1. Department of Veterans Affairs Advanced Planning Briefing to Industry (APBI) FY 2013 IT Budget Execution and IT’s FY 2014 Budget Rom Mascetti Deputy Assistant Secretary for IT Resource Management Office of Information & Technology June 19, 2013 1

2. FY 2013 Budget Execution 2

3. FY2013 VA IT Budget Execution Through March 3 Funding CategoryFY13 Appropriation ($M) FY13 Plan thru June ($M) Executed thru June 12 ($M) Executed to Date to Plan (%) Total Budget Authority3,3232,2422,03591% Pay & Admin1,02072464289% Sustainment1,8101,1471,218106% Development49437117547%

4. FY2013 VA IT Budget Execution 4

5. FY2013 Budget Execution 5 Department of Veterans Affairs Fiscal Year 2013 Office of Information and Technology Systems (Dollars in Thousands) Congressional Program FY 13 Appropriation FY13 Reprogramming Access to Healthcare IT Development 40,260 3,297 Surgical Quality and Workflow Management Development 27,467 20,302 Healthcare Efficiency IT Development 4,653 8,737 Homelessness IT Development 3,071 2,792 Integrated Electronic Health Record (iEHR) 103,863 Mental Health IT Development 8,806 3,481 New Models of Care IT Development 35,677 41,585 Veterans Benefits Management System (VBMS) 38,474 53,635 Virtual Lifetime Electronic Record (VLER) 49,873 49,307 Veterans Relationship Management 96,091 83,533 Health Management Platform Development 7,490 7,500 International Classification of Diseases - 10 Development 11,485 16,164 VHA Research IT Support Development 18,497 15,646 Human Capital Development 9,088 2,720 Integrated Operating Model 14,081 13,413 VA Learning Management Systems Development 5,533 0 Other IT Development 19,338 91,945 Development Totals 493,747 517,921

6. FY2013 Budget Execution 6 Department of Veterans Affairs Fiscal Year 2013 Office of Information and Technology Systems (Dollars in Thousands) Congressional Program FY 13 Appropriation FY13 Reprogramming Medical Operations and Maintenance 748,028 765,779 Benefits Operations and Maintenance 207,722 207,996 Enterprise Operations and Maintenance 756,569 758,893 Interagency Operations and Maintenance 97,335 97,464 Sustainment Totals 1,809,654 1,830,132 Total of Development and Sustainment 2,303,401 2,348,053 Total Budget Authority Development 493,747 517,291 Sustainment/O&M 1,809,654 1,830,132 Staffing and Administration 1,019,653 975,000 H1N1 Supplemental (P.L. 111-32) - - OEF/OIF Supplemental (P.L. 110-28) - - Total 3,323,053

7. FY 2014 President’s Budget 7

8. Strategic Direction Information Technology is fundamental to the operations and transformation of VA  Funds the operations and maintenance of existing systems and infrastructure.  Protects Veterans sensitive information through proper IT Security.  Supports VA’s transformation through funding of Major Transformational Initiatives such as iEHR and VBMS. Additional demand for Veterans healthcare, benefits and services results in proportional increased demand for IT  New facilities – 300 facilities came on line to deliver additional services over the past 6 years.  New users – approximately 45,000 new users supported over the past 6 years.  Increasing number of Veterans that will require or expect medical care and/or benefits over the next 5 years. Improving services for Veterans and their beneficiaries requires investments in advanced technologies such as telehealth and Voice as a Service (VaaS)  Telehealth improves efficiency and enhances care, especially in rural areas  With half a million Veterans receiving 1.4 million Telehealth-based episodes of care in fiscal year (FY) 2012, VA is a national leader in Telehealth  VaaS is an investment in VA’s future and will provide a survivable and scalable voice infrastructure, video, unified communications, chat on-line support and efficient call routing to access VA services. Movement away from public exchange (PBX) telephone systems. 8

