State Veterans Homes: $1.5 Billion a Year, an Enforcement Tool Never Used

The largest single setting for VA-paid long-term care isn't VA-run at all: 153 state veterans homes, owned and operated by the states, housing veterans on federal per-diem money — about $1.5 billion in FY2023 for almost 15,000 veterans. The VA is, in GAO's words, "the only federal entity that oversees all state veterans homes." Here is how that oversight has gone.

How the money works

For most residents, VA pays the basic per diem: the lesser of the annual basic rate or half the daily cost of the veteran's care. For veterans who need nursing care for a service-connected disability — and for every veteran rated 70% or more service-connected — the law requires the prevailing rate: the full cost of care. VA's own FY2026 prevailing-rate table runs from $452.78 a day at rural Alabama stations to $690.18 a day in Hilo, Hawaii. Every one of those days is paid whether the care that day was good, bad, or absent. The economics of the whole arrangement are on the per-diem page.

The inspection gap

As of January 2022, CMS had inspected only 116 of the 153 nursing-care homes. Of those inspected, over 40% were deficient in the same standard in both 2019 and 2021 — the same failures, found twice, three years apart, in a system whose residents cannot simply leave.

The tool that stays in the box

GAO records the enforcement posture in one devastating fact: the VA "had never used its only enforcement action, withholding payment, considering it too severe." VA implemented three of GAO's four recommendations — and in 2025 told GAO it is no longer pursuing additional enforcement tools. The money flows by the day. The one lever that could interrupt it has never been pulled, and no new lever is coming.

One of these homes is where Thomas Alan Bowman Sr. is dying — the facility class whose federal rate for his category runs over $500 a day. His story is here; the family-side resources for veterans in these homes are at BrownWaterVet.com.

Sources: GAO-25-108441 (April 2025) and highlights · GAO-20-697T · VA Geriatrics & Extended Care, FY26 Prevailing Rates table · 38 U.S.C. § 1710A(a); 38 C.F.R. § 51.41. Part of the VA Fraud record.