You at this point. Mr. Kaufman. Thank you, mr. Chairman. Mr. Secretary, thank you for your service in the United States army. Although the president id like to think the president chose you in recognition. In proctor and gamble. And we had in this committee, my predecessor on the over sight subcommittee had requested a study of Major Construction products and that was done and published in april of 2013. At that time, it said there were four ongoing projects one in las vegas orlando, new orleans aurora colorado listed as denver. That the average 366 Million Dollars over budget. And that they were each on average about three years behind schedule. We clearly knew there was a big problem. If you and proctor and gamble were to step in and you had an apartment that was that dysfunctional, you would have fired the management team. Straightened it out, spotted off when i look at the v. A. , your core competency is benefits to veterans, health care being a significant part of that. Construction is not a core mission. I would love it if you would reexamine extricating the the a from being involved in construction products. I know we have legislation today that would reduce the amount. I talked to gibson about this, he was at the 250 million figure that would be outsourced to the army corps of engineers. I think we have legislation today of 100 million. One of the problems is that the different investigation boards were supposed to be finished in june. They will not be done in june. They may be done in september. But i just think there is a real concern. We held a the subcommittee Oversight Committee held an investigative hearing in denver on the aurora projects at the state capital. I think it was last year, the chairman was there. Mr. Lamborn was there they stuck to the 604 million figure. That the project could be built for that. Lost in late 2014 on every single count was that this was a plan that could not be built for 604 million. The army corps of engineers is taking over the project. Were talking about shortfall of the day we are talking about a halffinish hospital. Hopefully a little over halffinish. It will cost another 625 million i believe is the figure. Which is more than the initial projected amount to finish. So, i would is really ask you, i mean as a veteran, is not the core competency of your organization. Focus on health care benefits, and to leave as many other agencies in the federal government they do these Major Construction projects. I love your response. Punishment kaufman, we agree in part with you. The only difference between your point of view and hours was what that right level was 250 or 100. I do want you to know that weve taken a lot of steps to improve our construction process. We are doing integrated master planning requiring Major Construction has at least 35 plans designs made prior to scheduling. We are doing very deliberate requirements to control process that we are instituting a project review board, using a project management system, establishing a v8 activation office. I could go on. These are best practices from the private sector. At the same time, we have also met repeatedly with the association of general contractors. They had boycotted the v. A. We met with them, secretary gibson i did, we took them through all the changes. We asked them for their point of view, if they are missing anything. Theyre helping us redesign. Wherever we end up with legislation, what i can assure you is we are now operating against a new and improved process. What happened in denver, which is really regrettable and awful should never happened. It will never happen again. We have been through this, wound up in the same position. I think 100 million ceiling will be 300 million ceiling, i dont have confidence it will change. I just want to be quick. As we move forward with this construction discussion, when you say General Service or army corps of engineers i know no one likes the word. When i look at the corps of engineers, i know what happened with katrina and that project. We need accountability, i dont care what agency is handling it. I yield back. Thank you, mr. Chairman. Mr. Secretary, you are introducing in my view a new way of talking about contract care with nonv. A. Providers not salaried within the ba. Is that correct . Yes, sir. You are calling this care in the community. On a bipartisan basis we are encouraging cooperating more with the community nonv. A. Providers. I think you are trying to change the culture, so that there is not this enmity not a conspiracy to disappear. That is where i am reading. That is why we changed the name to care in the community. We in the v. A. Own that care even though it is in the community. I have seen others within the the a health testify before the committee the concerns that you do own the care, you are responsible for it there need to be ways in which the contractor and the providers are also accountable. That that care is accountable. I have raise a number of times this issue of health records. You have centralized the billing and payment from the regional areas. You are saying in your testimony from what ive heard, that centralization had a lot to do with driving the shortfall. The misunderstanding that arose from what you knew from the regional billing to the centralized billing. Is that somewhat accurate . The requirement in the choice act to centralize the accounting and billing and administration of the choice act helped make it more obscure for us to figure out what was going on. So when you were in february seeing a discrepancy between the authorizations and payouts, you are not able to figure that out. This centralization of stored was obscuring your cash position . Yes sir, a new practice. My concern, is there any feeling that the centralized authorization has resulted in inappropriate authorizations . The regional offices had problems with records that were paper records being passed back and forth. There were complaints that even registered mail was not being acknowledged. I envisioned stacks and stacks of records that had to be scanned then, there were delays in payments to doctors because of that. Is the centralization