Introduction

The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans who meet certain eligibility criteria. These benefits and services include, among other things, hospital and medical care;¹ disability compensation and pensions;² education;³ vocational rehabilitation and employment services;⁴ assistance to homeless veterans;⁵ home loan guarantees;⁶ administration of life insurance, as well as traumatic injury protection insurance for servicemembers; and death benefits that cover burial expenses.⁷

The department carries out its programs nationwide through three administrations and the Board of Veterans Appeals (BVA). The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The Veterans Benefits Administration (VBA) is responsible for, among other things, providing compensation, pensions, and education assistance. The National Cemetery Administration (NCA)⁸ is responsible for maintaining national veterans cemeteries; providing grants to states for establishing, expanding, and improving state veterans cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. The BVA reviews all appeals made by veterans or their representatives for entitlement to veterans' benefits, including claims for service connection, increased disability ratings, pensions, insurance benefits, and educational benefits, among other things.

Scope and Limitations of This Report

This report provides an overview of the FY2022 President's request for VA and subsequent congressional action. It begins with a discussion of various appropriations and funds that constitute VA's budget, followed by a brief overview of the FY2021 congressional appropriations process and enacted amounts for FY2021, including American Rescue Plan (ARP) Act (P.L. 117-2) funding. It then discusses the President's request for FY2022 for care, benefits, and services for veterans and administration of the department, followed by congressional action on the FY2022 request. The report provides funding levels for the accounts as presented in the Military Construction, Veterans Affairs, and Related Agencies (MILCON-VA) appropriations bill; it does not provide funding levels at the subaccount, program, or activity levels. Generally, VA accounts are purpose specific rather than program specific. For example, VHA's supply chain modernization program could include funding from the medical support and compliance account and the information technology account. Appendix B lists appropriations to VA from FY1995 to FY2021. Funding amounts shown in the appendices of this report may include transfers in and out of accounts as calculated by VA; therefore, those amounts may be different from those shown in Table 2 which presents budget authority from the MILCON-VA appropriations bills and accompanying committee reports. Table 2 is included at the end of discussion on the FY2022 budget request and congressional action.

The Department of Veterans Affairs Budget

VA's budget includes both mandatory⁹ and discretionary funding.¹⁰ Mandatory accounts fund disability compensation for veterans, the survivor's Dependency and Indemnity Compensation (DIC) program, pensions, vocational rehabilitation and employment, education, life insurance, housing, clothing allowances, and burial benefits (such as burial allowances, grave liners, outer burial receptacles, and headstones and markers), among other benefits and services. Discretionary accounts fund medical care, medical research, construction programs, information technology, the Office of Inspector General, BVA, and general operating expenses, among other things. These accounts are further supplemented by revolving funds, such as the Canteen Service Revolving Fund and the Pershing Hall Revolving Fund; trust funds, such as the Department of Veterans Affairs Cemetery Gift Fund and the General Post Fund; and special funds, such as the Medical Care Collections Fund and the Capital Asset Fund.¹¹

Advance Appropriations¹²

VA has advance appropriation authority for specified medical care and benefits accounts. In 2009, Congress enacted the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), authorizing advance appropriations for three of the four VHA accounts: medical services, medical support and compliance, and medical facilities.¹³ In 2014, Congress passed the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235), which amended 38 U.S.C. §117 and included three more accounts to the advance appropriations list of accounts. This act authorized advance appropriations for three mandatory VA benefits programs within the Veterans Benefits Administration: compensation and pensions, readjustment benefits, and veterans insurance and indemnities. Beginning with the FY2016 Military Construction and Veterans Affairs, and Related Agencies Appropriations Act (MILCON- VA; P.L. 114-113), those accounts received advance appropriations for the first time in FY2017, in addition to the three VHA accounts already authorized to receive advance appropriations.

Section 4003 of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (P.L. 114-41) required the establishment of a separate new account for medical community care beginning with the FY2017 appropriations cycle. The Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits Improvement Act of 2016 (P.L. 114-315) authorized advance appropriations for the medical community care account.

Congress had authorized (through P.L. 111-81, P.L. 113-235, and P.L. 114-315) advance appropriations of new budget authority for the aforementioned VBA and VHA accounts to prevent potential delays in the delivery of care and benefits to veterans that may have arisen in the event of a funding lapse.

Under present budget scoring guidelines, advance appropriations are scored as new budget authority in the fiscal year in which they become available for obligation, not in the fiscal year the appropriations are enacted and are required to be accommodated within the statutory spending caps for that year.¹⁴ Therefore, throughout the funding tables in this report, advance appropriations numbers are displayed by the label "memorandum" and in the corresponding fiscal year column.

Historical Perspective

Figure 1 provides funding trends for mandatory, discretionary, and total VA-enacted appropriations from FY1995 through FY2021. Between FY1995 and FY2021, total mandatory appropriations grew from $19.45 billion to $154.15 billion in nominal dollars, a compound annual growth rate (CAGR) of 8.29%.¹⁵ During this same period, discretionary appropriations grew from $18.02 billion to $104.43 billion, a CAGR of 6.99%. The total VA appropriations from FY1995 through FY2021 grew from $37.47 billion to $258.58 billion, a CAGR of 7.71%.

Figure 1. VA Appropriations, FY1995-FY2021

Source: Figure prepared by CRS based on figures from the Department of Veterans Affairs, Office of Management, Office of Budget (see Appendix B). Notes: Amounts in nominal, or noninflation-adjusted, dollars, and discretionary funding excludes offsetting collections deposited in the Medical Care Collections Fund (MCCF). FY2009: American Recovery and Reinvestment Act (P.L. 111-5) provided supplemental funding, VHA received $1.0 billion for the medical facilities account, and the $700 million was for the economic recovery payments. The supplemental $700 million is not included in the discretionary subtotal but included in overall VA total. FY2014: Amounts include $15 billion in mandatory funding provided in the Veterans Choice Act (P.L. 113-146). FY2021: Amounts include American Rescue Plan (ARP) Act (P.L. 117-2) funding.

FY2021 Budget Summary¹⁶

President Donald Trump submitted his budget proposal for FY2021 on February 10, 2020. The President's budget requested $240.25 billion for VA. This amount included $135.43 billion in mandatory benefits funding and $104.81billion in discretionary funding.

On July 9, 2020, the House Appropriations Committee held a markup of the FY2021 MILCON-VA appropriations bill, and the bill was ordered reported to the full House on July 13 (H.R. 7609; H.Rept. 116-445). Subsequently, the text of H.R. 7609 was included in a four-bill appropriations package (H.R. 7608, the State, Foreign Operations, Agriculture, Rural Development, Interior, Environment, Military Construction, and Veterans Affairs Appropriations bill 2021) and passed by the full House on July 24. The House-passed measure (Division D of H.R. 7608) provided a total of $240.21 billion for VA, which included $135.43 billion in mandatory funding and $104.78 billion in discretionary funding.

On November 10, 2020, the chair of the Senate Committee on Appropriations, Senator Richard Shelby, released drafts of all 12 annual appropriations bills along with draft accompanying explanatory statements, including the FY2021 MILCON-VA appropriations bill.¹⁷ The release of the draft bills was intended to further negotiations on annual appropriations between the House and the Senate.¹⁸ The majority draft FY2021 MILCON-VA appropriations bill recommended $243.12 billion for VA, including $138.73 billion in mandatory spending and $104.39 billion in discretionary spending.

Because no regular appropriations bills were enacted at the beginning of FY2021 on October 1, 2020, certain VA accounts (excluding the seven advance appropriations accounts that received FY2021 budget authority in P.L. 116-94) were funded through a series of continuing resolutions (CRs).

