Key Takeaways
- •Douglas Allen Collins (Secretary, Department of Veterans Affairs) announced a successful Electronic Health Record Modernization rollout in Michigan and a reduction in the claims backlog from 260,000 to 77,000.
- •Collins defended the RISE reorganization plan to consolidate administrative functions, asserting that VA facilities currently maintain higher safety and quality ratings than most private hospital systems.
- •Sen. Jon Ossoff (D-GA) pressed Collins on the department's failure to provide legally required impact analyses before closing or scaling back services at clinics in four different states.
- •Republicans prioritized rural infrastructure and physician pay cap waivers, while Democrats criticized the 17.2 percent funding increase for privatized care versus only 2 percent for direct care.
- •The subcommittee will evaluate the $488.2 billion request to ensure it adequately addresses clinical staffing shortages and aging infrastructure while transitioning to a more efficient administrative reporting structure.
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Hearing Analysis
Overview
This hearing focused on the Department of Veterans Affairs (VA) budget request for fiscal year 2027 and advance appropriations for fiscal year 2028. The discussion centered on the department's massive $488.2 billion funding requirement, the ongoing implementation of the PACT Act, and a major organizational restructuring effort known as Restructure for Impact and Sustainability (RISE). Key priorities included the modernization of electronic health records, addressing veteran suicide and homelessness, and balancing the delivery of direct VA healthcare against the increasing reliance on outsourced community care.
Key Testimony & Policy
Secretary Douglas Allen Collins testified that the $488.2 billion request represents a 7.7 percent increase over fiscal year 2026 enacted levels. This total includes $144.7 billion in discretionary funds and $337.7 billion in mandatory funds, with $54.6 billion specifically allocated to the Toxic Exposure Fund to support requirements under the PACT Act. Secretary Collins emphasized that the department is currently providing more care and benefits to more veterans than ever before, noting that the Veterans Benefits Administration (VBA) successfully reduced the claims backlog from 260,000 to 77,000 in just over a year.
A significant portion of the testimony focused on the Electronic Health Record Modernization (EHRM) program. Following a period of instability, Secretary Collins highlighted a successful recent rollout in Michigan, which processed 26,000 patients without major incident. The budget requests $4.2 billion for EHRM, an $840 million increase intended to accelerate deployment to Ohio, Indianapolis, and Alaska. Additionally, the Secretary defended the RISE proposal, which aims to consolidate administrative functions above the clinic level into five regions to empower local hospital directors and reduce bureaucratic delays in hiring and procurement.
The hearing also addressed the department’s $10.4 billion request for major and minor construction, including $5 billion for deferred maintenance. Policy discussions touched on the Elizabeth Dole Act, specifically the limitations of a provision allowing waivers for physician pay caps. Secretary Collins argued that the current cap, limited to 300 doctors, creates pay inequities among clinical staff and suggested a more categorical approach to raising pay for specialists to remain competitive with the private sector.
Notable Exchanges & Partisan Dynamics
Sen. Jon Ossoff (D-GA) expressed concern over a "huge imbalance" in the budget request, noting a 17.2 percent increase for outsourced community care while direct care accounts increased by only 2 percent. He questioned why the VA was requesting fewer physicians and nurses for FY 2027 despite growing demand. Secretary Collins responded that while staffing increased by 14 percent since 2019, patient interactions only grew by 6 percent, suggesting a need to "right-size" the workforce based on actual clinical outcomes rather than raw headcount.
Sen. Ossoff (D-GA) and Sen. Kirsten E. Gillibrand (D-NY) also pressed the Secretary on the planned closure or "relocation" of clinics in Tennessee, New York, Maine, and Arkansas. Sen. Ossoff (D-GA) reminded the Secretary that federal law requires a formal analysis of the impact on veterans before any closures occur. Secretary Collins maintained that these were underperforming contract clinics where veterans were receiving substandard care, and pledged that no veteran would lose continuity of care.
Sen. Susan M. Collins (R-ME) highlighted the needs of the Togus VA Medical Center, the nation's oldest VA facility, and advocated for the expansion of highly rural transportation grants. She noted that current eligibility rules based on population density exclude many rural veterans who lack transportation to medical appointments. Sen. Lisa Murkowski (R-AK) discussed the unique challenges of Alaska, where 83 percent of communities are off the road system, and received assurances that the RISE reorganization would include a dedicated administrator for the state.
