[95th Congress, 1st session] A BILL To amend the Internal Revenue Code of 1954 to exempt from taxation amounts received under certain scholarship programs Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 117 of the Internal Revenue Code of 1954 (relating to scholarships and fellowship grants) is amended by adding at the end thereof the following new subsection: "(C) Certain Scholarship Programs for Members of the Armed Forces and the Public Health Service.-Any amount received “(1) from appropriated funds (including the value of contributed services and accommodations) by an individual who is receiving training under the Armed Forces Health Professions Scholarship Program or the National Health Service Corps Scholarship Program (or any other Federal program determined by the Secretary to have substantially similar objectives) from an educational institution (as defined in section 151(e) (4)); and "(2) under such a program as a scholarship, shall be treated as a scholarship under this section without regard to whether such individual is receiving training while on active duty or in an off-duty or inactive status, and without regard to whether a period of active duty or other service is required of such individual as a condition of receving the scholarshp." (b) The amendments made by subsection (a) shall apply to amounts received after December 31, 1976, in taxable years ending after such date. Mr. WHITE. If there is no further business, the subcommittee is adjourned. [Whereupon, at 2:55 p.m. the subcommittee was adjourned.] HOUSE OF REPRESENTATIVES, MILITARY PERSONNEL SUBCOMMITTEE, Washington, D.C., Wednesday, October 12, 1977. The subcommittee met, pursuant to notice, at 9:30 a.m., in room 2118, Rayburn House Office Building, Hon. Richard C. White (chairman of the subcommittee) presiding. Mr. WHITE. Good morning. The subcommittee will come to order. Today we continue our hearings on military health care, and we will receive testimony from Members of Congress who have sponsored or are interested in various bills addressed to military health care and to CHAMPUS. In the packet before each member is a copy of various bills and a summary of those measures for your ready reference. During the course of previous hearings on health care, testimony was addressed to several of these legislative proposals, and tomorrow the Assistant Secretary of Defense for Health Affairs will be present to offer additional recommendations and comments on that legislation. If time permits, we hope to receive a report from counsel, Mr. Hogan, on his recent visits to military hospitals. Also, after completing the testimony today on proposed legislation, we will receive a briefing from naval officers on the Naval Hospital at Oakland, Calif. In the latter regard, the members have been furnished an advance copy of the investigative report summary and a copy of that summary is currently before each member of the subcommittee. It is the purpose of the subcommittee to do all in its power to assist in maintaining military health care as a first class institution in this country. I am convinced at this point that in order to do that, all parties who are privy to the administration of health care, including the services, the Office of the Secretary of Defense, the Office of Management and Budget, and the Congress, must unite in the realization that those services can continue only if there is sufficient logistics support in the form of personnel, equipment, secretaries, stenographers, file clerks, and maintenance personnel and others to maintain a first-class institution. We trust these hearings will be a beginning of a unified effort in that direction and in improving the CHAMPUS program. Now we will hear from our first witness, Congressman Nichols, chairman of one of the subcommittees of this full committee, who will testify on H.R. 572. Mr. Nichols, as my close friend and also a distinguished member of this subcommittee, we are delighted to have you before us. (443) STATEMENT OF HON. BILL NICHOLS, A REPRESENTATIVE Mr. NICHOLS. Thank you, Mr. Chairman. I would like to thank the subcommittee for this opportunity to express my support for H.R. 572. But before I begin my remarks, Mr. Chairman, I would like to commend your subcommittee for taking this time to review the entire gamut of matters related to military medical services. This is an area of great concern to members of the full committee, and it is one that spills over into my own Subcommittee on Military Compensation, inasmuch as it relates to military doctors and the compensation of military doctors. And so I do commend you, Mr. Chairman, and your subcommittee, and I hope that out of these hearings some relief might be forthcoming in the form of legislation or otherwise. The matter that I want to talk to you about just briefly relates to my own bill, H.R. 572, concerning the service-connected Disabled Veterans of America. A little more than 2 years ago, Mr. Chairman, the Department of Defense dropped their coverage of service-connected medical conditions for which the Veterans' Administration could provide the necessary medical care and treatment. Legislative history of section 1086 of title 10 does not support DOD's deletion of dual coverage of service-connected disabled veterans, and as a result of the Department's action, these veterans are precluded from using CHAMPUS as a means of paying for medical treatment of their service-connected injuries. I believe the Department of Defense's interpretation of the language of the law, vis-a-vis congressional intent, to be most inaccurate. The only means of correcting this inequitable situation will be through the enactment of legislation, such as I offer this morning, H.R. 572. Throughout the Nation, there are thousands of disabled veterans unable to travel to their nearest VA hospital. This may be because of personal afflictions that these veterans suffered in time of combat. It may simply be that the VA hospital is too many miles removed from their place of residence, but as a result of DOD's policy prohibiting dual medical coverage, the veteran suffering from service-connected blindness, paralysis, or loss of limb may have no recourse but to pay for medical treatment of service-connected injuries out of his own pocket unless he is allowed to use CHAMPUS. Such a situation is contrary to a long history of congressional actions in support of our disabled veterans and clarification of