On December 27, 2020, the Consolidated Appropriations Act, 2021 (H.R. 133, P.L. 116-260), was enacted into law. Division J of this act contained the FY2021 Military Construction, Veterans Affairs, and Related Agencies (MILCON-VA) Appropriations Act. The act provided $243.16 billion for VA for FY2021, which included $138.73 billion in mandatory funding and $104.43 billion in discretionary funding. Figure 2 provides funding levels for VHA, VBA, and Departmental Administration, which includes the following accounts: general administration, BVA, information technology systems (IT systems); veterans electronic health record modernization (EHRM), Office of Inspector General, construction major and minor accounts, grants for construction of state extended care facilities; and grants for the construction of veterans cemeteries.

Figure 2. FY2021 VA-Enacted Appropriations

Source: Figure prepared by CRS based on U.S. Congress, House Committee on Appropriations, Consolidated Appropriations Act, 2021, committee print, prepared by House Committee on Appropriations, H.R. 133/P.L. 116-260 [Legislative Text and Explanatory Statement] Book 2 of 2 Divisions G–L, 116th Cong., 2nd sess. (Washington: GPO, 2021), pp. 1885-1903. Note: FY2021-enacted amounts exclude offsetting collections deposited in the Medical Care Collections Fund (MCCF) and American Rescue Plan (ARP) Act (P.L. 117-2) supplemental appropriations.

American Rescue Plan Act of 2021 (P.L. 117-2)

On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (P.L. 117-2). This legislation was crafted by authorizing committees, instead of appropriations committees, using the budget reconciliation process.¹⁹ The Veterans' Affairs Committee provisions (Title VIII of P.L. 117-2) provide approximately $17.08 billion in mandatory funds for VA programs and activities. The law provided funding based on several broad categories and allowed VA to allocate funding at the account level (see Figure 3).

Figure 3. American Rescue Plan Act of 2021 Funding

Source: Figure prepared by CRS based on Department of Veterans Affairs, FY2022 Budget Submission, Supplemental Information and Appendices, vol. 1of 4, May 28, 2021, p. Supplemental Information–11. Note: Allocations are estimates and subject to change based on FY2021 actual spending and changes throughout FY2022 and FY2023.

A summary of VA provisions follows, and Table 1 provides VA's estimated allocations by account level. Final FY2022 and FY2023 funding allocations are subject to change based on FY2021 actual spending and changes throughout FY2022 and FY2023.

• Section 8001 provided $272 million for VBA, general operating expenses account, and the Board of Veterans Appeals, to remain available until September 30, 2023, for processing disability claims and appeals for entitlement to veterans' benefits.
• Section 8002 provided $14.48 billion to remain available until September 30, 2023, for allocation to VA medical care accounts. VA established the Veterans Medical Care and Health Fund to execute Section 8002 of P.L. 117-2.
• Section 8003 provided $100 million to remain available until September 30, 2022, for the supply chain modernization initiative.
• Section 8004 provided $250 million for a one-time only obligation and expenditure to existing state extended care facilities for payment of per diem payments during March 11, 2021, through September 30, 2022. This section also provided $500 million to remain available until expended for grants to assist states to acquire, construct, remodel, modify, or alter state extended care facilities.
• Section 8005 provided $10 million for the Office of Inspector General to remain available until expended.
• Section 8006 provided $386 million for VBA for the Veterans Rapid Retraining Assistance Program (VRRAP), which was established by the American Rescue Plan Act of 2021.
• Section 8007 provided $1 billion to remain available until expended to provide for any health care copayment or other cost sharing, and to reimburse any veteran who already paid a copayment or other cost sharing, for care and prescriptions during the period beginning on April 6, 2020, and ending on September 30, 2021.
• Section 8008 provided $80 million for Emergency Department of Veterans Affairs Employee Leave Fund to remain available from March 11, 2021, through September 20, 2022. The fund would pay for paid leave for VHA employees appointed under Chapter 74 of 38 United States Code (U.S.C.) who are unable to work due to the Coronavirus Disease 2019 (COVID-19) pandemic.

The VA Transparency & Trust Act of 2021(P.L. 117-63) required the VA Secretary to submit to the Senate and House Veterans Affairs Committees detailed plans for obligating and expending funds provided in the American Rescue Plan (ARP) Act (P.L. 117-2), the Coronavirus Aid, Relief and Economic Security (CARES) Act (P.L. 116-136), and the Families First Coronavirus Response Act (P.L. 116-127). Additionally, P.L. 117-63 requires biweekly reports to the committees detailing the obligations, expenditures, and the planned uses for funds provided by P.L. 116-127, P.L. 116-136, and P.L. 117-2.

Budget Request for FY2022 and Congressional Action

President's Request

On April 9, 2021, President Biden submitted his discretionary funding request for FY2022.²⁰ The formal budget request for FY2022 was submitted on May 28. The President's budget requested $268.41 billion for VA. This amount included $155.44 billion in mandatory funding and $112.97 billion in discretionary appropriations. In addition, the Administration proposed to use $820 million from the Recurring Expenses Transformational Fund to supplement the discretionary budget request. The Recurring Expenses Transformational Fund was established by the Consolidated Appropriations Act, 2016 (P.L. 114-113, Division J, Title II, Section 243). The law allows unobligated balances of expired discretionary appropriations, in FY2016 or any succeeding fiscal year, to be transferred from the General Fund of the Treasury to VA and deposited in the Recurring Expenses Transformational Fund at the end of the fifth fiscal year after the last fiscal year for which such funds were available. The law stipulates that amounts deposited in the fund may be available for facility infrastructure improvements, including nonrecurring maintenance, at existing VA hospitals and clinics, and information technology systems improvements and sustainment, subject to approval by the Office of Management and Budget (OMB) and House and Senate Appropriations Committees.²¹

The President's budget request for FY2022 included $159.09 billion for VBA, including general operating expenses; $98.33 billion for VHA; $394 million for NCA; and $10.59 billion for departmental administration, which includes the following accounts: general administration, BVA, and information technology systems (IT systems); veterans electronic health record modernization (EHRM), Office of Inspector General, construction major and minor accounts, and grants for construction of state extended care facilities; and grants for the construction of veterans cemeteries (see Figure 4).

The President's budget also requested $156.59 billion in advance appropriations for FY2023 for VBA mandatory accounts and $111.29 billion in advance appropriations for FY2023 for VHA discretionary accounts.

Figure 4. FY2022 Budget Request

Source: Figure prepared by CRS based on U.S. Congress, House Committee on Appropriations, Military Construction, Veterans Affairs, and Related Agencies Appropriations Bill, 2022, report to accompany H.R. 4355, 117th Cong., 1st sess., July 2, 2021, H.Rept. 117-81. Note: Total budget authority excludes offsetting collections deposited in the Medical Care Collections Fund (MCCF).

House Action

On June 25, 2021, the House Committee on Appropriations, Subcommittee on Military Construction, Veterans Affairs, and Related Agencies, held a markup of the FY2022 Military Construction, Veterans Affairs, and Related Agencies (MILCON-VA) appropriations bill, and approved the draft bill. On June 30, the House Appropriations Committee held a markup of the FY2022 MILCON-VA appropriations bill, and the bill was ordered reported to the full House on July 2 (H.R. 4355; H.Rept. 117-81). Subsequently, the text of H.R. 4355 was included in a seven-bill appropriations package (H.R. 4502), consisting of the FY2022 Labor, Health and Human Services, Education; Agriculture, Rural Development; Energy and Water Development; Financial Services and General Government; Interior, Environment; Military Construction, Veterans Affairs; and Transportation, and Housing and Urban Development appropriations bills (House Committee Print 117-12). H.R. 4502 was passed by the House on July 29. Division F of H.R. 4502 contained the FY2022 MILCON-VA appropriations bill. The full House-passed measure provided $268.59 billion for VA, including $155.44 billion in mandatory funding and $113.15 billion in discretionary appropriations. Division F of H.R. 4502 also provided $159.09 billion for VBA, including general operating expenses; $98.46 billion for VHA; $392 million for NCA; and $10.65 billion for departmental administration accounts. The House Committee report (H.Rept. 117-81) did not address the Administration's proposal to use the Recurring Expenses Transformational Fund to supplement VA's discretionary budget amount.