improved at all . From what we know, the centralization not just of the choice act but across the payment function of the v. A. Has accelerated our ability to pay bills and you are not worried about the excel or is acceleration, the accountability centralization usually leads to better security. The care is still determined at a local facility level, a clinician seeing a patient, puts in that request. And the authorization is entered at a local level by the Business Office people at that facility into the facility records information, it is transferred to a third party. There is a great deal of umbrage, what is information we have to act on immediately, but the overall narrative i am getting though is more money is being pushed out the door more appropriately. Many more veterans are being served, more are finding out about the superior service. Meaning that you use the example of the Knee Replacement there is no copay. It is a rational decision that a lot of veterans who qualify for both programs are choosing to come to the v. A. , that accounts for, can you give me that number again . The number coming to the v. A. That you had before . It is over 2 million. But what we are talking about is 7 million more appointments in the last year i was looking at the increase. 4. 5 million more in Community Care, 2. 5 million in v. A. Care. This was of stored by the change in the choice act and how you do the accounting. I dont like the short notices but we have to act quickly. More importantly, we serve the veterans. The good news is we are serving more and more. And lets keep doing it. Thank you, mr. Chairman. I want to thank you gentlemen both for being here. He spoke today about the increase in productivity, and i think the number you said is every 1 of increase is 1. 4 billion . Is that a number . I may have confused you. That are ands 34 of their care from the v. A. Any increase of one percentage point of that leads to a 1. 5 million increase in budget need. That is different than productivity. With the increase in productivity the v. A. Is different from private practice. When you increase productivity, that is not money coming in. That money going out in most cases, there may be some silos there. Whereas on the flipside, an increase in productivity has more coming in. That is the reality we have to face in this, we ask for more productivity. One question i have, is that increase within the same amount of hours, if you will . In other words, if i increase my productivity because i work saturdays and sundays, that is different because did i increase in the same amount of time . Right, also what we worked at was productivity, disregarding how many more physicians we brought in. As we first shared on the 8. 5 increase in productivity, jim can talk about this more. Jim we have done it, increase productivity a number of ways. One of them is what you suggested. We have evening clinics, weve had a weekend clinics. And particularly those evening clinics have been very popular with younger female veterans, in particular. One of the things we need to focus, again the comparison with private facte practice, how do we increase in the same amount of time . We talked about poor setups and clinics, one room when you need four. The increase in productivity has to be looked at realistically im as well. These are good things to add but if we are not giving the same amount of time, we are hurting ourselves. Jim we are. It is a little bit of both. Increasing productivity during the normal hours, as well as the extended hours. One of our biggest hurdles to improving access is the physical infrastructure we have. If we can use that Physical Plant infrastructure more efficiently by having weekend hours, everybody benefits. I have frustration my first came here, before phoenix broke and everything else. I will go into clinics with you. I will go into the operating room with you and tell you why youre not getting more. I think we still need to do that. We have doctors on this committee that would be willing to partake in that process. We talked before about thirdparty payments, people coming to the v. A. I would love to see them as centers of excellence, they dont want to go anywhere else. People from the outside would prefer to go to the v. A. Because of the centers of excellence. We do have veterans that come in and i have other insurance. And i am not sure how this is taking place in a what percentage we are capturing, but maybe we should put that out to people who do claims like that all the time. Take it out and increase the revenue to the v. A. These are things we can do, and as we see more people wanting to go to the ba, especially if they have other insurance collections are up, but we are and value waiting a lot of our Business Offices practices. One of the things were looking at is whether collections is something that should be out i suggest we take bids on what that would look like. We talked about this before, at some point, we have to be able to know what we spend her relative value unit. If we do not know that, we do not know what the cost is compared to when we pay per rvu outside the walls. I do agree with you, care in the community. I agree with that, rather than nonv. A. Care. If i was still in practice seeing veterans, i would like to say i am a v. A. Provider. We have cost data and we should discuss that with you. I have asked about it several times. Secretary gibson said we cannot do that. Im talking everything, not just what you are paying the doctor. I am talking Physical Plant, staff, supplies, everything involved. That would be very important to the entire committee. I think the secretary would understand it is not just paper. Thank you both for being here, i appreciate it. Thank you to the chairman and Ranking Member for holding this hearing. When brave young men and Women Volunteer to serve in the armed forces, they swear to support and defend the constitution of the United States against all enemies foreign and domestic. They make a promise to all of us to keep us safe and protect our way of life. In recognition, we promise to care for them when they return. So veterans have served and