II

106TH CONGRESS

1ST SESSION S. 445

To amend title XVIII of the Social Security Act to require the Secretary

of Veterans Affairs and the Secretary of Health and Human Services

to carry out a demonstration project to provide the Department of

Veterans Affairs with Medicare reimbursement for Medicare health-care

services provided to certain Medicare-eligible veterans.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 23, 1999

Mr. JEFFORDS (for himself, Mr. SPECTER, Mr. ROCKEFELLER, Mr. MCCAIN,

Mr. THURMOND, Mr. MURKOWSKI, Mr. CAMPBELL, Mr. CRAIG, Mr.

HUTCHINSON, Ms. SNOWE, Mr. DASCHLE, Mr. GRAHAM, Mr. AKAKA, Mr.

WELLSTONE, Mrs. MURRAY, Mr. HOLLINGS, Mr. LEAHY, Mr. CLELAND,

Ms. LANDRIEU, and Mr. JOHNSON) introduced the following bill; which

was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to require

the Secretary of Veterans Affairs and the Secretary of

Health and Human Services to carry out a demonstration project to provide the Department of Veterans Affairs with Medicare reimbursement for Medicare healthcare services provided to certain Medicare-eligible veterans.

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

2 This Act may be cited as the ‘‘Veterans’ Equal Access

3 to Medicare Act’’.

4 SEC. 2. MEDICARE SUBVENTION DEMONSTRATION

5 PROJECT FOR VETERANS.

6 Title XVIII of the Social Security Act (42 U.S.C.

7 1395 et seq.) is amended by adding at the end the follow8 ing:

9 ‘‘MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR

10 VETERANS

11 ‘‘SEC. 1897. (a) DEFINITIONS.—In this section:

12 ‘‘(1) ADMINISTERING SECRETARIES.—The term

13 ‘administering Secretaries’ means the Secretary and

14 the Secretary of Veterans Affairs acting jointly.

15 ‘‘(2) DEMONSTRATION PROJECT; PROJECT.—

16 The terms ‘demonstration project’ and ‘project’

17 mean the demonstration project carried out under

18 this section.

19 ‘‘(3) DEMONSTRATION SITE.—The term ‘dem20 onstration site’ means a Veterans Affairs medical fa21 cility, including a group of Veterans Affairs medical

22 facilities that provide hospital care or medical serv23 ices as part of a service network or similar organiza24 tion.
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1 ‘‘(4) MILITARY RETIREE.—The term ‘military

2 retiree’ means a member or former member of the

3 Armed Forces who is entitled to retired pay.

4 ‘‘(5) TARGETED MEDICARE-ELIGIBLE VET5 ERAN.—The term ‘targeted Medicare-eligible vet6 eran’ means an individual who—

7 ‘‘(A) is a veteran (as defined in section

8 101(2) of title 38, United States Code) and is

9 described in section 1710(a)(3) of title 38,

10 United States Code;

11 ‘‘(B) has attained age 65;

12 ‘‘(C) is entitled to benefits under part A of

13 this title; and

14 ‘‘(D)(i) is enrolled for benefits under part

15 B of this title; and

16 ‘‘(ii) if such individual attained age 65 be17 fore the date of enactment of the Veterans’

18 Equal Access to Medicare Act, was so enrolled

19 on such date.

20 ‘‘(6) TRUST FUNDS.—The term ‘trust funds’

21 means the Federal Hospital Insurance Trust Fund

22 established in section 1817 and the Federal Supple23 mentary Medical Insurance Trust Fund established

24 in section 1841.
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1 ‘‘(7) VETERANS AFFAIRS MEDICAL FACILITY.—

2 The term ‘Veterans Affairs medical facility’ means a

3 medical facility as defined in section 8101 of title

4 38, United States Code.

5 ‘‘(b) DEMONSTRATION PROJECT.—

6 ‘‘(1) IN GENERAL.—

7 ‘‘(A) ESTABLISHMENT.—The administer8 ing Secretaries are authorized to establish a

9 demonstration project (under an agreement en10 tered into by the administering Secretaries)

11 under which the Secretary shall reimburse the

12 Secretary of Veterans Affairs, from the trust

13 funds, for Medicare health care services fur14 nished to certain targeted Medicare-eligible vet15 erans at a demonstration site.