Organizations Mentioned
- Department of Veterans Affairs (VA): The primary subject of the hearing regarding its $488.2 billion budget request and organizational restructuring. - National Cemetery Administration (NCA): Discussed regarding a $500 million request to expand four national cemeteries and the success of the Fargo National Veterans Cemetery. - Veterans Health Administration (VHA): Mentioned in the context of the RISE reorganization and the balance between direct clinical care and community-based services. - Veterans Benefits Administration (VBA): Praised for significantly reducing the disability claims backlog and simplifying the benefits application process. - Office of Inspector General (OIG): Cited by senators regarding reports on severe occupational shortages across various medical centers. - Centers for Medicare & Medicaid Services (CMS): Mentioned as a benchmark for hospital quality ratings, with the Secretary noting VA facilities often outperform private sector averages. - United States Postal Service (USPS): Criticized by Sen. Mike Rounds (R-SD) for poor mail service in South Dakota that delays veteran appointment notifications and prescriptions. - Disabled American Veterans (DAV): Recognized as a critical partner in providing volunteer drivers for rural veterans, though the Secretary noted the volunteer pool is aging.
What's Next
The subcommittee requested that the VA provide the legally mandated impact analysis regarding the closure of clinics in New York, Tennessee, Maine, and Arkansas. The department expects to roll out a simplified, three-to-four-page disability benefits application by July 2026. Future EHRM deployments are scheduled for Ohio and Indianapolis, with Alaska expected to go live by the fall of 2026. Additionally, Secretary Collins expressed a desire to work with the authorizing committees to reform physician pay caps beyond the current 300-doctor limit established in the Elizabeth Dole Act.
Transcript
Good morning. The subcommittee will come to order. Mr. Secretary, we are really thankful that you're here today to discuss the fiscal year 2027 budget and fiscal year 2028 advance appropriations request for the Department of Veterans Affairs. I would also like to recognize the VA Chief Financial Officer, Mr. Richard Topping, who is here to provide the technical budget support if necessary. He's going to answer the really difficult questions. And it's not hard to understand why that might be necessary in the sense that the budget request is a total of $488.2 billion in fiscal year 2027 for the Department of Veterans Affairs, representing a 7.7 percent increase over fiscal year 2026 enacted levels. This includes $144.7 billion in discretionary funds, $337.7 billion in mandatory funds to include $54.6 billion for the Toxic Exposure Fund and advance appropriations for fiscal year 2028. Landmark pieces of legislation like the PACT Act and the MISSION Act have reshaped access for veterans to healthcare. The creation of these programs has ensured more veterans are eligible to receive care and have access to the resources needed to exercise these earned benefits. This subcommittee has worked tirelessly to ensure that the department has the resources it needs to deliver world-class healthcare to those that have served. The budget request also includes significant investment in systems modernization to support veterans who use VA services and the dedicated workforce that is essential to providing a positive veterans experience. For instance, this year's budget request includes $4.2 billion, an $840 million increase to support the continued deployment acceleration of electronic medical record. The VA faced significant challenges during the early rollout stages. However, VA's current leadership has adapted and earlier this month delivered what seems to be a very successful rollout in Michigan. Secretary Collins, we look forward to an update on this program and hope we are on track to make health records boring again. Mr. Secretary, your RISE proposal would consolidate administrative functions in the Veterans Health Administration above the clinic level. This subcommittee is interested in an update on the proposal, the expected efficiency you hope to gain, what risk the VA is evaluating as it considers the final proposal, and any budget implications. In addition to updates on those big picture items, we also look forward to hearing details about the department's request for mental health services, including efforts to prevent veteran suicide, initiatives to prevent veteran homelessness, resources dedicated to care for women veterans, and efforts to improve care for our rural veterans. I would be remiss to not publicly acknowledge the retirement of long-time clerk of this subcommittee. For a dozen years, Patrick Magnuson has worked tirelessly to ensure adequate funding for VA and military construction through some of the most challenging and dynamic years in our nation's history. Thank you, Patrick, and Godspeed in your retirement. [Applause.] I understand you got a bunch of medals last night. I'm surprised you're not wearing them. [Laughter.] We do appreciate your, appreciate all of your hard work. Before we hear from the secretary, I want to advise the subcommittee that Secretary Collins has a family matter to attend to immediately after the hearing. He's been gracious enough to go ahead and come and testify regardless of this, but we will aim to finish no later than noon to allow him to catch his flight. With that, I'd like to recognize my colleague and friend and ranking member, Senator Ossoff, for any opening comments that he may have.
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