I 

114TH CONGRESS 

1ST SESSION H. R. 3320 

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

Affairs to enter into contracts with administrative contractors for the 

processing of claims for hospital care and medical services furnished 

in non-Department of Veterans Affairs facilities. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 29, 2015 

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

Committee on Veterans’ Affairs 

A BILL 

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

Secretary of Veterans Affairs to enter into contracts 

with administrative contractors for the processing of 

claims for hospital care and medical services furnished 

in non-Department of Veterans Affairs facilities. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Timely Payment for 

5 Veterans’ Medical Care Act’’. 


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1 SEC. 2. AUTHORITY OF SECRETARY OF VETERANS AFFAIRS 

2 TO ENTER INTO CONTRACTS WITH ADMINIS3 TRATIVE CONTRACTORS FOR THE PROC4 ESSING OF CLAIMS FOR HOSPITAL CARE AND 

5 MEDICAL SERVICES FURNISHED IN NON-DE6 PARTMENT OF VETERANS AFFAIRS FACILI7 TIES. 

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

9 States Code, is amended by inserting after section 1725 

10 the following new section: 

11 ‘‘§ 1725A. Authority to enter into contracts with ad12 ministrative contractors 

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

14 contracts with any eligible entity to serve as an adminis15 trative contractor with respect to the performance of any 

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

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

18 to secure performance thereof by other entities). 

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

20 respect to the performance of a particular function de21 scribed in paragraph (4) only if— 

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

23 carry out such function; 

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

25 interest standards as are generally applicable to 

26 Federal acquisition and procurement; 


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1 ‘‘(C) the entity has sufficient assets to finan2 cially support the performance of such function; 

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

4 process electronic filings of medical records; and 

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

6 as the Secretary may impose. 

7 ‘‘(3)(A) For purposes of this section, the term ‘ad8 ministrative contractor’ means an agency, organization, or 

9 other person with a contract under this section. 

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

11 function in relation to an individual enrolled in the patient 

12 enrollment system under section 1705 of this title, the ‘ap13 propriate’ administrative contractor is the administrative 

14 contractor that has a contract under this section with re15 spect to the performance of that function in relation to 

16 that individual, or non-Department facility. 

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

18 the following functions relating to the furnishing of med19 ical care and hospital services in non-Department facilities 

20 under section 1725 or 1728 of this title: 

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

22 required pursuant to this title to be made to a non23 Department facility. 


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1 ‘‘(B) Making payments described in subpara2 graph (A) (including receipt, disbursement, and ac3 counting for funds in making such payments). 

4 ‘‘(C) Providing education and outreach to indi5 viduals enrolled in the patient enrollment system 

6 under section 1705 of this title and providing assist7 ance to those individuals with specific issues, con8 cerns, or problems. 

9 ‘‘(D) Providing consultative services to institu10 tions, agencies, and other persons to enable them to 

11 establish and maintain fiscal records necessary for 

12 purposes of this title. 

13 ‘‘(E) Communicating to non-Department facili14 ties any information or instructions furnished to the 

15 administrative contractor by the Secretary, and fa16 cilitating communication between such facilities and 

17 the Secretary. 

18 ‘‘(F) Performing the functions relating to non19 Department facility education, training, and tech20 nical assistance. 

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

22 necessary to carry out the purposes of this title. 

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

24 requirement of this section, the Federal Acquisition Regu25 lation applies to contracts under this section. 


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

2 as provided in laws with general applicability to Federal 

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

4 Secretary shall use competitive procedures when entering 

5 into contracts with administrative contractors under this 

6 section, taking into account performance quality as well 

7 as price and other factors. 

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

9 administrative contractor under this section from term to 

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

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

12 if the administrative contractor has met or exceeded the 

13 performance requirements applicable with respect to the 

14 contract and contractor, except that the Secretary shall 

15 provide for the application of competitive procedures 

16 under such a contract not less frequently than once every 

17 5 years. 

