I 

114TH CONGRESS 

2D SESSION H. R. 4689 

To amend title 38, United States Code, to authorize the 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. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 3, 2016 

Mr. BOUSTANY introduced the following bill; which was referred to the 

Committee on Veterans’ Affairs 

A BILL 

To amend title 38, United States Code, to authorize the 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Timely Payment for Veterans’ Emergency Care Act’’. 

6 (b) FINDINGS.—Congress finds as follows: 


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1 (1) There is a need for the Department of Vet2 erans Affairs to improve the timeliness of emergency 

3 claims processing for non-Department of Veterans 

4 Affairs care. 

5 (2) Current Veterans Health Administration 

6 (hereinafter referred to as the ‘‘VHA’’) policies re7 quire paper medical records be sent to VHA claims 

8 processing offices by providers. 

9 (3) According to Government Accountability Of10 fice testimony to a February 11, 2016, House Vet11 erans’ Affairs Subcommittee on Health hearing on 

12 Department of Veterans Affairs Choice Program 

13 Consolidation: 

14 (A) ‘‘VHA policy requires that paper 

15 claims be manually date-stamped and scanned 

16 into the Fee Basis Claims System (FBCS) 

17 upon receipt. Electronic claims are imported 

18 into the FBCS. If the community provider is 

19 required to submit medical documentation for 

20 the claim to be processed—which is the case for 

21 most types of VA care in the community serv22 ices—VA can only accept it in paper form, and 

23 the medical documentation must also be 

24 scanned into FBCS.’’. 


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1 (B) ‘‘A VHA directive states that 90 per2 cent of all claims for VA care in the community 

3 must be processed (either paid or rejected) 

4 within 30 days of receipt.’’. 

5 (C) ‘‘Our preliminary work shows that in 

6 fiscal year 2015, VHA’s processing of claims 

7 for VA care in the community services was sig8 nificantly less timely than Medicare’s and 

9 TRICARE’s claims processing. VHA officials 

10 told us that the agency’s fiscal year 2015 data 

11 show that VHA processed about 66 percent of 

12 claims within the agency’s required timeframe 

13 of 30 days or less. In contrast, CMS and DHA 

14 data show that in fiscal year 2015, Medicare’s 

15 and TRICARE’s claims processing contractors 

16 processed about 99 percent of claims within 30 

17 or fewer days of receipt.’’. 

18 (D) ‘‘However, the difference between 

19 VHA’s claims processing timeliness and that of 

20 Medicare and TRICARE is likely greater than 

21 what VHA’s available data indicate. Specifi22 cally, VHA’s data likely overstate the agency’s 

23 claims processing timeliness because they do 

24 not account for delays in scanning paper claims, 

25 which VHA officials told us account for apVerDate Sep 11 2014 03:15 Mar 04, 2016 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4689.IH H4689

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1 proximately 60 percent of claims for VA care in 

2 the community services.’’. 

3 (E) ‘‘Our preliminary review raises ques4 tions about whether staff at VHA’s claims proc5 essing locations are following the agency’s pol6 icy for promptly scanning paper claims.’’. 

7 (F) ‘‘According to CMS and DHA officials, 

8 the vast majority of Medicare and TRICARE 

9 claims are submitted electronically.’’. 

10 (4) According to data compiled by the Veterans 

11 Health Administration’s Chief Business Office, there 

12 is currently a backlog of over $788,000,000 nation13 wide for non-Department of Veterans Affairs emer14 gency medical claims. 

15 SEC. 2. AUTHORITY OF SECRETARY OF VETERANS AFFAIRS 

16 TO ENTER INTO CONTRACTS WITH ADMINIS17 TRATIVE CONTRACTORS FOR THE PROC18 ESSING OF CLAIMS FOR HOSPITAL CARE AND 

19 MEDICAL SERVICES FURNISHED IN NON-DE20 PARTMENT OF VETERANS AFFAIRS FACILI21 TIES. 

22 (a) IN GENERAL.—Chapter 17 of title 38, United 

23 States Code, is amended by inserting after section 1725 

24 the following new section: 


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1 ‘‘§ 1725A. Authority to enter into contracts with ad2 ministrative contractors 

3 ‘‘(a) AUTHORITY.—(1) The Secretary may enter into 

4 contracts with any eligible entity to serve as an adminis5 trative contractor with respect to the performance of any 

6 or all of the functions described in paragraph (4) or parts 

7 of those functions (or, to the extent provided in a contract, 

8 to secure performance thereof by other entities). 

