Timely Payment for Veterans' Medical Care Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Timely Payment for Veterans' Medical 
Care Act''.

SEC. 2. AUTHORITY OF SECRETARY OF VETERANS AFFAIRS TO ENTER INTO 
              CONTRACTS WITH ADMINISTRATIVE CONTRACTORS FOR THE 
              PROCESSING OF CLAIMS FOR HOSPITAL CARE AND MEDICAL 
              SERVICES FURNISHED IN NON-DEPARTMENT OF VETERANS AFFAIRS 
              FACILITIES.

    (a) In General.--Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1725 the following new section:
``Sec. 1725A. Authority to enter into contracts with administrative 
              contractors
    ``(a) Authority.--(1) The Secretary may enter into contracts with 
any eligible entity to serve as an administrative contractor with 
respect to the performance of any or all of the functions described in 
paragraph (4) or parts of those functions (or, to the extent provided 
in a contract, to secure performance thereof by other entities).
    ``(2) An entity is eligible to enter into a contract with respect 
to the performance of a particular function described in paragraph (4) 
only if--
            ``(A) the entity has demonstrated capability to carry out 
        such function;
            ``(B) the entity complies with such conflict of interest 
        standards as are generally applicable to Federal acquisition 
        and procurement;
            ``(C) the entity has sufficient assets to financially 
        support the performance of such function;
            ``(D) the entity has the ability to accept and process 
        electronic filings of medical records; and
            ``(E) the entity meets such other requirements as the 
        Secretary may impose.
    ``(3)(A) For purposes of this section, the term `administrative 
contractor' means an agency, organization, or other person with a 
contract under this section.
    ``(B) With respect to the performance of a particular function in 
relation to an individual enrolled in the patient enrollment system 
under section 1705 of this title, the `appropriate' administrative 
contractor is the administrative contractor that has a contract under 
this section with respect to the performance of that function in 
relation to that individual, or non-Department facility.
    ``(4) The functions referred to in this paragraph are the following 
functions relating to the furnishing of medical care and hospital 
services in non-Department facilities under section 1725 or 1728 of 
this title:
            ``(A) Determining the amount of the payments required 
        pursuant to this title to be made to a non-Department facility.
            ``(B) Making payments described in subparagraph (A) 
        (including receipt, disbursement, and accounting for funds in 
        making such payments).
            ``(C) Providing education and outreach to individuals 
        enrolled in the patient enrollment system under section 1705 of 
        this title and providing assistance to those individuals with 
        specific issues, concerns, or problems.
            ``(D) Providing consultative services to institutions, 
        agencies, and other persons to enable them to establish and 
        maintain fiscal records necessary for purposes of this title.
            ``(E) Communicating to non-Department facilities any 
        information or instructions furnished to the administrative 
        contractor by the Secretary, and facilitating communication 
        between such facilities and the Secretary.
            ``(F) Performing the functions relating to non-Department 
        facility education, training, and technical assistance.
            ``(G) Performing such other functions as are necessary to 
        carry out the purposes of this title.
    ``(5) Except to the extent inconsistent with a specific requirement 
of this section, the Federal Acquisition Regulation applies to 
contracts under this section.
    ``(b) Contracting Requirements.--(1)(A) Except as provided in laws 
with general applicability to Federal acquisition and procurement or in 
subparagraph (B), the Secretary shall use competitive procedures when 
entering into contracts with administrative contractors under this 
section, taking into account performance quality as well as price and 
other factors.
    ``(B) The Secretary may renew a contract with an administrative 
contractor under this section from term to term without regard to 
section 5 of title 41, United States Code, or any other provision of 
law requiring competition, if the administrative contractor has met or 
exceeded the performance requirements applicable with respect to the 
contract and contractor, except that the Secretary shall provide for 
the application of competitive procedures under such a contract not 
less frequently than once every 5 years.
    ``(C) The Secretary may transfer functions among administrative 
contractors consistent with the provisions of this paragraph. The 
Secretary shall ensure that performance quality is considered in such 
transfers. The Secretary shall provide public notice (whether in the 
Federal Register or otherwise) of any such transfer (including a 
description of the functions so transferred, a description of the non-
Department facilities affected by such transfer, and contact 
information for the contractors involved).
    ``(D) The Secretary shall provide incentives for administrative 
contractors to provide quality service and to promote efficiency.
