STATEMENT OF
JOSEPH THOMPSON
UNDER SECRETARY FOR BENEFITS
DEPARTMENT OF VETERANS AFFAIRS
REGARDING LEGISLATIVE ITEMS
BEFORE THE
SENATE COMMITTEE ON VETERANS' AFFAIRS

July 20, 2000

Mr. Chairman, you asked that we comment on several bills, including

S. 1810, S. 2264, 2544, S. 2637, S. 2827, and 3 draft bills which your staff provided late last week. In view of the short amount of time available for the formulation of this testimony, we are unable to present the Department’s views with respect to certain provisions of the bills and draft proposals. However, we will be pleased to provide our formal written views concerning them at a later date once the necessary executive branch coordination is completed.

Draft Bill – Compensation Cost-of-Living Adjustment

Mr. Chairman, this draft proposal is perhaps the most important matter on today’s agenda. It would direct the Secretary of Veterans Affairs to increase administratively the rates of compensation for service-disabled veterans and of dependency and indemnity compensation (DIC) for the survivors of veterans whose deaths are service related, effective December 1, 2000. On February 15, 2000, the Secretary transmitted to Congress similar draft legislation proposing a cost-of-living adjustment (COLA) for compensation and DIC recipients at the same rate of increase as the COLA that will be provided under current law to veterans’ pension and Social Security recipients. We currently estimate that this year’s Social Security adjustment will be 2.5 percent. We believe this proposed COLA is necessary and appropriate in order to protect the affected benefits from the eroding effects of inflation. Therefore, we strongly support this proposal.

We estimate enactment of the proposed COLA would cost $345 million during fiscal year (FY) 2001 and $6.3 billion over the period FYs 2001 – 2005. However, this increase is already assumed in the baseline as required by the Omnibus Budget Reconciliation Act of 1990 (OBRA); therefore, the proposal would have a zero pay-as-you-go (PAYGO) impact.

Mr. Chairman, I would also like to take this opportunity to urge your favorable consideration of another Administration proposal. Our draft legislative proposal of February 15 also included a provision to repeal a provision of the Balanced Budget Act of 1997 that would require VA to defer until October 2, 2000, making veterans-benefit payments which would otherwise be delivered by mail or transmitted for credit to the payee’s account by Friday, September 29, 2000. We strongly believe that veterans should not be financially burdened by this provision and ask that you take action to correct this situation. This proposal is subject to the PAYGO requirements of the OBRA. The PAYGO effect will be an increase in outlays of $1.8 billion in FY 2000, with a corresponding decrease in FY 2001.

S. 1810 and Section 101 of Draft Bill – Duty to Assist

S. 1810 would amend 38 U.S.C. § 5107(a) to clarify that VA has a duty to assist all claimants in developing the facts pertinent to their claims. This would countermand precedent decisions of the United States Court of Appeals for Veterans Claims and the United States Court of Appeals for the Federal Circuit which have held that VA is required to assist only those claimants who have shown that their claims are "well grounded," as that term has been defined by the courts.

Section 101 of the draft bill would, similarly, eliminate the well-grounded claim threshold for VA’s duty to assist. That section would also specify a number of actions VA would be required to take to carry out its duty to assist, including special requirements in claims for service-connected disability compensation, the most frequently claimed VA benefit. The required actions would include informing claimants of the type of evidence that would be helpful to their claims, obtaining service medical records, VA treatment records, and other records which claimants have adequately identified and authorized VA to obtain, and providing medical examinations or medical opinions when necessary.

Section 101 also contains a provision which would permit readjudication of any claim that was denied as being not well grounded on or after July 14, 1999, the date of the CAVC’s decision in Morton v. West, 12 Vet. App. 477 (1999). In Morton, the CAVC held that VA cannot assist a claimant whose claim is not well grounded. As a result of that decision, VA has had to greatly restrict assistance to claimants whose claims are not well grounded.

VA supports the purpose of both proposals which is to clarify VA’s duty to assist claimants in processing claims. However, we believe that a more detailed approach, such as that reflected in section 101 of the draft bill, is preferable because it would establish greater certainty concerning the requirements of VA’s duty and would limit the need for judicial interpretation of these important provisions. Additionally, because this approach would provide a clear statutory framework for the claim-development process, VA would be able to implement those provisions more quickly and efficiently, without the need to rely extensively upon future rule making to establish uniform procedures for assisting claimants.

