103D CONGRESS

2D SESSION H. R. 4013

AMENDMENT
In the Senate of the United States,

June 8 (legislative day, June 7), 1994.

Resolved, That the bill from the House of Representatives (H.R. 4013) entitled ‘‘An Act to amend title 38, United

States Code, to provide the Secretary of Veterans Affairs

with necessary flexibility in staffing the Veterans Health Administration’’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘VA State Health Care

3 Reform Pilot Program Act’’.

4 SEC. 2. PURPOSE OF PILOT PROGRAMS.

5 The purpose of this Act is to authorize the participa6 tion of the Department of Veterans Affairs health care sys7 tem in the health care systems of States that have enacted

8 health care reform in order to evaluate the most appropriate

9 means of enabling the Department health care system to

10 participate in such systems and in the National health care
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1 system contemplated under any plans for National health

2 care reform.

3 SEC. 3. HEALTH CARE PILOT PROGRAMS.

4 (a) IN GENERAL.—The Secretary may carry out pilot

5 programs on the participation of the Department of Veter6 ans Affairs health care system in the health care systems

7 of States that have adopted comprehensive health benefit

8 plans. The Secretary shall carry out any pilot program

9 under this Act in accordance with the provisions of this

10 Act.

11 (b) STATES ELIGIBLE FOR DESIGNATION.—(1) The

12 Secretary shall designate each of not more than five States

13 as a location for a pilot program under this Act. The Sec14 retary shall complete the designation of States as locations

15 for pilot programs not later than 30 days after the date

16 of the enactment of this Act.

17 (2) The Secretary may designate a State as a location

18 for a pilot program under this Act if the Secretary deter19 mines that—

20 (A) the State has enacted, or will soon enact, a

21 statute establishing or providing for a comprehensive

22 health benefit plan; and

23 (B) the participation of the health care system of

24 the Department under the plan is feasible and appro25 priate in light of the purpose of this Act.
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1 (c) DEPARTMENT PARTICIPATION IN STATE HEALTH

2 BENEFIT PLANS—(1) To the maximum extent practicable,

3 the Secretary shall provide eligible persons under each pilot

4 program under this Act with the comprehensive package of

5 basic health care benefits that would otherwise be available

6 to such persons under the comprehensive health benefit plan

7 of the State in which the pilot program is carried out. The

8 Secretary shall provide such benefits through the health care

9 system of the Department in such State as if such system

10 were a provider of such benefits under such plan.

11 (2) Notwithstanding any other provision of law, a

12 State may not prohibit the participation of the Department

13 under the comprehensive health benefit plan of the State

14 under a pilot program unless the chief executive officer of

15 the State certifies to the Secretary that—

16 (A) the benefits to be provided by the Depart17 ment under the pilot program do not meet require18 ments for quality of benefits established by or pro19 vided under the plan; or

20 (B) the location of Department facilities (includ21 ing facilities providing services by contract or agree22 ment with the Secretary) in the State is such that the

23 proximity of eligible persons to such facilities does not

24 meet requirements so established for such proximity.
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1 (3) Not later than 30 days after the designation of a

2 State as a location for a pilot program under this Act, and

3 at such other times as the Secretary may determine, the

4 Secretary and the health system director for that State shall

5 jointly determine the regulations under the authority of the

6 Secretary the waiver or modification of which is necessary

7 in order to facilitate the carrying out of the pilot program.

8 Upon such determination, the Secretary shall waive or

9 modify the application of such regulations to the pilot pro10 gram.

11 (4) The Secretary shall furnish any eligible person liv12 ing in a State in which a pilot program is carried out (in13 cluding any eligible person electing to receive benefits under

14 the pilot program and any eligible person not electing to

15 receive benefits under the pilot program) with the health

16 care benefits for which such person is eligible under chapter

17 17 of title 38, United States Code, notwithstanding that the

18 comprehensive package of basic health care benefits provided

19 under the comprehensive health benefit plan of the State

20 does not otherwise include such health care benefits. The

21 Secretary shall furnish any health care benefits under this

22 paragraph in accordance with the provisions of that chap23 ter.