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

19 administrative contractors consistent with the provisions 

20 of this paragraph. The Secretary shall ensure that per21 formance quality is considered in such transfers. The Sec22 retary shall provide public notice (whether in the Federal 

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

24 description of the functions so transferred, a description 


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

2 and contact information for the contractors involved). 

3 ‘‘(D) The Secretary shall provide incentives for ad4 ministrative contractors to provide quality service and to 

5 promote efficiency. 

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

7 into with any administrative contractor unless the Sec8 retary finds that such administrative contractor will per9 form its obligations under the contract efficiently and ef10 fectively and will meet such requirements as to financial 

11 responsibility, legal authority, quality of services provided, 

12 and other matters as the Secretary finds pertinent. 

13 ‘‘(3)(A)(i) The Secretary shall develop contract per14 formance requirements to carry out the specific require15 ments applicable under this title to a function described 

16 in subsection (a)(4) and shall develop standards for meas17 uring the extent to which a contractor has met such re18 quirements. Such requirements shall include specific per19 formance duties expected of a medical director of an ad20 ministrative contractor, including requirements relating to 

21 professional relations and the availability of such director 

22 to conduct medical determination activities within the ju23 risdiction of such a contractor. 

24 ‘‘(ii) In developing such performance requirements 

25 and standards for measurement, the Secretary shall conVerDate Sep 11 2014 05:07 Aug 04, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3320.IH H3320

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1 sult with non-Department facilities, veterans service orga2 nizations, and organizations and agencies performing 

3 functions necessary to carry out the purposes of this sec4 tion with respect to such performance requirements. 

5 ‘‘(iii) The Secretary shall make such performance re6 quirements and measurement standards available to the 

7 public. 

8 ‘‘(B) The Secretary shall include, as one of the stand9 ards developed under subparagraph (A), non-Department 

10 facility and veteran satisfaction levels. 

11 ‘‘(C) All contractor performance requirements shall 

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

13 appropriate administrative contractor. Such performance 

14 requirements— 

15 ‘‘(i) shall reflect the performance requirements 

16 published under subparagraph (A), but may include 

17 additional performance requirements; 

18 ‘‘(ii) shall be used for evaluating contractor per19 formance under the contract; and 

20 ‘‘(iii) shall be consistent with the written state21 ment of work provided under the contract. 

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

23 with an administrative contractor under this section unless 

24 the contractor agrees— 


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1 ‘‘(A) to furnish to the Secretary such timely in2 formation and reports as the Secretary may find 

3 necessary in performing the functions of the Sec4 retary under this title; and 

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

6 access thereto as the Secretary finds necessary to 

7 assure the correctness and verification of the infor8 mation and reports under subparagraph (A) and 

9 otherwise to carry out the purposes of this title. 

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

11 under this section may require the administrative con12 tractor, and any of its officers or employees certifying pay13 ments or disbursing funds pursuant to the contract, or 

14 otherwise participating in carrying out the contract, to 

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

16 the Secretary may deem appropriate. 

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

18 administrative contractor under this section may contain 

19 such terms and conditions as the Secretary finds necessary 

20 or appropriate and may provide for advances of funds to 

21 the administrative contractor for the making of payments 

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

23 ‘‘(d) LIMITATION ON LIABILITY OF ADMINISTRATIVE

24 CONTRACTORS AND CERTAIN OFFICERS.—(1) No indi25 vidual designated pursuant to a contract under this secVerDate Sep 11 2014 05:07 Aug 04, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3320.IH H3320

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1 tion as a certifying officer shall, in the absence of the reck2 less disregard of the individual’s obligations or the intent 

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

4 with respect to any payments certified by the individual 

5 under this section. 

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

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

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

9 respect to any payment by such officer under this section 

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

11 applicable requirements for such internal controls estab12 lished by the Comptroller General of the United States) 

13 of a certifying officer designated as provided in paragraph 

14 (1) of this subsection. 

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

16 to the United States for a payment by a certifying or dis17 bursing officer unless, in connection with such payment, 

18 the administrative contractor acted with reckless disregard 

19 of its obligations under its administrative contract or with 

20 intent to defraud the United States. 