However, the details in the language used in the draft bill could have an enormous impact on the resources of the Department. Once we have had more time to consider the language of the draft bill, we will be pleased to provide our formal views regarding the duty to assist provisions contained in it, as well as an estimate of the effect of this language on VBA’s administrative expenses in the General Operating Expenses appropriation.

S. 2544 and Draft Bill - Women’s Health Issues

We estimate that enactment of H.R. 3998 would result in the costs shown in the table below. This estimate is based on the assumption that 33 more veterans will be entitled to special monthly compensation under the provisions of the bill each year and that the rate of compensation under section 1114(k) will remain $76 per month.

S. 2544 – Benefits for Children of Women Vietnam Veterans

Who Were Born With Certain Birth Defects and Section 2 of Draft Bill

Mr. Chairman, you also asked that we provide comment regarding S. 2544, 106th Congress, the "Children of Women Vietnam Veterans’ Benefits Act of 2000," a bill to provide compensation and benefits to children of women Vietnam veterans who were born with certain birth defects. VA strongly supports the enactment of this bill.

Background

In March 1999, the Secretary of Veterans Affairs appointed a task force, headed by the Under Secretary for Health, to review a report issued by the National Academy of Sciences’ (NAS) Institute of Medicine (IOM) in February entitled "Veterans and Agent Orange: Update 1998" and to make appropriate recommendations to the Secretary regarding matters addressed in the report. The task force established a working group of knowledgeable individuals from within VA and from other Federal organizations who reviewed and analyzed the report and solicited input from veterans service organizations and other interested groups.

The working group also reviewed a report, issued in October 1998, of a study conducted by VA’s Environmental Epidemiology Service entitled the "Women Vietnam Veterans Reproductive Outcomes Health Study." This study was not addressed in the NAS report. This study represented the last of three epidemiologic studies of women Vietnam veterans conducted in response to a congressional mandate for a comprehensive study of any long-term adverse health effects they may have suffered. In the VA study, a total of 4,140 women Vietnam veterans surviving as of January 1, 1992, and an equal number of women who served during the Vietnam-era but not in Vietnam, were identified for a structured telephone health interview. Overall, almost 92 percent of these women were located and 90 percent of those contacted participated in the study, resulting in a response rate of 82 percent.

A multivariate analysis of survey results found no appreciable difference in reported rates of miscarriage, stillbirth, low birth weight, pre-term births, or infant deaths between the Vietnam veterans and the Vietnam–era veterans who did not serve in Vietnam. However, the study identified a statistically significant increase in birth defects (10.5 percent vs. 7.0 percent) and severe birth defects (7.7 percent vs. 5.8 percent) in the offspring of women Vietnam veterans in comparison to the offspring of other women Vietnam–era veterans. The study found that the risk of a woman Vietnam veteran having a child with birth defects was significantly elevated even after adjustment for age, demographic variables, military characteristics, and smoking and alcohol consumption of the mothers.

Following its review, the task force recommended that the VA study be subjected to additional peer review and submitted to a scientific journal for publication. This study has been accepted for publication; its expected release date is September 2000. In addition, the task force recommended that the Secretary seek statutory authority to provide health care and other benefits to women Vietnam veterans’ offspring with birth defects. The Secretary approved both recommendations, and, on July 23, 1999, advised you that VA was in the process of developing legislation to benefit these individuals. On March 7, 2000, as a technical service, VA’s General Counsel provided Senator John D. Rockefeller, IV with draft bill language upon which S. 2544 is based.

Provisions of S. 2544

S. 2544 would restructure existing provisions in chapter 18 of title 38, United States Code, and add a new subchapter authorizing benefits for women Vietnam veterans’ children who were born with certain birth defects. This subchapter would apply with respect to birth defects, other than spina bifida, which result in permanent physical or mental disability, except for birth defects determined by the Secretary to result from familial disorders, birth-related injuries, or fetal or neonatal infirmities with well-established causes. In addition, the provision of health care or other benefits under this subchapter would not be authorized if evidence establishes that a particular birth defect suffered by an individual resulted from a cause other than the mother’s service in Vietnam.

The Secretary would be required to identify, within one year after the date of enactment of the Act, the birth defects associated with service of women Vietnam veterans in the Republic of Vietnam during the Vietnam era and to promulgate regulations delineating the birth defects identified. Certain categories of birth defects would be excluded because of a likelihood that they result from inherited disorders rather than as the result of the mothers’ service in Vietnam. Similarly, defects which result from causes such as birth-related conditions, or fetal or neonatal infirmities, would also be excluded.