Senate Action

On August 4, 2021, the Senate Committee on Appropriations held a markup of its version of the FY2022 MILCON-VA appropriations bill (S. 2604; S.Rept. 117-35) and reported it out of committee.²² The Senate-reported FY2022 MILCON-VA appropriations bill recommended $268.37 billion for VA. This amount included $155.44 billion in mandatory funding and $112.93 billion in discretionary funding. The Senate Appropriations committee report indicated agreement with the Administration's proposal to use the Recurring Expenses Transformational Fund to supplement VA's discretionary budget amount. According to the committee report, the FY2022 Recurring Expenses Transformational Fund balance is approximately $842 million, out of which VA proposed to allocate $820 million, with approximately $670 million for minor construction projects and the balance for IT systems.²³ S. 2604 (S.Rept. 117-35) also recommended $159.16 billion for VBA, including general operating expenses; $98.33 billion for VHA; $394 million for NCA; and $10.48 billion for departmental administration accounts.

On October 18, Senate Appropriations Committee Chairman Patrick Leahy released a draft version of the FY2022 Department of Defense Appropriations bill, among other bills. Division C of this draft committee bill included the Military Construction and Veterans Affairs, Additional Appropriations bill. This bill made certain amendments to S. 2604 to comply with the FY2022 budget resolution (S.Con.Res. 14), which grants special budgetary treatment to certain types of spending, essentially exempting such spending from budget enforcement rules. S.Con.Res. 14 applies such special budgetary treatment to veterans' medical care within the Medical Services, Medical Community Care, Medical Support and Compliance, and Medical Facilities accounts of the Veterans Health Administration. The exemption applies to spending provided in excess of $89,849,000,000, but may not exceed $7,602,000,000. Accordingly, the Senate bill provided the $98.33 billion recommended for VHA, with approximately $7.60 billion provided pursuant to S.Con.Res. 14.

Continuing Appropriations

Because none of the regular appropriations bills were enacted at the beginning of the fiscal year on October 1, 2021, Congress passed a series of continuing resolutions (CRs). The first CR, the Extending Government Funding and Delivering Emergency Assistance Act (H.R. 5305; P.L. 117-43), was signed into law on September 30, 2021. The act provided continuing appropriations for VA through December 3, 2021, at FY2021 funding levels, with certain exceptions.²⁴ Since seven accounts (compensation and pensions, readjustment benefits, insurance and indemnities, medical services, medical community care, medical support and compliance, and medical facilities) received advance appropriations budget authority for FY2022 in the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2021 (Division J of P.L. 116-260), these accounts were not affected by the CR.

However, Section 151 of Division A of the Extending Government Funding and Delivering Emergency Assistance Act provided VA with transfer authority to transfer up to $193.5 million of FY2021 unobligated balances from the medical services account to the following three accounts, specifying that

• up to $178 million may be transferred to the VBA general operating expenses account,
• up to $5.8 million may be transferred to BVA, and
• up to $9.7 million may be transferred to the information technology systems account.

These transferred amounts were to be used for expenses related to the processing of disability claims for asthma, rhinitis, and sinusitis on a presumptive basis due to presumed exposure to particulate matter (such as burn pit emissions) during servicemembers' deployment to countries in Southwest Asia and certain other countries.²⁵

Additional CRs—Further Extending Government Funding Act (P.L. 117-70), Further Additional Extending Government Funding Act (P.L. 117-86), Extension of Continuing Appropriations Act, 2022 (P.L. 117-95)—extended funding until the Consolidated Appropriations Act, 2022, was enacted.

Consolidated Appropriations Act, 2022 (H.R. 2471; P.L. 117-103)²⁶

March 9, 2022, the House passed H.R. 2471, consisting of all 12 FY2022 appropriations bills. The Senate passed the measure on March 10. President Biden signed the measure into law as P.L. 117-103 on March 15. Division J of the Consolidated Appropriations Act, 2022, included the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2022. The act provides $269.26 billion for VA for FY2022. This includes $157.05 billion in mandatory funding and $112.22 billion in discretionary funding (see Table 2). The act also provides $272.32 billion in advance appropriations for FY2023. This is $4.45 billion above the advance appropriations request of $267.87 billion for FY2023. This revised advance appropriations amount is for the compensation and pension account of VBA. Furthermore, Division J of the Consolidated Appropriations Act, 2022, includes Section 253, rescinding and reappropriating funds from the Recurring Expenses Transformational Fund in support of the Administration's proposal to use the Recurring Expenses Transformational Fund to supplement VA's discretionary budget amount. Nonrecurring maintenance projects (NRM) under the medical facilities account would receive $150 million, and the information technology account would receive $670 million (these amounts are not included in the medical facilities account and information technology account in Table 2 since they are reallocation of funds).

The next sections discuss account-level details of the President's FY2022 request and congressional action on regular VA appropriations. Comparisons to FY2021-enacted funding amounts do not include funding from the American Rescue Plan Act (P.L. 117-2).

Mandatory Programs Funding

Major mandatory program funding includes compensation and pensions (VA's disability compensation program; pensions to low-income veterans, their surviving spouses, and dependent children); readjustment benefits (education and vocational rehabilitation assistance); and veterans insurance and indemnities (the provision of life insurance).

Compensation and Pensions

The Compensation and Pensions category includes payments for benefits such as disability compensation; dependency and indemnity compensation (DIC); pension benefits for low-income disabled or elderly wartime veterans and their survivors; burial benefits (allowances, flags, headstones, etc.); and a clothing allowance for certain disabled veterans.

For FY2022, VA requested $137.58 billion for the Compensation and Pensions account, an increase of $13.22 billion over the FY2021-enacted level of funding and $7.3 billion over the FY2022 advanced appropriations amount (see Table 2).²⁷ The largest portion of the budget request was disability compensation, and VA estimated that $133.8 billion in compensation payments would go to an estimated 5.5 million veterans, 475,146 survivors, and 1,281 children in FY2022. Pension payments were estimated to be $4.8 billion to approximately 209,355 veterans and 147,472 survivors. Finally, an estimated $418.0 million was allocated for burial benefits.²⁸

The funding request increase included $3.0 billion in obligations during FY2022 for the three new Agent Orange presumptive conditions identified in P.L. 116-283: Parkinson's-like symptoms, bladder cancer, and hypothyroidism. VA estimated that these new conditions qualifying for disability compensation included approximately $2.2 billion in retroactive benefits.²⁹ In general, the average payments for benefits, including disability compensation, pension, and survivor benefits, was expected to increase due to the annual cost-of-living adjustment (COLA).

