I

103D CONGRESS

2D SESSION H. R. 4013

To amend title 38, United States Code, to provide the Secretary of Veterans

Affairs with necessary flexibility in staffing the Veterans Health Administration, to authorize the Secretary to establish pilot programs for health

care delivery, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 11, 1994

Mr. ROWLAND (for himself, Mr. MONTGOMERY, Mr. STUMP, and Mr. SMITH

of New Jersey) introduced the following bill; which was referred to the

Committee on Veterans’ Affairs

A BILL

To amend title 38, United States Code, to provide the Secretary of Veterans Affairs with necessary flexibility in

staffing the Veterans Health Administration, to authorize

the Secretary to establish pilot programs for health care

delivery, and for other purposes.

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.

4 This Act may be cited as the ‘‘Veterans Health Pro5 grams Improvement Act of 1994’’.
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1 TITLE I—VETERANS HEALTH AD2 MINISTRATION STAFFING

3 LEVELS

4 SEC. 101. FINDINGS.

5 The Congress makes the following findings:

6 (1) Under proposals for national health care re7 form, the Department of Veterans Affairs would be

8 required to establish an enrollment system for veter9 ans and to provide health care on a competitive basis

10 with other, private health care providers.

11 (2) In order to be able to implement changes

12 contemplated by proposals for national health care

13 reform, the Secretary of Veterans Affairs must have

14 flexibility to restructure and reform the Veterans

15 Health Administration as necessary without exter16 nally imposed constraints on full-time equivalent em17 ployee (FTEE) positions levels.

18 (3) The Office of Management and Budget, as

19 part of an announced plan to require a reduction

20 over five years of 252,000 FTEE positions in the

21 executive branch, proposes to require reductions of

22 FTEE positions totaling 25,493 in personnel of the

23 Veterans Health Administration, a reduction in per24 sonnel which would severely impede the ability of the

25 Department of Veterans Affairs to implement na-
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1 tional health care reform and to meet the respon2 sibilities of the Department under existing law.

3 SEC. 102. EMPLOYMENT LEVEL IN VETERANS HEALTH AD4 MINISTRATION.

5 (a) IN GENERAL.—Chapter 7 of title 38, United

6 States Code, is amended by adding at the end the follow7 ing new section:

8 ‘‘§ 713. Full-time equivalent employees: limitation on

9 reduction

10 ‘‘(a) During the five-year period beginning on Octo11 ber 1, 1994, no reduction may be made in the number

12 of full-time equivalent employees in the Veterans Health

13 Administration other than as specifically required by a law

14 directing reductions in personnel or positions of the Veter15 ans Health Administration or by the availability of funds.

16 During that period, the personnel of the Veterans Health

17 Administration shall be managed on the basis of the needs

18 of eligible veterans and the availability of funds.

19 ‘‘(b) During the period specified in subsection (a), no

20 law imposing a restriction on hiring by executive agencies

21 for the purpose of achieving workforce reductions shall

22 apply to the Veterans Health Administration.

23 ‘‘(c) No law may be construed as suspending or modi24 fying this section unless such law specifically refers to or

25 amends this section.’’.
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of such chapter is amended by adding

3 at the end the following new item:

‘‘713. Full-time equivalent employees: limitation on reduction.’’.

4 SEC. 103. REPORT ON STREAMLINING.

5 Not later than January 15, 1995, the Secretary of

6 Veterans Affairs shall submit to the Committees on Veter7 ans’ Affairs of the Senate and House of Representatives

8 a report on streamlining activities in the Veterans Health

9 Administration. The report shall include a description

10 of—

11 (1) opportunities to improve the efficiency and

12 effectiveness of delivery of health care services in the

13 Veterans Health Administration through consolida14 tion, reorganization, or other means;

15 (2) plans and actions taken to realize such effi16 ciencies; and

17 (3) impediments to implementing particular

18 plans.

19 TITLE II—PILOT PROGRAMS

20 SEC. 201. SHORT TITLE.

21 This title may be cited as the ‘‘Veterans Health-Care

22 Pilot Program Act of 1994’’.

23 SEC. 202. PILOT PROGRAM AUTHORITY.

24 (a) IN GENERAL.—Subject to section 203, the Sec25 retary of Veterans Affairs may establish and operate a
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1 pilot program under this Act in up to five States which

2 have established a State reform plan.