24 (d) HEALTH SYSTEM DIRECTOR.—(1) The Secretary

25 shall designate a health system director for each State in
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1 which a pilot program is carried out under this Act. To

2 the maximum extent feasible, the Secretary shall delegate

3 to the health system directors the responsibilities of the Sec4 retary under this Act.

5 (2)(A) Subject to subparagraph (B), the Secretary

6 shall designate an individual as health system director for

7 a State from among nominees for that position selected by

8 a panel composed of individuals who are senior manage9 ment personnel of the Department medical centers located

10 in that State.

11 (B) An individual selected for nomination to be a

12 health system director of a State under subparagraph (A)

13 shall be—

14 (i) the director or chief of staff of a Department

15 medical center located in the State in which the pilot

16 program is carried out; or

17 (ii) any other individual having experience with

18 the Department medical system that is equivalent to

19 the experience with that system of an individual in

20 a position referred to in clause (i).

21 (e) ADMINISTRATIVE REORGANIZATION.—The Sec22 retary may carry out any administrative reorganization of

23 an office, facility, activity, or function of the health care

24 system of the Department in a State in which a pilot pro25 gram is carried out that the Secretary and the health system
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1 director jointly determine to be necessary in order to facili2 tate the carrying out of the pilot program. Section 510(b)

3 of title 38, United States Code, shall not apply to any such

4 administrative reorganization.

5 (f) PROVISION OF BENEFITS.—(1)(A) Except as pro6 vided in subparagraph (B), the Secretary shall provide

7 health care benefits under a pilot program—

8 (i) through the direct provision of such services

9 by the health care system of the Department in the

10 State in which the pilot program is carried out; or

11 (ii) by contract or other agreement in accordance

12 with paragraph (2).

13 (B) The Secretary may exclude facilities of the Depart14 ment from participation in a pilot program. Any facilities

15 so excluded shall continue to provide health care benefits

16 to veterans and other persons eligible for such benefits in

17 accordance with the provisions of laws administered by the

18 Secretary.

19 (2) The health system director of a pilot program may

20 enter into contracts and agreements for the provision of

21 health care services and contracts and agreements for other

22 services with respect to the pilot program under paragraph

23 (1)(A)(ii). Any such contract or agreement (including any

24 lease) shall not be subject to the following provisions of law:
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1 (A) Section 8110(c) of title 38, United States

2 Code, relating to contracting of services at Depart3 ment health-care facilities.

4 (B) Section 8122(a)(1) of such title, relating to

5 the lease of Department property.

6 (C) Section 8125 of such title, relating to local

7 contracts for the procurement of health-care items.

8 (D) Section 702 of title 5, United States Code,

9 relating to the right of review of agency wrongs by

10 courts of the United States.

11 (E) Sections 1346(a)(2) and 1491 of title 28,

12 United States Code, relating to the jurisdiction of the

13 district courts of the United States and the United

14 States Court of Federal Claims, respectively, for the

15 actions enumerated in such sections.

16 (F) Subchapter V of chapter 35 of title 31,

17 United States Code, relating to adjudication of pro18 tests of violations of procurement statutes and regula19 tions.

20 (G) Sections 3526 and 3702 of such title, relat21 ing to the settlement of accounts and claims, respec22 tively, of the United States.

23 (H) Subsections (b)(7), (e), (f), (g), and (h) of

24 section 8 of the Small Business Act (15 U.S.C.

25 637(b)(7), (e), (f), (g), and (h)), relating to require-
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1 ments with respect to small businesses for contracts

2 for property and services.

3 (I) The provisions of law assembled for purposes

4 of codification of the United States Code as section

5 471 through 544 of title 40 that relate to the author6 ity of the Administrator of General Services over the

7 lease and disposal of Federal Government property.

8 (J) The Office of Federal Procurement Policy Act

9 (41 U.S.C. 401 et seq.), relating to the procurement

10 of property and services by the Federal Government.

11 (K) Chapter 3 of the Federal Property and Ad12 ministrative Services Act of 1949 (41 U.S.C. 251 et

13 seq.), relating to the procurement of property and

14 services by the Federal Government.

15 (L) Office of Management and Budget Circular

16 A–76.

17 (3)(A) Notwithstanding any other provision of law,

18 contracts and agreements for the provision of health care

19 services under this subsection may include contracts and

20 other agreements with insurers, health care providers, or

21 other individuals or entities that provide health care serv22 ices.

