Union Calendar No. 268

103D CONGRESS

2D SESSION H. R. 4013

[Report No. 103–477]

A BILL

To amend title 38, United States Code, to provide

other purposes.pilot programs for health care delivery, and foristration, to authorize the Secretary to establishflexibility in staffing the Veterans Health Adminthe Secretary of Veterans Affairs with necessary

APRIL 14, 1994

Reported with amendments, committed to the Committee

dered to be printedof the Whole House on the State of the Union, and or-
IB

Union Calendar No. 268

103D CONGRESS

2D SESSION H. R. 4013

[Report No. 103–477]

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

APRIL 14, 1994

Additional sponsors: Mr. BISHOP, Mr. KREIDLER, Mr. WILLIAMS, Ms. BROWN

of Florida, Mr. SANDERS, Mr. SANGMEISTER, Mr. STEARNS, Mr. HUTCHINSON, Mr. BILIRAKIS, Mr. EVERETT, Mr. QUINN, Mr. HEFNER, Mr.

RICHARDSON, Mr. STENHOLM, Mr. PAYNE of Virginia, and Mr. PARKER

APRIL 14, 1994

Reported with amendments, committed to the Committee of the Whole House

on the State of the Union, and ordered to be printed

[Omit the part struck through and insert the part printed in italic]

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
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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

5 Programs Improvement Act of 1994’’.

6 TITLE I—VETERANS HEALTH AD7 MINISTRATION STAFFING

8 LEVELS

9 SEC. 101. FINDINGS.

10 The Congress makes the following findings:

11 (1) Under proposals for national health care re12 form, the Department of Veterans Affairs would be

13 required to establish an enrollment system for veter14 ans and to provide health care on a competitive basis

15 with other, private health care providers.

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

17 contemplated by proposals for national health care

18 reform, the Secretary of Veterans Affairs must have

19 flexibility to restructure and reform the Veterans

20 Health Administration as necessary without exter21 nally imposed constraints on full-time equivalent em22 ployee (FTEE) positions levels.

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

24 part of an announced plan to require a reduction
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1 over five years of 252,000 FTEE positions in the

2 executive branch, proposes to require reductions of

3 FTEE positions totaling 25,493 in personnel of the

4 Veterans Health Administration, a reduction in per5 sonnel which would severely impede the ability of the

6 Department of Veterans Affairs to implement na7 tional health care reform and to meet the respon8 sibilities of the Department under existing law.

9 SEC. 102. EMPLOYMENT LEVEL IN VETERANS HEALTH AD10 MINISTRATION.

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

12 States Code, is amended by adding at the end the follow13 ing new section:

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

15 reduction

16 ‘‘(a) During the five-year period beginning on Octo17 ber 1, 1994, no reduction may be made in the number

18 of full-time equivalent employees in the Veterans Health

19 Administration other than as specifically required by a law

20 directing reductions in personnel or positions of the Veter21 ans Health Administration or by the availability of funds.

22 During that period, the personnel of the Veterans Health

23 Administration shall be managed on the basis of the needs

24 of eligible veterans and the availability of funds.
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1 ‘‘(b) During the period specified in subsection (a), no

2 law imposing a restriction on hiring by executive agencies

3 for the purpose of achieving workforce reductions shall

4 apply to the Veterans Health Administration.

5 ‘‘(c) No law may be construed as suspending or modi6 fying this section unless such law specifically refers to or

7 amends this section.’’.

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

9 at the beginning of such chapter is amended by adding

10 at the end the following new item:

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

11 SEC. 103. REPORT ON STREAMLINING.

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

13 Veterans Affairs shall submit to the Committees on Veter14 ans’ Affairs of the Senate and House of Representatives

15 a report on streamlining activities in the Veterans Health

16 Administration. The report shall include a description

17 of—

18 (1) opportunities to improve the efficiency and

19 effectiveness of delivery of health care services in the

20 Veterans Health Administration through consolida21 tion, reorganization, or other means;

22 (2) plans and actions taken to realize such effi23 ciencies; and

24 (3) impediments to implementing particular

25 plans.
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1 TITLE II—PILOT PROGRAMS

2 SEC. 201. SHORT TITLE.

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

4 Pilot Program Act of 1994’’.

5 SEC. 202. PILOT PROGRAM AUTHORITY.

6 (a) IN GENERAL.—Subject to section 203, the Sec7 retary of Veterans Affairs may establish and operate a

8 pilot program under this Act in up to five States which

9 have established a State reform plan.

