.  The Veterans Crisis Line and suicide coordinators will receive some of the funding as well.  In addition, funding will be directed towards the following program: The President’s Roadmap to Empower Veterans and End the National Tragedy of Suicide (PREVENTS).  PREVENTS includes a community integration and collaboration proposal, a national research strategy, and an implementation strategy.  With regard to research, federal agencies will prioritize research activities to strengthen coordination across the nation.  Such research includes identifying veterans who are at the highest risk for suicide within the community.

VA’s Push for Telehealth Services for Veterans (Especially Rural Veterans)

As mentioned, telehealth is an area that is receiving a lot of attention in the FY 2021 proposed budget.  Telehealth essentially gives veterans the ability to access medical providers using electronics.  Providers can write scripts, transmit vital information, and more via telehealth.  VA is allocating a 4.2 percent increase in funding in its proposed budget for 2021 as compared to the funding levels from FY 2020.

In the last year, there have been 900,000 veterans who actually accessed and utilized telehealth services, and it is projected to increase as more veterans become aware of how it works.  So far, these telehealth services have been used the most among veterans living in a rural community.  Specifically, approximately 45 percent of veterans using telehealth services are from rural areas.

Women Veterans’ Health and Funding for Medical Services

There has also been an increase in funding for women’s health issues and treatment.  There is a 9 percent increase in the 2021 proposed budget as compared to the 2020 budget when it comes to funds for women’s health care.  Importantly, women are the fastest-growing subgroup of veterans.  As such, improving medical services for this population is very important at this time.  These developments are necessary to ensure that female veterans are receiving access to unique and necessary care through the VA Medical Centers.  The funds are going to focus on providing programs or increasing the quality of existing programs that offer gynecological services, mammograms, in vitro fertilization (IVF) services, and other types of exams that are necessary as part of women’s healthcare.

Gender-specific mental health care is another initiative proposed within the FY 2021 budget.  VA is committed to having a women’s health care coordinator in place at all VA Medical facilities.

VA’s Caregiver Program Expansion: Funding and Implementation

With regard to the Caregiver Program expansion, VA has requested $1.2 billion, which is a 68 percent increase from last year’s budget.  Generally speaking, this expansion will be implemented under the VA Mission Act, and is intended to reimburse certain expenses that come up when certain caregiver services are provided.  Previously, the Caregiver Program was only applicable for veterans who served after September 11, 2001.  This expansion will provide benefits to veterans who served prior to September 11, 2001 as well.  Importantly, this expansion will be implemented over the course of several years, mainly in two phases:

  • Phase 1: caregiver benefits will first become available to veterans who were injured on or before May 7, 1975
  • Phase 2: further expansion of caregiver benefits to include veterans injured between 1975 and 2001 will occur two years later

Eligibility and compensation determinations will continue to be made by VHA and caregivers still reserve the right to appeal adverse decisions.

Veteran Homelessness and Funding for 2021

Veterans homelessness programs are receiving attention in the new proposed budget as well.  There is a 4.5 percent increase in funding proposed for FY 2021 with regard to this issue.  Some of these funds will be used in conjunction with the U.S. Department of Housing and Urban Development to provide certain housing vouchers to assist with rent payments for qualifying veterans.  In addition, funds will be allocated to helping veterans who may be at risk for homelessness develop skills to work their way out of that situation.