9. Top Priorities Ending Veteran homelessness  Expand mobile application development of handheld devices, so VA can implement mobile capability to Homeless Program Outreach workers and medical personnel.  Implementation of programs focused on homeless prevention and increased access to permanent housing with supportive services. Eliminating claims backlog  Automated process, work flow and work management capabilities that result in improved quality, accuracy and timeliness of claims decision. (Portal to Payment) Expanding access to benefits and services  Improve access by supporting more convenient ways of providing care.  Explore novel uses of telehealth technology to bring specialized services to remote locations.  Expand secure messaging, My HealtheVet, and evaluate new approaches to providing acute inpatient care. 9

10. 1. New employees -- Approximately 45,000 new users in 5 years 2. New facility activations -- Approximately 250 new facilities in 5 years 3. New systems and platforms released into production -- Approximately 150 new systems in 5 years; As PMAS maintains successes – more systems/platforms move to completion 4. Increase in proportion of staff with mobile computing and communicating requirement -- Percentage of mobile users increasing to ~25% of workforce; Mobile worker numbers driven by Telework legislation; Green-Carbon Reduction legislation, increasing utilization of virtual team work 5. Increase in reliance on WAN/LAN and other Telecom costs -- Traffic on WAN doubles every 18 months 6.Increase in reliance for mission delivery on IT Systems (“Life blood of VA”) 7. Unfunded/out of cycle requests -- Estimated IT needs are 40-50% greater than available budget in any given year resulting in large year-to-year roll-over of unmet demand 8. Security requirements -- As the quantity of data under management increases, security complexity increases 9. Greater need for tools to manage increasing complexity in IT environment -- Greater numbers of Service Level Agreements drives need to measure service Challenges – IT Business Cost Drivers 10

11. Development/Modernization/Enhancements (DME) - development that creates new functionality and/or capability Marginal sustainment – provides first year sustainment funding for newly deployed products Discretionary sustainment - includes important but non- critical sustainment efforts to continue or enhance OIT operations Mandatory sustainment - covers “must pay” items that are essential for the continuing operations of VA’s Information Technology infrastructure 11 FY2014 Budget Submission (Resource Band Definitions)

12. FY2014 Budget Prioritization (Resource Band view - $ in Millions) Resource Band FY14 Request Discretionary Sustainment & Other Continuing Development Other Continuing Development$30.400 ICD-10$4.600 Other Discretionary Sustainment$4.000 Reducing Risk of Infrastructure Failure$153.762 Activations - Discretionary Sustainment$180.397 Directed Programs Transformational Initiatives - Development$208.409 Transformational Initiatives - Marginal Sustainment $36.709 iEHR & VLER Health - Development$251.882 iEHR & VLER Health - Marginal Sustainment$38.700 Mandatory Sustainment Information Security$123.258 iEHR & VLER Health$53.032 Transformational Initiatives$109.432 Operations & Maintenance$1,462.363 Pay Administrative Expenses$156.451 OIT Staffing (Salaries & Benefits to support 7,355 FTE) $869.949 Total$3,683.344 Totals Development = $495M Sustainment = $2,162M Pay/Admin = $1,026M $356M or 10.7% higher than FY 2013 request 12

13. FY2014 Budget Display DME Funding Detail (Dollars in thousands) 13 FY 2014 Request Access to Healthcare IT Development$3,645 VPS Kiosk Development$3,645 Integrated Electronic Health Record (iEHR)$251,882 iEHR (Interagency 21st Century Core)$197,082 Scheduling$30,000 Laboratory Specific Services$5,000 Pharmacy Specific Services$4,000 VLER Health$15,800 New Models of Care IT Development$32,647 VistA Imaging Storage Infrastructure$4,782 Health Risk Assessment$3,000 My HealtheVet Capabilities Enhancement$6,000 Patient Health Record (PHR) On-Line Viewing$3,200 Secure Messaging$1,300 TeleMedicine (Store-Forwards)$1,962 Breast Cancer Registry$1,522 My HealtheVet Intergrations$2,500 Integrated Veterans Health Library$500 Home TeleHealth (HT) Capabilities Enhancements$7,881 Veterans Benefits Management System (VBMS)$32,834 VBMS$20,777 VETSNET$12,057 Virtual Lifetime Electronic Record (VLER)$11,352 VLER Memorials$11,352

