Robert McDonald speaks during his nomination by President Obama to lead the Department of Veterans Affairs on June 30, 2014. (Dennis Brack/EPA)

One year after an explosive Veterans Affairs scandal sparked national outrage, the number of veterans on wait lists to be treated for everything from Hepatitis C to post-traumatic stress is 50 percent higher than at the same time last year, according to VA data.

VA’s leadership attributed the growing wait times to soaring demand from veterans for medical services, brought on by the opening of new centers and a combination of aging Vietnam veterans seeking care, the return of younger veterans from Iraq and Afghanistan and the exploding demand for new and costly treatments for Hepatitis C.

Ahead of the House Committee on Veterans Affairs budget hearing scheduled for Thursday, VA leaders also warned that they are facing a $2.6 billion budget shortfall. They said they may have to start a hiring freeze or furloughs unless funding is reallocated for the federal government’s second-largest department.

Amid tense debate, VA Secretary Bob McDonald earlier this year asked for “flexibility” to reallocate billions of dollars in funds from the $10 billion that Congress established last year to fund private care to help former troops struggling to obtain appointments or who live far from a health center.

[Read about how McDonald is having a hard time talking Congress into using Choice Card funds.]

The embattled VA says that its vast health-care system has handled 2.7 million more appointments than in any previous year, and has increased its capacity by more than 7 million patient visits per year,  double what they anticipated, the New York Times first reported this week.

VA made more than 2.9 million authorizations for veterans to receive care in the private sector between June 1, 2014, and June 1, 2015, which is a 44 percent increase in authorizations, when compared to the same period in previous years.

“We are simply asking Congress, once again, for the budget flexibility to use our existing funds to provide Veterans with the care in the community they have already earned,” said VA Deputy Secretary Sloan Gibson via e-mail.

At the VA hospital in Phoenix, the epicenter of the crisis, more than 300 staff were added. But 34,000 additional appointments were completed, VA officials said. During the June-December period, the number of veterans receiving primary care was up 13 percent, specialty care up 15 percent and mental health care up 29 percent over the previous year, the VA said.

“We have confidence in Secretary McDonald. It’s clear that the VA is seeing more veterans than historically or in previous years and they are poorer, sicker and older than the past,” said Carlos Fuentes, senior legislative associate with Veterans of Foreign Wars. “At the same time, the Hep C drug is revolutionary, and unfortunately because it’s a high-cost drug, they are spending more than they expected. Ultimately our view is veterans should not be denied care because of budget questions.”

The VA wait-times scandal came to light last summer amid allegations that veterans died while waiting for care. After the scandal, the department that serves 8.7 million veterans received $15 billion to bring down wait times and hire more doctors and nurses last August under a Republican supported plan that included the Choice Card. That card would allow veterans to obtain private care when they wait too long for appointments or live far from the agency’s nearest clinic.

Former VA secretary Eric Shinseki resigned amid the scandal, in which department leaders and clerks allegedly falsified records to hide long wait times facing veterans seeking care.

McDonald, a former Procter & Gamble chief executive, took over last July with vows to reduce wait times and support an open culture that allows whistleblowers to highlight problems inside the system.

There have already been passionate objections among Republican lawmakers about using the Choice Card funds to make up for what the VA describes as a shortfall. Some also expressed deep frustration that the VA wasn’t able to better predict the need for Hepatitis C treatment.

According to internal VA memos, hospitals across the country have run out of money for treatment of new life-saving medicines for Hepatitis C. Wait lists are being maintained at most facilities along with a controversial directive to delay treating patients who have fatal illnesses.

“The VA received a $15 billion supplemental appropriation to help address the wait time issue,” said Rep. Mike Coffman (R-Colo.), who has been one of McDonald’s most vocal critics. “This is an organization that is so incompetently led that they can’t even tell us how much any given procedure costs, so it doesn’t surprise me that they can’t manage their existing resources to better serve veterans.”