Mr. BUYER. I have some questions for CBO. Under section 104 of the bill, you wrote that you do not have sufficient information to estimate the budgetary impacts. I could understand that, given the short time frame that you've had. Would you please tell me what additional information you would need, and how much time would you need, to do that estimate? Mr. VAN DE WATER. Dr. Miller will answer that question. Mr. MILLER. Mr. Buyer, I think we would need to get a better understanding of which military retirees would be likely to employ this option to use VA health care instead of TRICARE. I think a lot depends on where they live, the availability of VA resources, and their family status. I think single retirees may be more likely to use it than married retirees or retirees with dependents. In addition to those factors, we would need to compare the copayments that the retiree would face in his TRICARE option with those in the VA health system under this bill. It is hard to say exactly how much time that would take, but it's probably denominated in weeks. Mr. BUYER. All right. Let's use some thoughts here. In 1998, the VA, utilizing category 7-that would also be the TRICARE standard with copays-the VA treated about 250,000. Is that about right, for category 7? Dr. GARTHWAITE. That sounds reasonable. Mr. BUYER. If we went with the provision of the bill as presently written, there is a potential change of venue of category 7 that would shift from the TRICARE standard to the VA system, would it not, because they don't charge copays? This was a "no brainer" for me. If I'm out there and I have to pay enrollment fees and copays, and I look at that and say, wait a minute, if I'm going to use a military treatment facility, or I get to use the VA, this one is a no brainer for me if I'm worried about my wallet, correct? Mr. MILLER. Well, you go wherever the copayments are lower. Mr. BUYER. Thank you. Which means that there would be a shift in population, correct? Mr. MILLER. Yes. Mr. BUYER. Have you had conversations with the VA so that you could lay out these types of predicates to help you in your estimates? Mr. MILLER. No, we haven't. Mr. BUYER. That would be an enrichment process, would it not, to help you? Mr. MILLER. Yes. Mr. BUYER. And hopefully that will happen. The reason I'm going to ask these questions, and I want these answers, is because I also chair the Military Personnel Subcommittee. Dr. Snyder and I wear some dual hats here today. Our interests are not only in the treatment of the military retirees and our obligations to them, but I also understand what this bill does as to the potential run on DOD dollars. We worked very hard under the DOD system for a managed care system, as we manage utilization. The VA is a different model. Now, if we go with the bill as written-and I'm asking for your help here, Doctor-if we go with how the bill is presently written, that we are to do direct reimbursements based on whatever TRICARE contractor is out there, am I correct or incorrect that there would be potential windfalls to the VA because the VA charges and has cost factors for different procedures than DOD, and not only DOD, from a medical treatment facility perspective, but also negotiated rates per region with TRICARE contractors? Mr. MILLER. As I understand section 104, it would probably take a memorandum of understanding on reimbursement between the two agencies. But the provision also calls for reimbursement to the VA of whatever DOD would pay under TRICARE for that care. If the number of visits doesn't change, one would expect there to be no net cost, simply because DOD would write a check in the same amount, only to a different person. The private physician, let's say, in the case of TRICARE Mr. BUYER. Sir, time out. I don't think that's responsive to my question. I agree that's exactly what the bill says. But if you have the VA charging a different rate for a particular procedure, the VA charges differently from how the DOD charges for a particular procedure. These are carefully negotiated contracts that are out there. I'm going to have to go through bid price adjustments and contract, would I not? Mr. MILLER. It's possible. I expect that DOD wouldn't necessarily entertain what the VA says its costs for the care are, that it would say, "I know that under TRICARE I will pay x amount, and that's the amount I will pay for that service, regardless of what the VA's costs are." The added cost to DOD from this provision would come from the potential extra visits that a retiree might make to the VA, and that would be based on copayments. Mr. BUYER. Would the chair be kind enough to yield me additional time? Mr. STEARNS. We will have a second round of questions, so we'll just continue on, if the gentleman doesn't mind. The gentleman's time has expired. Let me just continue with what Mr. Buyer was saying. Mr. Hall, of the VA's Office of General Counsel, perhaps