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

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

12 established in a State if the Secretary determines that the

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

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

15 inadequate, health insurance coverage access to health

16 care services.

17 (c) AUTHORITY OF SECRETARY UNDER PILOT PRO18 GRAM.—Notwithstanding any other law, the Secretary, in

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

20 may do the following:

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

22 similar basis as the State reform plan mandates to

23 veterans, members of the family of a veteran who

24 participates in the pilot program, and individuals de25 scribed in section 1713(a) of title 38, United States
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1 Code, including the establishment of one or more

2 health plans in that State through Department of

3 Veterans Affairs health care facilities in the State

4 and the implementation of an enrollment option for

5 eligible beneficiaries.

6 (2) Comply with such requirements of State law

7 applicable to the establishment and operation of a

8 health plan under a State reform plan, or to func9 tioning as a participant in, member of, or contractor

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

11 appropriate for application to a Federal department.

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

13 Department of Veterans Affairs health-care facilities

14 located in the State.

15 (4) Establish such catchment areas for enroll16 ment in the pilot programs as the Secretary deter17 mines appropriate.

18 SEC. 203. CONDITIONS OF PARTICIPATION.

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

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

21 if—

22 (1) the Secretary has determined, based on

23 such factors as the Secretary considers relevant

24 (which shall include the factors specified in sub25 section (b)) that, in the absence of an enrollment op-
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1 tion through a Department of Veterans Affairs plan

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

3 Department of Veterans Affairs health care facilities

4 in the State would decline to a level that—

5 (A) would threaten to impair the capability

6 of those facilities to meet one or more assigned

7 mission of those facilities; or

8 (B) would result in a deterioration in the

9 quality of service-delivery to a degree that it

10 would not be reasonable to continue to provide

11 a needed service or services in such facility or

12 facilities and satisfactory alternative arrange13 ments could not feasibly be provided;

14 (2) the Secretary has taken action to ensure

15 that in designing and establishing a health plan

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

17 extent feasible, for the applicability and compatibil18 ity of the components of the plan with other Depart19 ment health care facilities that are not participants

20 in the pilot program in that State; and

21 (3) the Secretary has provided for an evaluation

22 of the pilot program to assess (A) appropriate meas23 ures of (i) access to service, (ii) cost of care, (iii)

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

25 care, (B) the ability of such plans to attract enroll-
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1 ees, and (C) such other matters as the Secretary de2 termines appropriate.; and

3 (4) the Secretary has required the director of

4 each medical center that is to participate in the pilot

5 program to establish, and to consult regularly with,

6 a committee, which shall include veteran and other

7 patient representatives, regarding the delivery of serv8 ices and conduct of the pilot program.

9 (b) FACTORS TO BE CONSIDERED.—Factors consid10 ered by the Secretary for purposes of subsection (a)(1)

11 shall include—

12 (1) the relative universality of coverage afforded

13 State residents under the State reform plan;

14 (2) the scope of benefits offered under such

15 plan; and

16 (3) the extent of financing supporting such

17 plan.

18 (c) SUBMISSION OF PLAN TO CONGRESS.—The Sec19 retary may implement a pilot program under section 202

20 only after—

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

22 Committees on Veterans’ Affairs of the Senate and

23 House of Representatives on the proposed plan, as

24 specified in subsection (d); and
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1 (2) a period of 30 days during which Congress

2 has been in continuous session has elapsed since

3 submission of the report under paragraph (1).

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

5 Congress is broken only by adjournment sine die, and

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

7 day period any day during which either House of Congress

8 is not in session during an adjournment of more than

9 three days to a day certain.

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

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

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

13 relates to the determinations described in sub14 sections (a)(1) and (g) of this section) for proposed

15 participation in the State reform plan which shall

16 specifically address the determinations under such

17 provisions.

18 (2) A description of the extent to which applica19 ble provisions of State law specifically accommodate

20 and facilitate participation by the Department in the

21 State reform plan.

22 (3) A detailed business plan for the Depart23 ment’s participation under the State reform plan.

