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“Review of the Fiscal Year 2027 Budget and 2028 Advance Appropriations Requests for the Department of Veterans Affairs”

Senate Veterans Affairs Committee Hearing

May 20, 2026 (recording here)

HEARING INFORMATION

Witnesses & Written Testimony (linked):

• The Honorable Douglas A. Collins: Secretary, U.S. Department of Veterans Affairs

• The Honorable Richard F. Topping: Assistant Secretary for Management and Chief Financial Officer, U.S. Department of Veterans Affairs

TOP-LINES TO SHOW YOU ARE IN THE KNOW

1. Democrats repeatedly accused the administration of quietly shifting the VA toward privatization by underfunding direct care while sharply increasing community care spending, while Sec. Collins forcefully rejected those claims throughout the hearing.

2. Electronic health record modernization remained one of the hearing’s biggest operational flashpoints, with lawmakers pressing the VA on rollout failures, interoperability problems, and the administration’s push to accelerate deployment to 26 additional sites.

3. Sec. Collins repeatedly defended workforce restructuring and staffing reductions by arguing the VA had simultaneously lowered wait times, reduced claims backlogs, and improved hospital quality ratings despite losing tens of thousands of employees.

4. Mental health and PTSD treatment drew bipartisan attention, including discussion of long behavioral health wait times and the VA’s growing interest in psychedelic-assisted therapies such as MDMA and ibogaine for treatment-resistant veterans.

5. Rural access and infrastructure modernization emerged as major themes, with Senators from both parties pushing for new facilities, expanded outpatient clinics, stronger community care networks, and faster construction timelines across the VA system.

PARTY LINE PERSPECTIVES

OPENING STATEMENTS FROM THE COMMITTEE

• Chairman Jerry Moran welcomed the witnesses and stated that the hearing focused on the Department of Veterans Affairs’ fiscal year 2027 budget request and fiscal year 2028 advance appropriations. He emphasized bipartisan support for fully funding the VA while maintaining strong congressional oversight of the department’s programs and spending. He highlighted priorities including workforce support, improvements to disability claims processing, and modernization of the community care system under the Mission Act. He also stressed the importance of ensuring that community care reforms improved coordination and transparency for veterans.

• Ranking Member Richard Blumenthal stated that bipartisan efforts and legislation such as the PACT Act had expanded healthcare and benefits access for veterans. He argued that caring for veterans was a moral obligation and expressed support for the Major Richard Star Act to address retirement and disability compensation issues. He raised concerns that the VA budget relied too heavily on community care at the expense of direct VA healthcare services and warned that staffing and funding shortfalls could harm care quality. He also criticized proposed cuts to research, appeals staffing, and oversight functions while questioning the increased use of automation and AI in claims processing.

SUMMARY OF KEY POINTS

• Secretary Doug Collins stated that the VA’s primary mission was to put veterans first and said the department had made measurable improvements in efficiency and service delivery. He highlighted reductions in the disability claims backlog, faster processing times, and high accuracy rates while defending the department’s handling of appeals. He argued that the VA healthcare system had achieved strong safety and hospital quality ratings and maintained that community care funding remained balanced against direct care spending. He also emphasized efforts to better manage staffing and workforce deployment while praising VA employees for their performance improvements.

• Chairman Moran asked about the VA’s proposal to consolidate healthcare accounts into separate direct care and community care structures under the RISE initiative. Sec. Collins and Mr. Topping responded that the new framework would improve transparency around healthcare costs, quality metrics, and resource allocation by separating administrative, contract, and care delivery expenses.

• Chairman Moran also raised concerns about proposed funding reductions for the VA Office of Inspector General and the State Veterans Home Grant Program, warning that cuts could weaken oversight and delay long-standing state veterans home projects. Sec. Collins acknowledged the concerns, said the department was working with states on long-term care challenges, and defended the administration’s proposed OIG funding levels.