    ``(2) No contract under this section shall be entered into with any 
administrative contractor unless the Secretary finds that such 
administrative contractor will perform its obligations under the 
contract efficiently and effectively and will meet such requirements as 
to financial responsibility, legal authority, quality of services 
provided, and other matters as the Secretary finds pertinent.
    ``(3)(A)(i) The Secretary shall develop contract performance 
requirements to carry out the specific requirements applicable under 
this title to a function described in subsection (a)(4) and shall 
develop standards for measuring the extent to which a contractor has 
met such requirements. Such requirements shall include specific 
performance duties expected of a medical director of an administrative 
contractor, including requirements relating to professional relations 
and the availability of such director to conduct medical determination 
activities within the jurisdiction of such a contractor.
    ``(ii) In developing such performance requirements and standards 
for measurement, the Secretary shall consult with non-Department 
facilities, veterans service organizations, and organizations and 
agencies performing functions necessary to carry out the purposes of 
this section with respect to such performance requirements.
    ``(iii) The Secretary shall make such performance requirements and 
measurement standards available to the public.
    ``(B) The Secretary shall include, as one of the standards 
developed under subparagraph (A), non-Department facility and veteran 
satisfaction levels.
    ``(C) All contractor performance requirements shall be set forth in 
the contract between the Secretary and the appropriate administrative 
contractor. Such performance requirements--
            ``(i) shall reflect the performance requirements published 
        under subparagraph (A), but may include additional performance 
        requirements;
            ``(ii) shall be used for evaluating contractor performance 
        under the contract; and
            ``(iii) shall be consistent with the written statement of 
        work provided under the contract.
    ``(4) The Secretary shall not enter into a contract with an 
administrative contractor under this section unless the contractor 
agrees--
            ``(A) to furnish to the Secretary such timely information 
        and reports as the Secretary may find necessary in performing 
        the functions of the Secretary under this title; and
            ``(B) to maintain such records and afford such access 
        thereto as the Secretary finds necessary to assure the 
        correctness and verification of the information and reports 
        under subparagraph (A) and otherwise to carry out the purposes 
        of this title.
    ``(5) A contract with an administrative contractor under this 
section may require the administrative contractor, and any of its 
officers or employees certifying payments or disbursing funds pursuant 
to the contract, or otherwise participating in carrying out the 
contract, to give surety bond to the United States in such amount as 
the Secretary may deem appropriate.
    ``(c) Terms and Conditions.--A contract with any administrative 
contractor under this section may contain such terms and conditions as 
the Secretary finds necessary or appropriate and may provide for 
advances of funds to the administrative contractor for the making of 
payments by it under subsection (a)(4)(B).
    ``(d) Limitation on Liability of Administrative Contractors and 
Certain Officers.--(1) No individual designated pursuant to a contract 
under this section as a certifying officer shall, in the absence of the 
reckless disregard of the individual's obligations or the intent by 
that individual to defraud the United States, be liable with respect to 
any payments certified by the individual under this section.
    ``(2) No disbursing officer shall, in the absence of the reckless 
disregard of the officer's obligations or the intent by that officer to 
defraud the United States, be liable with respect to any payment by 
such officer under this section if it was based upon an authorization 
(which meets the applicable requirements for such internal controls 
established by the Comptroller General of the United States) of a 
certifying officer designated as provided in paragraph (1) of this 
subsection.
    ``(3)(A) No administrative contractor shall be liable to the United 
States for a payment by a certifying or disbursing officer unless, in 
connection with such payment, the administrative contractor acted with 
reckless disregard of its obligations under its administrative contract 
or with intent to defraud the United States.
    ``(B) Nothing in this subsection shall be construed to limit 
liability for conduct that would constitute a violation of sections 
3729 through 3731 of title 31, United States Code.
    ``(4)(A) Subject to subparagraphs (B) and (D), in the case of an 
administrative contractor (or a person who is a director, officer, or 
employee of such a contractor or who is engaged by the contractor to 
participate directly in the claims administration process) who is made 
a party to any judicial or administrative proceeding arising from or 
relating directly to the claims administration process under this 
title, the Secretary may, to the extent the Secretary determines to be 
appropriate and as specified in the contract with the contractor, 
indemnify the contractor and such persons.
