II

104TH CONGRESS

1ST SESSION S. 613

To authorize the Secretary of Veterans Affairs to conduct pilot programs

in order to evaluate the feasibility of the participation of the Department

of Veterans Affairs health care system in the health care systems of

States that have enacted health care reform.

IN THE SENATE OF THE UNITED STATES

MARCH 24 (legislative day, MARCH 23), 1995

Mr. ROCKEFELLER (for himself, Mr. GRAHAM, Mr. AKAKA, Mr. DORGAN, Mr.

MURKOWSKI, Mr. JEFFORDS, Mr. DASCHLE, Mr. LEAHY, Mrs. MURRAY,

and Mr. WELLSTONE) introduced the following bill; which was read twice

and referred to the Committee on Veterans’ Affairs

A BILL

To authorize the Secretary of Veterans Affairs to conduct

pilot programs in order to evaluate the feasibility of

the participation of the Department of Veterans Affairs

health care system in the health care systems of States

that have enacted health care reform.

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 ‘‘VA State Health Care

5 Reform Pilot Program Act’’.
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1 SEC. 2. PURPOSE OF PILOT PROGRAMS.

2 The purpose of this Act is to authorize the participa3 tion of the Department of Veterans Affairs health care

4 system in the health care systems of States that have en5 acted health care reform in order to evaluate the most ap6 propriate means of enabling the Department health care

7 system to participate in such systems and in the National

8 health care system contemplated under any plans for Na9 tional health care reform.

10 SEC. 3. HEALTH CARE PILOT PROGRAMS.

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

12 programs on the participation of the Department of Veter13 ans Affairs health care system in the health care systems

14 of States that have adopted comprehensive health benefit

15 plans. The Secretary shall carry out any pilot program

16 under this Act in accordance with the provisions of this

17 Act.

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

19 Secretary shall designate each of not more than five States

20 as a location for a pilot program under this Act. The Sec21 retary shall complete the designation of States as locations

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

23 of the enactment of this Act.

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

25 for a pilot program under this Act if the Secretary deter26 mines that—
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1 (A) the State has enacted, or will soon enact,

2 a statute establishing or providing for a comprehen3 sive health benefit plan; and

4 (B) the participation of the health care system

5 of the Department under the plan is feasible and ap6 propriate in light of the purpose of this Act.

7 (c) DEPARTMENT PARTICIPATION IN STATE HEALTH

8 BENEFIT PLANS.—(1) To the maximum extent prac9 ticable, the Secretary shall provide eligible persons under

10 each pilot program under this Act with the comprehensive

11 package of basic health care benefits that would otherwise

12 be available to such persons under the comprehensive

13 health benefit plan of the State in which the pilot program

14 is carried out. The Secretary shall provide such benefits

15 through the health care system of the Department in such

16 State as if such system were a provider of such benefits

17 under such plan.

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

19 State may not prohibit the participation of the Depart20 ment under the comprehensive health benefit plan of the

21 State under a pilot program unless the chief executive offi22 cer of the State certifies to the Secretary that—

23 (A) the benefits to be provided by the Depart24 ment under the pilot program do not meet require-
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1 ments for quality of benefits established by or pro2 vided under the plan; or

3 (B) the location of Department facilities (in4 cluding facilities providing services by contract or

5 agreement with the Secretary) in the State is such

6 that the proximity of eligible persons to such facili7 ties does not meet requirements so established for

8 such proximity.

9 (3) Not later than 30 days after the designation of

10 a State as a location for a pilot program under this Act,

11 and at such other times as the Secretary may determine,

12 the Secretary and the health system director for that State

13 shall jointly determine the regulations under the authority

14 of the Secretary the waiver or modification of which is nec15 essary in order to facilitate the carrying out of the pilot

16 program. Upon such determination, the Secretary shall

17 waive or modify the application of such regulations to the

18 pilot program.

19 (4) The Secretary shall furnish any eligible person

20 living in a State in which a pilot program is carried out

21 (including any eligible person electing to receive benefits

22 under the pilot program and any eligible person not elect23 ing to receive benefits under the pilot program) with the

24 health care benefits for which such person is eligible under

25 chapter 17 of title 38, United States Code, notwithstand-
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1 ing that the comprehensive package of basic health care

2 benefits provided under the comprehensive health benefit

3 plan of the State does not otherwise include such health

4 care benefits. The Secretary shall furnish any health care

5 benefits under this paragraph in accordance with the pro6 visions of that chapter.

7 (5) The Secretary may not provide any health care

8 benefit under a pilot program under this Act that the Sec9 retary is not otherwise authorized to provide under the

10 laws administered by the Secretary.