9 ‘‘(2) An entity is eligible to enter into a contract with 

10 respect to the performance of a particular function de11 scribed in paragraph (4) only if— 

12 ‘‘(A) the entity has demonstrated capability to 

13 carry out such function; 

14 ‘‘(B) the entity complies with such conflict of 

15 interest standards as are generally applicable to 

16 Federal acquisition and procurement; 

17 ‘‘(C) the entity has sufficient assets to finan18 cially support the performance of such function; 

19 ‘‘(D) the entity has the ability to accept and 

20 process electronic filings of medical records; and 

21 ‘‘(E) the entity meets such other requirements 

22 as the Secretary may impose. 

23 ‘‘(3)(A) For purposes of this section, the term ‘ad24 ministrative contractor’ means an agency, organization, or 

25 other person with a contract under this section. 


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1 ‘‘(B) With respect to the performance of a particular 

2 function in relation to an individual enrolled in the patient 

3 enrollment system under section 1705 of this title, the ‘ap4 propriate’ administrative contractor is the administrative 

5 contractor that has a contract under this section with re6 spect to the performance of that function in relation to 

7 that individual, or non-Department facility. 

8 ‘‘(4) The functions referred to in this paragraph are 

9 the following functions relating to the furnishing of med10 ical care and hospital services in non-Department facilities 

11 under section 1725 or 1728 of this title: 

12 ‘‘(A) Determining the amount of the payments 

13 required pursuant to this title to be made to a non14 Department facility. 

15 ‘‘(B) Making payments described in subpara16 graph (A) (including receipt, disbursement, and ac17 counting for funds in making such payments). 

18 ‘‘(C) Providing education and outreach to indi19 viduals enrolled in the patient enrollment system 

20 under section 1705 of this title and providing assist21 ance to those individuals with specific issues, con22 cerns, or problems. 

23 ‘‘(D) Providing consultative services to institu24 tions, agencies, and other persons to enable them to 


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1 establish and maintain fiscal records necessary for 

2 purposes of this title. 

3 ‘‘(E) Communicating to non-Department facili4 ties any information or instructions furnished to the 

5 administrative contractor by the Secretary, and fa6 cilitating communication between such facilities and 

7 the Secretary. 

8 ‘‘(F) Performing the functions relating to non9 Department facility education, training, and tech10 nical assistance. 

11 ‘‘(G) Performing such other functions as are 

12 necessary to carry out the purposes of this title. 

13 ‘‘(5) Except to the extent inconsistent with a specific 

14 requirement of this section, the Federal Acquisition Regu15 lation applies to contracts under this section. 

16 ‘‘(b) CONTRACTING REQUIREMENTS.—(1)(A) Except 

17 as provided in laws with general applicability to Federal 

18 acquisition and procurement or in subparagraph (B), the 

19 Secretary shall use competitive procedures when entering 

20 into contracts with administrative contractors under this 

21 section, taking into account performance quality as well 

22 as price and other factors. 

23 ‘‘(B) The Secretary may renew a contract with an 

24 administrative contractor under this section from term to 

25 term without regard to section 5 of title 41, United States 


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1 Code, or any other provision of law requiring competition, 

2 if the administrative contractor has met or exceeded the 

3 performance requirements applicable with respect to the 

4 contract and contractor, except that the Secretary shall 

5 provide for the application of competitive procedures 

6 under such a contract not less frequently than once every 

7 5 years. 

8 ‘‘(C) The Secretary may transfer functions among 

9 administrative contractors consistent with the provisions 

10 of this paragraph. The Secretary shall ensure that per11 formance quality is considered in such transfers. The Sec12 retary shall provide public notice (whether in the Federal 

13 Register or otherwise) of any such transfer (including a 

14 description of the functions so transferred, a description 

15 of the non-Department facilities affected by such transfer, 

16 and contact information for the contractors involved). 

17 ‘‘(D) The Secretary shall provide incentives for ad18 ministrative contractors to provide quality service and to 

19 promote efficiency. 

20 ‘‘(2) No contract under this section shall be entered 

21 into with any administrative contractor unless the Sec22 retary finds that such administrative contractor will per23 form its obligations under the contract efficiently and ef24 fectively and will meet such requirements as to financial 


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1 responsibility, legal authority, quality of services provided, 

2 and other matters as the Secretary finds pertinent. 