3 (b) STATE REFORM PLANS.—For purposes of this

4 Act, a State reform plan shall be considered to have been

5 established in a State if the Secretary determines that the

6 State has enacted legislation that is intended, at least in

7 part, to provide residents of that State who lack, or have

8 inadequate, health insurance coverage access to health

9 care services.

10 (c) AUTHORITY OF SECRETARY UNDER PILOT PRO11 GRAM.—Notwithstanding any other law, the Secretary, in

12 carrying out a pilot program in a State under this title,

13 may do the following:

14 (1) Provide health-care services on the same or

15 similar basis as the State reform plan mandates to

16 veterans, members of the family of a veteran who

17 participates in the pilot program, and individuals de18 scribed in section l713(a) of title 38, United States

19 Code, including the establishment of one or more

20 health plans in that State through Department of

21 Veterans Affairs health care facilities in the State

22 and the implementation of an enrollment option for

23 eligible beneficiaries.

24 (2) Comply with such requirements of State law

25 applicable to the establishment and operation of a
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1 health plan under a State reform plan, or to func2 tioning as a participant in, member of, or contractor

3 to, such a health plan, as the Secretary considers

4 appropriate for application to a Federal department.

5 (3) Conduct the pilot program in some or all

6 Department of Veterans Affairs health-care facilities

7 located in the State.

8 (4) Establish such catchment areas for enroll9 ment in the pilot programs as the Secretary deter10 mines appropriate.

11 SEC. 203. CONDITIONS OF PARTICIPATION.

12 (a) IN GENERAL.—The Secretary may establish and

13 operate a pilot program in a State under section 202 only

14 if—

15 (1) the Secretary has determined, based on

16 such factors as the Secretary considers relevant

17 (which shall include the factors specified in sub18 section (b)) that, in the absence of an enrollment op19 tion through a Department of Veterans Affairs plan

20 in that State, the projected workload in one or more

21 Department of Veterans Affairs health care facilities

22 in the State would decline to a level that—

23 (A) would threaten to impair the capability

24 of those facilities to meet one or more assigned

25 mission of those facilities; or
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1 (B) would result in a deterioration in the

2 quality of service-delivery to a degree that it

3 would not be reasonable to continue to provide

4 a needed service or services in such facility or

5 facilities and satisfactory alternative arrange6 ments could not feasibly be provided;

7 (2) the Secretary has taken action to ensure

8 that in designing and establishing a health plan

9 under the pilot program, provisions are made, to the

10 extent feasible, for the applicability and compatibil11 ity of the components of the plan with other Depart12 ment health care facilities that are not participants

13 in the pilot program in that State; and

14 (3) the Secretary has provided for an evaluation

15 of the pilot program to assess (A) appropriate meas16 ures of (i) access to service, (ii) cost of care, (iii)

17 quality of service to patients, and (iv) quality of

18 care, (B) the ability of such plans to attract enroll19 ees, and (C) such other matters as the Secretary de20 termines appropriate.

21 (b) FACTORS TO BE CONSIDERED.—Factors consid22 ered by the Secretary for purposes of subsection (a)(1)

23 shall include—

24 (1) the relative universality of coverage afforded

25 State residents under the State reform plan;
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1 (2) the scope of benefits offered under such

2 plan; and

3 (3) the extent of financing supporting such

4 plan.

5 (c) SUBMISSION OF PLAN TO CONGRESS.—The Sec6 retary may implement a pilot program under section 202

7 only after—

8 (1) the Secretary has submitted a report to the

9 Committees on Veterans’ Affairs of the Senate and

10 House of Representatives on the proposed plan, as

11 specified in subsection (d); and

12 (2) a period of 30 days during which Congress

13 has been in continuous session has elapsed since

14 submission of the report under paragraph (1).

15 For purposes of paragraph (2), continuity of a session of

16 Congress is broken only by adjournment sine die, and

17 there shall be excluded from the computation of such 30-

18 day period any day during which either House of Congress

19 is not in session during an adjournment of more than

20 three days to a day certain.

21 (d) MATTERS TO BE INCLUDED IN REPORT.—Each

22 report under subsection (c) shall include the following:

23 (1) A detailed description of the rationale (as it

24 relates to the determinations described in sub25 sections (a)(1) and (g) of this section) for proposed
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1 participation in the State reform plan which shall

2 specifically address the determinations under such

3 provisions.

