For the Veteran

Various information for Veterans different government programs available to assist Veterans in starting a business. Veterans benefits programs. This is not a political blog but we will speak our minds about current treatment of Veterans returning from the Gulf.

Thursday, May 11, 2006

Veterans health care reform act of 1996

Assessing the Impact of Public Law 104-262,

the “Veterans’ Health Care Eligibility Reform Act of 1996”





The House Committee on Veterans’ Affairs has recently been criticized on the passage of PL 104-262 as the cause of veterans’ growth in demand consequent budget “over-runs”. In response, some members have asked for more information about this legislation. Below are some facts about the 1996 law.



1. First established in 1958, VA eligibility for medical care reflected the state of health care delivery at that time, centered around hospital services. Modern health care delivery is focused on prescription drugs, outpatient care and care in home or community-based settings.

2. Veterans were eligible or entitled for different services according to their basis for eligibility and the condition for which treatment was required. For example, if a veteran required care for a service-connected condition, he could receive almost any kind of care, but that same veteran might not be able to receive any care for a non-service connected condition. This often caused inappropriate patterns of health care delivery as VA sought to provide care within the context of the law (see details about eligibility below)

a. VA questioned its authority to discharge some veterans treated for non-service-connected conditions who required prosthetics “post-hospitalization”. For example, if a veteran was being treated for a broken hip, it was questionable if VA could discharge these veterans with a cane or walker. As a result, many times veterans in these types of situations had artificially prolonged hospitalizations.

b. VA could not provide ongoing outpatient care or prescription drugs to many of its users in order to manage veterans’ chronic conditions, such as hypertension, diabetes, or schizophrenia. Instead, these veterans’ conditions often had to reach a crisis point at which time VA could admit them to a hospital bed for treatment. The need for such care could have been pre-empted by routine care management.

c. VA was not authorized to offer preventive services such as influenza shots or routine primary care to monitor blood pressure, cholesterol levels, or weight. It did not offer routine counseling on smoking cessation or substance use disorders.

3. The eligibility reform act (PL 104-262) allowed VA to offer hospital or medical services to all veterans. It also required VA to establish an enrollment process to manage demand. Between 1997 and January 17, 2003, VA elected to enroll all eligible veterans for health care services. On January 17, the Secretary cut of eligibility to Priority 8 (higher income) veterans who had never previously enrolled.

4. The Committee report accompanying H.R. 3118 notes that GAO believed VA was engaging in some of these types of care, even before reform, without clear authority to do so. A VA Survey reached that same conclusion.

5. The same report indicated that, while it doubted only eligibility reform VA could produce “new demand” for services, VA would create new demand if it opened new “points of access”. It has created at least 800 new community based outpatient clinics each one attracting an average of about 60% new users since that time. VA now treats twice as many “users” (5 million in 2003) as it had in 1996 (about 2.9 million).

6. While the law was silent on providing benefits such as prescription drugs, prosthetics, and sensory aids (such as eyeglasses and hearing aids), VA elected to include them in a standard “basic benefits” package. These services drew many new veterans to VA. VA estimates in 2002, about 900,000 veterans probably used the system for access to inexpensive prescription drugs.

7. In the past, VA has rewarded its managers for increasing the numbers of veterans enrolled for care. Incentives to increase third party collections also encouraged system directors to recruit “wealthier” insured veterans.

8. VA’s new funding allocation system, required under a contemporary (FY 1997) appropriations act, does encourage managers to enroll “high priority veterans”. It funds networks according to the number of Priority 1-6 veterans VA served and the types of services these veterans required. This system is known as the Veterans Equitable Resource Allocation (VERA) system.



In summary, eligibility reform upheld its promise to allow VA to offer the “right care, at the right place, at the right time”. In terms of treating individual veterans, these changes inarguably saved VA valuable scarce resources. However, in implementing the law, VA chose to not only restructure its outdated service delivery, but to add outpatient clinics, provide incentives to managers to recruit new veteran patients and to expand access to additional benefits which, in turn, created new demand from veterans. These changes also, in most cases, improved the quality, cost-effectiveness, and appropriateness of VA health care services. As a result, veterans have been drawn to a revitalized health care system that is more responsive to their basic health care needs.





Eligibility Prior to P.L. 104-262



a. Veterans who required care for service-connected conditions and veterans who had service-connected conditions rated 50% or greater for any condition; whose discharge was for a disability incurred or aggravated in the line of duty; who were in receipt of 1151 compensation; former prisoners of war; veterans of the Mexican border war or WWI; veterans were exposed to toxic substances or radiation (for resultant conditions); and who were under the VA-determined means test were eligible for hospital services were entitled to hospital care and eligible for nursing home care

b. Medical services, except for service-connected veterans with conditions rated over 50% and care for service-connected conditions, were available only to “obviate the need” for hospitalization, or for pre- or post-hospitalization care.

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