SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Medical Care Revenue 
Enhancement Act of 2005''.

SEC. 2. DEMONSTRATION PROJECT TO IMPROVE BUSINESS PRACTICES OF VETERANS 
              HEALTH ADMINISTRATION.

    (a) Demonstration Project Required.--
            (1) In general.--The Secretary of Veterans Affairs shall 
        conduct a demonstration project under this section for the 
        improvement of business practices of the Veterans Health 
        Administration.
            (2) Performance-based contract.-- To carry out the 
        demonstration project, the Secretary shall enter into a 
        performance-based contract for a contractor to carry out the 
        functions specified in subsection (e).
            (3) Cost limitation.--The total amount paid to the 
        contractor under the contract may not exceed $10,000,000.
    (b) Commencement and Duration of Project.--The demonstration 
project shall be conducted during the two-year period beginning on the 
first day of the first month beginning more than 120 days after the 
date of the enactment of this Act.
    (c) Sites for Conduct of Project.--The Secretary shall conduct the 
demonstration project at two medical centers of the Veterans Health 
Administration within the same service area (referred to as a Veterans 
Integrated Service Network) of the Veterans Health Administration. The 
two medical centers at which the project is conducted shall be selected 
by the Secretary from among medical centers that are located in those 
services areas of the Veterans Health Administration that the Secretary 
determines have relatively low rates of recovery or collection of 
indebtedness from third-party payors under section 1729 of title 38, 
United States Code.
    (d) Selection of Contractor.--The Secretary shall carry out the 
process for selection of the contractor for the demonstration project 
so that the contractor to perform the contract is selected, and the 
contract is awarded, not later than three months after the date of the 
enactment of this Act. The contractor shall be an entity or 
organization that has significant experience in the administrative 
processing of health care charges and claims.
    (e) Functions of Contractor.--The Secretary shall provide in the 
contract for the following functions of the contractor with respect to 
each facility at which the demonstration project is conducted:
            (1) Establishment of a plan to standardize and coordinate 
        all activities related to billing for health-care items and 
        services furnished to veterans for non-service-connected 
        disabilities.
            (2) Reengineering of the business processes for billing and 
        accounts receivable activities.
            (3) Application of commercial-industry standards for 
        measures of access, timeliness, and performance.
            (4) Establishment of a database containing third-party 
        payor information for veterans receiving health care and 
        services.
            (5) Such other requirements with respect to business 
        practices as the Secretary may specify.
    (f) VHA Project Manager.--As part of the demonstration project, the 
Secretary shall ensure that a Veterans Health Administration employee 
is designated to be the full-time project manager for the project and 
that such employee's duty station is at one of the medical centers at 
which the project is conducted, with provision for visits as needed to 
the other medical center at which the project is conducted.
    (g) Employee Protection.--The Secretary shall administer the 
demonstration project so that during the period of the conduct of the 
demonstration project there is no reduction in full-time equivalent 
employees of the Department of Veterans Affairs at the medical centers 
at which the project is conducted that is attributable to the conduct 
of the demonstration project.
    (h) Reports to Congress.--
            (1) Periodic progress reports on project implementation.--
                    (A) Reports required.--The Secretary shall submit 
                to Congress progress reports on the implementation of 
                the demonstration project.
                    (B) Time for progress reports.-- Such reports shall 
                be submitted as expeditiously as feasible after the end 
                of--
                            (i) the 60-day period, the 90-day period, 
                        and the 180-day period beginning on the date of 
                        the enactment of this Act; and
                            (ii) the 60-day period, the 90-day period, 
                        and the 180-day period beginning on the date of 
                        the award of the contract under subsection (d).
                    (C) Matter to be included.--Each report under this 
                paragraph shall set out the progress to date on the 
                implementation of the demonstration project, 
                including--
                            (i) before the contractor has been 
                        selected, progress toward selection of the 
                        contractor (identified by the steps in the 
                        acquisition process that have been accomplished 
                        and that remain to be accomplished); and
                            (ii) after the contractor has been 
                        selected, the contractor's progress in 
                        initiating and carrying out the demonstration 
                        project in accordance with the requirements of 
                        this section.
            (2) Interim reports on project operation.--After the 
        completion of the first 12 months, and after the completion of 
        the first 18 months, of the demonstration project, the 
        Secretary shall submit to Congress an interim report on the 
        operation of the demonstration project to that date. Each such 
        report shall include the following:
                    (A) The assessment of the Secretary as to whether 
                the rate of recovery or collection of indebtedness owed 
                the United States from third-party payors has improved 
                by reason of the project.
                    (B) The assessment of the Secretary as to the 
                performance of the contractor.
                    (C) Estimated cost savings to the Department as a 
                result of the project.
            (3) Final report.--After the conclusion of the 
        demonstration project, the Secretary shall submit to Congress a 
        final report on the project. The Secretary shall include in 
        that report the matters specified in paragraph (2) and the 
        Secretary's recommendation for implementing on a permanent 
        basis the recovery or collection system tested in the 
        demonstration project and expanding the demonstration project 
        to other facilities of the Veterans Health Administration. The 
        final report shall be submitted not later than 90 days after 
        the conclusion of the demonstration project.
    (i) Comptroller General Review and Reports.--
            (1) Review.--The Comptroller General shall review the 
        demonstration project on an ongoing basis.
            (2) Reports.--The Comptroller General shall submit to 
        Congress a report on the Comptroller General's findings and 
        recommendations concerning the demonstration project--
                    (A) after the operation of the demonstration 
                project for a period of one year; and
                    (B) after the operation of the demonstration 
                project for a period of two years.
    (j) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of Veterans Affairs for the conduct of 
the demonstration project under this section the sum of $10,000,000.
Veterans Medical Care Revenue Enhancement Act of 2005 - Directs the Secretary of Veterans Affairs to: (1) conduct a demonstration project for the improvement of business practices of the Veterans Health Administration (VHA); and (2) enter into a performance-based contract for a contractor to carry out functions specified in this Act.

Requires the Secretary to conduct the project at two VHA medical centers within the same service area, selected from among medical centers located in those areas that the Secretary determines have relatively low rates of recovery or collection of indebtedness from third-party payors.

Sets forth provisions regarding the selection and functions of the contractor, including requiring the contractor to establish a plan to standardize and coordinate all activities related to billing for health care furnished to veterans for non-service-connected disabilities, and a database containing third-party payor information for veterans receiving health care.

Directs the Secretary to: (1) ensure that a VHA employee is designated to be the full-time project manager for the project and that such employee's duty station is at one of the medical centers at which the project is conducted; and (2) administer the project so that during the period of the conduct of the project (two years) there is no reduction in full-time equivalent employees of the Department of Veterans Affairs at the medical centers at which the project is conducted that is attributable to the conduct of the project.
To direct the Secretary of Veterans Affairs to conduct a demonstration project for the improvement of business practices of the Veterans Health Administration.