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Week Ending July 15, 2005
H.R.1220 To increase, effective as of December 1, 2005, the rates of disability compensation for veterans with service-connected disabilities and the rates of dependency and indemnity compensation for survivors of certain service-connected disabled veterans, and for other purposes.
BRIEF
The summary accompanying the bill explained that the bill would
“Provide effective December 1, 2005, a cost-of-living adjustment to the rates of disability compensation for veterans with service-connected disabilities and to the rates of dependency and indemnity compensation for survivors of certain service-connected disabled veterans. The percentage amount would be equal to the increase for benefits provided under the Social Security Act, which is calculated based upon changes in the Consumer Price Index.
“Codify the current dollar amounts of disability compensation and dependency and indemnity compensation, as provided for in Public Law 108-363.
“Authorize a 2-year demonstration project for improvement of business practices in the Veterans Health Administration relating to standardization and coordination of activities related to billing, reengineering of billing and accounts receivable, application of commercial-industry standards, establishment of a database for third-party payor information, and such other requirements as the Secretary of Veterans Affairs may specify; and
“Permanently authorize, subject to appropriations, six Department of Veterans Affairs Parkinson's Disease Research Education and Clinical Centers to be centers of excellence in clinical care, scientific research, educational outreach and training.”
Sponsor: Representative Steve Buyer (IN-4th)
Vote: Passed House (July 13, 2005)
Cost to the taxpayers: CBO estimates that enacting this legislation would increase direct spending for veterans disability compensation by less than $200,000 in 2006, $1 million over the 2006-2010 period, and $2 million over the 2006-2015 period. In addition, CBO estimates that discretionary spending resulting from implementation of H.R. 1220 would total $2 million in 2006 and $10 million over the 2006-2008 period, assuming appropriation of the authorized amount.
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MORE INFORMATION
COMMITTEE DISCUSSION OF THE BILL
Increase in rates of disability compensation and dependency and indemnity compensation- Section 2 of the bill would increase, effective December 1, 2005, the rates of compensation for service-connected disabilities and the rates of dependency and indemnity compensation (DIC) for surviving spouses and children of veterans who die of service-connected causes, as well as the additional amounts for dependents and survivors, and clothing allowances for certain veterans. Congress has provided annual increases in these rates for every fiscal year since 1976.
The Committee is following its longstanding practice of setting the cost-of-living adjustment (COLA) by reference to the yet-to-be-determined Social Security increase. At the time of the filing of this report, the increase is expected to be 2.3 percent, but it may be higher or lower depending on changes in the Consumer Price Index; the exact percentage is calculated as of September 30, 2005. Last year's increase was 2.7 percent.
The basic purpose of the disability compensation program is to provide relief from the impaired earning capacity of veterans disabled as the result of their military service. The amount of compensation payable varies according to the degree of disability. This amount in turn is required by law to represent, to the extent practicable, the average impairment in earning capacity in civilian occupations resulting from such disability or combination of disabilities.
To be eligible to receive disability compensation, a veteran must have a disability incurred or aggravated during military service, which is not the result of willful misconduct, and have been discharged under other than dishonorable conditions. The responsibility for determining a veteran's entitlement to service-connection for a disability rests with the Department of Veterans Affairs (VA). More than 2.6 million veterans were receiving service-connected disability compensation as of May 2005.
Surviving spouses and dependent children of veterans who died of disabilities determined by VA to be service-connected (including veterans who died while on active duty) or who had a service-connected disability rated at 100 percent for certain periods of time prior to death are entitled to receive monthly dependency and indemnity compensation (DIC) benefits. Additional amounts are paid to survivors who are housebound, in need of aid and attendance, or have minor children. The purpose of DIC benefits authorized under chapter 13 of title 38, United States Code, is to provide partial compensation to the appropriate survivors for the loss in financial support due to the service-connected death. Income and need are not factors in determining a surviving
spouse's or child's entitlement because the Nation in part assumes the legal and moral obligation of the veteran to support the spouse and children. As of May 2005, there were more than 307,000 surviving spouses and more than 29,000 children receiving DIC.