4 (2) A description of the extent to which applica5 ble provisions of State law specifically accommodate

6 and facilitate participation by the Department in the

7 State reform plan.

8 (3) A detailed business plan for the Depart9 ment’s participation under the State reform plan.

10 (4) A description of the actions the Secretary

11 has taken to consult with veterans on the Depart12 ment’s proposed participation in such State reform

13 plan.

14 (e) EXEMPTION OF HIGH-PRIORITY VETERANS

15 FROM PREMIUMS, ETC.—A veteran described in section

16 1710(a)(1) of title 38, United States Code, who receives

17 health care services from the Secretary under a pilot pro18 gram under this title incurs no liability to pay a premium,

19 deductible, copayment, or other charge in connection with

20 (1) receiving the hospital care services the veteran is eligi21 ble for under section 1710(a)(1) of such title, and (2)

22 medical services to persons described in section 1710(a)(1)

23 of such title, subject to the limitations in section 1710(e)

24 of such title.
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1 (f) RETENTION OF SPECIALIZED CAPACITIES.—In

2 carrying out the pilot programs, the Secretary shall ensure

3 that the Department maintains its capacity to provide for

4 the specialized treatment and rehabilitative needs of dis5 abled veterans described in section 1710(a) of title 38,

6 United States Code, including veterans with spinal cord

7 dysfunction, blindness, and mental illness.

8 (g) REQUIREMENT FOR CONSIDERATION OF USE OF

9 EXPANDED SHARING AUTHORITY.—The Secretary may

10 not make a determination under subsection (a)(1) unless

11 the Secretary has fully considered the feasibility of using

12 authority under title II of this Act.

13 SEC. 204. FUNDING.

14 (a) ESTABLISHMENT OF REVOLVING FUND.—There

15 is established in the Treasury of the United States a re16 volving fund for conduct of the pilot programs under this

17 title. Amounts in the revolving fund are available without

18 fiscal year limitation for all expenses necessary to carry

19 out the purposes of the pilot program.

20 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

21 authorized to be appropriated to the revolving fund such

22 sums as may be necessary for each of fiscal years 1995

23 through 2000 for conduct and evaluation of the pilot

24 programs.
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1 (c) AUTHORIZATION TO TRANSFER CERTAIN

2 FUNDS.—(1) In addition to funds appropriated pursuant

3 to subsection (a), the Secretary may transfer to the revolv4 ing fund authorized by subsection (a) funds from the Med5 ical Care Appropriation Account and the Construction Ap6 propriation Accounts of the Department for any fiscal

7 year when the Secretary determines such transfer is nec8 essary to carry out the purposes of the pilot program.

9 (2) The authority in paragraph (1) shall apply only

10 with respect to amounts appropriated after the date of the

11 enactment of this Act.

12 (d) AUTHORIZED DISBURSEMENTS.—(1) Notwith13 standing any other provision of law, the Secretary, subject

14 to paragraph (2), may make disbursements from the re15 volving fund established under subsection (a) as the Sec16 retary considers necessary to carry out the purposes of

17 the pilot programs and their evaluation. Such disburse18 ments may be made to furnish medical care and services,

19 or for the acquisition, construction, repair, or renovation

20 of facilities (including the land on which facilities are lo21 cated or to be constructed) necessary to carry out the pilot

22 program, and for conducting consumer surveys, printing,

23 marketing, and advertising (including contracts for such

24 services).
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1 (2) Funds in the revolving fund shall not be available

2 for a major medical facility project, or a major medical

3 facility lease, as defined in section 8104(a)(3) of title 38,

4 United States Code, unless funds for such project or lease

5 have been specifically authorized by law.

6 (e) RECEIPT OF FUNDS.—(1) Notwithstanding any

7 other provision of law, the Secretary may recover or collect

8 funds by reason of the furnishing of health care under a

9 pilot program authorized under section 202 in the same

10 manner as any other health-care provider or plan operat11 ing in the State, whether such funds are received from

12 an individual, another agency or department of the United

13 States, an agency of State or local government, a health14 care provider, health care plan, insurer, or other entity

15 (including amounts received as premiums, copayments,

16 deductibles, or third-party reimbursements). Any such

17 funds so received shall be deposited to the revolving fund.

18 (2) Any such funds so received and deposited, the re19 covery or collection of which is authorized in section

20 1729(a) of title 38, United States Code, as in effect on

21 February 1, 1994, shall be administered in accordance

22 with paragraph (3).