23 (B) Contracts and agreements under this paragraph

24 may be entered into without prior review by the Central

25 Office of the Department.
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1 (4)(A) Contracts and agreements under this subsection

2 for services other than the services referred to in paragraph

3 (3) (including contracts and agreements for procurement of

4 equipment, maintenance and repair services, and other

5 services related to the provision of health care services) shall

6 not be subject to prior review by the Central Office if the

7 amount of such contracts or agreements is less than

8 $250,000.

9 (B) Contracts and agreements for services under this

10 paragraph shall be subject to prior review by the Central

11 Office if the amount of such contracts or agreements is

12 $250,000 or greater. If the Central Office fails to approve

13 or reject a contract or agreement under this clause within

14 30 days of its submittal to the Central Office, such contract

15 or agreement shall be deemed approved by the Central Of16 fice.

17 (g) DEPARTMENT PERSONNEL.—(1) Notwithstanding

18 any other provision of law and to the extent necessary to

19 carry out the purpose of a pilot program, the Secretary

20 may—

21 (A) appoint personnel to positions in the health

22 care system of the Department in the State in which

23 the pilot program is carried out in accordance with

24 such standards for such positions as the Secretary

25 may establish; and
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1 (B) promote and advance personnel serving in

2 such positions in accordance with such standards as

3 the Secretary may establish.

4 (2) Not later than 60 days after the designation of a

5 State as a location for a pilot program under this Act, or

6 at such other time as the Secretary may determine, the Sec7 retary shall request authority from the Director of the Office

8 of Management and Budget to permit the Secretary to em9 ploy a number of full time equivalent employees in the

10 health care system of the Department in that State which

11 exceeds the number of such employees that would otherwise

12 be authorized for such employment by the Director.

13 (3) Notwithstanding any other provision of law, em14 ployees of the Department at facilities of the Department

15 under a pilot program shall not, during the carrying out

16 of the pilot program, be subject to any reduction in the

17 number of full time employees of the Department or as a

18 result of a reduction in the number of full time employees

19 of the Federal Government.

20 (h) ELIGIBLE PERSONS.—(1) A person eligible for

21 health care benefits under a pilot program is any person

22 residing in a State in which a pilot program is carried

23 out as follows:

24 (A) Any veteran.

25 (B) Any spouse or child of a veteran.
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1 (C) Any individual eligible for care under para2 graph (2) or (3) of section 1713(a) of title 38, United

3 States Code.

4 (2) Notwithstanding any other provision of law, a

5 State may not require that any person other than a person

6 referred to in paragraph (1) be eligible for health care bene7 fits through the Department under a pilot program.

8 (i) COPAYMENTS AND OTHER CHARGES.—(1) Except

9 as provided in paragraph (2), the Secretary may collect

10 from or on behalf of any individual receiving health care

11 benefits from the Secretary under a pilot program under

12 this Act a premium, deductible, copayment, or other charge

13 with respect to the provision of a benefit under the pilot

14 program. The amount of the premium, deductible,

15 copayment, or other charge collected with respect to a bene16 fit provided under a pilot program may not exceed the max17 imum amount otherwise permitted for a premium, deduct18 ible, copayment, or other charge with respect to that benefit

19 under the comprehensive health benefits plan of the State

20 in which the pilot program is carried out.

21 (2)(A) Except as provided in subparagraph (B), the

22 Secretary shall not collect under the pilot programs pre23 miums, deductibles, copayments, and other charges with re24 spect to the benefits provided by the Department to the fol25 lowing:
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1 (i) Veterans with compensable service-connected

2 disabilities.

3 (ii) Veterans whose discharge or release from ac4 tive military, naval, or air service was for a compen5 sable disability that was incurred or aggravated in

6 the line of duty.

7 (iii) Veterans who are in receipt of, or who, but

8 for a suspension pursuant to section 1151 of title 38,

9 United States Code (or both a suspension and the re10 ceipt of retired pay), would be entitled to disability

11 compensation, but only to the extent that such veter12 ans’ continuing eligibility for such care is provided

13 for in the judgment or settlement provided for in such

14 section.