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

12 shall designate a health system director for each State in

13 which a pilot program is carried out under this Act. To

14 the maximum extent feasible, the Secretary shall delegate

15 to the health system directors the responsibilities of the

16 Secretary under this Act.

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

18 shall designate an individual as health system director for

19 a State from among nominees for that position selected

20 by a panel composed of individuals who are senior man21 agement personnel of the Department medical centers lo22 cated in that State.

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

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

25 shall be—
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1 (i) the director or chief of staff of a Depart2 ment medical center located in the State in which

3 the pilot program is carried out; or

4 (ii) any other individual having experience with

5 the Department medical system that is equivalent to

6 the experience with that system of an individual in

7 a position referred to in clause (i).

8 (e) ADMINISTRATIVE REORGANIZATION.—The Sec9 retary may carry out any administrative reorganization of

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

11 system of the Department in a State in which a pilot pro12 gram is carried out that the Secretary and the health sys13 tem director jointly determine to be necessary in order to

14 facilitate the carrying out of the pilot program. Section

15 510(b) of title 38, United States Code, shall not apply to

16 any such administrative reorganization.

17 (f) PROVISION OF BENEFITS.—(1)(A) Except as pro18 vided in subparagraph (B), the Secretary shall provide

19 health care benefits under a pilot program—

20 (i) through the direct provision of such services

21 by the health care system of the Department in the

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

23 (ii) by contract or other agreement in accord24 ance with paragraph (2).
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1 (B) The Secretary may exclude facilities of the De2 partment from participation in a pilot program. Any facili3 ties so excluded shall continue to provide health care bene4 fits to veterans and other persons eligible for such benefits

5 in accordance with the provisions of laws administered by

6 the Secretary.

7 (2) The health system director of a pilot program

8 may enter into contracts and agreements for the provision

9 of health care services and contracts and agreements for

10 other services with respect to the pilot program under

11 paragraph (1)(A)(ii). Any such contract or agreement (in12 cluding any lease) shall not be subject to the following pro13 visions of law:

14 (A) Section 8110(c) of title 38, United States

15 Code, relating to contracting of services at Depart16 ment health-care facilities.

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

18 the lease of Department property.

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

20 contracts for the procurement of health-care items.

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

22 relating to the right of review of agency wrongs by

23 courts of the United States.

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

25 United States Code, relating to the jurisdiction of
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1 the district courts of the United States and the

2 United States Court of Federal Claims, respectively,

3 for the actions enumerated in such sections.

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

5 United States Code, relating to adjudication of pro6 tests of violations of procurement statutes and regu7 lations.

8 (G) Sections 3526 and 3702 of such title, relat9 ing to the settlement of accounts and claims, respec10 tively, of the United States.

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

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

13 637(b)(7), (e), (f), (g), and (h)), relating to require14 ments with respect to small businesses for contracts

15 for property and services.

16 (I) The provisions of law assembled for pur17 poses of codification of the United States Code as

18 section 471 through 544 of title 40 that relate to the

19 authority of the Administrator of General Services

20 over the lease and disposal of Federal Government

21 property.

22 (J) The Office of Federal Procurement Policy

23 Act (41 U.S.C. 401 et seq.), relating to the procure24 ment of property and services by the Federal Gov25 ernment.
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1 (K) Chapter 3 of the Federal Property and Ad2 ministrative Services Act of 1949 (41 U.S.C. 251 et

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

4 services by the Federal Government.

5 (L) Office of Management and Budget Circular

6 A–76.

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

8 contracts and agreements for the provision of health care

9 services under this subsection may include contracts and

10 other agreements with insurers, health care providers, or

11 other individuals or entities that provide health care serv12 ices.

13 (B) Contracts and agreements under this paragraph

14 may be entered into without prior review by the Central

15 Office of the Department.

16 (4)(A) Contracts and agreements under this sub17 section for services other than the services referred to in

18 paragraph (3) (including contracts and agreements for

19 procurement of equipment, maintenance and repair serv20 ices, and other services related to the provision of health

21 care services) shall not be subject to prior review by the

22 Central Office if the amount of such contracts or agree23 ments is less than $250,000.

24 (B) Contracts and agreements for services under this

25 paragraph shall be subject to prior review by the Central
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1 Office if the amount of such contracts or agreements is

2 $250,000 or greater. If the Central Office fails to approve

3 or reject a contract or agreement under this clause within

4 30 days of its submittal to the Central Office, such con5 tract or agreement shall be deemed approved by the

6 Central Office.

7 (g) DEPARTMENT PERSONNEL.—(1) Notwithstand8 ing any other provision of law and to the extent necessary

9 to carry out the purpose of a pilot program, the Secretary

10 may—

11 (A) appoint personnel to positions in the health

12 care system of the Department in the State in which

13 the pilot program is carried out in accordance with

14 such standards for such positions as the Secretary

15 may establish; and

16 (B) promote and advance personnel serving in

17 such positions in accordance with such standards as

18 the Secretary may establish.