Public Law 108-454 authorized an additional DIC payment of $250 a month provided for the first 2 years of DIC eligibility to surviving spouses with minor children. This new benefit is aimed at easing the transition following the death of the servicemember/veteran. Payment is based on the family unit, not per child, and terminates prior to the end of the 2-year period if there are no longer children under the age of 18. H.R. 1220, as amended, would provide a cost-of-living adjustment to the new 2-year transitional DIC benefit.
Codification of cost-of-living adjustment provided in Public Law 108-147- Section 4 of the bill would codify the current dollar amounts of compensation for service-connected disabilities and the rates of DIC for surviving spouses and children of veterans who die of service-connected causes, as well as the additional amounts for dependents and survivors, and clothing allowances for certain veterans. These rates went into effect on December 1, 2004, pursuant to Public Law 108-363, which was signed by President Bush on October 25, 2004.
Demonstration project to improve business practices of Veterans Health Administration- Section 5 of the bill would establish a demonstration project to improve the Department of Veterans Affairs' (VA) collections from third-party payers. VA provides health care to eligible veterans through medical facilities managed by the Veterans Health Administration (VHA). Under certain circumstances, VA is authorized to collect reasonable charges from a veteran's health insurance company to offset the cost of medical care and medications for treatment of nonservice-connected conditions. Specifically, VA may bill insurance companies for treatment of conditions that are not a result of injuries or illnesses incurred or aggravated during military service. VA is not authorized to bill for health care conditions that result from military service, nor is it generally authorized to collect from Medicare and Medicaid. Despite improvements in VA's third-party collections, there continues to be weaknesses in the billings and collections processes that impair VA's ability to maximize the amount of dollars paid by third-party insurance companies.
The Committee's view is that site selection for the new demonstration project should assure geographic separation from Veterans Integrated Service Network (VISN) 10, the host site of the demonstration project authorized by Public Law 108-357. The current demonstration project is preparing the Patient Financial Services System (PFSS) for deployment to implement certain VA business practices relating to third-party collections as a precursor to developing an integrated and automated financial system for VHA. The Committee believes that geographic separation is necessary to avoid duplications of process and to gain the cultural distance necessary to see how other parts of VHA perform their business practices.
The Committee is also concerned how VA measures the performance of the Medical Care Collection Fund (MCCF) cycle. VA should ascertain the universe of possible collections for the MCCF to comprehensively assess the performance of its particular parts. Currently, the Committee can only rely on previous performance and rate improvements. However, VA's efforts to determine the universe of collections should in no way delay or interfere with implementation of the new demonstration project.
The Committee expects that all revenue collected from the pilot project would be returned to the VHA medical centers where the demonstration takes place, and would not be subjected to appropriations offsets.
Finally, the Committee expects that no VA FTEE associated with the demonstration project would be terminated during its 2-year period of operation, except for purposes of personnel actions relating to employee misconduct or unsatisfactory performance, in accordance with existing labor-management agreements and the personnel authorities of titles 5 and 38, United State Code, as applicable. The Committee further expects that vacancies due to personnel actions would be expeditiously filled so that the number of active FTEE associated with the demonstration pilot would remain unchanged during the period of the pilot project.
Parkinson's disease research, education, and clinical centers- Section 6 of the bill would permanently authorize six Parkinson's Disease Research Education and Clinical Centers (PADRECCs), subject to appropriations, and give priority to the existing PADRECCs for medical care and research dollars, insofar as such funds are awarded to projects for research in Parkinson's disease and other movement disorders.
Parkinson's disease is a serious health problem which affects up to 1.5 million Americans. By 2010, an estimated 39,000 veterans who are age 85 and older will have this progressive neurological disorder. Treatments exist for Parkinson's, but medical research continues in search of a cure.
In 2001, VA took an important step toward eradicating this disease by establishing six PADRECCs, located at VA medical centers in Houston, West Los Angeles, Philadelphia, Portland-Seattle, Richmond, and San Francisco. These centers provide an opportunity for researchers to see their results rapidly and directly applied to improve patient care. Through the PADRECCs and the National VA Parkinson's Disease Consortium, a network of 200 VA clinicians with expertise or interest in the fields of Parkinson's disease and related movement disorders, VA is able to treat 42,000 veterans with Parkinson's disease.
