H.R. 740, Veterans’ Assuring Critical Care Expansions to Support Servicemembers Act of 2025

Bill Summary

H.R. 740 would extend the deadline for community health care providers to submit claims for payment from the Department of Veterans Affairs (VA). The bill also would require VA to establish a three-year pilot program to allow veterans to access outpatient mental health and substance-use treatment through community providers without prior approval from the department.

In addition, the bill would direct VA to develop an online health care portal to allow veterans to schedule appointments, track referrals, and appeal denials of requests for care. H.R. 740 would require VA to notify veterans of their eligibility for community care and notify veterans in writing when the department denies requests for community care.

The bill also would require VA to report on the clinical appeals process and utilization of community care and would direct the Government Accountability Office to study the department’s ability to use opioid alternatives for pain management and rehabilitation. Finally, the bill would extend the higher rates for fees that VA charges borrowers for home loan guarantees.

Estimated Federal Cost

The estimated budgetary effects of H.R. 740 are shown in Table 1. The costs of the legislation fall within budget function 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that H.R. 740 will be enacted near the beginning of fiscal year 2026 and that outlays will follow historical spending patterns for affected programs.

Provisions that Affect Spending Subject to Appropriation and Direct Spending

CBO expects that some of the costs of implementing the provisions of the bill that affect VA health care benefits would be paid from the Toxic Exposures Fund (TEF) established by Public Law 117-168, the Honoring our PACT Act. The TEF is a mandatory appropriation that VA uses to pay for health care, disability claims processing, medical research, and IT modernization that benefit veterans who were exposed to environmental hazards.

Additional spending from the TEF would occur if legislation increases the costs of similar activities that benefit veterans with such exposure. Thus, in addition to increasing spending subject to appropriation, enacting the bill would increase amounts paid from the TEF, which are classified as direct spending. CBO projects that the proportion of costs paid by the TEF will grow over time based on the amount of formerly discretionary appropriations that CBO expects will be provided through the mandatory appropriation as specified in the Honoring our PACT Act.[1]

CBO estimates that over the 2026-2035 period, implementing the health care-related provisions of H.R. 740 would increase spending subject to appropriation by $258 million and direct spending by $87 million.

Claims Submission Deadline. Section 105 would extend by six months the deadline for community health care providers to submit claims for payment to VA. Through the Veterans Community Care program, VA pays for veterans to receive health care from providers in their communities, outside of VA facilities, when the department cannot provide such care according to certain standards for availability, timeliness, and quality. CBO estimates that payments to community health care providers totaled $23 billion in 2025.

Under current law, those community providers must submit claims for payment to VA within 180 days of providing the care. Using information from VA about the reasons that claims are denied, CBO estimates that, although most providers will submit claims within the 180-day limit, extending the filing deadline to one year would increase the number of claims paid by 0.1 percent annually.

CBO estimates that implementing section 105 would cost $228 million over the 2026‑2035 period. Of that amount, $170 million would be spending subject to appropriation, and $58 million would be direct spending from the TEF.

Mental Health and Substance Use Treatment. Section 202 would require VA to allow veterans to receive outpatient mental health and substance use treatment from community providers without prior approval from the department. That requirement would expire after three years.

On the basis of information from VA about projected participation and the average cost of outpatient mental health visits, CBO expects the department would pay for roughly 10,000 patients to receive 10 appointments annually at an average cost of $245 per visit.

In total, CBO estimates that implementing section 202 would cost $75 million over the 2026–2035 period. Of that amount, $58 million would be spending subject to appropriation, and $17 million would be direct spending from the TEF.

Online Health Care Portal. Section 201 would require VA to develop an online system to allow veterans to manage the health care they receive from the Veterans Health Administration, both directly from the department and through the Veterans Community Care program. The system would enable veterans to request appointments, track referrals, receive reminders, and appeal denials of requests for care. VA also would be required to provide an implementation plan and quarterly progress reports to the Congress for two years.

On the basis of information from VA about the costs to develop and maintain new information technology systems, CBO estimates that implementing section 201 would cost $30 million over the 2026-2035 period. Of that amount, $21 million would be spending subject to appropriation, and $9 million would be direct spending from the TEF.

Community Care Notifications. Sections 102 and 103 would require VA to notify veterans about their eligibility for community care and to notify veterans in writing when it denies requests for community care. Section 103 would require VA to include the reason for the denial and instructions on how to appeal the denial when it notifies veterans that their requests for care have been denied. CBO expects that VA would need to develop an electronic system to ensure eligibility notifications are sent to veterans and that managing that system would increase the department’s workload by the equivalent of two full-time employees.

Using information from VA about mailing expenses and staffing costs, CBO estimates that implementing those provisions would cost $12 million over the 2026-2035 period. Of that amount, $9 million would be spending subject to appropriation, and $3 million would be direct spending from the TEF.

Direct Spending

In addition to expanding benefits that would partly be covered by the TEF, enacting section 205 of the bill would affect direct spending by extending higher fees for VA home loan guarantees. In total, CBO estimates that enacting H.R. 740 would decrease net direct spending by $290 million over the 2026-2035 period (see Table 2).

Home Loan Fees. The bill would extend—for about six months—the higher fees that VA charges borrowers for its loan guarantees.VA provides loan guarantees to lenders that allow eligible borrowers to obtain better loan terms—such as lower interest rates or smaller down payments—to purchase, construct, improve, or refinance a home. VA typically pays lenders up to 25 percent of the outstanding mortgage balance if a borrower’s home is foreclosed upon. Those payments, net of fees paid by borrowers and recoveries by lenders, constitute the subsidy cost for the loan guarantees.^[2]

Under current law, the rates for most of the fees that borrowers pay to VA for loans guaranteed after June 9, 2034, will drop from a weighted average of about 2.4 percent to about 1.2 percent of the loan amount. The bill would extend the higher rates through November 29, 2034, thereby reducing the subsidy cost of loans guaranteed during that period. Using its forecast of loan volume based on data provided by VA, CBO estimates that extending the higher rates would decrease direct spending by $377 million over the 2026‑2035 period.

Spending Subject to Appropriation

The discussion above in “Provisions That Affect Both Spending Subject to Appropriation and Direct Spending” describes the costs of changes to the VA health care programs. Implementing those provisions would increase spending subject to appropriation by $258 million over the 2026-2035 period, CBO estimates.

In addition, the bill would require VA to report to the Congress on several issues related to veterans’ use of community care and would direct the Government Accountability Office to study VA’s ability to provide pain management therapy without using opioids. On the basis of the costs of similar reports and studies, CBO estimates that satisfying those requirements would cost $2 million over the 2026-2035 period; such spending would be subject to the availability of appropriated funds.

In total, CBO estimates that implementing H.R. 740 would increase spending subject to appropriation by $260 million over the 2026–2035 period (see Table 3).

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 2.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 740 would not increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2036.

CBO estimates that enacting H.R. 740 would not increase on‑budget deficits by more than $5 billion 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.

Estimate Prepared By

Federal Costs:

Noah Callahan (for veterans’ health care) 
Paul B.A. Holland (for veterans’ home loans)

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

Estimate Approved By