15 (iv) Veterans who are former prisoners of war.

16 (v) Veterans of the Mexican border period or of

17 World War I.

18 (vi) Veterans who are unable to defray the ex19 penses of necessary care, as determined in accordance

20 with section 1722(a) of such title.

21 (B) The Secretary may collect premiums, deductibles,

22 copayments, and other charges with respect to benefits pro23 vided under a pilot program to veterans referred to in sub24 paragraph (A) from any third party obligated to provide,

25 or to pay the expenses of, such benefits to or for such veter-
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1 ans under the comprehensive health benefits plan of the

2 State in which the pilot program is carried out.

3 (j) FUNDING.—(1) There is established in the Treasury

4 a fund to be known as the Department of Veterans Affairs

5 Health Care Reform Fund (hereafter referred to in this sub6 section as the ‘‘Fund’’).

7 (2)(A) Notwithstanding any other provision of law,

8 amounts shall be deposited in the Fund as follows:

9 (i) Amounts collected under a pilot program in

10 accordance with subsection (i).

11 (ii) Amounts made available to a pilot program

12 based upon a determination under paragraph (3).

13 (iii) Amounts transferred to the Fund with re14 spect to a pilot program under paragraph (4).

15 (iv) Such other amounts as the Secretary and

16 the health system directors of the pilot programs

17 jointly determine to be necessary in order to carry out

18 the pilot programs.

19 (v) Such other amounts as may be appropriated

20 to the pilot programs.

21 (B) Amounts deposited in the Fund pursuant to

22 clauses (ii) and (iv) shall be derived from amounts appro23 priated to the Department of Veterans Affairs for the Veter24 ans Health Administration for medical care.
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1 (C) The Secretary shall establish and maintain a sepa2 rate account under the Fund for each pilot program carried

3 out under this Act. Any deposits and expenditures with re4 spect to a pilot program shall be made to or from the ac5 count established and maintained with respect to that pilot

6 program.

7 (3)(A) For each year of the operation of a pilot pro8 gram under this Act, the Secretary shall deposit in the ac9 count of the Fund for the pilot program an amount (as

10 determined by the Secretary) equal to the amount that

11 would otherwise be made available to the health care system

12 of the Department in the State in which the pilot program

13 is carried out for the payment of the cost of health care

14 services by such system in that State in that year. The Sec15 retary shall deposit such amount at the beginning of such

16 year.

17 (B) The costs referred to in subparagraph (A) shall

18 not include costs relating to the provision by the Secretary

19 of the following services:

20 (i) Services relating to post-traumatic stress dis21 order.

22 (ii) Services relating to spinal-cord dysfunction.

23 (iii) Services relating to substance abuse.

24 (iv) Services relating to the rehabilitation of

25 blind veterans.
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1 (v) Services relating to prosthetics.

2 (4) Funds deposited in the Medical-Care Cost Recovery

3 Fund established under section 1729(g) of title 38, United

4 States Code, during any fiscal year in an amount in excess

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

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

7 that fiscal year shall not be subject to paragraph (4) of sec8 tion 1710(f), 1712(f), or 1729(g) (as the case may be) of

9 that title, but shall be transferred to the fund established

10 under this subsection. Such transfer for any fiscal year shall

11 be made at any time that the total of amounts so received

12 less amounts estimated to cover the expenses, payments, and

13 costs described in paragraph (3) of section 1729(g) of that

14 title is in excess of the applicable Congressional Budget Of15 fice baseline.

16 (5)(A) Notwithstanding any other provision of law,

17 amounts in the Fund shall be available for all expenses in18 curred by the Veterans Health Administration in carrying

19 out the pilot programs. Subject to subparagraph (B), the

20 health system director for a State in which a pilot program

21 is carried out shall determine the expenses of the pilot pro22 gram for that State for purposes of this paragraph.

23 (B)(i) Except as provided in clause (ii), the costs of

24 carrying out a pilot program under this paragraph shall

25 include any costs of marketing and advertising under the
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1 program, costs of legal services provided to such pilot pro2 gram by the General Counsel of the Department of Veterans

3 Affairs, and costs relating to acquisition (including acquisi4 tion of land), construction, repair, or renovation of facili5 ties.

