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Statement of Need: Public Law 104-262, the Veterans' Health Care Eligibility Reform Act of 1996, requires the Secretary of Veterans Affairs to make annual decisions concerning enrollment in VA's health care system in order to ensure that resources are available to provide medical services that are both timely and acceptable in quality. This document announces the enrollment decision to suspend the enrollment of additional veterans who are in the lowest statutory enrollment category (priority category 8). This also amends existing regulations to establish additional subpriorities within priority categories 7 and 8.

Summary of the Legal Basis: 38 CFR 17.36(c) requires that the Secretary determine which categories of veterans are eligible to be enrolled and that the Secretary notify eligible enrollees of the determination by announcing it in the Federal Register.

Alternatives: The Department had to consider placing additional enrollees on waiting lists and extending the waiting period for eligible enrollees seeking appointments for care as alternatives.

Anticipated Costs and Benefits: By suspending enrollment of additional priority category 8 veterans, VA would avoid significant additional medical benefits costs and begin to bring demand in line with capacity, which will reduce the number of veterans on waiting lists. Without action to suspend new enrollment, the cost projection for FY 2003 is $23.455 billion. This is based on the projected average enrollment for FY 2003 of 6,991,405, together with the projected expenditures that would be needed to provide the medical benefits package to all enrollees. Suspending new enrollment would reduce enrollment in priority category 8 by 164,367 in FY 2003, which is expected to grow to over 520,000 by FY 2005.

Risks: Without action to suspend new enrollment, patient safety and quality and access to care would be adversely affected.