H.R. 3854, Modernizing All Veterans and Survivors Claims Processing Act

Bill Summary

H.R. 3854 would require the Department of Veterans Affairs (VA) to annually report on the causes of death among veterans, and to develop a plan to make automation tools more widely available for processing of claims for veterans’ benefits. The bill would further require VA to update its information technology (IT) system used for processing benefits claims to notify employees who process those claims of certain circumstances when a claim would not be allowed. Finally, the bill would extend the reduction of pension payments for veterans and survivors who reside in Medicaid nursing homes.

Estimated Federal Cost

The estimated budgetary effect of H.R. 3854 is shown in Table 1. The costs of the legislation fall within budget functions 550 (health) and 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that H.R. 3854 will be enacted at the beginning of fiscal year 2026, and that outlays will follow historical spending patterns for affected programs.

Spending Subject to Appropriation

The reporting, planning, and automatic notifications required by H.R. 3854 would increase spending subject to appropriation by less than $500,000, CBO estimates.

Report on Veteran Deaths. Section 2 of H.R. 3854 would require VA to annually report to the Congress on the causes of death among veterans. That requirement would expire five years after the bill’s enactment. VA already collects information on and reports about the causes of veteran deaths; thus, producing the additional report to the Congress would cost less than $500,000, CBO estimates.

Plan for Expanding Automated Claims Processing. Section 3 of the bill would require VA to submit a plan to the Congress on ways to make its existing automation tools available to other divisions of the agency. That plan would be due within one year of enactment. VA currently uses automated technology to help it process claims for certain veterans’ benefits. The plan would require VA to analyze the feasibility and benefits of extending the use of existing automation technology to process additional veterans’ benefits. Using information on the cost of producing similar plans and reports, CBO estimates the requirement would cost less than $500,000.

Automatic Notification of Unallowed Benefits. The bill would require VA to update its claim processing system to automatically identify for VA employees certain claims for benefits that cannot be received concurrently with other benefits the applicant is receiving. The department already has the capability to flag such claims within its IT systems and is implementing technology to automatically disallow such claims without human intervention. As such, CBO estimates that providing an automatic notice to VA employees for those unallowed claims would cost less than $500,000.

Direct Spending

Under current law, VA reduces pension payments to veterans and survivors who reside in Medicaid nursing homes to $90 per month. That required reduction expires November 30, 2031. Section 5 of H.R. 3854 would extend that reduction for two months, through January 31, 2032. CBO estimates that extending that requirement would reduce VA benefits by $10 million per month. (Those benefits are paid from mandatory appropriations and are therefore considered direct spending.) As a result of that reduction in beneficiaries’ income, Medicaid would pay more of the cost of their care, increasing spending for that program by $6 million per month. Thus, enacting section 5 would reduce net direct spending by $8 million over the 2025-2035 period.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 3854 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2036.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Federal Costs: Logan Smith

Mandates: Brandon Lever

Estimate Reviewed By

David Newman
Chief, Defense, International Affairs, and Veterans’ Affairs Cost Estimates Unit

Kathleen FitzGerald
Chief, Public and Private Mandates Unit

Christina Hawley Anthony
Deputy Director of Budget Analysis

Phillip L. Swagel

Director, Congressional Budget Office