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“Hearing on Pending Legislation”

House Veterans Affairs Committee, Oversight and Investigations Subcommittee Hearing

June 11, 2025 (recording here)

HEARING INFORMATION

Witnesses & Written Testimony (linked) (Panel One):

• Ms. Laura Duke: Chief Financial Officer, Veterans Health Administration, U.S. Department of Veterans Affairs

• Dr. Jennifer McDonald: Director, Community Care Division, Office of Audits and Evaluations, Office of the Inspector General, U.S. Department of Veterans Affairs

• Dr. Toni Phillips: Chief Nurse Informatics Officer, Electronic Health Record Management Information Office, U.S. Department of Veterans Affairs

• Ms. Cherri Waters: Acting Deputy Chief Information Officer; Executive Director, Health Portfolio, Office of Information and Technology, U.S. Department of Veterans Affairs

Witnesses & Written Testimony (linked) (Panel Two):

• Mr. Cody Carbone: Chief Executive Officer, The Digital Chamber

• Mr. Cole T. Lyle: Director of the Veterans Affairs & Rehabilitation (VA&R) Division, The American Legion

• Dr. Edward O'Bryan: Chief, Veterans and Corrections ICCE, Associate Professor of Medicine Medical, University of South Carolina

Keywords mentioned:

• VA modernization, community care scheduling, fraud detection, electronic health records, inventory management, scams, accountability measures, technology modernization, oversight

IN THEIR WORDS

OPENING STATEMENTS FROM THE SUBCOMMITTEE

• Chairwoman Jen Kiggans outlined nine bills focused on VA technology, supply chain management, fraud prevention, debt collection, and community care scheduling. She explained that stakeholder input would guide which proposals ultimately advanced and briefly summarized each measure’s purpose and sponsor. She then emphasized that modernizing VA systems was essential to better service delivery.

• Ranking Member Delia Ramirez voiced disappointment that the agenda featured eight Republican bills and only one Democratic bill, which she felt broke with the Committee’s bipartisan tradition. She highlighted several excluded Democratic proposals aimed at workforce protections, data privacy, and collective-bargaining rights, and she praised Rep. Adam Gray’s STRIVE Act (H.R. 3812) for shielding veterans from outdated co-pay bills caused by VA errors. The Ranking Member argued that true modernization required parallel investments in staffing and resources and warned that current workforce cuts risked pushing the VA toward privatization. She urged revisions before the measures moved to the full Committee.

SUMMARY OF KEY POINTS (PANEL ONE)

• Ms. Cherri Waters testified that the VA generally supported the Veterans Scam And Fraud Evasion Act (H.R. 1663), the Veterans Community Care Scheduling Improvement Act (H.R. 3482), the VA Hospital Inventory Management System Authorization Act (H.R. 3494), and a bill focused on continued EHR modernization, all contingent on technical amendments and available appropriations. She cautioned that H.R. 3482 might duplicate existing efforts and restrict flexibility, and she offered to collaborate on adjustments that would target high-risk claims and protect veterans’ data. Ms. Waters stressed that human-centered design and process fixes were as crucial as new technology. She reiterated the VA’s commitment to combat fraud, modernize systems, and improve supply chain efficiency.

• Dr. Jennifer McDonald explained that the OIG had paused the VA’s Program Integrity Tool (PIT) in February 2023 after data-quality problems undermined its ability to detect duplicate payments and other fraud in community care claims. She reported that the pause delayed revenue collection of more than $660 million and created a significant billing backlog that could burden veterans with year-old co-pays. Dr. McDonald urged the VA to supply adequate staff and resources to clear the backlog and resume full fraud-detection functions. She pledged continued OIG oversight of all VA IT modernization projects to ensure they met cost, schedule, and performance goals while safeguarding veterans’ benefits.

• Chairwoman Kiggans asked how a modern, unified hospital-inventory system would strengthen oversight. Ms. Waters replied that a single platform would give enterprise-wide visibility into supplies and allow proactive, resource-efficient management. She went on to say that three disparate systems, one with many local instances, made enterprise reporting difficult, but a replacement effort was already underway.

• The Chairwoman asked what standards and integration plans the VA would use. Ms. Waters answered that a dynamic requirements set would guide procurement of one end-to-end system. She stated that all required users would be trained, though human-centered design should minimize training needs.