In just a brief time since their inception, the six PADRECCs have made significant contributions to the care and research of Parkinson's disease, and training of health care professionals. The PADRECCs, including the VA hospitals in Albuquerque, Las Vegas, Lorna Linda, Long Beach, Phoenix, San Diego, and Tucson, which are affiliated with the Southwestern PADRECC located at the West Los Angeles VA Medical Center, put VA at the forefront of the landmark multi-site study assessing effectiveness of surgical implantation of deep brain stimulators in reducing the symptoms of the disease. The
Committee recognizes the efforts of the PADRECCs as a model of innovation in the delivery of health care and research for chronic disease in the veteran population, which deserve continued support. The American Legion, Disabled American Veterans, and Parkinson's Action Network are in support of this provision.
Section 1 of the bill would provide that this Act may be cited as the `Veterans' Compensation Cost-of-Living Adjustment Act of 2005'.
Section 2(a) of the bill would require the Secretary of Veterans Affairs to increase, effective December 1, 2005, the dollar amounts in effect for the payment of disability compensation and dependency and indemnity compensation.
Section 2(b) of the bill would specify the programs to receive increased dollar amounts: compensation in effect under section 1114 of title 38, United States Code; additional compensation for dependents in effect under section 1115(1) of title 38, United States Code; clothing allowance in effect under section 1162 of title 38, United States Code; new DIC rates in effect under paragraphs (1) and (2) of section 1311(a) of title 38, United States Code; old DIC rates in effect under section 1311(a)(3) of title 38, United States Code; additional DIC for surviving spouses with minor children in effect under section 1311(b) and paragraph (1) of section 1311(f) of title 38, United States Code; additional DIC for disability in effect under sections 1311(c) and (d) of title 38, United States Code; and DIC for dependent children in effect under sections 1313(a) and 1314 of title 38, United States Code.
Section 2(c)(1) of the bill would increase the dollar amounts for those programs specified in subsection (b) based on the amount in effect on November 30, 2005.
Section 2(c)(2) of the bill would specify that each amount shall be increased by the same percentage by which benefits are increased under title II of the Social Security Act (42 U.S.C. 401 et seq.).
Section 2(c)(3) of the bill would round down to the next lower dollar amount all compensation and DIC benefits, when the amount is not a whole dollar amount.
Section 2(d) of the bill would provide a special rule authorizing the Secretary of Veterans Affairs to adjust administratively, consistent with the increases made under subsection (a), the rates of disability compensation payable to persons within the purview of section 10 of Public Law 85-857 (72 Stat. 1263), who are not in receipt of compensation payable pursuant to chapter 11 of title 38, United States Code.
Section 2(e) of the bill would redesignate the second subsection (e) of section 1311, title 38, United States Code (added by section 301(a) of the Veterans Benefits Improvement Act of 2004 (Public Law 108-454: 118 Stat. 3610)) as subsection (f).
Section 3 of the bill would require the Secretary of Veterans Affairs to publish in the Federal Register the amounts specified in subsection (b), as increased pursuant to that section.
Section 4 of the bill would codify the cost-of-living adjustments provided in Public Law 108-363.
Section 5(a)(1) through subsection (a)(3) of the bill would authorize an amount not to exceed $10 million in funding to initiate a performance based contract for a contractor to carry out the functions specified in subsection (e).
Section 5(b) of the bill would authorize the demonstration project for a 2-year period to begin on the first day of the month beginning more than 120 days after the date of enactment of the bill.
Section 5(c) of the bill would direct the Secretary of Veterans Affairs to select two sites from among medical centers located in Veterans Health Administration service areas that the Secretary determines have relatively low rates of recovery or collection.
Section 5(d) of the bill would require the Secretary of Veterans Affairs to select and award a contractor within 3 months after enactment of the bill that is an entity or organization with significant experience in administrative processing of health care charges and claims.