23 (3) Funds recovered or collected by the Department

24 pursuant to section 1729(a) of title 38, United States

25 Code, during any fiscal year in an amount in excess of
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1 the current Congressional Budget Office baseline for re2 ceipts under that section for that fiscal year shall not be

3 subject to section 1729(g)(2) of such title, to the extent

4 those funds are attributable to the operation of a pilot pro5 gram under this title.

6 (f) CHECKING ACCOUNTS.—The Secretary may es7 tablish and maintain checking and savings accounts in any

8 Federal Reserve Bank, any depository for public funds,

9 or in such other places and in such manner as the Sec10 retary determines appropriate in connection with the re11 volving fund established under subsection (a). The Sec12 retary may disburse funds from any such account in such

13 manner as the Secretary considers necessary to carry out

14 the purposes of the pilot programs associated with those

15 funds.

16 (g) TRANSFER OF EXCESS FUNDS TO TREASURY.—

17 If the Secretary determines that moneys in the revolving

18 fund established under subsection (a) are in excess of the

19 needs of the pilot program, the Secretary shall transfer

20 the excess funds to the Medical Care Appropriation

21 account of the Department.

22 SEC. 205. ADMINISTRATIVE FLEXIBILITY.

23 The Secretary, when the Secretary considers it nec24 essary to carry out a pilot program authorized under

25 section 202, may—
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1 (1) carry out administrative reorganizations,

2 subject to section 203(f) of this title, without regard

3 to section 510(b) of title 38, United States Code;

4 (2) when the Secretary finds it is cost-effective

5 or necessary in order to provide health care services

6 in a timely manner, enter into contracts—

7 (A) for procurement of any commercially

8 available item at a cost of under $100,000

9 without regard to any provision of law or regu10 lation (i) requiring competitive procedures; (ii)

11 mandating or giving priority to any source of

12 supply; or (iii) pertaining to protests; and

13 (B) without regard to the provisions of sec14 tion 8110(c) of title 38, United States Code;

15 (3) carry out consumer-survey, promotional, ad16 vertising, and marketing activities related to estab17 lishing and operating a health plan; and

18 (4) exercise the authority established in title

19 III.

20 SEC. 206. ANNUAL REPORTS TO CONGRESS.

21 Not later than November 30 of each year from 1995

22 through 2000, the Secretary shall submit to the Commit23 tees on Veterans’ Affairs of the Senate and House of Rep24 resentatives a report on the Department’s experience in

25 carrying out the provisions of this title and the findings
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1 or interim findings of evaluations carried out under sec2 tion 203(a)(3). Each such report shall include information

3 regarding the effect on Department health care delivery

4 and operations in each State in which a State reform plan

5 has been implemented and shall specifically identify each

6 transfer of funds under section 204(c) and account specifi7 cally for the use of such funds.

8 SEC. 207. EXPIRATION OF AUTHORITY.

9 The authority to conduct pilot programs under this

10 title shall expire on September 30, 2000.

11 TITLE III—HEALTH CARE

12 RESOURCE AGREEMENTS

13 SEC. 301. AUTHORITY IN STATES WITH STATE REFORM

14 PLANS.

15 (a) IN GENERAL.—The director of a Department of

16 Veterans Affairs’ health care facility serving veterans who

17 reside in a State that has established a State reform plan

18 may, without regard to section 1703 of title 38, United

19 States Code, or any other law or regulation pertaining to

20 competitive procedures, acquisition procedures or policies

21 (other than contract dispute settlement procedures), or bid

22 protests, enter into agreements with health care plans, in23 surers, and health care providers, and with any other en24 tity or individual, to furnish or obtain any health-care re-
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1 source, as that term is defined in section 8152 of title 38,

2 United States Code.

3 (b) LIMITATION.—A director may enter into an

4 agreement under subsection (a) only if the director has

5 determined that the agreement is necessary to maintain

6 an acceptable level and quality of service to veterans at

7 that facility.

8 SEC. 302. REIMBURSEMENT METHODOLOGY.

9 An agreement under section 301 shall provide for re10 imbursement to the Department based on a methodology

11 that provides appropriate flexibility to establish an appro12 priate reimbursement rate. Any proceeds to the Govern13 ment received from the agreement shall be credited to the

14 applicable Department medical appropriation and to funds

15 that have been allotted to the facility that furnished the

16 resource involved.

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