16 ‘‘(B) AGREEMENT.—The agreement en17 tered into under subparagraph (A) shall include

18 at a minimum—

19 ‘‘(i) a description of the benefits to be

20 provided to the participants in the dem21 onstration project established under this

22 section;

23 ‘‘(ii) a description of the eligibility

24 rules for participation in the demonstration

25 project, including any terms and conditions
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1 established under subparagraph (C) and

2 any cost-sharing required under subpara3 graph (D);

4 ‘‘(iii) a description of how the dem5 onstration project will satisfy the require6 ments under this title (including bene7 ficiary protections and quality assurance

8 mechanisms);

9 ‘‘(iv) a description of the demonstra10 tion sites selected under paragraph (2);

11 ‘‘(v) a description of how reimburse12 ment and maintenance of effort require13 ments under subsection (h) will be imple14 mented in the demonstration project;

15 ‘‘(vi) a statement that the Secretary

16 shall have access to all data of the Depart17 ment of Veterans Affairs that the Sec18 retary determines is necessary to conduct

19 independent estimates and audits of the

20 maintenance of effort requirement, the an21 nual reconciliation, and related matters re22 quired under the demonstration project;

23 ‘‘(vii) a description of any require24 ment that the Secretary waives pursuant

25 to subsection (d); and
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1 ‘‘(viii) a certification, provided after

2 review by the administering Secretaries,

3 that any entity that is receiving payments

4 by reason of the demonstration project has

5 sufficient—

6 ‘‘(I) resources and expertise to

7 provide, consistent with payments

8 under subsection (h), the full range of

9 benefits required to be provided to

10 beneficiaries under the project; and

11 ‘‘(II) information and billing sys12 tems in place to ensure the accurate

13 and timely submission of claims for

14 benefits and to ensure that providers

15 of services, physicians, and other

16 health care professionals are reim17 bursed by the entity in a timely and

18 accurate manner.

19 ‘‘(C) VOLUNTARY PARTICIPATION.—Par20 ticipation of targeted Medicare-eligible veterans

21 in the demonstration project shall be voluntary,

22 subject to the capacity of participating dem23 onstration sites and the funding limitations

24 specified in subsection (h), and shall be subject

25 to such terms and conditions as the administer-
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1 ing Secretaries may establish. In the case of a

2 demonstration site described in paragraph

3 (2)(C)(i), targeted Medicare-eligible veterans

4 who are military retirees shall be given pref5 erence for participating in the project conducted

6 at that site.

7 ‘‘(D) COST-SHARING.—The Secretary of

8 Veterans Affairs may establish cost-sharing re9 quirements for veterans participating in the

10 demonstration project. If such cost-sharing re11 quirements are established, those requirements

12 shall be the same as the requirements that

13 apply to targeted Medicare-eligible patients at

14 medical centers that are not Veterans Affairs

15 medical facilities.

16 ‘‘(E) DATA MATCH.—

17 ‘‘(i) ESTABLISHMENT OF DATA

18 MATCHING PROGRAM.—The administering

19 Secretaries shall establish a data matching

20 program under which there is an exchange

21 of information of the Department of Veter22 ans Affairs and of the Department of

23 Health and Human Services as is nec24 essary to identify veterans (as defined in

25 section 101(2) of title 38, United States
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1 Code) who are entitled to benefits under

2 part A or enrolled under part B, or both,

3 in order to carry out this section. The pro4 visions of section 552a of title 5, United

5 States Code, shall apply with respect to

6 such matching program only to the extent

7 the administering Secretaries find it fea8 sible and appropriate in carrying out this

9 section in a timely and efficient manner.

10 ‘‘(ii) PERFORMANCE OF DATA

11 MATCH.—The administering Secretaries,

12 using the data matching program estab13 lished under clause (i), shall perform a

14 comparison in order to identify veterans

15 who are entitled to benefits under part A

16 or enrolled under part B, or both. To the

17 extent such Secretaries deem appropriate

18 to carry out this section, the comparison

19 and identification may distinguish among

20 such veterans by category of veterans, by

21 entitlement to benefits under this title, or

22 by other characteristics.