24 (4) A description of the actions the Secretary

25 has taken to consult with veterans on the Depart-
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1 ment’s proposed participation in such State reform

2 plan.

3 (e) EXEMPTION OF HIGH-PRIORITY VETERANS

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

5 1710(a)(1) of title 38, United States Code, who receives

6 health care services from the Secretary under a pilot pro7 gram under this title incurs no liability to pay a premium,

8 deductible, copayment, or other charge in connection with

9 (1) receiving the hospital care services the veteran is eligi10 ble for under section 1710(a)(1) of such title, and (2)

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

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

13 of such title.

14 (f) RETENTION OF SPECIALIZED CAPACITIES.—In

15 carrying out the pilot programs, the Secretary shall ensure

16 that the Department maintains its capacity to provide for

17 the specialized treatment and rehabilitative needs of dis18 abled veterans described in section 1710(a) of title 38,

19 United States Code, including veterans with spinal cord

20 dysfunction, blindness, and mental illness.

21 (g) REQUIREMENT FOR CONSIDERATION OF USE OF

22 EXPANDED SHARING AUTHORITY.—The Secretary may

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

24 the Secretary has fully considered the feasibility of using

25 authority under title II III of this Act.
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1 SEC. 204. FUNDING.

2 (a) ESTABLISHMENT OF REVOLVING FUND.—There

3 is established in the Treasury of the United States a re4 volving fund for conduct of the pilot programs under this

5 title. Amounts Subject to subsection (e), amounts in the re6 volving fund are available without fiscal year limitation for

7 all expenses necessary to carry out the purposes of the

8 pilot program.

9 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

10 authorized to be appropriated to the revolving fund such

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

12 through 2000 for conduct and evaluation of the pilot

13 programs.

14 (c) AUTHORIZATION TO TRANSFER CERTAIN

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

16 to subsection (a), the Secretary may transfer to the revolv17 ing fund authorized by subsection (a) funds from the Med18 ical Care Appropriation Account and the Construction Ap19 propriation Accounts of the Department for any fiscal

20 year when the Secretary determines such transfer is nec21 essary to carry out the purposes of the pilot program.

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

23 with respect to amounts appropriated after the date of the

24 enactment of this Act.

25 (d) AUTHORIZED DISBURSEMENTS.—(1) Notwith26 standing any other provision of law, the Secretary, subject
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1 to paragraph (2) and to subsection (e), may make disburse2 ments from the revolving fund established under sub3 section (a) as the Secretary considers necessary to carry

4 out the purposes of the pilot programs and their evalua5 tion. Such disbursements may be made to furnish medical

6 care and services, or for the acquisition, construction, re7 pair, or renovation of facilities (including the land on

8 which facilities are located or to be constructed) necessary

9 to carry out the pilot program, and for conducting

10 consumer surveys, printing, marketing, and advertising

11 (including contracts for such services).

12 (2) Funds in the revolving fund shall not be available

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

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

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

16 have been specifically authorized by law.

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

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

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

20 pilot program authorized under section 202 in the same

21 manner as any other health-care provider or plan operat22 ing in the State, whether such funds are received from

23 an individual, another agency or department of the United

24 States, an agency of State or local government, a health25 care provider, health care plan, insurer, or other entity
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1 (including amounts received as premiums, copayments,

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

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

4 (2) Any such funds so received and deposited, the re5 covery or collection of which is authorized in section

6 1729(a) of title 38, United States Code, as in effect on

7 February 1, 1994, shall be administered in accordance

8 with paragraph (3).

9 (3) Funds recovered or collected by the Department

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

11 Code, during any fiscal year in an amount in excess of

12 the current Congressional Budget Office baseline for re13 ceipts under that section for that fiscal year shall not be

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

15 those funds are attributable to the operation of a pilot pro16 gram under this title.