sacrificed to uphold their end of the bargain, we must do whatever it takes to uphold our end. Many veterans in my district who are excluded from the strict requirements and the Choice Program are unable to receive care in the community, for which they are statutorily authorized. The v. A. Has already gone delaying elective care due to the shortfall. As a physician, i can tell you that even if a condition does not meet the urgent working standard for nonchoice purchased care, it may still be painful and very urgent to the patient. Veterans being deprived of health care, they have earned whether due to unforeseen increases in cost or demand, budgetary mismanagement at the v. A. , congressional dysfunction or any other problem outside the control is completely unacceptable. It is absolutely critical we stabilize the immediate problem and resume serving veterans who need Community Care at full capacity to prevent any furloughs or facility closures and reform whatever structure systems that have failed. You are actively searching for new ways to be able to predict the way future needs of veterans this is a problem due to the success of have an 7 million more appointments. As a physician and Public Health expert, i understand that you cannot predict to the t the health needs of a growing population. Of a system in transition that needs to take risks to identify best practices and understand that some of these practices may fail therefore we need to learn from those lessons. In order to improve. And you mentioned before the term managed to budget, which we have done in the past. Now you are managing to the requirement. But i want to warn you that the one requirement you are managing to is only one of the larger piece and complex. Whether a veteran gets seen within 30 days is not the same whether they get the quality care, the respect they need, and the efficiency of care when they are being seen. Thankfully, and a lot of our v. A. s veterans rate their care very highly. We need to manage the Veterans Health care needs with efficiency, to the point of measuring how much it costs per rvu. And the Percentage Rate of cost due to the amount due to the increase in amount, that reflects on the efficiency of the v. A. So i really want to stress those points. My concern here is this claim we are shutting down facilities that the way it is being presented you are holding them hostage because youre not getting your way. Absolutely, i know thee sentiment is not true. Can you explain more what is going on in denver. How this is affecting the care . Of our veterans and receiving that care . Two, one of the concerns is that if you take this flexibility which i think is a great idea, if you take money from one pot that you already have for another, there is going to be takeaway. Is this a surplus fund, what is the takeaway that is at risk here . The choice care act itself that Congress Approved was to provide care in the community for veterans. There is a 10 billion appropriation that is to expire in three years. What we are talking about is care in the community largely there is another half 1 million for hepatitis c drugs. So we would be using the money for what it was set aside or, care in the community. In that way, we are using the money for what it was set aside for it is not a new appropriation. Secondly, the issue you raise about denver, because we have an influx of money between accounts, the accounts it came from this fiscal year for denver do not affect the health care of veterans and other locations. So in that sense, denver has no impact. Now, as i said in my prepared remarks, we have to get denver the denver medical complex we have to get that in the 2016 budget. I am concerned about that since the original house budget cut our construction by 50 . Ok, thank you. I yield back. Mr. Costello. I would certainly like to associate my comments with those of the congress andwomen rice and ruiz, what i am hearing in my district i want to assure those veterans in Montgomery County that i will work at 100 and110 to make sure there is no on intrepid care. I am very confident in the leadership, the ranking minority member brown we are going to resolve this. So that there is in no way a diminishment or any interruption in the care for veterans. But i do also want to focus on a couple of things that are either in your written testimony or that i have learned that are very frustrating for me. And i want to start with the issue of technology, and i want to talk about the use of the term flexibility. You received 475 million for the i. T. System, the report comes out and says there is essentially nothing to show for it. In 2010, the vehicle the plug on more money. You were not around then, i was not around then. It is very clear that in the past, the v. A. Has identified a need for updated technological capacity, as well as congress being willing to invest in that. Part i feel of your explanation in coming here with this request relates to the Financial Systems that are in place as being attributable to why you have a budget shortfall. I dont want to put words in your mouth, but i believe that is what you said thus far. But on the issue of flexibility you indicate and i would just quote you on page three, over 70 line items in the budget are inflexible. Freed up, they would help us give veterans what they deserve. The 70 line items. Are you talking about the 170 billion plus budget. . With the choice act, we have given the veteran a choice whether they get their care within the v. A. Or outside the v. A. Very simplistically, those two budgets cannot be comingled. So i have to predict how that veteran makes that choice. Or come back to you each week i get where he is going you dont always know what the medical need is going to be. I understand there is going to be flexibility with the budget to appropriately address the needs. But i also feel that in a budget of 170 billion, and that is itemized among 70 line items that isnt really that many line items. And in terms of flexibility, the more money we just say, do what you like with it, the more i fear we will get into the issue of 475 million disappearing into an i. T. B