23 ‘‘(iii) DEADLINE FOR FIRST DATA

24 MATCH.—Not later than October 31, 1999,
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1 the administering Secretaries shall first

2 perform a comparison under clause (ii).

3 ‘‘(iv) CERTIFICATION BY INSPECTOR

4 GENERAL.—

5 ‘‘(I) IN GENERAL.—The admin6 istering Secretaries may not conduct

7 the program unless the Inspector Gen8 eral of the Department of Health and

9 Human Services certifies to Congress

10 that the administering Secretaries

11 have established the data matching

12 program under clause (i) and have

13 performed a comparison under clause

14 (ii).

15 ‘‘(II) DEADLINE FOR CERTIFI16 CATION.—Not later than December

17 15, 1999, the Inspector General of the

18 Department of Health and Human

19 Services shall submit a report to Con20 gress containing the certification

21 under subclause (I) or the denial of

22 such certification.

23 ‘‘(2) NUMBER OF DEMONSTRATION SITES.—

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graphs (B) and (C), and subsection
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1 (g)(1)(D)(ii), the administering Secretaries

2 shall establish a plan for the selection of up to

3 10 demonstration sites located in geographically

4 dispersed locations to participate in the project.

5 ‘‘(B) CRITERIA.—The administering Sec6 retaries shall favor selection of those dem7 onstration sites that consideration of the follow8 ing factors indicate are suited to serve targeted

9 Medicare-eligible veterans:

10 ‘‘(i) There is a high potential demand

11 by targeted Medicare-eligible veterans for

12 the services to be provided at the dem13 onstration site.

14 ‘‘(ii) The demonstration site has suffi15 cient capability in billing and accounting to

16 participate in the project.

17 ‘‘(iii) The demonstration site can dem18 onstrate favorable indicators of quality of

19 care, including patient satisfaction.

20 ‘‘(iv) The demonstration site delivers

21 a range of services required by targeted

22 Medicare-eligible veterans.

23 ‘‘(v) The demonstration site meets

24 other relevant factors identified in the

25 plan.
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1 ‘‘(C) REQUIRED DEMONSTRATION SITES.—

2 At least 1 of each of the following demonstra3 tion sites shall be selected for inclusion in the

4 demonstration project:

5 ‘‘(i) DEMONSTRATION SITE NEAR

6 CLOSED BASE.—A demonstration site that

7 is in the same catchment area as a mili8 tary treatment facility referred to in sec9 tion 1074(a) of title 10, United States

10 Code, which was closed pursuant to

11 either—

12 ‘‘(I) the Defense Base Closure

13 and Realignment Act of 1990 (part A

14 of title XXIX of Public Law 101–510;

15 10 U.S.C. 2687 note); or

16 ‘‘(II) title II of the Defense Au17 thorization Amendments and Base

18 Closure and Realignment Act (Public

19 Law 100–526; 10 U.S.C. 2687 note).

20 ‘‘(ii) DEMONSTRATION SITE IN A

21 RURAL AREA.—A demonstration site that

22 serves a predominantly rural population.

23 ‘‘(3) RESTRICTION.—No new buildings may be

24 built or existing buildings expanded with funds from

25 the demonstration project.
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1 ‘‘(4) DURATION.—The administering Secretar2 ies shall conduct the demonstration project during

3 the 3-year period beginning on January 1, 2000.

4 ‘‘(c) CREDITING OF PAYMENTS.—A payment received

5 by the Secretary of Veterans Affairs under the demonstra6 tion project shall be credited to the applicable Department

7 of Veterans Affairs medical appropriation and (within that

8 appropriation) to funds that have been allotted to the

9 demonstration site that furnished the services for which

10 the payment is made. Any such payment received during

11 a fiscal year for services provided during a prior fiscal year

12 may be obligated by the Secretary of Veterans Affairs dur13 ing the fiscal year during which the payment is received.

14 ‘‘(d) AUTHORITY TO WAIVE CERTAIN MEDICARE RE15 QUIREMENTS.—

16 ‘‘(1) IN GENERAL.—Except as provided in para17 graph (2), the Secretary may, to the extent nec18 essary to carry out the demonstration project, waive

19 any requirement under this title.