Division F of H.R. 4502 recommended for FY2022 an appropriation of $137.58 billion for VA's Compensation and Pensions account, which was the exact amount VA requested (see Table 2).³⁰ The House Appropriations Committee, in its report (H.Rept. 117-81), highlighted various areas of interest and directive actions. The committee encouraged VA to continue implementing GAO's recommendations to improve regional office processing of claims, increase communication with Veterans Service Organizations (VSOs), and discuss the feasibility of locating satellite congressional offices within VA Medical Centers. In addition, the committee remained concerned with the backlog of disability claims and the processing of dependency and indemnity compensation (DIC) claims when the cause of death is listed as COVID-19. The committee directed VA to provide additional guidance on how a survivor can request a medical opinion to determine if a service-connected illness or disability contributed to the veteran's death, and directed VA to continue providing quarterly reports on the disability backlog.³¹

In S. 2604, the Senate Appropriations Committee recommended providing $7.35 billion in additional funding to the $130.23 billion provided in advanced appropriations for FY2022. This amount provided VA with a total budget of $137.58 billion, equal to VA's FY2022 request (see Table 2).³² The committee's report, S.Rept. 117-35, explained that the increase in appropriations reflected the increased obligations VA faces with disability compensation payments, the implementation of new laws, and the requirement to adjudicate disability claims for Blue Water Navy veterans.³³

Title II of Division J in the Consolidated Appropriations Act, 2022 (P.L. 117-103), provides $139.18 billion for VA's FY2022 Compensation and Pension account (see Table 2). This amount is $14.82 billion over FY2021's enacted amount, $8.96 billion over FY2022 advanced appropriations, and $1.61 billion over VA's requested amount. The increase in funding is to provide for the expansion of benefits with the new presumption of service connection claims VA is adjudicating for exposure to environmental hazards.

Readjustment Benefits

The Readjustment Benefits category reflects several benefits related to the transition of servicemembers from active duty status to veteran status, as well as benefits for disabled veterans. Some of these programs include education benefits for veterans, survivors, and dependents; vocational rehabilitation and employment training for service-connected disabled veterans; and helping individual veterans purchase and/or rehabilitate homes.

For FY2022, VA requested appropriations of $14.95 billion to provide funding for Readjustment Benefits, which was approximately $2.37 billion more than the amount enacted in FY2021 (see Table 2). In addition to the appropriated funds, VA combined $174.3 million in offsetting collections from the Department of Defense (DOD), and an estimated unobligated balance of $3.7 billion from FY2021 to sufficiently provide the benefits required. The increase in readjustment benefits funding was due, in part, to two legislative directives. First, P.L. 116-140, the Student Veteran Coronavirus Response Act of 2020, changed education and VR&E benefits due to the pandemic and required the continuation of benefits paid that otherwise may have stopped due to educational institutions closing or the shift to a virtual learning environment.³⁴ Second, P.L. 116-315, the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020, enhanced and expanded the eligibility for the Edith Nourse Rogers STEM Scholarship and the Fry Scholarship.³⁵

Division F of H.R. 4502 provided $14.95 billion for Readjustment Benefits in FY2022, the exact amount requested by VA.³⁶ The House Appropriations Committee, in its report (H.Rept. 117-81), highlighted several VA efforts to help veterans transition to civilian life and requested that VA continue and enhance those efforts. The committee believed that VA should increase coordination with the Departments of Defense, Education, and Labor to ensure that veterans can successfully transition into jobs, receive employment training, and understand options available for repayment or forgiveness of student loans. The committee also requested that VA explore possible options to continue the payment of benefits after December 21, 2021, with the possibility of educational institutions continuing with virtual or hybrid programs.

In the same manner as the House Appropriations Committee, the Senate Appropriations Committee recommended $14.95 billion for Readjustment Benefits in FY2022, the exact amount requested by VA in S. 2604.³⁷ The committee report, S.Rept. 117-35, addressed one program within VA's Readjustment Benefits, the Veteran Employment Through Technology Education Courses (VET TEC) Program. The committee supported this program and called on VA to consider expanding the program to address increased demand.³⁸

Title II of Division J in the Consolidated Appropriations Act, 2022 (P.L. 117-103), provides $14.95 billion for VA's FY2022 Readjustment benefits account (Table 2). This is $2.34 billion over FY2021's enacted amount and is equal to VA's requested amount. The funding will enable VA to continue to pay education and VR&E benefits to veterans whose programs were disrupted by the COVID-19 pandemic. It will also fund the expansion of VA's educational scholarship programs.

Veterans Insurance and Indemnities (VI&I)

The Veterans Insurance and Indemnities account is the mandatory funding mechanism for several government life insurance programs for veterans. In addition to direct payments made to insured veterans and their beneficiaries, this category includes supplemental funding for National Service Life Insurance (NSLI),³⁹ Service-Disabled Veterans Insurance (S-DVI),⁴⁰ and Veterans Mortgage Life Insurance (VMLI).⁴¹

For FY2022, VA estimated that this account required $136.95 million, approximately $5.58 million more than the FY2021-enacted funding.⁴² This funding will help provide life insurance to 5.6 million veterans, servicemembers, and dependents. Provided appropriations for FY2022 enabled VA to transfer $20,000 to the NSLI program, $32.3 million to the VMLI program, and $104.7 million to the S-DVI program. In addition, VA will have an estimated $6.0 million in collections from premiums, interest on investments, and extra hazard payments from military service branches. VA also requested $109.87 million in advance appropriations for FY2023.⁴³

In H.R. 4502 and S. 2604, both the House and Senate Appropriations Committees recommended appropriating $136.95 million to VA's insurance and indemnity account, which was the amount VA requested.⁴⁴ Title II of Division J in the Consolidated Appropriations Act, 2022 (P.L. 117-103), provides $136.95 million VA's FY2022 Insurance and Indemnities account (see Table 2). This is $7.73 million over FY2021's enacted amount and equal to VA's requested amount.

Medical Care and Medical Research Discretionary Programs Funding

Background

The Veterans Health Administration operates one of the nation's largest integrated direct health care delivery systems.⁴⁵ Although Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) are also publicly funded programs, most health care services under these programs are delivered by private providers in private facilities. In contrast, the VA health care system could be categorized as a veterans-specific national health care system, in the sense that the federal government owns the medical facilities and employs the health care providers.⁴⁶

The VA's health care system is organized into 18 geographically defined Veterans Integrated Service Networks (VISNs). Although policies and guidelines are developed at VA headquarters to be applied throughout the VA health care system, management authority for basic decisionmaking and budgetary responsibilities is delegated to the VISNs.⁴⁷ As of September 30, 2020, the VHA operated 146 hospitals, 134 nursing homes, 775 community-based outpatient clinics (CBOCs),⁴⁸ and 300 Readjustment Counseling Centers (Vet Centers).⁴⁹ In 2009, VA began a pilot Mobile Vet Center (MVC) program to improve access to services for veterans in rural areas, and the department has deployed 83 MVCs to date.⁵⁰

Although VHA provides most health care services to eligible veterans through its integrated network of facilities, it does pay for care in the community under certain circumstances. The Veterans Community Care Program (VCCP) applies eligibility for care in the community broadly to all enrolled veterans based on specific criteria.⁵¹ VA is authorized to provide care in the community through individual agreements with community providers, called veterans care agreements. VA is also authorized to reimburse for emergency care visits if specific criteria are met.⁵² Inpatient and outpatient care is provided in the private sector to eligible dependents of veterans under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA).⁵³ In addition, VHA provides grants for construction of state-owned nursing homes and domiciliary facilities⁵⁴ and collaborates with the Department of Defense in sharing health care resources and services.

Apart from providing direct patient care to veterans,⁵⁵ VHA's other statutory missions are to conduct medical research,⁵⁶ serve as a contingency backup to the DOD medical system during a national security emergency,⁵⁷ provide support to the National Disaster Medical System and the Department of Health and Human Services as necessary,⁵⁸ and train health care professionals to provide an adequate supply of health personnel for VA and the nation.⁵⁹

The Veteran Patient Population⁶⁰

In FY2021, approximately 9.2 million of the 19.5 million total veterans were enrolled in VA's health care system.⁶¹ VA estimates that in FY2022, enrollment will grow by approximately 5,000. In FY2021, of the total number of enrolled veterans, VA anticipated treating approximately 7.0 million unique veteran and nonveteran patients.⁶² For FY2022, VHA estimates that it will treat about 7.2 million unique veteran patients, or 1.0% over the FY2021 estimate (see Table A-1 for veteran population, VA enrollees, and VA patients from FY2000 to FY2022).