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

20 a State as a location for a pilot program under this Act,

21 or at such other time as the Secretary may determine, the

22 Secretary shall request authority from the Director of the

23 Office of Management and Budget to permit the Secretary

24 to employ a number of full time equivalent employees in

25 the health care system of the Department in that State
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1 which exceeds the number of such employees that would

2 otherwise be authorized for such employment by the Direc3 tor.

4 (3) Notwithstanding any other provision of law, em5 ployees of the Department at facilities of the Department

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

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

8 number of full time employees of the Department or as

9 a result of a reduction in the number of full time employ10 ees of the Federal Government.

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

12 health care benefits under a pilot program is any person

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

14 out as follows:

15 (A) Any veteran.

16 (B) Any spouse or child of a veteran.

17 (C) Any individual eligible for care under para18 graph (2) or (3) of section 1713(a) of title 38,

19 United States Code.

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

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

22 referred to in paragraph (1) be eligible for health care ben23 efits through the Department under a pilot program.

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

25 as provided in paragraph (2), the Secretary may collect
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1 from or on behalf of any individual receiving health care

2 benefits from the Secretary under a pilot program under

3 this Act a premium, deductible, copayment, or other

4 charge with respect to the provision of a benefit under the

5 pilot program. The amount of the premium, deductible,

6 copayment, or other charge collected with respect to a ben7 efit provided under a pilot program may not exceed the

8 maximum amount otherwise permitted for a premium, de9 ductible, copayment, or other charge with respect to that

10 benefit under the comprehensive health benefits plan of

11 the State in which the pilot program is carried out.

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

13 Secretary shall not collect under the pilot programs pre14 miums, deductibles, copayments, and other charges with

15 respect to the benefits provided by the Department to the

16 following:

17 (i) Veterans with compensable service-connected

18 disabilities.

19 (ii) Veterans whose discharge or release from

20 active military, naval, or air service was for a com21 pensable disability that was incurred or aggravated

22 in the line of duty.

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

24 for a suspension pursuant to section 1151 of title

25 38, United States Code (or both a suspension and
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1 the receipt of retired pay), would be entitled to dis2 ability compensation, but only to the extent that

3 such veterans’ continuing eligibility for such care is

4 provided for in the judgment or settlement provided

5 for in such section.

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

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

8 World War I.

9 (vi) Veterans who are unable to defray the ex10 penses of necessary care, as determined in accord11 ance with section 1722(a) of such title.

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

13 copayments, and other charges with respect to benefits

14 provided under a pilot program to veterans referred to in

15 subparagraph (A) from any third party obligated to pro16 vide, or to pay the expenses of, such benefits to or for

17 such veterans under the comprehensive health benefits

18 plan of the State in which the pilot program is carried

19 out.

20 (j) FUNDING.—(1) There is established in the Treas21 ury a fund to be known as the Department of Veterans

22 Affairs Health Care Reform Fund (hereafter referred to

23 in this subsection as the ‘‘Fund’’).

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

25 amounts shall be deposited in the Fund as follows:
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1 (i) Amounts collected under a pilot program in

2 accordance with subsection (i).

3 (ii) Amounts made available to a pilot program

4 based upon a determination under paragraph (3).

5 (iii) Amounts transferred to the Fund with re6 spect to a pilot program under paragraph (4).

7 (iv) Such other amounts as the Secretary and

8 the health system directors of the pilot programs

9 jointly determine to be necessary in order to carry

10 out the pilot programs.

11 (v) Such other amounts as may be appropriated

12 to the pilot programs.

13 (B) The Secretary shall make available amounts

14 under clauses (ii) and (iv) of subparagraph (A) from

15 amounts appropriated to the Department of Veterans Af16 fairs for the provision of health care services.

17 (C) The Secretary shall establish and maintain a sep18 arate account under the Fund for each pilot program car19 ried out under this Act. Any deposits and expenditures

20 with respect to a pilot program shall be made to or from

21 the account established and maintained with respect to

22 that pilot program.

23 (3)(A) For each year of the operation of a pilot pro24 gram under this Act, the Secretary shall deposit in ac25 count of the Fund for the pilot program an amount (as
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1 determined by the Secretary) equal to the amount that

2 would otherwise be made available to the health care sys3 tem of the Department in the State in which the pilot pro4 gram is carried out for the payment of the cost of health

5 care services by such system in that State in that year.

6 The Secretary shall deposit such amount at the beginning

7 of such year.

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

9 not include costs relating to the provision by the Secretary

10 of the following services:

11 (i) Services relating to post-traumatic stress

12 disorder.

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

14 (iii) Services relating to substance abuse.

15 (iv) Services relating to the rehabilitation of

16 blind veterans.

17 (v) Services relating to prosthetics.