• Ranking Member Blumenthal focused heavily on the growth in veterans’ appeals and argued that the VA had shifted its backlog problems from initial claims processing to appeals. Sec. Collins disputed Ranking Member Blumenthal’s characterization, defended the department’s claims processing improvements, and said the VA had reduced overall claims backlogs while improving turnaround times and accuracy.

• Ranking Member Blumenthal also argued that reductions in staffing and unfilled vacancies at VA facilities were effectively pushing veterans toward community care, while Sec. Collins countered that wait times and care metrics had improved despite workforce restructuring.

• The exchange became contentious as both men disagreed over staffing cuts, workforce management, and the interpretation of appeals data, while Sec. Collins additionally argued that an inspector general report cited by Ranking Member Blumenthal reflected problems that predated his tenure.

• Sen. Marsha Blackburn praised the department’s efforts to expand healthcare access, reduce claims backlogs, and modernize the VA system, and she asked how the next generation of community care contracts would improve veteran access to care. Sec. Collins said the VA had received 71 bids for new community care contracts, which he argued would significantly expand provider networks, especially in rural areas, while also improving scheduling and coordination through electronic health record modernization.

• Sen. Blackburn additionally asked about the role of community care in preserving access in rural Tennessee, including the McMinnville VA clinic situation, and Sec. Collins said the department intervened because the contractor operating the clinic had provided substandard care.

• Sen. Blackburn also raised concerns about women veterans’ healthcare access, and Sec. Collins outlined efforts to expand women-specific care services, streamline referrals for OB-GYN care, and improve access through both VA facilities and community care options.

• Sen. Patty Murray criticized the VA for failing to fully implement the Isakson-Roe Veterans Healthcare Improvement Act’s child care requirements despite Congress appropriating funding for VA child care sites. Sec. Collins and Mr. Topping said the department had opened two pilot sites and was collecting utilization and outcomes data while developing reimbursement models and future budget plans.

• Sen. Murray also raised concerns about long behavioral health wait times, staffing shortages, and employee burnout at VA facilities in Washington state, arguing that workforce reductions had worsened access to care. Sec. Collins disputed that staffing reductions were driving the problem, said mental health wait times had improved nationally, and acknowledged ongoing operational issues while defending the department’s hiring flexibility and management approach.

• Sen. Murray additionally pressed Sec. Collins on persistent problems with the VA electronic health record rollout in Washington state, and Sec. Collins agreed the original implementation had been mishandled while promising continued remediation efforts and improvements at legacy sites.

• Sen. Tommy Tuberville relayed feedback from Alabama VA facilities that physician pay remained uncompetitive and that excessive bureaucracy limited decision-making authority at the local level. Sec. Collins responded by strongly defending VA employees and highlighting reductions in wait times, expanded appointment availability, new facility openings, and progress on electronic health record modernization.

• Sen. Tuberville also raised concerns about poor interoperability between VA systems and community care providers, and Sec. Collins acknowledged that the current technology infrastructure remained outdated and unable to effectively share records even between VA facilities. Sec. Collins emphasized that modernization of the electronic health record system remained critical to improving care coordination and defended recent increases in VA funding for construction, technology upgrades, and community care investments.

• Sen. Mazie Hirono raised concerns about reductions in funding for the State Veterans Home Construction Grant Program and warned that Hawaii’s veterans home expansion project on Maui could face further delays despite meeting matching fund requirements. Sec. Collins acknowledged the growing backlog of projects and said the department would continue working through the appropriations process to address funding limitations.

• Sen. Hirono also pressed the VA on delays in implementing healthcare services for veterans living in the freely associated states under the Compact of Free Association agreements, and Sec. Collins said the VA remained committed to implementation but needed coordination with the Departments of State and Interior on telehealth, pharmacy, and regulatory issues.

• Sen. Hirono further questioned delays involving healthcare-related contracts in Hawaii, including agreements with Tripler Army Medical Center and the University of Hawaii, and Sec. Collins acknowledged ongoing contracting and interagency coordination problems while pledging to review the specific cases.

