Department of Veterans Affairs officials mulled a plan to ration expensive medications after asking Congress for $500 million to pay for the same drugs.

Although the VA knew since at least January it was facing an enormous budget shortfall due to the rising cost of the medications, agency officials led Congress to believe it was a sudden development that required swift action, asking for the additional funding only weeks before the budget holes would have forced them to close hospitals around the country.

Emails and internal memos obtained by the Washington Examiner indicate the VA proceeded with a plan to withhold the hepatitis C drugs from certain veterans even after receiving congressional permission to raid a controversial agency program for the required funding.

"It's another instance of the VA telling Congress, the Veterans Committee and others about how, if we give them money, it would be spent, and then it's a different plan once we give them the money," Sen. Jerry Moran told the Examiner.

"If the VA tells us there's a crisis and tells us to respond to that crisis, I would expect them to use the money as they told us they would," said the Kansas Republican, who is a member of the Senate Committee on Veterans' Affairs.

"A question would be, then how are you spending the money if you are refusing to treat all the veterans that are suffering from this condition?" Moran said.

Sloan Gibson, deputy VA secretary, testified in June that the agency faces more than $1 billion in costs from the drug this year.

"We don't expect to do any rationing of care with Hepatitis C," Gibson told the House Veterans' Affairs Committee on June 25, when he asked Congress to give the agency $500 million to cover the cost of the drugs.

But the VA had seemingly already made progress on an internal plan to ration the medication at the time of Gibson's testimony.

The agency's top budget official refused to acknowledge early warnings of the budget shortfall when other VA employees raised the issue with her in January.

"Please stop the discussion on the funds at this time," wrote Kathleen Turco, the VA's chief financial officer, in response to internal concerns that the demand for hepatitis C medication would deplete funds in 2015.

Turco dismissed those concerns on Jan. 21. Six months later, VA officials stood before Congress and claimed they were essentially blindsided by the largest budget shortfall in the agency's history.

Turco did not respond to a request for comment.

After officials briefed Gibson on the budget problem, the deputy secretary and other senior officials evidently latched onto the idea of raiding the "choice" program to pay for the shortfall. The choice program allows veterans to bypass the VA system by seeking care in the private sector.

"[A]s soon as Mr. Gibson brought up the option of using Choice, any effort to make the case to secure additional funding essentially collapsed," one VA official wrote in an email to colleagues April 23.

Just one day earlier, nearly 200 doctors who treat hepatitis C patients in the VA sent a letter to Robert McDonald, the VA secretary, to inform him of their "dismay" over the impending shortfall.

"We were informed recently that FY2015 funds for medicines to cure hepatitis C are nearly exhausted, and when they are gone, we will have limited ability to treat Veterans with hepatitis C in VA facilities until FY16," the practitioners wrote.

"To halt hepatitis C treatment at [Veterans Health Administration] facilities now would be unconscionable," the letter continued.

In a July 31 email, a VA official acknowledged the plan to allocate the medication meant "deferring patients with less serious disease even if there is available capacity/funds."

The plan to withhold medicine from patients who were less sick was referred to later in the email as a "prioritization scheme."

"[T]reatment is more effective in those without cirrhosis," one VA physician wrote in an April 25 email expressing reservations about the plan to ration medication. "Hence, even those patients without evidence of advanced liver disease can derive substantial benefit."

The physician argued that since patients are not prioritized for care based on their symptoms in other expensive treatment areas, such as chemotherapy, they should not be sorted by their symptoms in the hepatitis C treatment program.

"We don't have a fixed budget for the treatment of cancer or inflammatory bowel disease," the physician wrote. "I don't understand why hepatitis C treatment is being considered differently."

"Denying anyone care was never mentioned," said the then-undersecretary for patient care services in an April 26 response.

However, within a month, the VA was working on a draft memo that hinted at a plan to ration the medication.

Another VA official blasted the rationing scheme in May after examining that internal memo, which laid out the criteria that would exclude certain veterans from care.

"There is no precedent for systematic rationing of pharmaceutical treatment of a serious disease in VA because of funding constraints," one agency official noted in an email chain about the plan.

According to the draft memo, the VA planned to deny treatment to any veteran whose disease was so severe that his or her life expectancy was less than a year.

Any veterans with "advanced dementia" or who were in a "persistent vegetative state" would also be denied the hepatitis drug.

A final version of the memo, signed May 12, calls the plan to ration medication a "hierarchy of care."

A VA official who requested anonymity said the policy was amended after "internal screaming" about rationing the drug.

In the wake of internal pushback on the plan to ration drugs for veterans, the VA issued clarification on Aug. 14, instructing facilities to offer appointments to less-sick patients "if the slot cannot be filled" by a veteran with advanced liver disease after agency "outreach" attempted to recruit such patients.

The VA did not respond to a request for comment.