3 ‘‘(3)(A)(i) The Secretary shall develop contract per4 formance requirements to carry out the specific require5 ments applicable under this title to a function described 

6 in subsection (a)(4) and shall develop standards for meas7 uring the extent to which a contractor has met such re8 quirements. Such requirements shall include specific per9 formance duties expected of a medical director of an ad10 ministrative contractor, including requirements relating to 

11 professional relations and the availability of such director 

12 to conduct medical determination activities within the ju13 risdiction of such a contractor. 

14 ‘‘(ii) In developing such performance requirements 

15 and standards for measurement, the Secretary shall con16 sult with non-Department facilities, veterans service orga17 nizations, and organizations and agencies performing 

18 functions necessary to carry out the purposes of this sec19 tion with respect to such performance requirements. 

20 ‘‘(iii) The Secretary shall make such performance re21 quirements and measurement standards available to the 

22 public. 

23 ‘‘(B) The Secretary shall include, as one of the stand24 ards developed under subparagraph (A), non-Department 

25 facility and veteran satisfaction levels. 


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1 ‘‘(C) All contractor performance requirements shall 

2 be set forth in the contract between the Secretary and the 

3 appropriate administrative contractor. Such performance 

4 requirements— 

5 ‘‘(i) shall reflect the performance requirements 

6 published under subparagraph (A), but may include 

7 additional performance requirements; 

8 ‘‘(ii) shall be used for evaluating contractor per9 formance under the contract; and 

10 ‘‘(iii) shall be consistent with the written state11 ment of work provided under the contract. 

12 ‘‘(4) The Secretary shall not enter into a contract 

13 with an administrative contractor under this section unless 

14 the contractor agrees— 

15 ‘‘(A) to furnish to the Secretary such timely in16 formation and reports as the Secretary may find 

17 necessary in performing the functions of the Sec18 retary under this title; and 

19 ‘‘(B) to maintain such records and afford such 

20 access thereto as the Secretary finds necessary to 

21 assure the correctness and verification of the infor22 mation and reports under subparagraph (A) and 

23 otherwise to carry out the purposes of this title. 

24 ‘‘(5) A contract with an administrative contractor 

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1 tractor, and any of its officers or employees certifying pay2 ments or disbursing funds pursuant to the contract, or 

3 otherwise participating in carrying out the contract, to 

4 give surety bond to the United States in such amount as 

5 the Secretary may deem appropriate. 

6 ‘‘(c) TERMS AND CONDITIONS.—A contract with any 

7 administrative contractor under this section may contain 

8 such terms and conditions as the Secretary finds necessary 

9 or appropriate and may provide for advances of funds to 

10 the administrative contractor for the making of payments 

11 by it under subsection (a)(4)(B). 

12 ‘‘(d) LIMITATION ON LIABILITY OF ADMINISTRATIVE

13 CONTRACTORS AND CERTAIN OFFICERS.—(1) No indi14 vidual designated pursuant to a contract under this sec15 tion as a certifying officer shall, in the absence of the reck16 less disregard of the individual’s obligations or the intent 

17 by that individual to defraud the United States, be liable 

18 with respect to any payments certified by the individual 

19 under this section. 

20 ‘‘(2) No disbursing officer shall, in the absence of the 

21 reckless disregard of the officer’s obligations or the intent 

22 by that officer to defraud the United States, be liable with 

23 respect to any payment by such officer under this section 

24 if it was based upon an authorization (which meets the 

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1 lished by the Comptroller General of the United States) 

2 of a certifying officer designated as provided in paragraph 

3 (1) of this subsection. 

4 ‘‘(3)(A) No administrative contractor shall be liable 

5 to the United States for a payment by a certifying or dis6 bursing officer unless, in connection with such payment, 

7 the administrative contractor acted with reckless disregard 

8 of its obligations under its administrative contract or with 

9 intent to defraud the United States. 

10 ‘‘(B) Nothing in this subsection shall be construed 

11 to limit liability for conduct that would constitute a viola12 tion of sections 3729 through 3731 of title 31, United 

13 States Code. 

14 ‘‘(4)(A) Subject to subparagraphs (B) and (D), in the 

15 case of an administrative contractor (or a person who is 

16 a director, officer, or employee of such a contractor or who 

17 is engaged by the contractor to participate directly in the 

18 claims administration process) who is made a party to any 

19 judicial or administrative proceeding arising from or relat20 ing directly to the claims administration process under 

21 this title, the Secretary may, to the extent the Secretary 

22 determines to be appropriate and as specified in the con23 tract with the contractor, indemnify the contractor and 

24 such persons. 