17 (2) Any such funds received under paragraph (1),

18 other than funds for which recovery could have been accom19 plished under section 1710(f), 1712(f), 1722A, or 1729(a)

20 of title 38, United States Code, shall be deposited in the

21 revolving fund. Funds for which recovery could have been

22 accomplished under any of those sections shall be deposited

23 in the Medical-Care Cost Recovery Fund established under

24 section 1729(g) of that title.
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1 (3) Funds deposited in the Medical-Care Cost Recovery

2 Fund during any fiscal year in an amount in excess of

3 the Congressional Budget Office baseline (as of the date of

4 the enactment of this Act) for deposits in that fund for that

5 fiscal year shall not be subject to paragraph (4) of section

6 1710(f), 1712(f), or 1729(g) (as the case may be) of that

7 title, but shall be transferred to the revolving fund. Such

8 transfer for any fiscal year shall be made at any time that

9 the total of amounts so received less amounts estimated to

10 cover the expenses, payments, and costs described in para11 graph (3) of section 1729(g) of that title is in excess of the

12 applicable Congressional Budget Office baseline.

13 (f) CHECKING ACCOUNTS.—The Secretary may es14 tablish and maintain checking and savings accounts in any

15 Federal Reserve Bank, any depository for public funds,

16 depository for public funds or in such other places and in

17 such manner as the Secretary determines appropriate in

18 connection with the revolving fund established under sub19 section (a). The Subject to subsection (e), the Secretary

20 may disburse funds from any such account in such manner

21 as the Secretary considers necessary to carry out the pur22 poses of the pilot programs associated with those funds.

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

24 If the Secretary determines that moneys in the revolving

25 fund established under subsection (a) are in excess of the
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1 needs of the pilot program, the Secretary shall transfer

2 the excess funds to the Medical Care Appropriation

3 account of the Department.

4 SEC. 205. ADMINISTRATIVE FLEXIBILITY.

5 The Secretary, when the Secretary considers it nec6 essary to carry out a pilot program authorized under

7 section 202, may—

8 (1) carry out administrative reorganizations,

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

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

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

12 or necessary in order to provide health care services

13 in a timely manner, enter into contracts—

14 (A) for procurement of any commercially

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

16 without regard to any provision of law or regu17 lation (i) requiring competitive procedures; (ii)

18 mandating or giving priority to any source of

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

20 (B) without regard to the provisions of sec21 tion 8110(c) of title 38, United States Code;

22 (3) carry out consumer-survey, promotional, ad23 vertising, and marketing activities related to estab24 lishing and operating a health plan; and
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1 (4) exercise the authority established in title

2 III.

3 SEC. 206. ANNUAL REPORTS TO CONGRESS.

4 Not later than November 30 of each year from 1995

5 through 2000, the Secretary shall submit to the Commit6 tees on Veterans’ Affairs of the Senate and House of Rep7 resentatives a report on the Department’s experience in

8 carrying out the provisions of this title and the findings

9 or interim findings of evaluations carried out under sec10 tion 203(a)(3). Each such report shall include information

11 regarding the effect on Department health care delivery

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

13 has been implemented and shall specifically identify each

14 transfer of funds under section 204(c) and account specifi15 cally for the use of such funds.

16 SEC. 207. EXPIRATION OF AUTHORITY.

17 The authority to conduct pilot programs under this

18 title shall expire on September 30, 2000.

19 TITLE III—HEALTH CARE

20 RESOURCE AGREEMENTS

21 SEC. 301. AUTHORITY IN STATES WITH STATE REFORM

22 PLANS.

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

24 Veterans Affairs’ health care facility serving veterans who

25 reside in a State that has established a State reform plan
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1 may, without regard to section 1703 of title 38, United

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

3 competitive procedures, acquisition procedures or policies

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

5 protests, enter into agreements with health care plans, in6 surers, and health care providers, and with any other en7 tity or individual, to furnish or obtain any health-care re8 source, as that term is defined in section 8152 of title 38,

9 United States Code.

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

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

12 determined that the agreement to furnish services is nec13 essary to maintain an acceptable level and quality of serv14 ice to veterans at that facility.

15 SEC. 302. REIMBURSEMENT METHODOLOGY.

16 An agreement under section 301 shall provide for re17 imbursement to the Department based on a methodology

18 that provides appropriate flexibility to establish an appro19 priate reimbursement rate. Any proceeds to the Govern20 ment received from the agreement shall be credited to the

21 applicable Department medical appropriation and to funds

22 that have been allotted to the facility that furnished the

23 resource involved.

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