20 ‘‘(2) BENEFICIARY PROTECTIONS FOR MAN21 AGED CARE PLANS.—In the case of a managed care

22 plan established by the Secretary of Veterans Affairs

23 pursuant to subsection (g), such plan shall comply

24 with the requirements of part C of this title that re25 late to beneficiary protections and other matters, in-
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1 cluding such requirements relating to the following

2 areas:

3 ‘‘(A) Enrollment and disenrollment.

4 ‘‘(B) Nondiscrimination.

5 ‘‘(C) Information provided to beneficiaries.

6 ‘‘(D) Cost-sharing limitations.

7 ‘‘(E) Appeal and grievance procedures.

8 ‘‘(F) Provider participation.

9 ‘‘(G) Access to services.

10 ‘‘(H) Quality assurance and external re11 view.

12 ‘‘(I) Advance directives.

13 ‘‘(J) Other areas of beneficiary protections

14 that the Secretary determines are applicable to

15 such project.

16 ‘‘(3) DESCRIPTION OF WAIVER.—If the Sec17 retary waives any requirement pursuant to para18 graph (1), the Secretary shall include a description

19 of such waiver in the agreement described in sub20 section (b)(1)(B).

21 ‘‘(e) INSPECTOR GENERAL.—Nothing in the agree22 ment entered into under subsection (b) shall limit the In23 spector General of the Department of Health and Human

24 Services from investigating any matters regarding the ex25 penditure of funds under this title for the demonstration
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1 project, including compliance with the provisions of this

2 title and all other relevant laws.

3 ‘‘(f) REPORT.—At least 60 days prior to the com4 mencement of the demonstration project, the administer5 ing Secretaries shall submit a copy of the agreement en6 tered into under subsection (b) to the committees of juris7 diction in Congress.

8 ‘‘(g) MANAGED HEALTH CARE.—

9 ‘‘(1) MANAGED HEALTH CARE PLANS.—

10 ‘‘(A) IN GENERAL.—The Secretary of Vet11 erans Affairs may establish and operate man12 aged health care plans at demonstration sites.

13 ‘‘(B) REQUIREMENTS.—Any managed

14 health care plan established in accordance with

15 subparagraph (A) shall be operated by or

16 through a Veterans Affairs medical facility, or

17 a group of Veterans Affairs medical facilities,

18 and may include the provision of health care

19 services by public and private entities under ar20 rangements made between the Department of

21 Veterans Affairs and the other public or private

22 entity concerned. Any such managed health

23 care plan shall be established and operated in

24 conformance with standards prescribed by the

25 administering Secretaries.
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1 ‘‘(C) MINIMUM BENEFITS.—The admin2 istering Secretaries shall prescribe the mini3 mum health care benefits to be provided under

4 a managed health care plan to veterans enrolled

5 in the plan, which benefits shall include at least

6 all health care services covered under the Medi7 care program under this title.

8 ‘‘(D) INCLUSION IN NUMBER OF DEM9 ONSTRATION SITES.—

10 ‘‘(i) IN GENERAL.—Subject to clause

11 (ii), if the Secretary of Veterans Affairs

12 elects to establish a managed health care

13 plan under this section, the establishment

14 of such plan is a selected demonstration

15 site for purposes of applying the numerical

16 limitation under subsection (b)(2).

17 ‘‘(ii) LIMITATION.—The Secretary of

18 Veterans Affairs shall not establish more

19 than 4 managed health care plans under

20 this section.

21 ‘‘(2) DEMONSTRATION SITE REQUIREMENTS.—

22 The Secretary of Veterans Affairs may establish a

23 managed health care plan under paragraph (1)

24 using 1 or more demonstration sites and other pub25 lic or private entities only after the Secretary of Vet-
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1 erans Affairs submits to Congress a report setting

2 forth a plan for the use of such sites and entities.

3 The plan may not be implemented until the Sec4 retary of Veterans Affairs has received from the In5 spector General of the Department of Veterans Af6 fairs, and has forwarded to Congress, certification of

7 each of the following:

8 ‘‘(A) The cost accounting system of the

9 Veterans Health Administration (currently

10 known as the Decision Support System) is oper11 ational and is providing reliable cost informa12 tion on care delivered on an inpatient and out13 patient basis at such sites and entities.