In addition, VHA estimates that outpatient visits will increase from 114.72 million visits in FY2021 to 118.99 million visits in FY2022, an increase of 4.27 million, or 3.7%. VHA anticipates a decrease in the total number of inpatients treated in all inpatient facilities from 1.05 million patients in FY2021 to 1.03 million patients in FY2022, a decrease of 1.9%.⁶³

President's Request and Congressional Action

The VA's annual appropriations for the medical services, medical community care, medical support and compliance, and medical facilities accounts include advance appropriations that become available one fiscal year after the fiscal year for which the appropriations act was enacted. Therefore, funding levels for FY2022 for these four accounts were provided by the Consolidated Appropriations Act, 2021 (Div. J; P.L. 116-260). However, in any given year the Administration could submit a revised budget request based on projected budget requirements for the upcoming fiscal year and Congress could revise previously enacted advance appropriation amounts through the annual appropriations process. Across all four accounts, the President's budget increased by $3.27 billion over the enacted advance appropriation amounts for FY2022.⁶⁴ This increase from the FY2022 request was driven by readjusted actuarial estimates for the medical community care account. In total, the FY2022 budget request for VHA is $101.72 billion, including medical care collections (see Table 2).⁶⁵ The medical and prosthetic research account does not receive advance appropriation and is funded through regular annual appropriations.

As required by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), the President's budget requested $111.29 billion in advance appropriations for the four medical care appropriations (medical services, medical community care, medical support and compliance, and medical facilities) for FY2023, an increase of approximately 14.2% over the FY2022-requested amount of $97.45 billion for the same four accounts. In FY2023, the Administration's budget request would provide $70.32 billion for the medical services account, $24.16 billion for medical community care, $9.67 billion for the medical support and compliance account, and $7.13 billion for the medical facilities account (see Table 2).

The House-passed version of the MILCON-VA appropriations bill (Division F of H.R. 4502; H.Rept. 117-81) provided a higher VHA appropriation than the President's request for FY2022 ($123 million higher), while the Senate Appropriations Committee MILCON-VA bill for FY2022 (S. 2604; S.Rept. 117-35) recommended the same amount as the President's request.

The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $101.32 billion in total for VHA in FY2022. This is $400 million less than the President's request and is due to rescissions in the Medical Services and Medical Community Care accounts ($200 million each).⁶⁶ The act provides $111.29 billion in advance appropriations for FY2023, the same amount as the President's request.

The sections below detail the amounts requested for each VHA account for FY2022, the funds provided in the House-passed bill and recommended in the Senate Appropriations Committee bill for each account, and the final amount provided by the Consolidated Appropriations Act, 2022.

Medical Services

The medical services account covers expenses for furnishing inpatient and outpatient care and treatment of veterans and certain dependents, including care and treatment in non-VA facilities; outpatient care on a fee basis; medical supplies and equipment; salaries and expenses of employees hired under Title 38, United States Code (U.S.C.); cost of hospital food service operations;⁶⁷ grants for adaptive sports programs for disabled veterans and members of the Armed Forces, beneficiary travel, prosthetics, Long-Term Services and Supports (LTSS), aid to state veterans' homes; and assistance and support services for family caregivers, and costs associated with activation of newly constructed or leased VA medical care facilities, among other distinct activities.⁶⁸

For FY2022, the President's budget requested $58.90 billion for the medical services account. This amount is equal to the FY2022 advance appropriated amount. According to VA, when combined with $9.6 billion of unobligated balances from funding provided in the American Rescue Plan Act, this amount fully funds all needs.

The House-passed version of the MILCON-VA appropriations bill (Division F of H.R. 4502; H.Rept. 117-81) provided $106 million over the FY2022 President's request. The Senate Appropriations Committee MILCON-VA bill recommendation for FY2022 was the same as the President's request. Both the House-passed bill and the Senate Appropriations Committee bill provided FY2023 advance appropriations equal to the President's request of $70.32 billion (see Table 2).

The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $58.7 billion in FY2022. This is $200 million less than the President's request. The act provides $70.32 billion in advance appropriations for FY2023, the same amount as the President's request.

The act provides for a vast array of specific initiatives funding through Medical Services. This includes $1.4 billion for the VA's caregiver programs and $3.3 million for the Office of Rural Health and the Rural Health Initiative.⁶⁹

Medical Community Care

Section 4003 of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (P.L. 114-41) required the establishment of a separate new account for medical community care, beginning with the FY2017 appropriations cycle. The Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits Improvement Act of 2016 (P.L. 114-315) authorized advance appropriations for the medical community care account. The account is intended to consolidate all community care programs under a single appropriation, and it is the funding source for care that VHA provides to eligible veterans through community health care providers. These programs include the Veterans Community Care Program (VCCP), the Camp Lejeune Family Member Program (CLFMP), CHAMPVA, the Foreign Medical Program (FMP), the Spina Bifida Health Care Program, the Children of Women Vietnam Veterans Health Care Benefits Program (CWVV), and the Indian Health Service (IHS)/Tribal Health Programs (THP) Reimbursement Agreements Program.

Some expenses related to the community care program are funded through the medical support and compliance account and the Information Technology account. These expenses include administrative expenses related to claims processing performed by the Third Party Administrators (TPAs) and VHA, and software required for information technology (IT) systems related to the community care program.⁷⁰

The President's budget requested $23.42 billion for the medical community care account. This amount was $3.27 billion over the FY2022 advance appropriated amount of $20.15 billion. This requested increase was largely driven by readjusted actuarial estimates for the medical community care account.⁷¹

The House-passed version of the MILCON-VA appropriations bill (Division F of H.R. 4502; H.Rept. 117-81) provided $3.26 million more than the FY2022 advance appropriation amount. This was $5 million less than the FY2022 request. The Senate Appropriations Committee bill recommended the same amount as the FY2022 request. Both bills provided FY2023 advance appropriation amounts equivalent to the President's request (see Table 2).

The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $23.22 billion in FY2022. This is $200 million less than the President's request. The act provides $24.16 billion in advance appropriations for FY2023, the same amount as the President's request.

The committees remain focused on preventing disruption of care—specifying that the VA is encouraged to sustain continuity of care for rural veterans and that care is not disrupted for dialysis patients.⁷²

Medical Support and Compliance

This account provides for expenses related to the management, security, and administration of VA's health care system through the operation of VA medical centers (VAMCs) and other medical facilities, such as community-based outpatient clinics (CBOCs) and Vet Centers. This includes among other things, VMAC leadership teams (Director, Chief of Staff, Chief Medical Officer, and Chief Nurse) and VAMC support functions, such as "quality of care oversight, security services, legal services, billing and coding activities, acquisition, procurement, and logistics activities, human resource management, logistics and supply chain management, and financial management."⁷³ This account also funds 18 Veterans Integrated Service Network (VISN)⁷⁴ offices, which include network management activities such as the following network leadership teams within each VISN: Network Director, Deputy Network Director, Chief Financial Officer, Chief Medical Officer, and Chief Information Officer.⁷⁵ This account also provides for expenses related to VHA Central Office (VHACO) operating units, such as offices of the Assistant Under Secretary for Community Care and Deputy Assistant Under Secretary for Community Care, the Office of the Assistant Under Secretary for Health for Clinical Services and the Chief Medical Officer (AUSH/CS), and the Office of Discovery, Education, and Affiliate Networks (DEAN), among other offices and suboffices.

The President's budget requested $8.40 billion for the medical support and compliance account. This amount is equivalent to the FY2022 advance appropriated amount.⁷⁶

Both the House-passed version of the MILCON-VA appropriations bill (Division F of H.R. 4502; H.Rept. 117-81) and the Senate Appropriations Committee bill provided the same amount as the President's request (see Table 2).