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1 ‘‘(B) The Secretary may not provide indemnification 

2 under subparagraph (A) insofar as the liability for such 

3 costs arises directly from conduct that is determined by 

4 the judicial proceeding or by the Secretary to be criminal 

5 in nature, fraudulent, or grossly negligent. If indemnifica6 tion is provided by the Secretary with respect to a con7 tractor before a determination that such costs arose di8 rectly from such conduct, the contractor shall reimburse 

9 the Secretary for costs of indemnification. 

10 ‘‘(C) Indemnification by the Secretary under sub11 paragraph (A) may include payment of judgments, settle12 ments (subject to subparagraph (D)), awards, and costs 

13 (including reasonable legal expenses). 

14 ‘‘(D) A contractor or other person described in sub15 paragraph (A) may not propose to negotiate a settlement 

16 or compromise of a proceeding described in such subpara17 graph without the prior written approval of the Secretary 

18 to negotiate such settlement or compromise. Any indem19 nification under subparagraph (A) with respect to 

20 amounts paid under a settlement or compromise of a pro21 ceeding described in such subparagraph are conditioned 

22 upon prior written approval by the Secretary of the final 

23 settlement or compromise. 

24 ‘‘(E) Nothing in this paragraph shall be construed— 


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1 ‘‘(i) to change any common law immunity that 

2 may be available to an administrative contractor or 

3 person described in subparagraph (A); or 

4 ‘‘(ii) to permit the payment of costs not other5 wise allowable, reasonable, or allocable under the 

6 Federal Acquisition Regulation. 

7 ‘‘(e) REQUIREMENTS FOR INFORMATION SECU8 RITY.—(1) An administrative contractor that performs the 

9 functions referred to in subparagraphs (A) and (B) of sub10 section (a)(4) (relating to determining and making pay11 ments) shall implement a contractor-wide information se12 curity program to provide information security for the op13 eration and assets of the contractor with respect to such 

14 functions under this title. An information security pro15 gram under this paragraph shall meet the requirements 

16 for information security programs imposed on Federal 

17 agencies under paragraphs (1) through (8) of section 

18 3544(b) of title 44, United States Code (other than the 

19 requirements under paragraphs (2)(D)(i), (5)(A), and 

20 (5)(B) of such section). 

21 ‘‘(2)(A) Each year an administrative contractor that 

22 performs the functions referred to in subparagraphs (A) 

23 and (B) of subsection (a)(4) (relating to determining and 

24 making payments) shall undergo an evaluation of the inVerDate Sep 11 2014 03:15 Mar 04, 2016 Jkt 059200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H4689.IH H4689

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1 formation security of the contractor with respect to such 

2 functions under this title. The evaluation shall— 

3 ‘‘(i) be performed by an entity that meets such 

4 requirements for independence as the Inspector Gen5 eral of the Department of Health and Human Serv6 ices may establish; and 

7 ‘‘(ii) test the effectiveness of information secu8 rity control techniques of an appropriate subset of 

9 the contractor’s information systems (as defined in 

10 section 3502(8) of title 44, United States Code) re11 lating to such functions under this title and an as12 sessment of compliance with the requirements of this 

13 subsection and related information security policies, 

14 procedures, standards and guidelines, including poli15 cies and procedures as may be prescribed by the Di16 rector of the Office of Management and Budget and 

17 applicable information security standards promul18 gated under section 11331 of title 40, United States 

19 Code. 

20 ‘‘(B)(i) The results of independent evaluations under 

21 subparagraph (A) shall be submitted promptly to the In22 spector General of the Department and to the Secretary. 

23 ‘‘(ii) The Inspector General of the Department shall 

24 submit to Congress annual reports on the results of such 


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1 evaluations, including assessments of the scope and suffi2 ciency of such evaluations. 

3 ‘‘(f) INCENTIVES TO IMPROVE CONTRACTOR PER4 FORMANCE IN NON-DEPARTMENT FACILITY EDUCATION

5 AND OUTREACH.—The Secretary shall use specific claims 

6 payment error rates or similar methodology of administra7 tive contractors in the processing or reviewing of claims 

8 in order to give such contractors an incentive to implement 

9 effective education and outreach programs for non-De10 partment facilities.’’. 

11 (b) CLERICAL AMENDMENT.—The table of sections 

12 at the beginning of such chapter is amended by inserting 

13 after the item relating to section 1725 the following new 

14 item: 

‘‘1725A. Authority to enter into contracts with administrative contractors.’’. 

Æ 


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