18 (4) Funds deposited in the Medical-Care Cost Recov19 ery Fund established under section 1729(g) of title 38,

20 United States Code, during any fiscal year in an amount

21 in excess of the Congressional Budget Office baseline (as

22 of the date of the enactment of this Act) for deposits in

23 that fund for that fiscal year shall not be subject to para24 graph (4) of section 1710(f), 1712(f), or 1729(g) (as the

25 case may be) of that title, but shall be transferred to the
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1 fund established under this subsection. Such transfer for

2 any fiscal year shall be made at any time that the total

3 of amounts so received less amounts estimated to cover

4 the expenses, payments, and costs described in paragraph

5 (3) of section 1729(g) of that title is in excess of the appli6 cable Congressional Budget Office baseline.

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

8 the health system director for a State in which a pilot pro9 gram is carried out shall determine the costs for which

10 amounts in the Fund may be expended in carrying out

11 the pilot program.

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

13 carrying out a pilot program under this paragraph shall

14 include any costs of marketing and advertising under the

15 program, costs of legal services provided to such pilot pro16 gram by the General Counsel of the Department of Veter17 ans Affairs, and costs relating to acquisition (including ac18 quisition of land), construction, repair, or renovation of

19 facilities.

20 (ii) Costs under this subparagraph shall not include

21 any costs relating to a major medical facility project or

22 a major medical facility lease as such terms are defined

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

24 title 38, United States Code, respectively.
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1 (C) Amounts in the Fund for the payment of costs

2 of a pilot program under this subsection shall be available

3 for such purpose without fiscal year limitation.

4 (k) TERMINATION.—A pilot program carried out

5 under this Act shall terminate not later than 2 years after

6 the date of the commencement of provision of benefits

7 under the pilot program.

8 SEC. 4. REPORTS ON PILOT PROGRAMS.

9 (a) COLLECTION OF INFORMATION.—(1) The Sec10 retary shall collect such information with respect to the

11 provision of health care benefits under each pilot program

12 as is necessary to permit the Secretary to evaluate the

13 pilot program in light of the purpose of the pilot program

14 under this Act.

15 (2) The information collected by the Secretary under

16 paragraph (1) shall include aggregated data on the follow17 ing:

18 (A) The number of persons participating in

19 each pilot program, including the age, sex, health

20 status, disability ratings (if any), employment sta21 tus, and incomes of such persons.

22 (B) The nature of benefits sought by such per23 sons under each pilot program.

24 (C) The nature and quantity of benefits pro25 vided to such persons under each pilot program.
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1 (D) The cost to the Department of providing

2 such benefits under each pilot program.

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

4 the date of the completion of the designation of States

5 as locations for pilot programs under this Act, the Sec6 retary shall submit to the Committees on Veterans’ Affairs

7 of the Senate and House of Representatives a report on

8 the progress of the Secretary in carrying out the pilot pro9 grams. Such report shall include the information referred

10 to in subsection (a)(2) on the date of the report.

11 (2) Not later than November 30 of the year of the

12 termination of the final pilot program under this Act, the

13 Secretary shall submit to the committees referred to in

14 paragraph (1) a report on the pilot programs carried out

15 under this Act. The report shall include the following:

16 (A) The information referred to in subsection

17 (a)(2), together with the comments and conclusions

18 of the Secretary with respect to such information.

19 (B) An assessment by the Secretary of the util20 ity of each pilot program for carrying out the pur21 pose of this Act.

22 (C) An assessment by the Secretary of appro23 priate means of integrating the health care system

24 of the Department into the health care systems of

25 States that have enacted health care reform and into
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1 the National health care system contemplated under

2 any plans for National health care reform.

3 (D) Such other information, assessments, and

4 conclusions as the Secretary considers appropriate.

5 SEC. 5. DEFINITIONS.

6 For the purposes of this Act—

7 (1) The terms ‘‘Secretary’’, ‘‘Department’’,

8 ‘‘veteran’’, ‘‘child’’ and ‘‘spouse’’ have the meanings

9 given such terms in paragraphs (1), (2), (4), and

10 (31) of section 101 of title 38, United States Code,

11 respectively.

12 (2) The term ‘‘comprehensive health benefit

13 plan’’, in the case of a State, means a plan or sys14 tem established under the law of the State that—

15 (A) attempts to ensure the access of resi16 dents of the State to a comprehensive package

17 of basic health care benefits; and

18 (B) ensures such access by providing that

19 such benefits shall be provided directly or by

20 contract by public and private entities.

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

22 health care benefits’’ means the health care benefits

23 provided for by a State under the comprehensive

24 health benefit plan of the State.
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1 (4) The term ‘‘health care system of the De2 partment’’, in the case of a State designated as a lo3 cation for a pilot program, means the facilities and

4 personnel of the Department located in that State

5 that provide health care services under chapter 17 of

6 title 38, United States Code.

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