The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $23.22 billion in FY2022. This is equivalent to the President's request. The act provides $9.67 billion in advance appropriations for FY2023, the same amount as the President's request.

Medical Facilities

The medical facilities account funds expenses pertaining to the operations and maintenance of VHA's capital infrastructure. These expenses include utilities and administrative expenses related to planning, designing, and executing construction or renovation projects at VHA facilities. It also funds medical facility leases, including clinical space in CBOCs, engineering and environmental management, grounds maintenance, fire protection, nonrecurring maintenance, recurring maintenance and repairs, textile care processing and maintenance, and operating equipment maintenance and repairs, among others.

The President's budget requested $6.73 billion for the medical facilities account. This amount is equivalent to the FY2022 advance appropriated amount.⁷⁷

Both the House-passed version of the MILCON-VA appropriations bill (Division F of H.R. 4502; H.Rept. 117-81) and the Senate Appropriations Committee bill provided the same amount as the President's request (see Table 2).

The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $6.73 billion in FY2022. This is equivalent to the President's request. The act provides $7.13 billion in advance appropriations for FY2023, the same amount as the President's request.

Medical and Prosthetic Research

As required by law, the medical and prosthetic research program (medical research) focuses on research into the special health care needs of veterans. This account provides funding for many types of research, such as investigator-initiated research; mentored research; large-scale, multisite clinical trials; and centers of excellence. VA researchers receive funding not only through this account but also from DOD, the National Institutes of Health (NIH), and private sources. The medical services, medical support and compliance, and medical facilities accounts also provide funds for additional expenses required for VAMCs supporting research activities.

In general, VA's research program is intramural; VA investigators conduct research at VA facilities and in approved off-site space occupied by VA under a legal agreement. Unlike other federal agencies, such as NIH and DOD, VA does not have the statutory authority to make research grants to colleges and universities, cities and states, or any other non-VA entities.

The President's budget requested $882 million for the medical and prosthetic research account, an increase of $87 million, or 10.9%, above the FY2021-enacted amount of $795 million. The VHA's major research priorities in FY2022 include, among others, traumatic brain injury (TBI), military exposures, and Coronavirus-related research and impact, cloud computing and storage, data security/counterintelligence, precision oncology, and collaboration with Department of Energy.⁷⁸

The House-passed version of the MILCON-VA appropriations bill (Division F of H.R. 4502; H.Rept. 117-81) provided $22 million more than the FY2022 request. The amount recommended by the Senate Appropriations Committee bill for FY2022 was the same as the request (see Table 2). The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $882 million in FY2022.

Nonmedical Discretionary Programs Funding

National Cemetery Administration (NCA)

The majority of NCA's discretionary funding falls into the Operations and Maintenance category. VA requested a total of $394 million in FY2022 for this account (see Table 2)—a $42 million, or 12%, increase for NCA's operations and maintenance expenses over the FY2021-enacted amount. The requested funding will provide for an estimated 136,000 interments, perpetual care of 4 million gravesites, and the operations and maintenance of 158 national cemeteries and 34 additional sites.⁷⁹ The request also included funding to support hiring an additional 97 full-time equivalents (FTEs), bringing the total number of FTEs from 2,120 in FY2021 to 2,217 in FY2022.⁸⁰

As VA works toward its goal of providing 95% of veterans with access to a cemetery within 75 miles of their homes, VA's request included $7.6 million for the continued activation of the rural cemeteries in Fargo, ND; Cheyenne, WY; and Northwoods, WI; along with the initial activation of the New York and Indianapolis columbarium-only cemeteries and the Cedar City, UT, rural cemetery. With the addition of these new cemeteries and the increased workload anticipated during FY2022, VA requested $7.7 million and 35 new FTEs to address these needs.⁸¹

Within the Operations and Maintenance appropriations category, VA requested funds to support the agency's programs and initiatives to memorialize the veterans in the cemeteries. The funds will be used to continue developing the Veterans Legacy Memorial (VLM) and to incorporate millions of veterans' records from non-VA national cemeteries. To complement NCA's digital efforts, NCA will continue to develop onsite interpretive signs, exhibits, and publications to increase the public's knowledge of NCA's history. To commemorate its 50^th anniversary, NCA is to produce a book that would be the "first comprehensive history of NCA highlighting its establishment and transformation to the present."⁸²

Division F of H.R. 4502 provided $392 million for NCA expenses in FY2022, which is $2 million less than the requested amount but $40 million over the FY2021-enacted amount (see Table 2).⁸³ The House Appropriations Committee, in its report (H.Rept. 117-81), explained that NCA should prioritize two key goals: (1) maintaining the current level of services at existing cemeteries and (2) activating new cemeteries to increase burial access. In addition, the committee highlighted two items it would like to see more action on: (1) completing the replacement of the headstones of prisoners of war that have a German insignia on them and (2) pursing efforts to expand and ensure burial access to veterans in rural communities.⁸⁴

In comparison, the Senate Appropriations Committee, in S. 2604, recommended $394 million for NCA expenses in FY2022, which is equivalent to the requested amount and $42 million over the FY2021-enacted amount.⁸⁵ The committee report, S.Rept. 117-35, addressed three ongoing NCA projects. First, the committee directed VA to establish a pilot program to partially or fully enclose committal shelters at national cemeteries located in various climates. Second, the committee was pleased with the progress toward completion of the Western New York National Cemetery and requested a timeline for completion within 60 days after enactment of the act. Finally, the committee supported additional infrastructure at rural cemeteries, but requested that VA consider any necessary water, sewer, and electric utilities needed for these projects.⁸⁶

Title II of Division J in the Consolidated Appropriations Act, 2022 (P.L. 117-103), provides $394 million for VA's FY2022 National Cemetery Administration account (see Table 2). This is $42 million over FY2021's enacted amount and equal to VA's requested amount.

VBA, General Operating Expenses

VA requested $3.423 billion in funding for VBA general operating expenses for FY2022. This amount was an estimated $243 million, or 7.6%, increase over the enacted FY2021 budget and will support 25,303 FTEs, an increase of 560 over FY2021 (see Table 2).⁸⁷ In addition, VA's two key priorities for FY2022 are benefits delivery and suicide prevention.⁸⁸ To address these priorities, VA requested $81.5 million to modernize the Education Service platform to improve claims processing, collaboration with stakeholders, and communications through an online platform. In addition, VA requested $3.6 million to develop and implement a pilot program that would provide employment opportunities to veterans and servicemembers with service-connected disabilities, and to use this program to learn more about ways to assist disabled veterans.⁸⁹

Division F of H.R. 4502 provided $3.417 billion for VBA General Operating Expenses in FY2022, which is $5.6 million less than the requested amount but $237.4 million over the FY2021-enacted amount (see Table 2).⁹⁰ The committee stated that "VBA should prioritize use of these funds to process claims, including claims related to new Agent Orange presumptive conditions, and reduce the claims backlog."⁹¹ In addition, the committee identified several areas that it wanted VA to address. The committee encouraged VA to create a transparent and evidence-based framework to expeditiously establish new presumptions for illnesses and disability associated with toxic exposures. It also directed VA to partner with DOD, TRICARE, private sector health providers, and the Centers for Medicare & Medicaid Services (CMS) to complete a report that examines the total number of veterans who have filed claims for disability compensation related to burn pits, along with the demographic information, medical diagnoses, location of burn pits, and the approval and denial rates and rationale for denials.⁹²