• Chairwoman Kiggans then inquired about a new anti-fraud IT system and how it would protect older veterans from scammers. Ms. Waters said that the VA supported H.R. 1663, noted that a V-SAFE officer had been in place since 2023, and urged codifying that post.

• Chairwoman Kiggans queried how political appointees would be held accountable through performance plans. Ms. Waters responded that new performance-plan changes focused on accountability.

• Finally, the Chairwoman asked whether OIG investigations had continued after the suspects left the VA. Dr. McDonald replied that colleagues were compiling that information for staff. She then claimed that an applicant’s prior investigations always aided program-level audits.

• Ranking Member Ramirez asked how staffing, clear processes, and reviews of past failures affected technology rollouts. Dr. McDonald answered that adequate resources, upfront needs assessments, guidance, training, and post-deployment evaluations were essential, citing repeated supply chain and Electronic Health Record Modernization (EHRM) setbacks when those elements were missing.

• Ranking Member Ramirez requested data on the number of staff involved in EHRM, supply chain, scheduling, and fraud monitoring who had left under the Deferred Resignation Program since January 2025. Ms. Waters and Dr. Toni Phillips each committed to supply it.

• The Ranking Member asked whether the VA had analyzed prior supply chain failures before pursuing H.R. 3494’s new pilot. Ms. Waters reported that an assessment had been completed and that the VA had adopted an incremental, disciplined approach to avoid past pitfalls. When pressed about whether outstanding challenges were resolved, she reiterated that phased deployment should mitigate risks.

• Ranking Member Ramirez asked how VA Secretary Doug Collins’s pending reorganization might affect modernization. Ms. Waters could not comment until the plan was released.

• Rep. Tom Barrett asked how the VA concluded that H.R. 1663’s savings would “more than pay” for the new IT system. Ms. Laura Duke replied that the estimate came from comparing private-sector recoupment rates, and the VA intended to fund the project through its revolving fund so recovered overpayments would offset costs.

• Rep. Barrett asked whether the VA wanted the authority to fine fraudulent providers. Ms. Duke responded that determining intent falls under the Department of Justice, while the VA would focus on detecting and recouping overpayments.

• Rep. Barrett asked for annual community care claim volume and fraud indicators. Dr. McDonald noted that during the PIT pause a single year saw about 40 million claims worth $28.6 billion, and investigators typically looked for duplicate payments and same-day, different-location billings to flag potential fraud.

• Rep. Adam Gray asked how often IT failures and administrative errors delayed veterans’ co-pays. Dr. McDonald cited the PIT pause (February 2023–August 2024) and said that revenue staff were still clearing the backlog.

• Rep. Gray asked whether shifting waiver authority to the VA under H.R. 3812 would improve consistency. Ms. Duke agreed that it could but cautioned that details must prevent unintended incentives.

• Rep. Gray then asked how many veterans were affected by delayed co-pays. Ms. Duke replied that totals would remain uncertain until all PIT data were processed. Rep. Gray referenced estimates exceeding 85,000 veterans, which Ms. Duke called consistent with preliminary figures.

SUMMARY OF KEY POINTS (PANEL TWO)

• Mr. Cole T. Lyle conveyed that the American Legion, speaking for 1.5 million members, supported nearly all of the bills under consideration because they advanced accountability, access, and dignity for veterans. He endorsed H.R. 984 to relieve veterans of debts caused by VA errors, H.R. 1663, and the Personnel Integrity in Veterans Affairs Act (H.R. 3185) to ensure employees under investigation could not evade consequences by retiring or transferring. He also backed H.R. 3482 and H.R. 3494 to streamline community-care scheduling and inventory management, underscoring that uniform staff training and clear wait-time comparisons are crucial. Mr. Lyle then supported the draft EHR modernization bill and legislation barring copay collections when the VA delays caused the debt.

• Mr. Cody Carbone testified that outdated 20th-century systems were hampering VA service delivery and that blockchain could provide secure, transparent, tamper-resistant infrastructure for claims, records, and payments. He explained that the Veterans Affairs Distributed Ledger Innovation Act (H.R. 3455) would prudently direct the VA to study high-value blockchain applications while assessing risks. Mr. Carbone stated that blockchain was not a cure-all but, if carefully implemented, could reduce paperwork, cut wait times, and improve accountability across multiple agencies. He pledged the Digital Chamber’s expertise to help the VA harness these tools.