Section 5(e)(I) through subsection (5)(e)(4) of the bill would establish the following functions of the contract with respect to each facility: detailed specification of existing processes that the contractor determines are relevant to the capability of the facility to recover or collect indebtedness from third-party payors; reengineering of the business processes mentioned above, including provisions for standardization application of such reengineered process throughout the facility; establish and implement a plan to transition from the business process identified to reengineered and standardized business as mentioned above; establishment of a database containing third-party payor information for veterans receiving health care and services.
Section 5(f) of the bill would require the Secretary of Veterans Affairs to ensure that a VHA employee is designated as a full-time project manager for the project and that the project manager's place of duty is one of the medical centers at which the project is conducted.
Section 5(g) of the bill would authorize the Secretary of Veterans Affairs to administer the demonstration project so that during the period of the project there would be no reduction in full-time equivalent employees (FTEE) attributable to the project at the VA medical centers where the project is conducted.
Section 5(h)(1) through subsection (h)(3) of the bill would require VA to provide regular reports to Congress on the status of project implementation, to include any changes or modifications to the contract.
Section 5(i) through subsection (i)(2) of the bill would require the Comptroller General to review the demonstration project on an ongoing basis, and require the Comptroller General to submit to Congress a report of its findings and recommendations after operation of the demonstration project for a period of 1 year and after the operations of the demonstration project for a period of 2 years.
Section 5(j) of the bill would authorize to be appropriated to the Secretary of Veterans Affairs a sum of $10 million.
Section 6(a)(1) of the bill would amend subchapter II of chapter 73 of title 38, United States Code, to add a new section 7329, to establish requirements for Parkinson's Disease Research, Education, and Clinical Centers (PADRECC).
New section 7329(a) of title 38, United States Code, would authorize the Secretary to designate six VA health-care facilities as the locations for PADRECC activities, upon recommendation of the Under Secretary for Health and subject to appropriations.
New section 7329(b) of title 38, United States Code, would provide that each PADRECC in operation as of January 1, 2005, would be designated unless the Secretary determines that such facility has not demonstrated effectiveness in carrying out the established purposes or the potential to carry out such purposes in the future.
New section 7329(c) of title 38, United States Code, would require that a healthcare facility designated as a location for a Center meet the highest competitive standards of scientific and clinical merit as determined by the peer review panel established under new section 7329(d), title 38, United States Code, and be determined by the Secretary to meet criteria established under this subsection to develop the necessary capacity to function as a center of excellence in research, education, diagnosis and treatment of neurodegenerative disorders, including Parkinson's disease.
New section 7329(d) of title 38, United States Code, would require the Secretary to establish an expert panel to assess the scientific and clinical merit of proposals that are submitted to the Secretary for the establishment of new centers under new section 7329 of title 38, United States Code.
New section 7329(e) of title 38, United States Code, would require the Secretary to assure that each facility is receiving adequate funding to function in the areas of Parkinson's disease research, education, and clinical activities before providing funds for operating a center at a new facility location other than centers in operation before January I, 2005.
New section 7329(f) of title 38, United States Code, would authorize such sums as may be necessary to be appropriated for the support of the PADRECCs and would require the Under Secretary to allocate funds generally appropriated for medical care and medical research to the PADRECCs as appropriate.
New section 7329(g) of title 38, United States Code, would provide that clinical and scientific activities at each PADRECC shall be eligible to compete for awards of funds from the Department's appropriated medical and prosthetics research account, insofar as funds are awarded for research in Parkinson's disease and other movement disorders.
Section 6(a)(2) of the bill would amend the table of sections of chapter 73, title 38, United States Code, to add the following new item: `7329. Parkinson's disease research, education, and clinical centers.'.
Section 6(b) of the bill would require new section 7329 to take effect on October 1, 2005.
