SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Long-Term Care Security Act 
of 2006''.

SEC. 2. REQUIREMENT FOR REPORT TO CONGRESS BEFORE IMPLEMENTATION OF 
              REDUCTION IN PER DIEM RATES FOR CARE PROVIDED TO VETERANS 
              IN STATE HOMES.

    (a) Requirement for Report.--Subsection (c) of section 1741 of 
title 38, United States Code, is amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding at the end the following new paragraph:
    ``(2)(A) If the Secretary proposes to implement a reduction in 
payments made under this section with respect to a fiscal year the 
Secretary shall, not later than January 1 of the preceding fiscal year, 
submit to the Committee on Veterans' Affairs of the Senate and the 
Committee on Veterans' Affairs of the House of Representatives a report 
containing a detailed justification of such proposed reduction.
    ``(B) For purposes of this paragraph, a reduction in payments is--
            ``(i) a lack of increase in the rates paid under subsection 
        (a) pursuant to a determination of the Secretary under 
        paragraph (1); or
            ``(ii) a modification of the eligibility for veterans to 
        receive care in State homes that would, if enacted into law, 
        result in fewer veterans eligible to receive such care in State 
        homes.
    ``(C) In preparing a report under subparagraph (A), the Secretary 
shall consult with the heads and appropriate officials of the State and 
local agencies responsible for the supervision of State homes in each 
State in which State homes are operated, and representatives of such 
other organizations with expertise in State home matters as the 
Secretary determines appropriate.
    ``(D) A report under subparagraph (A) shall include the following 
information:
            ``(i) A specific description of the degree to which the 
        proposed reduction in payments would effect the financial well-
        being of each State home.
            ``(ii) A detailed description of the consultation with 
        heads, officials, and representatives required under 
        subparagraph (C), and the results of that consultation.
            ``(iii) A description of the intent of the Secretary to 
        recover grant amounts under section 8136(a) of this title where 
        a State determines, as a result of the proposed reduction in 
        payments, to close a State home within the period prescribed 
        under that section.
            ``(iv) A description of the effect of the proposed 
        reduction in payments on the long-term care needs of veterans 
        who receive care in State homes, including a description of the 
        options for long-term care in reasonably proximate facilities 
        available to such veterans and an assessment of the cost of the 
        provision of care for such veterans in such facilities.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act, and apply with 
respect to per diem payments made under section 1741 of title 38, 
United States Code, on or after such date.

SEC. 3. NURSING HOME CARE AND PRESCRIPTION MEDICATIONS IN STATE HOMES 
              FOR VETERANS WITH SERVICE-CONNECTED DISABILITIES.

    (a) Nursing Home Care.--Subchapter V of chapter 17 of title 38, 
United States Code, is amended by adding at the end the following new 
section:
``Sec. 1744. Nursing home care and medications for veterans with 
              service-connected disabilities
    ``(a)(1) The Secretary shall pay each State home for nursing home 
care at the applicable rate payable under section 1720 of this title 
for nursing home care furnished in a non-Department nursing home (as 
that term is defined in subsection (e)(2) of such section), where such 
care is provided to any veteran as follows:
            ``(A) Any veteran in need of such care for a service-
        connected disability.
            ``(B) Any veteran who--
                    ``(i) has a service-connected disability rated at 
                70 percent or more; and
                    ``(ii) is in need of such care.
    ``(2) Payment by the Secretary under paragraph (1) to a State home 
for nursing home care provided to a veteran described in that paragraph 
constitutes payment in full to the State home for such care furnished 
to that veteran.''.
    (b) Provision of Prescription Medicines.--Such section is further 
amended by adding at the end the following new subsection:
    ``(b) The Secretary shall furnish such drugs and medicines as may 
be ordered on prescription of a duly licensed physician as specific 
therapy in the treatment of illness or injury to any veteran as 
follows:
            ``(1) Any veteran in need of such drugs and medicines for a 
        service-connected disability.
            ``(2) Any veteran who--
                    ``(A) has a service-connected disability rated at 
                50 percent or more;
                    ``(B) is provided nursing home care that is payable 
                under subsection (a); and
                    ``(C) is in need of such drugs and medicines.''.
    (c) Conforming Amendments.--
            (1) Criteria for payment.--Section 1741(a)(1) of such title 
        is amended by striking ``The'' and inserting ``Except as 
        provided in section 1744 of this title, the''.
            (2) Eligibility for nursing home care.--Section 1710(a)(4) 
        of such title is amended--
                    (A) by striking ``and'' before ``the requirement in 
                section 1710B of this title''; and
                    (B) by inserting ``, and the requirement in section 
                1744 of this title to provide nursing home care and 
                prescription medicines to veterans with service-
                connected disabilities in State homes'' after ``a 
                program of extended care services''.
    (d) Clerical Amendment.--The table of sections at the beginning of 
chapter 17 of such title is amended by inserting after the item 
relating to section 1743 the following new item:

