Is Loophole Shortchanging Mentally Ill Veterans?

Veterans with serious mental illness and other disabilities could pay an increasingly high price for the failure of Congress to define a key term in legislation passed in 1996.

PL 104-262 states that “the Secretary shall ensure that the Department maintains its capacity to provide for the specialized treatment and rehabilitative needs of disabled veterans (including veterans with spinal cord dysfunction, blindness, amputations, and mental illness) within distinct programs or facilities of the Department that are dedicated to the specialized needs of those veterans in a manner that affords. . .reasonable access to care and services for those specialized needs and ensures that the overall capacity of the Department to provide such services is not reduced. . . .”

Miklos Losonczy, M.D, Ph.D., told Psychiatric News that Congress did not define “capacity” in the legislation. He was then a member of the Committee on Care of the Seriously Mentally Ill Veteran (SMI committee), which was established by Congress to monitor and advise on the care of the groups specified in the legislation, and is now the committee’s co-chair. He is also associate chief of staff for mental health and behavioral sciences at the VA New Jersey Healthcare System.

Model of Care Changed

According to Losonczy, the legislation came about because the Veterans Administration (VA, now Veterans Affairs) was about to move to a capitation model of distributing funds throughout its health care system. Advocates and others were concerned that veterans with costly illnesses and disabilities might be short-changed because of the cost advantage in treating other kinds of patients.

The VA asked the committee for advice about a definition of capacity.

That group decided that capacity should be measured by the number of veterans treated and the dollars expended for their care in specialized programs.

Losonczy said, “We assumed that the dollars would be inflation adjusted each year, as they are in other VA cost analyses.”

VA staff prepares the “capacity report” and submits it to the SMI committee for comment. With one exception, the report never has reflected the impact of inflation in its analysis of dollars expended.

“Every year,” said Losonczy, “we explain the importance of considering inflation to key VA officials, and we comment about it in our official memorandum about the report to the undersecretary for health. The response generally is ‘We’ll get back to you.’ ”

In the memorandum accompanying the most recent report, the committee wrote, “Dollars expended was seen as a pragmatic means to measure the intensity of service provided this special population. As a measure of intensity of service, the committee believes this is meaningful only if a reasonable adjustment for inflation is included and has consistently presented this view since the first capacity report in 1997.”

VA Not in Compliance

The committee contends that the VA “is still not in substantial compliance with the capacity provisions of PL 104-262 and PL 107-135” and argues that there has been a 25 percent decline in expenditures for specialized treatment for the SMI population, using 1996 as a base.

The VA, however, in the executive summary of the report, writes, “VA maintained its national operating capacity in FY 2001 for all categories of special disability, with the exception of substance abuse. . . . On a national scale, treatment and rehabilitative capacity for all other mental health special disability categories was maintained or improved since the last capacity report.”

The report is for Fiscal 2001, although it was not released to the Committee on Veterans Affairs until October 25, 2002.

Health care economist Paul Ginsburg, Ph.D., told Psychiatric News, “Unless one imagines sharp productivity increases, the failure to consider the impact of inflation will result in a decrease in labor resources devoted to mental health services.”

Ginsburg is president of the Center for Studying Health System Change.

The committee contends that those decreases have, in fact, occurred. The report alleges that there has been a 23 percent decline in total mental health staff.

Losonczy said, “The percentage decline in staff almost exactly mirrors the percentage decline in inflation-adjusted dollars.”

Veterans organizations, such as the American Legion, support the committee’s contention about inflation, according to Losonczy.

Joy Ilem, assistant national legislative director for the Disabled Veterans of America, told Psychiatric News, “We fully support the committee’s position about inflation. Year after year, we raise the issue whenever we can. The definition of capacity affects veterans with other kinds of disabilities as well and is part of the overall problem of an overburdened VA health care budget.”

APA Assembly Speaker Albert Gaw, M.D., told Psychiatric News, “APA’s Caucus on Veterans Affairs supports all efforts to maintain the capacity of the VA to provide quality care for veterans with serious mental illness. We would register a concern if a failure to consider the impact of inflation on the financial resources devoted to this population results in a deterioration of care.”

Gaw is co-chair of the APA Caucus of VA Psychiatrists and medical director of the San Francisco Mental Health Rehabilitation Facility.

The means by which capacity is measured could affect the VA response to a request from Sen. John D. Rockefeller IV (D-W.Va.), then chair of the Senate Veterans Affairs Committee, according to Losonczy.

In a hearing on July 24 about mental health services, Rockefeller asked Robert Roswell, M.D., the VA’s undersecretary for health, “What would it cost to do the job right?” (Psychiatric News, September 6, 2002).

Roswell agreed to submit a budget figure to the committee. A spokesperson for the committee told Psychiatric News that Roswell later had written to the committee that he would submit the figure in February 2003. ▪