• Sen. John Boozman asked whether the fiscal year 2027 budget request provided sufficient funding to accelerate the VA’s electronic health record modernization rollout without sacrificing quality. Sec. Collins and Mr. Topping responded that the requested $4.2 billion would support implementation at 26 additional sites and stressed that the program required full congressional funding moving forward because the department could not reverse course on modernization.

• Sen. Boozman also asked about the role of community care investments in supporting rural healthcare systems, and Mr. Topping said VA reimbursements accounted for roughly 5% of revenue for many rural providers, helping sustain hospitals, physicians, home health agencies, and mental health services in underserved areas. Sec. Collins added that the VA’s next-generation community care contracts would improve provider participation and strengthen healthcare access in rural states.

• Sen. Tammy Duckworth sharply criticized what she characterized as the administration’s movement toward privatization of VA healthcare, arguing that the proposed budget disproportionately increased community care funding while underinvesting in direct VA care, staffing, research, and state veterans facilities. She cited recommendations from veterans service organizations calling for substantially higher direct care investments and accused the department of ignoring veterans’ preferences for VA-based treatment.

• Sec. Collins forcefully rejected claims that the administration intended to privatize the VA and argued that the department continued to spend more than twice as much on direct care as community care while following requirements under the Mission Act.

• The exchange became contentious as Sen. Duckworth argued that staffing reductions and budget trends would ultimately weaken VA facilities and force veterans into private-sector care, while Sec. Collins defended the department’s management decisions and challenged her characterization of the budget.

• Sen. Kevin Cramer defended the role of community care in sustaining rural hospitals and improving access for veterans who lived far from VA facilities. He asked Sec. Collins to review changes to a new VA payment system for veterans receiving care at community nursing facilities because of concerns about unintended consequences affecting access to long-term care. Sec. Collins agreed to review the issue and reiterated that veterans could not directly access community care without going through VA eligibility processes.

• Sen. Cramer also asked about efforts to prioritize American-made medical equipment and healthcare supply chains, and Sec. Collins said the department was working to expand domestic sourcing for products ranging from gloves to ventilators while acknowledging procurement and supply chain challenges tied to existing federal contracting rules.

• Sen. Angus King praised recent data showing VA hospitals continued to outperform non-VA hospitals on quality ratings but expressed concern that staffing reductions and rapidly increasing community care spending could gradually weaken the direct VA healthcare system. He highlighted workforce losses, including reductions in physicians and nurses, and questioned whether projected increases in community care funding signaled a long-term shift away from VA-operated care.

• Sec. Collins denied any intent to privatize the VA and argued that staffing levels alone did not determine quality or performance, pointing instead to improved wait times, expanded hiring reforms, and continued quality gains. Mr. Topping further argued that current budget structures obscured the true costs of direct and community care and said the department’s proposed accounting reforms would provide greater transparency into administrative, contract, and healthcare spending across both systems.

• Sen. Banks praised the VA’s prioritization of a new Indianapolis Medical Center and Fishers outpatient facility and asked how the redesigned model would better serve veterans while improving efficiency. Sec. Collins said the department was shifting toward outpatient and ambulatory care models located closer to where veterans live, mirroring broader trends across the healthcare industry. He also argued that the VA’s traditional construction process had produced excessive delays and cost overruns and defended efforts to fully fund projects upfront rather than relying on incremental appropriations over many years.

• Sen. Banks additionally asked about the benefits of CHIP IN partnerships, and Sec. Collins said collaborative projects with universities and community providers could reduce costs, modernize infrastructure, and improve care coordination for veterans.

• Chairman Moran revisited concerns about physician pay caps at the VA and noted that Congress had previously authorized limited waivers through the Elizabeth Dole Act. Sec. Collins argued that the waiver system had created inequities among physicians because only a small percentage of doctors could receive higher compensation. Ranking Member Blumenthal added that he had introduced the HONOR Act to fully remove the physician pay cap, and Sec. Collins expressed openness to working with Congress on a broader long-term solution to improve physician recruitment and retention.