A key element of S. 2544 is authorization for the provision of comprehensive medical care, which could be provided directly by VA or by contract with non-VA providers. Second, because of the likelihood that individuals who suffer from certain severely disabling birth defects will encounter difficulties in pursuing vocational goals, the bill authorizes the Secretary to assist these individuals through the provision of vocational training benefits. Finally, in recognition of the additional financial needs likely to face persons suffering from disabling birth defects, the bill authorizes the Secretary to provide these individuals with a monetary allowance to help defray additional expenses associated with these disabilities. The Secretary would be required to base the amount of the allowance on each child’s level of disability, in accordance with a schedule to be established for this purpose. VA would pay the allowance based upon four levels of disability, resulting in monthly payments of $100 for the lowest level of disability, $214 for the lower intermediate level of disability, $743 for the next higher intermediate level of disability, and $1,272 for the highest level of disability. The dollar amounts for the upper three levels of disability would be equivalent to the three levels of allowance currently payable under section 1805 of title 38, United States Code, to children of Vietnam veterans who suffer from spina bifida. The lower dollar amount of $100 would provide a limited benefit consistent with a level of disability that does not result in a significant economic burden. The legislation would be effective one year after the date of its enactment, in order to allow time for establishment of implementing regulations.

VA’s Position

VA does not have authority to provide health care or other benefits to the women Vietnam veterans’ children who suffer from birth defects other than spina bifida. Thus, enabling legislation is necessary to address the needs of these children. We believe the legislative model adopted by Congress in Pub. L. No. 104-204 for the benefit of Vietnam veterans’ children born with spina bifida, which is reflected in the provisions of S. 2544, is an appropriate one to follow in this instance. As was the case with Vietnam veterans’ children who suffer from spina bifida, the provision of assistance to women Vietnam veterans’ children who suffer other birth defects would be an appropriate extension of the principle of providing benefits for disabilities that are incurred or aggravated as a result of service on active duty in the Armed Forces of the United States. Accordingly, we strongly support enactment of this legislation.

S. 2544 is subject to the PAYGO requirements of the OBRA and, if enacted, would result in benefit costs of $1.7 million in Fiscal Year (FY) 2001 and $17 million during FYs 2001 – 2005.

Section 2 of the draft bill contains provisions similar to S. 2544.

Special Monthly Compensation for Service-Connected

Loss of One or Both Breasts Due to Mastectomy

Section 3 of the draft bill would authorize special monthly compensation under

38 U.S.C. § 1114(k) for female veterans who have suffered the service-connected loss of one or both breasts (including loss by mastectomy). VA supports this provision in principle, but would prefer that no distinction be made between male and female veterans.

Section 1114(k) of title 38, United States Code, authorizes a special rate of compensation (the "k" rate) if a veteran, as the result of service-connected disability, has suffered the anatomical loss or loss of use of one or more creative organs, or one foot, or one hand, or both buttocks, or blindness of one eye, having only light perception, or has suffered complete organic aphonia with constant inability to communicate by speech, or deafness of both ears, having absence of air and bone conduction. Under current section 1114(k), a monthly award of $76 is payable, generally, for each such loss or loss of use. This special monthly compensation is payable in addition to the compensation payable by reason of percentage disability ratings assigned under the rating schedule.

Under the current schedule for rating disabilities, the disability suffered following surgical removal of one breast by radical mastectomy is assigned a 50% disability rating. (38 C.F.R. § 4.116). The resulting disability following removal of both breasts by radical mastectomy is currently assigned an 80% disability rating. The loss of one breast by modified radical mastectomy is rated 40% disabling, and the removal of both breasts by modified radical mastectomy is rated 60% disabling. A veteran is also compensated for at least six months at the total-disability level following the cessation of any surgical procedure to treat breast cancer.

Special monthly compensation is currently authorized for certain anatomical losses or losses of use for which the rating schedule, which is based solely on impairment of earning capacity, is considered inadequate for compensation purposes. The statute recognizes that the loss of a hand or foot, for example, or loss of a creative organ, involves loss of bodily integrity which may negatively affect self-image and precipitate considerable emotional distress.

The service-connected radical or modified-radical mastectomies covered by

section 3 involve loss of bodily integrity and associated emotional trauma to a degree that is at least comparable to the removal of a single testicle, for example, for which special monthly compensation is currently payable regardless of its effect on a veteran’s procreative ability and regardless of whether the veteran is still of procreative age. As a matter of simple equity, these mastectomies warrant equal compensation for the veterans who undergo them.