In comparison, the Senate Appropriations Committee, in S. 2604, recommended $3.486 billion for VBA general operating expenses in FY2022. This funding is $63 million above VA's requested amount and $306 million over the FY2021-enacted amount.⁹³ The committee report, S.Rept. 117-35, addressed several issues, such as, but not limited to, compensation and pension exams, digitization of military records, and a national training curriculum. The committee expressed its concern about VBA's increased reliance on contract examiners for compensation and pension exams and urged VA to make these exams available at VA facilities "with the capability to conduct them in a safe and thorough manner."⁹⁴ The committee also requested that VA work in coordination with the Archivist of the United States to provide an update, in the form of a report, on the progress made by the National Personnel Records Center on improving veterans' access to military records and on the effort to digitize outstanding personnel records for the year 1990 and earlier. Finally, the committee encouraged VA to improve its training of disability claim processors to ensure they are correctly adjudicating claims of veterans suffering from posttraumatic stress disorder (PTSD).⁹⁵

Title II of Division J in the Consolidated Appropriations Act, 2022 (P.L. 117-103), provides $3.45 billion for VBA's FY2022 General Operating Expenses account (see Table 2). This is $273.81 million over FY2021's enacted amount and $30.81 million over VA's requested amount. The increase in funding is intended to help VA process new benefits claims and lower the claims backlog.⁹⁶

Board of Veterans' Appeals

The Board of Veterans' Appeals is an agency within VA established in 1933.⁹⁷ The BVA's role is to conduct hearings and make final decisions on behalf of the VA Secretary regarding appeals for veterans' benefits and services from VBA, VHA, and NCA, as well as the Office of General Counsel (OGC), that are presented to BVA for appellate review.⁹⁸

The VA's FY2022 request for BVA was $228 million, a $32 million increase over the FY2021-enacted amount of $196 million (see Table 2). This amount would support 129 new full time equivalent (FTE) staff, including 35 additional Veteran Law Judges (VLJs).

The House-passed version of the MILCON-VA appropriations bill (Division F of H.R. 4502; H.Rept. 117-81) provided $228 million as requested, along with authority to carry over 10% of this funding into FY2023.

The Senate Committee version MILCON-VA bill for FY2022 (S. 2604; S.Rept. 117-35), similar to the House-passed bill, recommended the same amount as the President's request. The committee report, while acknowledging the current appeals backlog, stated: "[the] Department is currently experiencing a backlog of disability claims, which has only been exacerbated by the COVID–19 pandemic. The Committee recognized veterans' expectations regarding timely and accurate appeals processing, and supports full funding of the [BVA] to increase personnel, reduce the backlog of claims and get veterans the timely answers they deserve."⁹⁹

Title II of Division J in the Consolidated Appropriations Act, 2022 (P.L. 117-103), provides $228 million for VA's FY2022 Board of Veterans Appeals account (see Table 2). This is $32 million over FY2021's enacted amount and equal to VA's requested amount.

Information Technology

The information technology (IT) account provides funding for department-wide IT activities such as IT and telecommunications support, management of data systems, and acquisition of IT systems and department-wide cybersecurity efforts, among other things.

The President's FY2022 IT budget request was $4.843 billion, a decrease of $31.7 million below the 2021-enacted budget (see Table 2). Of this amount, $297 million would have been for IT development, such as building new software applications; $3.13 billion would have been for operations and maintenance (O&M); and $1.414 billion would have been for staffing and administrative support services. The Administration's budget proposed to supplement the IT budget request with $670 million from the Recurring Expenses Transformational Fund in FY2022.¹⁰⁰ The budget proposed to use the Transformational Fund to support IT infrastructure readiness, Financial Management Business Transformation (FMBT),¹⁰¹ and modernizing human resources systems.¹⁰²

The House-passed bill (Division F of H.R. 4502) provided approximately $4.842 billion for the IT systems account for FY2022, which was approximately $1 million less than the request (see Table 2). Within this total, the House-passed measure allocated $297 million for IT development, such as building new software applications; $3.13 billion for operations and maintenance (O&M); and $1.413 billion for staffing and administrative support services. H.Rept. 117-81 directed the Office of Information Technology (OIT), in coordination with VHA and Office of Electronic Health Records Modernization (OEHRM), to develop end-to-end encrypted communication for telehealth, and to develop a centralized data system to catalog sexual harassment and assault complaint data as part of a comprehensive policy to end sexual assault, including sexual harassment and gender-based harassment, throughout VA.¹⁰³

The Senate Appropriations Committee-reported FY2022 MILCON-VA appropriations bill (S. 2604: S.Rept. 117-35) recommended approximately $4.843 billion for the IT systems account, the same as the Administration's request (see Table 2). Of this amount, the Senate version of the MILCON-VA appropriations bill recommended $297 million for IT development, $3.13 billion for operations and maintenance (O&M), and $1.414 billion for staffing and administrative support services, the same as the President's budget request. The committee also supported the Administration's proposal to allocate Recurring Expenses Transformational Fund funds to supplement funds for IT programs delineated in the Administration's budget proposal for FY2022.¹⁰⁴

The Consolidated Appropriations Act, 2022, provides $4.843 billion for the IT systems account (see Table 2), and of this amount, $1.414 billion is for staffing and administrative support services, $3.13 billion is for O&M, and $297 million is for systems development. Furthermore, the act includes a provision to allocate $670 million of the Recurring Expenses Transformational Fund balances to support IT programs.

Electronic Health Record Modernization (EHRM)¹⁰⁵

On May 17, 2018, VA signed a contract with Cerner Corporation to modernize its electronic health care record system. This account provides funding for activities required to plan and deploy the Cerner Millennium electronic health care record system at VA medical facilities. This includes the Electronic Health Record (EHR) contract costs, infrastructure readiness, and expenses related to the Project Management Office (PMO). Beginning with the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act for FY2018 (P.L. 115-141), Congress established this new account, which is "intended to be the single source of funding within VA for the electronic health record effort" (H.Rept. 115-673). The Office of the Deputy Secretary is the only office responsible for administering the funds in this account.

On October 24, 2020, VA began initial deployment of the Cerner Millennium EHR at the Mann-Grandstaff VAMC in Spokane, WA, and the West Consolidated Patient Account Center. Due to various implementation challenges, and potential patient safety issues encountered during transition to the new EHR system, as highlighted by the Government Accountability Office (GAO), VA OIG, and medical center staff, on March 19, 2021, Secretary Denis McDonough announced a strategic review of the EHRM program.¹⁰⁶ The results of this review were released in July 2021.¹⁰⁷ Considering the results of the strategic review, VA altered the deployment schedule for Cerner Millennium EHR, based on assessing and ensuring readiness at each deployment site.¹⁰⁸ Previously, the deployment schedule was tied to a synchronized DOD and VA regional schedule.

The President requested $2.66 billion for the EHR account for FY2022 (see Table 2). The request was further separated into three subaccounts: approximately $1.43 billion allocated for the Cerner EHR Millennium solution, approximately $951.8 million allocated for infrastructure readiness, and approximately $285.7 million allocated for program support.¹⁰⁹

The House-passed measure (Division F of H.R. 4502) provided approximately $2.64 billion for the EHR account, which was $26 million less than the Administration's request (see Table 2). Furthermore, the bill stipulated that 25% of funding would not be available until July 1, 2022, and that the release of funds would be based on the certification by the Secretary regarding any changes to the EHRM deployment schedule. The House Committee report (H.Rept. 117-81) further delineated EHR funding at the subaccount level, including approximately $1.42 billion allocated for the electronic health record contract, approximately $276.71 million allocated for program management, and approximately $943.79 allocated for infrastructure support.¹¹⁰ In addition, "due to the uncertainty of the timing of obligations," funds in this account would have been available for three fiscal years.¹¹¹

