Peters, Stabenow Urge Action on Delayed VA Medical Leases

WASHINGTON, DC — U.S. Senators Gary Peters and Debbie Stabenow joined 13 of their colleagues in sending a bipartisan letter urging the Senate Committee on Veterans’ Affairs to authorize leases for 18 major medical facilities across 12 states, including a new expanded outpatient facility in Ann Arbor, MI, that have been awaiting congressional authorization for over a year. An additional six leases for facilities, including a new outpatient clinic in Pontiac, MI, must be authorized this year. The two new Michigan facilities will expand services and reduce congestion and wait times for Michigan veterans seeking VA health care.

“These lease authorizations are needed to enable the VA to deliver care and services to veterans across the United States,” the Senators wrote in the letter. “As such, we ask that you act swiftly to authorize these pending leases until a more permanent solution to the issue can be found. Inaction on this issue hampers the ability of veterans in our states to access timely and quality care from the VA.”

The proposed Ann Arbor lease will create a new 145,000 square-foot outpatient clinic to provide clinical services in support of the VA Ann Arbor Healthcare System. The new, larger Ann Arbor facility will help alleviate wait times and overburdened services by expanding the current primary care, mental health, and specialty care services and offer new services including women’s health services.

The proposed Pontiac project will lease a new 37,619 square-foot outpatient clinic to replace and expand the current 9,900 square-foot Pontiac Community Based Outpatient Clinic, which is too small to meet the growing number of veterans seeking care at the facility. There are more than 698,000 veterans currently living in Michigan, and approximately 224,750 Michigan veterans are currently enrolled in the VA health care system.

Under current law, the Department of Veterans Affairs (VA) must receive specific legislative authorization to lease medical facilities with average annual rental payments in excess of $1 million. But since 2012, Congress has not, through a regular process, authorized any VA major medical facility leases, hampering the ability of the VA to provide much-needed health care and services to veterans around the country.

A technical change in the way the Congressional Budget Office (CBO) estimates the cost of these leases has stymied efforts to authorize any VA major medical facility leases. In 2012, CBO changed the VA lease classifications from operating leases to capital leases primarily because the clinics are build-to-suit for VA use alone.  In 2012, CBO began scoring all VA clinics as capital leases to reflect the total cost of the lease - which can cover a 20 year period for some facilities - rather than the cost of the annual lease payments as done with operating leases. As a result, the estimated cost of legislation authorizing these leases increased significantly, even though actual spending would not increase and the leases are ultimately subject to annual appropriations. The current 18 outstanding leases from fiscal years 2015 and 2016 have been estimated at an overall cost of $904 million.

The letter was also signed by Sens. Mark Warner (D-VA), Michael Bennet (D-CO), Richard Burr (R-NC),  Susan Collins (R-ME), Steve Daines (R-MT), Kirsten Gillibrand (D-NY), Tim Kaine (D-VA), Angus King (I-ME), Ed Markey (D-MA), Bill Nelson (D-FL), Chuck Schumer (D-NY), Jon Tester (D-MT), and Elizabeth Warren (D-MA).

A copy of the letter is copied below and available here.

Chairman Isakson and Ranking Member Blumenthal:

We urge you to act to authorize the Department of Veterans Affairs (VA) major medical facility leases currently pending before Congress, and for which funding has been included in the Senate Committee-passed fiscal year 2017 Military Construction, Veterans Affairs, and Related Agencies Appropriations bill. These lease authorizations are needed to enable the VA to deliver care and services to veterans across the United States. Together, the 18 VA facilities with authorizations pending before Congress deliver care to our veterans.

Authorization of these leases has been hampered by a scorekeeping issue. Under current law, the VA must receive specific legislative authorization to lease medical facilities with average annual rental payments in excess of $1 million.  In 2012, the Congressional Budget Office (CBO) began scoring the total obligations for the life of a VA major medical lease at the time of authorization, rather than annually. As such, legislation authorizing VA major medical leases receives much larger direct spending scores even though actual spending would not increase and the leases are subject to appropriations.

This scoring change has stymied efforts to authorize any VA major medical facility leases. Currently, 18 leases in 12 states from fiscal years 2015 and 2016 have been pending authorization in Congress for more than one year:

1. Ann Arbor, MI - Outpatient Clinic
2. Birmingham, AL - Outpatient Mental Health Clinic
3. Birmingham, AL - Outpatient Specialty Clinic
4. Boston, MA - Research
5. Charleston, SC - Research
6. Daytona Beach, FL - Outpatient Clinic
7. Denver, CO - Chief Business Office Purchased Care
8. Gainesville, FL - Outpatient Clinic
9. Hampton Roads, VA - Outpatient Clinic
10. Mission Bay, CA - Research
11. Missoula, MT - Outpatient Clinic
12. Northern Colorado, CO - Outpatient Clinic
13. Ocala, FL - Outpatient Clinic
14. Oxnard, CA - Outpatient Clinic
15. Pike County, GA - Outpatient Clinic
16. Portland, ME - Outpatient Clinic
17. Raleigh, NC - Outpatient Clinic
18. Santa Rosa, CA - Outpatient Clinic

Additionally, there are major medical facility leases in New York, Texas, and Indiana that require authorization.  As such, we ask that you act swiftly to authorize these pending leases until a more permanent solution to the scorekeeping issue can be found.  Inaction on this issue hampers the ability of veterans in our states to access timely and quality care from the VA.  We thank you for your continued dedication to our nation’s veterans and their families, and look forward to working with you on this critical issue.