Section 3 of the draft bill would be subject to the PAYGO requirement of the Omnibus Budget Reconciliation Act of 1990 (OBRA) and, if enacted, would increase direct spending. According to our preliminary estimates, enactment of section 3 (with the inclusion of male veterans) would increase benefits cost by less than $500,000 in FY 2001 and $2.5 million over the 2001-2005 period.

Omnibus Draft Bill

VA does not have positions regarding several provisions of the draft bill. However, we will be pleased to provide our formal written views concerning them at a later date once the necessary executive branch coordination is completed. Those provisions for which we have developed positions follow:

Title I – Compensation and Pension Matters

Our comments on section 101 of the draft bill, regarding VA’s duty to assist veterans in the development of their claims, are noted above.

Title VII – Construction and Facilities Matters

Sections 701 and 702 of the draft bill would authorize the Secretary of Veterans Affairs to carry out two major medical facility projects for fiscal year 2001 using $40,600,000 for the Construction, Major Projects account.

VA is not opposed to these provisions because they would authorize funding for the two major medical facility construction projects located in Palo Alto, California and in Murfreesboro, Tennessee as reflected in the President’s budget. Last year, Congress appropriated, but did not authorize $14,000,000 in fiscal year 2000 funding for the Murfreesboro, Tennessee project. Accordingly, Section 702(a), which authorizes the appropriations, needs to be changed to specifically authorize $26,600,000 for fiscal year 2001 for the Palo Alto California project and $14,000,000 for fiscal year 2000 for the Murfreesboro Tennessee project. Sections 702(a) and (b) refer to the authorization of funds for fiscal year 2001. This language needs to be extended an additional year for fiscal year 2002. With this additional language, major construction projects authorized in fiscal year 2001 but not carried out until fiscal year 2002 would not have to be authorized again.

S. 2264 – Establishment of Position of Advisor on PAs

Section 2 of S. 2264 would establish a position of Advisor on Physician Assistants (PAs) within the Office of the Under Secretary for Health. Section 2 would also require such Advisor to advise the Under Secretary for Health on matters concerning the optimal use of physician assistants by the Veterans Health Administration (VHA) and the feasibility of establishing clinical privileges and practice areas for this specialty. In addition, this section would require the Advisor to (1) develop initiatives to assist the Under Secretary for Health in using the full range of clinical capabilities of physician assistants and (2) advise the Under Secretary for Health on policies affecting the employment of such personnel by VHA.

VHA does not consider it necessary to enact legislation to require a PA advisor in Headquarters. The Chief Consultant, Primary and Ambulatory Care who is in direct contact with the Physician Assistant Field Advisory Group (PAFAG) currently represents PAs in VHA. The composition of the PAFAG consists of four PAs and two physicians. Its chairperson serves as program advisor to the Chief Consultant for Primary and Ambulatory Care. Further, one PA from that advisory group participates in Primary and Ambulatory Care office conferences and is routinely included in office communications and decisions. The current chairperson of the advisory group, Rebecca Goldsmith, PA-C, has served on the Under Secretary for Health’s Work Group tasked with Exploring Internal Practice Barriers for Advanced Practice Nurses, Clinical Pharmacy Specialists and Physician Assistants. The work group identified barriers to hiring non-physician health care providers in VHA. Ms. Goldsmith also serves as the Co-Chair of the Multidisciplinary Practice Advisory Council. This group is charged with implementing changes to overcome the barriers to hiring non-physician health providers. VHA has promulgated the "PA Employment Handbook" which has provided guidance to VHA health care facilities when hiring PAs and the "PA Practice Issues Handbook," which is an educational tool that assists health care managers to understand the role of PAs in VHA. The work of Ms. Goldsmith and others on the PAFAG has helped VHA health facilities to recruit and retain PAs. The relationship between the Chief Consultant, Primary and Ambulatory Care and the PAFAG has worked well in supporting the PA Program.

S. 2637 – Miles City, MT Land Transfer and S. 2827 – Ft. Lyon, CO Land Transfer

S. 2637 would require VA, as soon as practicable, to transfer ownership of the Miles City VA Medical Center complex to Custer County, Montana. VA has not developed a position with respect to the transfer of this facility, but we will be pleased to provide our formal written views at a later date. Section 1 of S. 2827 would authorize VA to transfer the Ft. Lyon VA Medical Center to the State of Colorado for the purpose of establishing a correctional facility. VA has not developed a position with respect to this bill; however, we will be pleased to provide our formal written views at a later date.

This concludes my formal testimony.

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