After Secretary of Veterans Affairs Bob McDonald (left) and House Committee on Veterans Affairs, Chairman Jeff Miller, R-Fla. (right).

After Secretary of Veterans Affairs Bob McDonald (left) and House Committee on Veterans Affairs, Chairman Jeff Miller, R-Fla. (right). (Joe Gromelski/Stars and Stripes photos)

WASHINGTON — House lawmakers said Wednesday they felt forced to fill a $3 billion budget hole at the Department of Veterans Affairs that could halt outside health care treatment at the end of the month and shutter hospitals and clinics after Aug. 20.

VA Secretary Bob McDonald said the agency is running out of annual funding for health care due to surging demand among vets and an expensive new drug to treat hepatitis C. It now needs to tap $3 billion from a fund created last summer by Congress as an emergency fix in the wake of its wait-time scandal, the secretary told the House Veterans Affairs Committee.

The revelation that VA financial difficulties could suspend care in its health system of 9 million enrollees came just a day after President Barack Obama told a national gathering of veterans in Pittsburgh that the agency had made progress over the past year but faces a “huge challenge” ahead.

“You’ve come in here basically demanding $3 billion or health care shuts down on Aug. 20,” said committee member Rep. Doug Lamborn, a Republican from Colorado.

Congress would have to pass a bill by the end of July to avert the VA shutdown or face delaying its annual month-long August recess to find a fix.

The House committee was notified of a shortfall last month but was not aware of the potential shutdowns. Staff said Wednesday that the House and Senate were working on legislation but that nothing had been introduced.

Rep. Jeff Miller, R-Fla., chairman of the Veterans Affairs Committee, said lawmakers are reluctant to let the agency use the emergency funds passed last summer to cover basic budget costs.

“I think that’s what you heard from the Republicans and the Democrats on the committee, that there is a lack of trust, so just to give them a blank check is not the direction we need to move,” Miller said.

One year ago, Congress passed a massive $16.3 billion VA overhaul that included $10 billion to provide emergency outside medical care to veterans who could not make good on promised benefits by getting an appointment at an agency hospital or clinic. Federal audits discovered staff across the country had manipulated patient appointment data to hide long delays in treatment for tens of thousands of beneficiaries.

Congress controls the $10 billion fund, known as the Veterans Choice program, and VA cannot move that money.

“I’m asking again for the simple flexibility to serve the veterans with the money you have already provided,” McDonald told lawmakers.

McDonald said he discovered in May — and notified the White House — that the VA would need to take $3 billion out of the $10 billion pot of money. The majority will go to pay for veteran health care until the fiscal year ends in October, and $500 million will cover a breakthrough hepatitis C drug that has the potential for the first time to cure those with the condition.

If lawmakers do not allow the agency to tap the money, the resulting budget shortfall “will essentially affect every medical facility in the country,” according to James Tuchschmidt, the acting VA principal deputy undersecretary for health, who also testified.

When pressed by lawmakers, McDonald said the budgeting problem was caused by about 7 million more health care appointments over the past year and antiquated VA computer systems.

“There are many reasons why we are where we are. I think we all share some responsibility, including some members of Congress,” he said. Twitter: @Travis_Tritten

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