VA Update: the PACT Act and FY23 Appropriations

PACT ACT DELIVERS MAJOR VA EXPANSION FOR VETERANS HARMED BY TOXIC EXPOSURE

 On August 10, President Biden signed “The Sergeant First Class Heath Robinson Honoring Our Promises to Address Comprehensive Toxics (PACT) Act of 2022” into law. The PACT Act is named for SFC Heath Robinson, a solider with the Ohio Army National Guard who died of a rare lung cancer at age 39 after exposure to burn pits in Iraq. His VA claims related to the cancer were denied. SFC Robinson’s widow and daughter attended the bill signing ceremony at the White House. Based on DOD data, VA estimates that up to 3.5 million post-9/11 veterans may have been exposed to burn pits.

The PACT Act expands and extends eligibility for VA health care for veterans with toxic exposures. It applies to veterans of the Vietnam, Gulf War, and post-9/11 eras and includes 23 new presumptive conditions. “Presumptive” means that a veteran suffering from one of the named conditions is considered “service-connected” disabled based on the location and timeframe of their service—they are not required to prove causality. Affected veterans and their families will receive increased disability compensation, health care services, caregiver stipends, and other assistance. The Act directs VA to screen veterans for toxic exposures; evaluate links between toxic exposure and mental health conditions; develop, analyze, and report on multiple data sets; improve processes; and design and conduct research to better understand and treat toxin-associated illnesses. VA expects a huge number of new claimants, and swiftly set up a new web page to help vets with claims. Veterans whose claims were denied in the past are encouraged to resubmit them.

We have many obligations but only one truly sacred obligation: to equip those we send into harm’s way and to care for them and their families when they come home…This is the most significant law our nation has ever passed to help millions of veterans who were exposed to toxic substances during their military service.

President Biden,
August 10

In addition to compensation payments and health care services, the PACT Act funds the mission-critical backbone to deliver services — information technology, staff and facilities. Costs of the PACT Act are estimated to be about $680 billion over 10 years and will be classified as “direct” (or mandatory) spending. The latest Congressional Budget Office ten-year estimate (June 6) includes: Compensation (veteran’s benefits) at $152 billion, Camp LeJeune water claims $6 billion, and VA facility leases of $6 billion. The law sets up a new “Cost of War Toxic Exposure Fund” to cover health care services. CBO estimates health care at $514 billion: $117 billion in new funding and $397 billion of discretionary funds that will be reclassified as direct (mandatory) spending.

The PACT Act specifically authorizes expenditures for information technology, directing VA to use “such amounts as may be necessary to continue the modernization, development and expansion of capabilities and capacity of information technology systems” for claims processing. VA is directed to develop a full IT modernization plan for veterans benefits and provide it to Congress within 180 days of enactment. For health care expansion, including tracking multiple sets of data and research about toxic exposure, VA is directed to “establish information systems to assess the implementation of [health care for toxic exposed veterans] section 103” not later than October 1, 2024.

FY23 VA APPROPRIATIONS CLOSELY TRACK BIDEN’S BUDGET

 The House passed the Military Construction-VA funding bill on July 20 with a vote of 220-207. It was part of a six-bill package that received only Democratic support. The Senate Appropriations Committee (SAC) has posted its bills and reports but has not acted on them; Subcommittee Chair Heinrich (D-NM) introduced the bill to the Senate on August 3.

As highlighted in Chart I, the FY23 Biden budget numbers, the House-passed bill, and the SAC-bill top lines are very close, hovering around $135 billion in discretionary funding. The House VA funding bill and the SAC bill largely follow Biden’s budget request for each VA program, including:

• Full funding for patient care and medical facilities, including $13.9 billion for mental healthcare, including $497 million specifically for suicide prevention;
• $4.8 billion on telehealth treatment and Connected Care;
• $5.782 billion for the Office of Information and Technology;
• $1.759 billion for the Electronic Health Record Modernization (EHRM) project;
• $916 million for research, including scientific computing, researcher “cloud credits” and use of AI; and
• $3.863 billion for Veterans Benefits Administration, which includes $120 million to automate the disability compensation claims process from submission to authorization

*Senate rescinds $87M in prior year funds from this account. Chart I: VA Discretionary Totals by Program, FY21-FY23.

HOUSE AND SENATE CONCERNS

 Supply Chain Reassessment/Recompete
 Neither the House nor Senate provides funding for the enterprise-wide VA supply chain solution, consistent with the FY23 Biden budget that paused the project after a botched VA procurement and a Court of Federal Claims loss. House Committee report language addressing the issue, criticized VA for delays and directed submission of a VA Supply Chain Management Strategy to Congress with a full cost estimate within 90 days.

VA has made multiple attempts to modernize its supply chain yet still lacks an enterprise solution to effectively purchase and track supplies critical to providing healthcare for the nation’s veterans…The Committee recommends the Department apply rigorous vetting standards to ensure that industry partners demonstrate the ability to deliver modernized supply chain solutions at the scale and scope VA requires.

H. Rpt. 117-391

Electronic Health Records (EHRM)
Both the House-passed and SAC-posted bill fund EHRM at the Biden request level, although the Senate intends to rescind $87 million in prior year funds. (EHRM funds have multi-year availability.) Both the House and Senate reports are critical of the EHRM rollout, especially the patient safety issues encountered at Mann-Grandstaff VA Medical Center in Washington state. The House report “strongly urges VA to postpone additional rollouts of the new EHR system until all issues that could contribute to patient safety or harm have been fully resolved” and requires oversight by the VA Inspector General. The SAC report also urges caution and sets detailed requirements for VA, concluding that EHRM lessons learned “should not be at the expense of veteran patients or clinical employees.”

Cybersecurity
VA’s FY23 budget for cybersecurity is fully funded in both the House and SAC bills. The House report commends VA on its implementation of the 2021 cybersecurity Executive Order 14028 and supports VA’s use of end-to-end encrypted communications with zero trust architecture, while encouraging VA to continue efforts to protect veterans’ sensitive information.

OUTLOOK

 Despite these Congressional concerns, the FY23 VA appropriation looks to be on track, with program levels that closely mirror the Biden budget. VA’s challenges in the next year will be largely managerial and technical for the supply chain and EHRM. The most significant task for VA is the implementation of the PACT Act. Behind the scenes, it is critical for VA to hone processes and design robust and scalable information systems for both benefits and health services that will handle a large influx of claims and patients, be usable for VA staff, and, most importantly, provide veterans and their families a caring, efficient, and positive experience.