you might want to comment on the effect that increases in copayments under H.R. 2116 might have. That's something you might want to comment on, in reference to his question. Mr. HALL. I don't have anything in particular to add. Mr. STEARNS. Would the shift in care from TRICARE to VA that Mr. Buyer is talking about necessarily take place given that the bill also calls an increase in VA copayments? Wouldn't an increase in VA copayments under the bill have an effect on what retirees decide about using VA care? Mr. HALL. If we have authority to adjust the copayments-- Mr. HALL. Yes, it would. Mr. STEARNS. Okay. Let me then pose a question for CBO. This bill says the VA may pay for emergency care, and it may increase drug copayments. Both are simple authorizations. But you assume the VA will fully implement the one that results in cost, but you completely fail to take account of the one that generates revenue. I don't understand. It seems inconsistent, why wouldn't you find offsetting savings based on provisions that would generate revenue. Mr. VAN DE WATER. In the case of the copayments, as you indicated, you provide authority or flexibility for VA to implement copayments, but there is not a specific requirement that copayments be imposed in any particular amount or any particular schedule. So we have to make a judgment as to the likelihood of that authority being used. With respect to prescription drugs in particular, given the lack of popularity of the existing two dollars per prescription copayment, which is currently scheduled to expire Mr. STEARNS. But the emergency care provision is also a simple authorization. You assigned that a cost. Your argument is that the copayment is only a simple authorization so you couldn't score it, but in the case of emergency care, also a simple authorization which might or might not be implemented, you did score it. So that seems inconsistent. Mr. VAN DE WATER. AS I tried to make clear in my statement, the cost estimate for the provision of emergency care does not assume the extent to which it actually will be implemented. The cost estimate is an estimate of the resources that would be required were the provision to be fully implemented. Mr. STEARNS. I'm sorry. Say that again. I just didn't follow that. Mr. VAN DE WATER. We have produced an estimate, as we did with the section involving- Mr. STEARNS. I mean, the language is very simple for the revenue side, as well as for the cost side. But for the revenue side you don't give us any benefit, but on the cost side you take the opposite approach. Tell us again why you're being consistent. Mr. VAN DE WATER. In terms of the spending authority, when we are faced with authorizing provisions such as these, we attempt to provide an estimate of what additional resources would be required to implement the provision if the VA were to carry it out fully. In the case of the copayments, we have to make a judgment as to whether or not VA would be likely to use the authority. In our estimation, it is not particularly likely. Mr. STEARNS. How much could be saved through the new pharmacy and prosthetic copayment? Mr. VAN DE WATER. In the limit? I don't know. It depends on how high the VA would be willing to set it. If the VA would indicate that they are, in fact, intending to use this flexibility and would give us some indication of how much, we certainly would change the estimate to reflect that. I don't know if Dr. Garthwaite could give us an indication of that. But, again, we certainly would be happy to take that into account if we've misjudged the situation. Mr. STEARNS. Dr. Garthwaite, is there anything you would like to comment on in reference to his-Can you help him out at all? Dr. GARTHWAITE. I think it would be very likely we would continue some copayment. I think a fair amount of discussion would have to be had about the level of copayment. But I think there is a fair amount of wisdom for copayments in certain categories of services. Mr. STEARNS. I think our concern, and the staff's concern, is that CBO had no trouble coming up with a cost estimate on a speculative item like the tobacco provision, yet when you came to the a revenue generating provision, you couldn't do this. Again, we're just seeing some inconsistency here in assumptions, so it makes it a little frustrating for us. Mr. Hall, counsel advises me that the only provision of this bill that creates a new spending mandate is the one directing VA to provide extended care to veterans who are 50 percent or more service connected. Do you agree with that? Mr. HALL. I wouldn't necessarily call it a mandate. It's limited, of course, by the requirement that we find appropriations to cover those costs. In addition, it is the same language that's used in 1710 with regard to outpatient and hospital care. We have always concluded that that language, in fact, is more in the nature of a priority for veterans, who the Secretary