Veterans Affairs says agency faces $2.5 billion budget shortfall

WASHINGTON — The Department of Veterans Affairs said Thursday it faces a budget shortfall of more than $2.5 billion, mainly because of increased demand by veterans for health care, including new life-saving treatments for Hepatitis C.

Deputy VA Secretary Sloan Gibson told a House committee that VA health care sites experienced a 10.5 percent increase in workload for the 12-month period that ended in April.

The VA needs flexibility from Congress to close the budget gap, Gibson said, adding that the agency is considering furloughs, hiring freezes and other significant moves.

The VA wants to use money from the new Veterans Choice program to pay for the increased health care, Gibson said. The program, the centerpiece of a VA overhaul approved last year, makes it easier for veterans to receive federally paid medical care from local doctors. Congress approved $10 billion over three years for the Choice program as it responded to a scandal over long waits for veterans seeking medical care and falsified records to cover up the delays.

The program got off to a rocky start, but has expanded dramatically in recent months and is likely to grow even more, Gibson said. The VA also has expanded its staff, office space and productivity in the wake of the wait-time scandal, Gibson said.

The VA completed 7 million more appointments for care in the past year, compared to the previous year, Gibson said, but said veterans still face increased wait times in Phoenix, Las Vegas and other sites

“As we improve access, even more veterans are coming to VA for their care,” Gibson told the House Veterans Affairs Committee.

As a result, wait times for appointments longer than 30 days are up 50 percent from a year ago, he said.

House Speaker John Boehner, R-Ohio, sneered at Gibson’s remarks.

“The VA’s problem isn’t funding — it’s outright failure. Absolute failure to take care of our veterans,” Boehner said at a news conference. The Ohio Republican mocked Gibson’s message to Congress as, “Get your checkbooks out.”

Congress has given VA authority to fire poor-performing bureaucrats, but the agency has “fired practically no one,” Boehner said. Congress also gave the VA resources to build hospitals, yet “they can’t get any of them built on time,” Boehner said. “We gave the VA the resources to improve their care, the waiting lists are even longer.”

But Gibson insisted that the VA’s problems were the result of increased demand, not bureaucratic bungling.

Wait times are up in Phoenix, the epicenter of last year’s scandal, even after the VA added 337 staff members, increased the number of appointments by 109,000 and authorizations for outside care by 91 percent, Gibson said.

The reason: In the same time period, the number of veterans in Phoenix receiving primary care increased by 11 percent, Gibson said. He said those receiving specialty care went up by 17 percent, and mental health appointments increased by 16 percent.

Similar increases have been seen around the country, Gibson said. The Veterans Health Administration, the VA’s health care arm, now expects to spend $10.1 billion in the current budget year for private care, an increase of $1.9 billion from last year.

Even medical breakthroughs have hurt the VA’s budget, according to Gibson. For instance, new treatments for the Hepatitis C virus have saved the lives of many veterans, but a single pill can cost up to $1,000. The VA says it can buy pills for about half that amount because of volume discounts, but still has blown through its $700 million budget for Hepatitis C with more than three months left in the budget year.

“Veterans’ desire for this treatment has been extraordinarily strong,” Gibson said.

Rep. Jeff Miller, R-Fla., chairman of the veterans affairs panel, called it “disturbing” that VA officials waited nearly nine months into the budget year to announce such a large budget gap.

Miller and other lawmakers faulted the VA for what they called a continued emphasis on a failed and bloated construction project for a VA hospital in Denver that is more than $1 billion over budget. “It proves to me once again that VA’s current problems reflect a management issue far more than they represent a money issue,” he said.