    ``(B) The Secretary may not provide indemnification under 
subparagraph (A) insofar as the liability for such costs arises 
directly from conduct that is determined by the judicial proceeding or 
by the Secretary to be criminal in nature, fraudulent, or grossly 
negligent. If indemnification is provided by the Secretary with respect 
to a contractor before a determination that such costs arose directly 
from such conduct, the contractor shall reimburse the Secretary for 
costs of indemnification.
    ``(C) Indemnification by the Secretary under subparagraph (A) may 
include payment of judgments, settlements (subject to subparagraph 
(D)), awards, and costs (including reasonable legal expenses).
    ``(D) A contractor or other person described in subparagraph (A) 
may not propose to negotiate a settlement or compromise of a proceeding 
described in such subparagraph without the prior written approval of 
the Secretary to negotiate such settlement or compromise. Any 
indemnification under subparagraph (A) with respect to amounts paid 
under a settlement or compromise of a proceeding described in such 
subparagraph are conditioned upon prior written approval by the 
Secretary of the final settlement or compromise.
    ``(E) Nothing in this paragraph shall be construed--
            ``(i) to change any common law immunity that may be 
        available to an administrative contractor or person described 
        in subparagraph (A); or
            ``(ii) to permit the payment of costs not otherwise 
        allowable, reasonable, or allocable under the Federal 
        Acquisition Regulation.
    ``(e) Requirements for Information Security.--(1) An administrative 
contractor that performs the functions referred to in subparagraphs (A) 
and (B) of subsection (a)(4) (relating to determining and making 
payments) shall implement a contractor-wide information security 
program to provide information security for the operation and assets of 
the contractor with respect to such functions under this title. An 
information security program under this paragraph shall meet the 
requirements for information security programs imposed on Federal 
agencies under paragraphs (1) through (8) of section 3544(b) of title 
44, United States Code (other than the requirements under paragraphs 
(2)(D)(i), (5)(A), and (5)(B) of such section).
    ``(2)(A) Each year an administrative contractor that performs the 
functions referred to in subparagraphs (A) and (B) of subsection (a)(4) 
(relating to determining and making payments) shall undergo an 
evaluation of the information security of the contractor with respect 
to such functions under this title. The evaluation shall--
            ``(i) be performed by an entity that meets such 
        requirements for independence as the Inspector General of the 
        Department of Health and Human Services may establish; and
            ``(ii) test the effectiveness of information security 
        control techniques of an appropriate subset of the contractor's 
        information systems (as defined in section 3502(8) of title 44, 
        United States Code) relating to such functions under this title 
        and an assessment of compliance with the requirements of this 
        subsection and related information security policies, 
        procedures, standards and guidelines, including policies and 
        procedures as may be prescribed by the Director of the Office 
        of Management and Budget and applicable information security 
        standards promulgated under section 11331 of title 40, United 
        States Code.
    ``(B)(i) The results of independent evaluations under subparagraph 
(A) shall be submitted promptly to the Inspector General of the 
Department and to the Secretary.
    ``(ii) The Inspector General of the Department shall submit to 
Congress annual reports on the results of such evaluations, including 
assessments of the scope and sufficiency of such evaluations.
    ``(f) Incentives To Improve Contractor Performance in Non-
Department Facility Education and Outreach.--The Secretary shall use 
specific claims payment error rates or similar methodology of 
administrative contractors in the processing or reviewing of claims in 
order to give such contractors an incentive to implement effective 
education and outreach programs for non-Department facilities.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1725 the following new item:

``1725. Authority to enter into contracts with administrative 
                            contractors.''.

Summary: Timely Payment for Veterans' Medical Care Act This bill authorizes the Department of Veterans Affairs (VA) to enter into contracts with an eligible entity to serve as an administrative contractor with respect to the performance of any or all of the following functions relating to providing medical care and hospital services in non-VA facilities: determining and making the payments required to be made to a non-VA facility. Providing education and outreach to individuals enrolled in the patient enrollment system. Providing consultative services to institutions, agencies, and other persons to enable them to maintain necessary fiscal records. Communicating to non-VA facilities any information or instructions furnished to the administrative contractor by the VA. And performing functions relating to non-VA facility education, training, and technical assistance. An administrative contractor that performs such payment-related functions shall implement a contractor-wide information security program. The VA shall use claims payment error rates or similar methodology of administrative contractors in the processing or reviewing of claims in order to give such contractors an incentive to implement effective education and outreach programs for non-VA facilities.