H.R. 7083, Centralized Reimbursement for Upgraded Innovative Service Equipment Act

Bill Summary

H.R. 7083 would require the Department of Veterans Affairs (VA) to modify and report on how it pays vendors that provide automobiles and adaptive equipment to disabled veterans. The bill also would extend a temporary limitation on certain pension payments through October 31, 2033.

Estimated Federal Cost

The estimated budgetary effects of H.R. 7083 are 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. 7083 will be enacted in fiscal year 2026 and that

outlays will follow historical spending patterns for affected programs.

Direct Spending

H.R. 7083 would require VA to comply with regulations of the Prompt Payment Act. Under those regulations, agencies that make late payments to vendors must pay interest penalties. The bill also would extend a statutory limitation on VA pension payments. CBO estimates that enacting those provisions would increase net direct spending by $7 million over the 2026-2036 period (see Table 2).

Interest on late payments. H.R. 7083 would require VA to comply with regulations prescribed under the Prompt Payment Act concerning the timeliness of payments to certain vendors. That law requires federal agencies to pay interest penalties to vendors if the agency does not make timely payments for proper invoices. Under current law, VA pays vendors to provide automobiles and related adaptive equipment to veterans with specified disabilities. Those benefits are paid from mandatory appropriations. On the basis of information about the frequency and amount of late payments by VA for automobile benefits, CBO estimates that, under H.R. 7083, VA would pay interest penalties on roughly $35 million in late payments each year on average. CBO anticipates that VA would pay those penalties from the same mandatory appropriation available for the automobile benefits. Using the prompt payment interest rate of 4.75 percent currently established by the U.S. Treasury, CBO estimates that interest penalties on late payments would total $16 million over the 2026‑2036 period.

Pensions and Medicaid. 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 January 31, 2033. H.R. 7083 would extend that reduction for 9 months, through October 31, 2033. CBO estimates that extending that requirement would reduce VA benefits by $2 million per month. 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 $1 million per month. Thus, enacting the provision would reduce net direct spending by $9 million over the 2026-2036 period.

Spending Subject to Appropriation

For two years after enactment, H.R. 7083 would require VA to publish semiannual reports that include statistics on payment timeliness and information technology needed to improve payment timeliness. The bill also would direct the Government Accountability Office to assess and report on VA’s implementation of the payment reforms and provide recommendations for improvements. On the basis of the costs for similar requirements, CBO estimates that implementing the reporting requirements of H.R. 7083 would cost $2 million over the 2026-2036 period (see Table 1). Such spending would be subject to the availability of appropriated funds.

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 3.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 7083 would not increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2037.

CBO estimates that enacting H.R. 7083 would not increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2037.

Mandates

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

Estimate Prepared By

Federal Costs:
Paul B.A. Holland (for automotive benefits) 
Logan Smith (for pensions)

Mandates: Brandon Lever

Estimate Reviewed By

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

Christina Hawley Anthony
Deputy Director of Budget Analysis

Chad Chirico 
Director of Budget Analysis

Estimate Approved By