• Sen. Hassan questioned the VA’s proposal for a new medical facility in Manchester, New Hampshire, and argued that the plan did not fulfill President Trump’s earlier commitment to build a full-service inpatient VA hospital in the state. Mr. Topping explained that the proposed $1.3 billion replacement facility would focus primarily on ambulatory and outpatient services because demand for inpatient beds in the region remained relatively low.

• Sen. Hassan expressed concern that relying more heavily on community providers could become problematic given financial pressures on New Hampshire hospitals tied to Medicaid cuts and warned that veterans could lose access to high-quality inpatient care if rural hospitals closed. Sec. Collins and Mr. Topping responded that the VA intended to continue supporting community care access during construction and argued that maintaining flexibility between VA and community providers would best meet veterans’ needs in the region.

• Sen. Gallego asked about the VA’s approach to innovative PTSD therapies, including psychedelic-assisted treatments such as MDMA and ibogaine, and urged the department to move more quickly in supporting research and patient access for veterans with treatment-resistant conditions. Sec. Collins said the VA was actively developing treatment protocols in coordination with HHS, FDA, and CMS, and noted that the department had already launched additional MDMA-related treatment efforts while preparing for future ibogaine research pending federal approvals and sourcing arrangements.

• Sen. Gallego also pressed Sec. Collins on staffing plans for the new Yuma VA outpatient facility, expressing concern that broader staffing caps and workforce restructuring could leave the clinic understaffed when it opens in 2027. Sec. Collins responded that the facility would be staffed appropriately for local veteran demand and agreed to provide additional details on workforce planning for the Arizona facility.

• Sen. Sanders raised concerns about delays and bureaucracy surrounding the construction of new community-based outpatient clinics in Vermont and asked Sec. Collins to help accelerate the timeline for the projects. Sec. Collins acknowledged the delays and pledged to work on reducing bureaucratic obstacles while continuing coordination with Sen. Sanders’ office.

• Sen. Sanders also argued that dental care should be considered part of healthcare and asked whether the VA should expand dental coverage beyond service-connected veterans. Sec. Collins agreed there was a significant unmet need for dental services among veterans but said any broader expansion would require congressional action and careful consideration of affordability and resource constraints.

• Sen. King briefly praised the quality of VA community-based outpatient clinics in Maine, highlighting newly opened facilities and commending VA staff for improving local access to care. Sec. Collins responded that the department had opened 35 new facilities over the previous year and a half and said expanding community-based access remained a key priority.

• Ranking Member Blumenthal asked about the timeline for ongoing construction at the West Haven VA facility and raised concerns about staffing shortages at the National Cemetery Administration ahead of Memorial Day. Sec. Collins said the department was working closely with National Cemetery Administration leadership to address workforce and budget issues while praising Under Secretary Sam Brown’s leadership.

• Ranking Member Blumenthal also revisited concerns about rising appeals volumes, contract cancellations, veterans housing programs, and proposed research funding reductions, arguing that the VA risked undermining important services and scientific progress. Sec. Collins defended the decision to terminate the VASP foreclosure prevention program, arguing it lacked statutory authority, while stating that the replacement partial claims program would launch ahead of schedule. Mr. Topping also defended the department’s research budget request, arguing that the VA was improving oversight and accountability for research spending rather than reducing its overall scientific mission.

• They with a tense exchange after Ranking Member Blumenthal criticized Sec. Collins for allegedly traveling primarily with Republican lawmakers during VA facility visits, which Sec. Collins disputed while defending his engagement with veterans and staff across the country.

• Chairman Moran closed the hearing by following up on bipartisan requests for additional briefings regarding VA contract cancellations and descoped agreements. Mr. Topping responded that the department had already provided extensive documentation on reviewed and canceled contracts and agreed to coordinate a formal staff briefing with the committee.

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