``1744.  Nursing home care and medications for veterans with service-
                            connected disabilities.''.
    (e) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2006.

SEC. 4. AUTHORITY TO TREAT CERTAIN HEALTH FACILITIES AS STATE HOMES.

    (a) Authority.--Subchapter III of chapter 81 of title 38, United 
States Code, is amended by adding at the end the following new section:
``Sec. 8138. Treatment of certain health facilities as State homes
    ``(a) The Secretary may treat a health facility as a State home for 
purposes of subchapter V of chapter 17 of this title if the following 
requirements are met:
            ``(1) The facility meets the standards for the provision of 
        nursing home care that is applicable to State homes, as 
        prescribed by the Secretary under section 8134(b) of this 
        title, and such other standards relating to the facility as the 
        Secretary may require.
            ``(2) The facility is licensed or certified by the 
        appropriate State and local agencies charged with the 
        responsibility of licensing or otherwise regulating or 
        inspecting State home facilities.
            ``(3) The State demonstrates in an application to the 
        Secretary that, but for the treatment of a facility as a State 
        home under this subsection, a substantial number of veterans 
        residing in the geographic area in which the facility is 
        located who require nursing home care will not have access to 
        such care.
            ``(4) The Secretary determines that the treatment of the 
        facility as a State home best meets the needs of veterans for 
        nursing home care in the geographic area in which the facility 
        is located.
            ``(5) The Secretary approves the application submitted by 
        the State with respect to the facility.
    ``(b) The Secretary may not treat a health facility as a State home 
under subsection (a) if the Secretary determines that such treatment 
would increase the number of beds allocated to the State in excess of 
the limit on the number of beds provided for by regulations prescribed 
under section 8134(a) of this title.
    ``(c) The number of beds occupied by veterans in a health facility 
for which payment may be made under subchapter V of chapter 17 of this 
title by reason of subsection (a) shall not exceed the number of 
veterans in beds in State homes that otherwise would be permitted in 
the State under regulations prescribed under section 8134(a) of this 
title.
    ``(d) The number of beds in a health facility in a State that has 
been treated as a State home under subsection (a) shall be taken into 
account in determining the unmet need for beds for State homes for the 
State under section 8134(d)(1) of this title.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 81 of such title is amended by inserting after the item 
relating to section 8137 the following new item:

``8138.  Treatment of certain health facilities as State homes.''.
Veterans Long-Term Care Security Act of 2006 - Requires the Secretary of Veterans Affairs to submit to the congressional veterans' committees a detailed justification of any proposal to implement a reduction in per diem payments to state nursing homes for care provided to veterans.

Directs the Secretary to pay for nursing home care furnished in a non-Department of Veterans Affairs nursing home where such care is provided to any veteran: (1) in need of such care for a service-connected disability; or (2) with a service-connected disability rated at 70 percent or more and in need of such care.

Directs the Secretary to furnish such drugs and medicines as ordered by a duly licensed physician for any veteran: (1) in need of such drugs and medicines for a service-connected disability; or (2) with a service-connected disability rated at 50 percent or more in need of such drugs and medicines while being provided nursing home care payable through the Department.

Authorizes the Secretary to treat certain health facilities as state homes for purposes of eligibility for payments for care provided to veterans.
A bill to amend title 38, United States Code, to ensure appropriate payment for the cost of long-term care provided to veterans in State homes, and for other purposes.