DOLLAR PER DOLLAR BREAKDOWN OF INCREASES
(a) Veterans' Disability Compensation- Section 1114 of title 38, United States Code, is amended--
(1) in subsection (a), by striking `$106' and inserting `$108';
(2) in subsection (b), by striking `$205' and inserting `$210';
(3) in subsection (c), by striking `$316' and inserting `$324';
(4) in subsection (d), by striking `$454' and inserting `$466';
(5) in subsection (e), by striking `$646' and inserting `$663';
(6) in subsection (f), by striking `$817' and inserting `$839';
(7) in subsection (g), by striking `$1,029' and inserting `$1,056';
(8) in subsection (h), by striking `$1,195' and inserting `$1,227';
(9) in subsection (i), by striking `$1,344' and inserting `$1,380';
(10) in subsection (j), by striking `$2,239' and inserting `$2,299';
(11) in subsection (k)--
(A) by striking `$82' both places it appears and inserting `$84'; and
(B) by striking `$2,785' and `$3,907' and inserting `$2,860' and `$4,012', respectively;
(12) in subsection (l), by striking `$2,785' and inserting `$2,860';
(13) in subsection (m), by striking `$3,073' and inserting `$3,155';
(14) in subsection (n), by striking `$3,496' and inserting `$3,590';
(15) in subsections (o) and (p), by striking `$3,907' each place it appears and inserting `$4,012';
(16) in subsection (r), by striking `$1,677' and `$2,497' and inserting `$1,722' and `$2,564', respectively; and
(17) in subsection (s), by striking `$2,506' and inserting `$2,573'.
(b) Additional Compensation for Dependents- Section 1115(1) of such title is amended--
(1) in subparagraph (A), by striking `$127' and inserting `$130';
(2) in subparagraph (B), by striking `$219' and `$65' and inserting `$224' and `$66', respectively;
(3) in subparagraph (C), by striking `$86' and `$65' and inserting `$88' and `$66', respectively;
(4) in subparagraph (D), by striking `$103' and inserting `$105';
(5) in subparagraph (E), by striking `$241'and inserting `$247'; and
(6) in subparagraph (F), by striking `$202' and inserting `$207'.
(c) Clothing Allowance for Certain Disabled Veterans- Section 1162 of such title is amended by striking `$600' and inserting `$616'.
(d) Dependency and Indemnity Compensation for Surviving Spouses-
(1) NEW LAW DIC- Section 1311(a) of such title is amended--
(A) in paragraph (1), by striking `$967' and inserting `$993'; and
(B) in paragraph (2), by striking `$208' and inserting `$213'.
(2) OLD LAW DIC- The table in paragraph (3) of such section is amended to read as follows:
-----------------------------------------------
`Pay grade Monthly rate Pay grade Monthly rate
-----------------------------------------------
E-1 $993 W-4 $1,188
E-2 $993 O-1 $1,049
E-3 $993 O-2 $1,084
E-4 $993 O-3 $1,160
E-5 $993 O-4 $1,227
E-6 $993 O-5 $1,351
E-7 $1,027 O-6 $1,523
E-8 $1,084 O-7 $1,645
E-9 $1,1311 O-8 $1,805
W-1 $1,049 O-9 $1,931
W-2 $1,091 O-10 $2,1182
W-3 $1,123
-----------------------------------------------
(3) ADDITIONAL DIC FOR CHILDREN OR DISABILITY- Section 1311 of such title is amended--
(A) in subsection (b), by striking `$241' and inserting `$247';
(B) in subsection (c), by striking `$241' and inserting `$247'; and
(C) in subsection (d), by striking `$115' and inserting `$118'.
(e) Dependency and Indemnity Compensation for Children-
(1) DIC WHEN NO SURVIVING SPOUSE- Section 1313(a) of such title is amended--
(A) in paragraph (1), by striking `$410' and inserting `$421';
(B) in paragraph (2), by striking `$590' and inserting `$605';
(C) in paragraph (3), by striking `$767' and inserting `$787'; and
(D) in paragraph (4), by striking `$767' and `$148' and inserting `$787' and `$151', respectively.
(2) SUPPLEMENTAL DIC FOR CERTAIN CHILDREN- Section 1314 of such title is amended--
(A) in subsection (a), by striking `$241' and inserting `$247';
(B) in subsection (b), by striking `$410' and inserting `$421'; and
(C) in subsection (c), by striking `$205' and inserting `$210'.
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