The Per-Diem Economy: $2,062 a Day
A per-diem is the simplest contract in government: a bed, a veteran, a day, a rate. The VA buys long-term care three different ways, and its own budget submission prices the same day of care at three wildly different numbers. The veteran in the bed is identical. The spread is the story.
Three prices for the same day
Those rates are the VA's own, from its FY2027 budget submission (FY2025 actuals). A day of care inside one of the VA's 134 Community Living Centers cost the taxpayer $2,062.01 — more than four times the contract nursing-home rate and more than six times the state-home rate. The CLC program alone spent $5.714 billion in FY2025. Notably, no per-facility CLC budget is public: what any individual VA nursing home spends, bed by bed, is not published. Getting it requires a FOIA fight for the VA's internal station cost reports.
State homes: the cheapest door, still a river of money
For state-run veterans homes, the VA pays a per-diem set by regulation. GAO reported the VA paid roughly $1.5 billion in FY2023 to state homes caring for about 15,000 veterans. The basic per-diem for FY2026 is $146.98 a day; for veterans rated 70% or more service-connected — the prevailing-rate category — the federal payment rises to $520.16 a day in FY2026 and $536.81 in FY2027. A full 120-bed home at the prevailing rate is an eight-figure annual federal revenue stream, paid per occupied bed, per day.
Contract homes: paid as a percentage of Medicare math
Community nursing homes hold direct five-year contracts with the VA's regional networks and are paid a bundled per-diem calculated as a percentage of Medicare's patient-driven payment model. Public contract data shows the pattern: individual operators holding multi-million-dollar VA obligations, renewed at flat annual amounts year after year. The per-diem structure pays for days and beds. Nothing in the rate depends on the veteran getting better.
The math nobody at the VA has to answer for
Institutional long-term care cost the VA $10.508 billion in FY2025; the full long-term services and supports ledger was $19.56 billion. Purchased long-term care also carried $347.41 million in improper or unknown payments in FY2025 by the VA's own accounting. Add the three price tiers together and the question writes itself: if a state home delivers a day of care for $330 and a contract home for $499, what exactly does the taxpayer's extra $1,500 a day buy inside the VA's own walls — and who, anywhere in the chain, is responsible for answering?
Sources: VA FY2027 Budget Submission, Vol. 2 (FY2025 actual cost and payment data); GAO-25-108441 (state veterans homes); VA state-home per-diem rate tables, FY2026–FY2027; federal contract records (FPDS). Obligations shown in federal spending data are amounts committed, not final claims paid. Part of the VA Fraud record.