the law is essential. The philosophy behind this legislation and that embodied in other similar bills, such as H.R. 2470 as sponsored by Mr. Mollohan of West Virginia, is to insure that the most convenient and best medical care is made available to our service-connected disabled veterans. Certainly the programs carried out by the veterans' hospitals will be most widely utilized. Yet if such VA hospital care is inconvenient or inaccessible to the veteran, certainly I believe you would agree with me, he should not be required to pay the entire cost of medical treatment out of his pocket for his service-connected injury. I hope that the subcommittee agrees with the principles encompassed in this legislation and favorably reports the legislation to the full committee so that immediate consideration may be provided this important legislation. I thank the subcommittee for their time. Mr. WHITE. Thank you very much, Mr. Nichols. I was looking for a copy of your bill. Your bill would propose to allow veteran CHAMPUS opportunities for treatment in the military hospitals or both. Mr. NICHOLS. Yes, sir. Let me just give an example, Mr. Chairman. Here is a veteran who may have a kidney problem, we will say, a service-connected kidney problem. Under the present law embodied in section 1086 of title 10, this veteran is required to go to a VA hospital because he is service connected. He has no other choice but to go to a VA hospital or to pay for the care out of his pocket. What I am saying is that there are cases where this veteran may be so incapacitated that travel would present a particular hardship to him, or the VA hospital may be 200 or 300 miles removed as some of our remote sections of the West. I don't believe it was intended by this Congress, when we passed the previous law, to preclude that man from using CHAMPUS. I don't believe that the Congress meant for him to pay it all out of his pocket. And all I am asking is that if the disabled veteran has problems with his service-connected disability and he can't go to a VA hospital or doesn't care to, the Government ought to let him use CHAMPUS to take care of this situation. Mr. WHITE. I think that probably within the 20-year span you are going to see more and more treatment of veterans moving in this direction anyway. Does your bill also address the question of treatment in the medical hospital, the military hospital, as an absolute right, or does it merely speak of CHAMPUS? Mr. NICHOLS. It gives him this option to use CHAMPUS, Mr. Chairman. Mr. WHITE. Either way. Mr. NICHOLS. He may or may not, that is right. The bill gives him the option to use CHAMPUS, if he so desires, for his serviceconnected disability. Mr. WHITE. I cannot see where the U.S. Government could quarrel with that position, frankly. Mr. NICHOLS. If he had a heart condition develop after his service, and it is not service connected, this is not the type of thing I am talking about. I am simply talking about Mr. WHITE. Service connected. Mr. NICHOLS. The type of injury which he is being compensated for. Mr. WHITE. And the veterans' hospitals have not been that expanded in recent years. In fact some have closed down. So it makes it even more of a hardship for many of the veterans in certain localities. Mr. NICHOLS. That is my understanding, Mr. Chairman. Mr. WHITE. Thank you, Mr. Nichols. I would like to join the chairman in welcoming our great friend and colleague, Congressman Bill Nichols. Congressman Nichols knows something about service-connected disabilities, in that he has a serviceconencted illness and 10-percent total disability that he received in combat in World War II, so he knows something about what he is talking of here today, Mr. Chairman. I do have some questions to clear up in my mind. In effect, if this service-connected person used CHAMPUS under your legislation, he would have to pay 25 percent of the cost of the medical bill. That seems to be the penalty that the person would have to suffer by not going to the veterans' hospital or to a military hospital. Mr. NICHOLS. That is correct, Mr. Montgomery. My bill would in no way relieve him of that 25-percent out-of-pocket cost, but it would say that the remaining part of it would be paid under CHAMPUS. Mr. MONTGOMERY. In service connected, I know the VA classifies a person service connected from 10 percent, 40 percent, 50 percent, 100 percent. That would not have any effect. A person would not have to be 100-percent service connected to use CHAMPUS under your legislation. Mr. NICHOLS. Absolutely not. If he is being compensated 10 percent, he would be eligible to use CHAMPUS for that particular injury. Mr. MONTGOMERY. Say this person, he or she, well, say he had lost a leg in combat, and it was 75-percent service connected. Then this person had a heart attack, which I believe is the example you gave. Even though this is not connected with the 75-percent service connected, could this person under your bill use CHAMPUS for treatment of the heart attack? Mr. NICHOLS. He could go into a civilian hospital, Mr. Chairman, it is my understanding, and use CHAMPUS for the heart condition since the condition, as you describe it, is not service connected. Now, if he is in the VA hospital for treatment of the leg, and he develops a heart condition, I think it is customary to honor that and to treat that while he is in the hospital. But the answer would be in the negative. He could not go into the VA hospital and be treated for the non-service-connected condition. This pertains only to the service-connected injury for which he is being compensated. Mr. MONTGOMERY. Well, Bill, this CHAMPUS restriction seems to be just a little unfair. I would think he could, Bill, and counsel I believe agrees, maybe he could clear it up for us, because under the CHAMPUS program, under a non-service-connected claim, a person would be covered under CHAMPUS even though it had nothing to do with the service-connected disability, under the program we have now. I think we will look at that area and try to clear up that point. Thank you very much. Mr. NICHOLS. Yes, sir. Mr. WHITE. Mr. Won Pat. Mr. WON PAT. No questions at this time. Mr. WHITE. Mr. Hillis. Mr. HILLIS. Thank you, Mr. Chairman. I, too, want to say that I am very happy to see my colleague here, and recognize the fine job he does on the committee. I apologize that I wasn't here a few minutes earlier to hear your testimony, but I am reviewing your statement. |