The Senate Appropriations Committee-reported version of the FY2022 MILCON-VA appropriations bill (S. 2604; S.Rept. 117-35) recommended $2.5 billion for the EHR account, which was $163 million below the Administration's request (see Table 2). The committee expressed its displeasure with VA's EHR deployment: "while the Committee remains supportive of replacing VA's current EHR with the same system being acquired by DoD, frustrations continue with the delays in execution, as well as with the Department's poor communication."¹¹² Furthermore, similar to the House-passed measure, the bill stipulates that 25% of funding would not be available until July 1, 2022, and that the release of funds would be based on the Secretary providing a plan to the committees regarding "benchmarks and measureable metrics for deployment, and a plan for addressing all required infrastructure upgrades."¹¹³ Moreover, VA was advised to consult with the Indian Health Service, as the IHS modernizes the Indian Health Service Electronic Health Record system, in order to ensure interoperability between VA and the IHS EHR systems.¹¹⁴

Division J of the Consolidated Appropriations Act, 2022 (P.L. 117-103), provides $2.3 billion for EHRM activities related to the development and rollout of the EHR system. Furthermore, the act stipulates that 25% of these funds will not be available until July 1, 2022, and are contingent upon VA providing a plan to the House and Senate Committees on Appropriations "with benchmarks and measurable metrics for deployment, and a plan for addressing all required infrastructure upgrades" no later than 30 days prior July 1, 2022. According to the joint explanatory statement accompanying this act, "the Secretary is not provided transfer authority and is directed to continue using this account as the sole source of funding within the Department for EHRM."¹¹⁵

Construction

Construction accounts include major construction, minor construction, and construction and renovation grants for state extended care facilities, as well as grants for state veterans cemeteries.

The major construction account provides funds for capital projects costing $20 million or more that are intended to design, build, alter, extend, or improve a VHA facility. Projects identified through the Strategic Capital Investment Planning (SCIP) process are submitted for congressional authorization. Congress reviews, approves, and funds major construction on a project-by-project basis. Typical major construction projects are replacements of hospital buildings, the addition of large ambulatory care centers, and new hospitals or nursing homes.

The minor construction account provides funds for capital projects costing less than $20 million that are intended to design, build, alter, extend, or improve a VHA facility. The total cost of a minor construction project cannot be greater than this statutory threshold. Minor construction projects are approved by the Office of Capital Asset Management and Support at the VA Central Office through the SCIP process. The grants to the state extended care facilities account provide grants to states for construction or acquisition of state home facilities, including funds to remodel, modify, or alter existing buildings used for furnishing domiciliary, nursing home, or hospital care to veterans. A grant may not exceed 65% of the total cost of the project. Lastly, the grants for construction of the veterans cemeteries account provide grants to states, territories, and federally recognized tribal governments for the establishment, expansion, or improvement of state and tribal veterans cemeteries.

The President's FY2022 budget request for construction and construction grants is approximately $2.21 billion. This amount included $1.61 billion for the major construction account, $553 million for the minor construction account, and $45 million for grants for construction of veterans cemeteries (see Table 2). In addition, the budget request proposed $150 million from the Recurring Expenses Transformational Fund to supplement the minor construction account in FY2022.¹¹⁶ The Administration did not request any funding for grants for state extended care facilities. The department estimated that it would carry over $596 million into FY2022 from prior year appropriations and American Rescue Plan (ARP) Act (P.L. 117-2) funding.¹¹⁷

The House-passed bill (Division F of H.R. 4502) provided approximately $2.30 billion for construction and construction grants accounts for FY2022, approximately $92.1 million above the request. This included the requested amounts for the construction major and minor accounts, and $90 million for funding for grants for state extended care facilities (see Table 2). According to House Committee report (H.Rept. 117-81): "supporting grants for construction of state extended care facilities has been and will continue to be a priority of the Committee. As such, in order to ensure that VA has the resources required to address priority project applications submitted in April 2021, the bill maintains level funding of $90 million for fiscal year 2022."¹¹⁸ Lastly, the House-passed MILCON-VA appropriations bill provided $47.1 million for grants for construction of veterans cemeteries.

The Senate Appropriations Committee-reported version of the FY2022 MILCON-VA appropriations bill (S. 2604; S.Rept. 117-35) recommended approximately $2.26 billion for construction and construction grants, approximately $55 million above the President's FY2022 request (see Table 2). This included the requested amounts for the construction major and minor accounts. S. 2604 also included a provision to include $150 million from the Recurring Expenses Transformational Fund to supplement minor construction account. The committee recommendation included $50 million for grants for state extended care facilities, and noted "that additional projects are needed around the country to support the needs of our Nation's veterans, and VA receives new applications each year. Therefore, the Committee recommends funding in fiscal year 2022 to address applications for additional Priority 1 projects."¹¹⁹ S. 2604 also recommended $50 million for grants for construction of state veterans cemeteries, which is $5 million above the request.

The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $2.27 billion for construction and construction grant accounts for FY2022, and $53.50 million above the President's request (see Table 2). The act provides $50 million for grants for state extended care facilities and recommended $48.5 million for grants for construction of state veterans cemeteries. The act does not include $150 million from the Recurring Expenses Transformational Fund to supplement minor construction account, but rather includes a provision to allocate $150 million from the Recurring Expenses Transformational Fund to supplement for facilities infrastructure improvements, including nonrecurring maintenance (NRM), at existing VHA hospitals and clinics under the medical facilities account.

Asset and Infrastructure Review

Title II of the VA MISSION Act (P.L. 115-182) included the VA Asset and Infrastructure Review (AIR) Act of 2018. The AIR Act establishes a process for realigning and modernizing VHA facilities. Under this process, VA is to develop criteria for selecting VHA facilities to dispose of, modernize, or acquire, so as to better meet the health care needs of veterans.¹²⁰ VA must then create a list of recommendations based on those criteria and submit it to a newly created Asset and Infrastructure Review Commission (the Commission). This nine-member commission reviews the VA's recommendations but may not alter them, unless it determines that one or more recommendations are inconsistent with the criteria. The Commission submits the list of recommendations to the President, who either approves the list in its entirety or sends it back to the Commission with the reasons for disapproval. The Commission shall take into account the reasons for disapproval and submit a second report to the President with recommendations for realignment and modernization of VHA facilities. The President may approve or disapprove the revised list. If the President approves the original or revised list, then VA must begin implementation of the recommendations within three years, unless Congress passes a joint resolution of disapproval, in which case the process terminates.¹²¹

As required by the AIR Act, VA conducted its market assessments and publicly released the department's recommendations on March 14, 2022.¹²² On March 10 and 21, 2022, President Biden submitted nominees to the AIR Commission to the Senate.¹²³ The AIR Commission is to submit its recommendations to the President for review and approval, prior to sending to Congress for review and approval in 2023.¹²⁴ Figure 5 provides a summary of the process as prepared by VA.

Figure 5. Summary of AIR Act Process

Source: Department of Veterans Affairs. Adopted from VA briefing documents titled "VA's Recommendations to the AIR Commission: Summary of Process and Outcomes," March 2022.

For the first time, the Administration's request for FY2022 included $5 million in funding for a new Asset and Infrastructure Review account (see Table 2). This funding would provide for support staff and necessary day-to-day operational expenses related to the AIR Commission activities, which would be conducted in calendar years 2022 and 2023.¹²⁵ The versions of the FY2022 MILCON-VA appropriations bill passed by the House and reported by the Senate Appropriations Committee provided $5 million as requested. The Consolidated Appropriations Act, 2022 (Division J of P.L. 117-103), provides $5 million as requested for FY2022, which will remain available until September 30, 2023.

On June 27, 2022, Senate Veterans' Affairs Committee Chairman Jon Tester and several other Senators issued a statement stating that the AIR Commission process would not move forward. According to the press release, "Without the Senate's approval of the nominees, no Commission will be established and the process as outlined by the VA MISSION Act will not move forward."¹²⁶

Appendix A. Veteran Population, VA Enrollees, and VA Patients, FY2000-FY2022

Appendix B. VA Appropriations FY1995-FY2021