14. FY2014 Budget Display DME Funding Detail cont. 14 FY 2014 Request Veterans Relationship Management$120,157 Enterprise Veterans Self Service$36,344 Customer Relationship Management$4,149 Voice Access Modernization$5,514 Identity and Access Management$45,000 Military Service Data Sharing$5,607 Enterprise Health Benefits Determinations$19,793 VetSuccess$3,750 Health Management Platform Development$7,774 International Classification of Diseases - 10 Development$4,600 Other IT Development$30,400 Compensation and Pension Records Interface Development$1,100 Healthcare Reform/ Affordable Care Act$3,400 Computerized Patient Records System$4,200 EDI Transactions - Mandated Compliance$20,000 Bar Code Expansion Positive Patient Identification$1,700 Grand Total of all Development$495,291

15. FY2014 Budget Display Sustainment Funding Detail FY2014 Sustainment Estimate (Dollars in Thousands) Mandatory Sustainment Software Licenses and Maintenance $ 307,845 Corporate Data Center Operations Charges $ 300,000 IT Support Contracts $ 283,843 Telecommunications $ 269,000 Hardware Maintenance $ 103,627 Transformational Initiatives, iEHR and VLER Health $ 162,464 Information Security $ 123,258 National Data Center Program (NDCP) $ 19,699 Veterans Benefits Management System (VBMS) $ 86,117 Other $ 92,232 Discretionary Sustainment Activation of new or renovated VA facilities $ 180,397 Voice as a Service (VaaS) $ 115,996 Hardware and Desktop Refresh $ 37,766 Vocational Rehabilitation and Employment Transition Assistance program $ 3,000 Marginal Sustainment Transformational Initiatives $ 36,709 iEHR and VLER Health $ 38,700 Other Marginal Sustainment $ 1,000 TOTAL $ 2,161,653 15

16. The Interagency Program Office (IPO) - iEHR and VLER Health Established by the National Defense Authorization Act for Fiscal Year 2008 (NDAA FY08), the IPO is mandated:  “To act as the single point of accountability for the Department of Defense and the Department of Veterans Affairs in the rapid development and implementation of electronic health record systems or capabilities…”  “To accelerate the exchange of health care information between the DoD and VA in order to support the delivery of health care by both Departments.” FY2014 Budget Request supports:  Enabling DoD patients to download their health care record in a standard format using the Blue Button technology  Standardizing health care data to enable the sharing among DoD and VA clinicians achieving data exchange and interoperability  Accelerating the delivery of the iEHR functionality through the use of a “Core” system Way Forward  Both VA and DOD have committed to deliver initial operating capabilities by September 2014  VA will utilize VistA as its Core  IPO is expanding the “Blue Button” capability to allow secure and standardized record downloading IPO Funding = $343.614M  iEHR Development = $236.082 million  iEHR Sustainment = $85.031 million  VLER Health = $22.501 million 16

17. FY 2014 Unfunded Requirements (UFRs) process 1 st Quarter identification and prioritization 1 st & 2 nd quarter funding “sweeps” Mid-Year IT Reprogramming to fund UFRs IT’s award winning Budget Tracking Tool (BTT) is used to track about 1,500 funding lines for budget and acquisition execution to develop the approved FY 2014 IT Budget Operating Plan Congressional flexibility/constraints for moving funds between IT programs and projects to meet priorities and budget execution Reprogramming Rules established by Congress FY 2014 IT Challenges 17