• Dr. Edward O'Bryan recounted his clinical work with the Ralph H. Johnson VA Medical Center and underscored the importance of strong VA–academic-affiliate partnerships for timely, high-quality care. He said that H.R. 3482’s direct digital scheduling link between VA and community providers had already cut consult wait times at the Medical University of South Carolina (MUSC) by an average of 8.8 days across 26 specialties. Dr. O’Bryan observed that integrating community specialists into the VA platform improved transparency for patients and care teams and demonstrated the benefits of modern, streamlined systems. He urged passage of the modernization, accountability, and integrity measures before the Committee, stating that they would enhance veteran outcomes and pledging continued collaboration with lawmakers.

• Chairwoman Kiggans asked about a recent sophisticated scam targeting veterans. Mr. Lyle promised written specifics but cited Federal Trade Commission data showing a sharp 2024 rise in military community identity theft losses, which totaled $584 million. He also said he would look into whether veterans were receiving VA guidance on fraud prevention.

• The Chairwoman requested the American Legion’s view on how VA accountability measures would bolster trust. Mr. Lyle replied that veterans needed a VA transparently answerable for provider misconduct, and he would supply case examples.

• Chairwoman Kiggans asked what resources helped veterans avoid or recover from scams. Mr. Lyle said that thousands of American Legion service officers offered local education and assistance, including debt waiver help.

• Then, the Chairwoman asked if the OIG’s “unsustainable” supply chain finding concerned Mr. Lyle. He said yes, noting that H.R. 3494’s reforms could curb waste that had already delayed surgeries at facilities such as Houston.

• Ranking Member Ramirez asked how waiving certain co-pays might boost vulnerable veterans’ care utilization. Dr. O’Bryan replied that many veterans skipped prescriptions or specialty visits over cost, so eliminating co-pays would remove a barrier, especially since veterans already had “skin in the game” through service.

• The Ranking Member asked how H.R. 3812’s co-pay relief would aid American Legion members. Mr. Lyle said that it would improve care access in remote posts, citing Puerto Rico staffing drops, and prevent systemic billing issues.

• Ranking Remember Ramirez asked Mr. Lyle about preserving privacy protections in EHR legislation. Mr. Lyle stated that safeguarding PHI was vital because compromised data heightened scam risks and imposed financial and emotional stress on veterans.

• The Ranking Member questioned Dr. O’Bryan on provider engagement with VA scheduling. Dr. O’Bryan reported that MUSC had grown from about 100 to 415 providers sharing real-time schedules. To broaden outreach to community providers, he suggested appointing dedicated liaisons to large academic centers to raise awareness of the scheduling tool.

• Rep. Barrett asked what drove the nine-day wait time cut from External Provider Scheduling (EPS). Dr. O’Bryan credited close collaboration with VA nurses and expanded MUSC provider availability. He claimed that onboarding with the new digital process was vastly easier than the old fax-based system.

• Rep. Barrett asked whether the VA should track time and cost savings and set performance goals. Dr. O’Bryan answered yes to both.

• Rep. Barrett asked if direct-booking tools for VA schedulers would speed care. Mr. Lyle said yes, noting EPS’s success and underlining the need for provider training and better communication. Rep. Barrett shared his own scheduling frustrations as an example of current inefficiencies.

• Rep. Nancy Mace turned to Mr. Carbone, asking why Congress should explore blockchain for veteran services. Mr. Carbone explained that legacy systems were siloed and fragile, while blockchain offered a unified, auditable ledger that cut paperwork, sped claims, and eliminated single points of failure.

• Rep. Mace asked how blockchain reduced fraud. Mr. Carbone elaborated, saying that immutable, transparent records required consensus across all network nodes, making tampering impracticable.

• Rep. Mace inquired about MUSC innovations for veterans. Dr. O’Bryan cited the statewide expansion of MUSC’s comprehensive cancer-care network to bring treatment closer to veterans.

• Rep. Mace then asked each witness for one change they would make for veterans. Dr. O’Bryan said that he would give them “the world’s greatest insurance.” Mr. Lyle advocated for redefining suicide-prevention programs beyond a purely mental-health lens. Mr. Carbone called for modernization legislation to deliver benefits in seconds rather than months or years.

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