is required and shall provide care to, as opposed to a mandate that would create an entitlement. Mr. STEARNS. Thank you. Dr. Snyder, do you have a second round of questions? Dr. SNYDER. Yes. I just wanted to ask one question of Dr. Garthwaite and Mr. Schoeps. It's more of a policy question. Could you give me a background, a couple minutes discussion, about where State veterans' homes fit in this whole challenge of long-term care for veterans today and where you see them five years from now? Dr. GARTHWAITE. We see them as an important resource for meeting veteran's needs for long-term care. With the State's support we are able to care for veterans at a significantly reduced rate of federal appropriations. Having invested early in the construction of facilities, that must meet our standards, we are able to place veterans in homes that we believe are of high quality and where we have a special relationship in terms of our oversight of the administration of those homes. Overall we see the State Home Program as a very positive program. Dr. SNYDER. Now big a part of the need are they currently meeting? Dr. GARTHWAITE. Do you know the percentage offhand, Dan? Mr. SCHOEPS. They are meeting between 40 and 45 percent of the long-term-the nursing home care needs of veterans. Of the mix of VA, community and State, they are between 40 and 45 percent. We're the largest single provider of nursing home care on an average daily census basis. Dr. GARTHWAITE. They're meeting that percentage of our current delivery of services. I think need is a separate discussion. Dr. ŠNYDER. How about just the State-owned homes, if you included VA and Mr. SCHOEPS. Of the VA, community and State, the States' share is 45 percent, 40 to 45 percent. Dr. GARTHWAITE. Current patients in nursing home beds, about 44 or 45 percent are in State nursing homes. Dr. SNYDER. What do you see that role will be as time goes by? Dr. GARTHWAITE. We have continued to invest in State nursing homes. There is a line in the budget this year for additional funding, so there is some gradual expansion. That would assume that, if the rest stayed constant, their proportion might go up. We continue to believe that it's a good program. There is a fair amount of discrepancy and variability in the availability of those beds by State. We have tried to maintain a very rigorous selection criteria that involves State contributions to the construction. We have actually-I'm not sure of the exact status of this, but we've been developing a revised methodology for making State Nursing Home Grant requests at the request of many members on the Hill and many of our stakeholders. Dr. SNYDER. I haven't been on this committee very long. When you talk about the budget line, is that a construction line orDr. GARTHWAITE. Yes. It's separately identified in the VA's Construction Budget. Dr. SNYDER. Thank you. Mr. STEARNS. I thank the gentleman. I understand the gentlewoman, Miss Carson, would like to pass? Ms. CARSON. Yes. Mr. STEARNS. Okay. Let me just conclude with one question here. I thought, since the staff has had the opportunity to look at this a lot more carefully, and it's rare that you have an opportunity like this, I was going to let staff on either side maybe ask questions-if you'll give me forbearance here. This is directed to Mr. Van de Water. After just the brief hearing we've had this morning, I guess the question is what level of confidence do you have in projecting $1.4 billion under this bill in fiscal year 2004. Are you extremely confident, are you moderately confident, perhaps uncomfortable, need more information? Would you make a significant personal financial decision based upon the same level of confidence that you have projected? Mr. VAN DE WATER. I think this is a little bit of a trick question. Certainly we want to have some time to learn more about the information that Mr. Schoeps has presented here, because we do take that extremely seriously. Having said that, I still retain a fairly strong degree of confidence in the estimate that we have presented. I think, as Dr. Garthwaite indicated a few moments ago in answering a question, we all recognize that the needs for long-term care are massive. Í think that was the adjective he used. Dr. Snyder himself made the same general point. I think we're all aware of the needs for potential long-term care being faced by many of our own parents. So the notion, again as Dr. Kizer expressed on the 19th, that the costs of this provision are likely to be substantial still strikes me as being closer to the right answer than the answer that we've heard this morning-that the program would be sufficiently inexpensive and would most likely be paid for by the potential copayments in the bill. That's what my instinct tells me. But I do want to have our staff look very carefully at the information, the data, and the modeling that Mr. Schoeps has presented here this morning. |