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

22 to limit liability for conduct that would constitute a viola23 tion of sections 3729 through 3731 of title 31, United 

24 States Code. 


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

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

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

4 is engaged by the contractor to participate directly in the 

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

6 judicial or administrative proceeding arising from or relat7 ing directly to the claims administration process under 

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

9 determines to be appropriate and as specified in the con10 tract with the contractor, indemnify the contractor and 

11 such persons. 

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

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

14 costs arises directly from conduct that is determined by 

15 the judicial proceeding or by the Secretary to be criminal 

16 in nature, fraudulent, or grossly negligent. If indemnifica17 tion is provided by the Secretary with respect to a con18 tractor before a determination that such costs arose di19 rectly from such conduct, the contractor shall reimburse 

20 the Secretary for costs of indemnification. 

21 ‘‘(C) Indemnification by the Secretary under sub22 paragraph (A) may include payment of judgments, settle23 ments (subject to subparagraph (D)), awards, and costs 

24 (including reasonable legal expenses). 


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1 ‘‘(D) A contractor or other person described in sub2 paragraph (A) may not propose to negotiate a settlement 

3 or compromise of a proceeding described in such subpara4 graph without the prior written approval of the Secretary 

5 to negotiate such settlement or compromise. Any indem6 nification under subparagraph (A) with respect to 

7 amounts paid under a settlement or compromise of a pro8 ceeding described in such subparagraph are conditioned 

9 upon prior written approval by the Secretary of the final 

10 settlement or compromise. 

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

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

13 may be available to an administrative contractor or 

14 person described in subparagraph (A); or 

15 ‘‘(ii) to permit the payment of costs not other16 wise allowable, reasonable, or allocable under the 

17 Federal Acquisition Regulation. 

18 ‘‘(e) REQUIREMENTS FOR INFORMATION SECU19 RITY.—(1) An administrative contractor that performs the 

20 functions referred to in subparagraphs (A) and (B) of sub21 section (a)(4) (relating to determining and making pay22 ments) shall implement a contractor-wide information se23 curity program to provide information security for the op24 eration and assets of the contractor with respect to such 

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1 gram under this paragraph shall meet the requirements 

2 for information security programs imposed on Federal 

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

4 3544(b) of title 44, United States Code (other than the 

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

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

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

8 performs the functions referred to in subparagraphs (A) 

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

10 making payments) shall undergo an evaluation of the in11 formation security of the contractor with respect to such 

12 functions under this title. The evaluation shall— 

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

14 requirements for independence as the Inspector Gen15 eral of the Department of Health and Human Serv16 ices may establish; and 

17 ‘‘(ii) test the effectiveness of information secu18 rity control techniques of an appropriate subset of 

19 the contractor’s information systems (as defined in 

20 section 3502(8) of title 44, United States Code) re21 lating to such functions under this title and an as22 sessment of compliance with the requirements of this 

23 subsection and related information security policies, 

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1 rector of the Office of Management and Budget and 

2 applicable information security standards promul3 gated under section 11331 of title 40, United States 

4 Code. 

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

6 subparagraph (A) shall be submitted promptly to the In7 spector General of the Department and to the Secretary. 

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

9 submit to Congress annual reports on the results of such 

10 evaluations, including assessments of the scope and suffi11 ciency of such evaluations. 

12 ‘‘(f) INCENTIVES TO IMPROVE CONTRACTOR PER13 FORMANCE IN NON-DEPARTMENT FACILITY EDUCATION

14 AND OUTREACH.—The Secretary shall use specific claims 

15 payment error rates or similar methodology of administra16 tive contractors in the processing or reviewing of claims 

17 in order to give such contractors an incentive to implement 

18 effective education and outreach programs for non-De19 partment facilities.’’. 

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

21 at the beginning of such chapter is amended by inserting 

22 after the item relating to section 1725 the following new 

23 item: 

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

Æ 


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