6 (ii) Costs under this subparagraph shall not include

7 any costs relating to a major medical facility project or

8 a major medical facility lease as such terms are defined

9 in subparagraphs (A) and (B) of section 8104(a)(3) of title

10 38, United States Code, respectively.

11 (C) The period of availability of amounts in an ac12 count established in the Fund for a pilot program shall end

13 on the last day of the fiscal year in which the pilot program

14 is carried out.

15 (k) TERMINATION.—A pilot program carried out under

16 this Act shall terminate not later than 2 years after the

17 date of the commencement of provision of benefits under the

18 pilot program.

19 SEC. 4. REPORTS ON PILOT PROGRAMS.

20 (a) COLLECTION OF INFORMATION.—(1) The Secretary

21 shall collect such information with respect to the provision

22 of health care benefits under each pilot program as is nec23 essary to permit the Secretary to evaluate the pilot program

24 in light of the purpose of the pilot program under this Act.
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1 (2) The information collected by the Secretary under

2 paragraph (1) shall include aggregated data on the follow3 ing:

4 (A) The number of persons participating in each

5 pilot program, including the age, sex, health status,

6 disability ratings (if any), employment status, and

7 incomes of such persons.

8 (B) The nature of benefits sought by such persons

9 under each pilot program.

10 (C) The nature and quantity of benefits provided

11 to such persons under each pilot program.

12 (D) The cost to the Department of providing

13 such benefits under each pilot program.

14 (b) REPORTS.—(1) Not later than 14 months after the

15 date of the completion of the designation of States as loca16 tions for pilot programs under this Act, the Secretary shall

17 submit to the Committees on Veterans’ Affairs of the Senate

18 and House of Representatives a report on the progress of

19 the Secretary in carrying out the pilot programs. Such re20 port shall include the information referred to in subsection

21 (a)(2) on the date of the report.

22 (2) Not later than November 30 of the year of the ter23 mination of the final pilot program under this Act, the Sec24 retary shall submit to the committees referred to in para-
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1 graph (1) a report on the pilot programs carried out under

2 this Act. The report shall include the following:

3 (A) The information referred to in subsection

4 (a)(2), together with the comments and conclusions of

5 the Secretary with respect to such information.

6 (B) An assessment by the Secretary of the utility

7 of each pilot program for carrying out the purpose of

8 this Act.

9 (C) An assessment by the Secretary of appro10 priate means of integrating the health care system of

11 the Department into the health care systems of States

12 that have enacted health care reform and into the Na13 tional health care system contemplated under any

14 plans for National health care reform.

15 (D) Such other information, assessments, and

16 conclusions as the Secretary considers appropriate.

17 (3) Not later than 30 days after the end of any fiscal

18 year in which a pilot program is carried out under section

19 3, the Secretary shall submit to the appropriate committees

20 of Congress a report describing the amounts expended from

21 the Department of Veterans Affairs Health Care Reform

22 Fund established under section 3(j)(1) during that fiscal

23 year for each pilot program so carried out.

24 SEC. 5. DEFINITIONS.

25 For the purposes of this Act—
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1 (1) The terms ‘‘Secretary’’, ‘‘Department’’, ‘‘vet2 eran’’, ‘‘child’’ and ‘‘spouse’’ have the meanings given

3 such terms in paragraphs (1), (2), (4), and (31) of

4 section 101 of title 38, United States Code, respec5 tively.

6 (2) The term ‘‘comprehensive health benefit

7 plan’’, in the case of a State, means a plan or system

8 established under the law of the State that—

9 (A) attempts to ensure the access of resi10 dents of the State to a comprehensive package of

11 basic health care benefits; and

12 (B) ensures such access by providing that

13 such benefits shall be provided directly or by con14 tract by public and private entities.

15 (3) The term ‘‘comprehensive package of basic

16 health care benefits’’ means the health care benefits

17 provided for by a State under the comprehensive

18 health benefit plan of the State.

19 (4) The term ‘‘health care system of the Depart20 ment’’, in the case of a State designated as a location

21 for a pilot program, means the facilities and person22 nel of the Department located in that State that pro-
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1 vide health care services under chapter 17 of title 38,

2 United States Code.

Attest:

Secretary.
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