14 ‘‘(B) The demonstration sites and entities

15 have developed a credible plan (on the basis of

16 market surveys, data from the Decision Support

17 System, actuarial analysis, or other appropriate

18 methods and taking into account the level of

19 payment under subsection (h) and the costs of

20 providing covered services at the sites and enti21 ties) to minimize, to the extent feasible, the risk

22 that appropriated funds allocated to the sites

23 and entities will be required to meet the obliga24 tion of the sites and entities to targeted Medi-
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1 care-eligible veterans under the demonstration

2 project.

3 ‘‘(C) The demonstration sites and entities

4 collectively have available capacity to provide

5 the contracted benefits package to a sufficient

6 number of targeted Medicare-eligible veterans.

7 ‘‘(D) The Veterans Affairs medical facility

8 administering the health plan has sufficient sys9 tems and safeguards in place to minimize any

10 risk that instituting the managed care model

11 will result in reducing the quality of care deliv12 ered to participants in the demonstration

13 project or to other veterans receiving care under

14 paragraph (1) or (2) of section 1710(a) of title

15 38, United States Code.

16 ‘‘(3) RESERVES.—The Secretary of Veterans

17 Affairs shall maintain such reserves as may be nec18 essary to ensure against the risk that appropriated

19 funds, allocated to demonstration sites and public or

20 private entities participating in the demonstration

21 project through a managed health care plan under

22 this section, will be required to meet the obligations

23 of those sites and entities to targeted Medicare-eligi24 ble veterans.
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1 ‘‘(h) PAYMENTS BASED ON REGULAR MEDICARE

2 PAYMENT RATES.—

3 ‘‘(1) PAYMENTS.—

4 ‘‘(A) IN GENERAL.—Subject to the suc5 ceeding provisions of this subsection, the Sec6 retary shall reimburse the Secretary of Veter7 ans Affairs for services provided under the dem8 onstration project at the following rates:

9 ‘‘(i) NONCAPITATION.—Except as pro10 vided in clause (ii) and subject to subpara11 graphs (B) and (D), at a rate equal to 95

12 percent of the amounts that otherwise

13 would be payable under this title on a

14 noncapitated basis for such services if the

15 demonstration site was not part of this

16 demonstration project, was participating in

17 the Medicare program, and imposed

18 charges for such services.

19 ‘‘(ii) CAPITATION.—Subject to sub20 paragraphs (B) and (D), in the case of

21 services provided to an enrollee under a

22 managed health care plan established

23 under subsection (g), at a rate equal to 95

24 percent of the amount paid to a
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1 Medicare+Choice organization under part

2 C with respect to such an enrollee.

3 ‘‘(iii) OTHER CASES.—In cases in

4 which a payment amount may not other5 wise be readily computed under clauses (i)

6 or (ii), the Secretaries shall establish rules

7 for computing equivalent or comparable

8 payment amounts.

9 ‘‘(B) EXCLUSION OF CERTAIN AMOUNTS.—

10 In computing the amount of payment under

11 subparagraph (A), the following shall be ex12 cluded:

13 ‘‘(i) DISPROPORTIONATE SHARE HOS14 PITAL ADJUSTMENT.—Any amount attrib15 utable to an adjustment under section

16 1886(d)(5)(F) of the Social Security Act

17 (42 U.S.C. 1395ww(d)(5)(F)).

18 ‘‘(ii) DIRECT GRADUATE MEDICAL

19 EDUCATION PAYMENTS.—Any amount at20 tributable to a payment under subsection

21 (h) of such section.

22 ‘‘(iii) PERCENTAGE OF INDIRECT

23 MEDICAL EDUCATION ADJUSTMENT.—40

24 percent of any amount attributable to the
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1 adjustment under subsection (d)(5)(B) of

2 such section.

3 ‘‘(iv) PERCENTAGE OF CAPITAL PAY4 MENTS.—67 percent of any amounts at5 tributable to payments for capital-related

6 costs under subsection (g) of such section.

7 ‘‘(C) PERIODIC PAYMENTS FROM MEDI8 CARE TRUST FUNDS.—Payments under this

9 subsection shall be made—

10 ‘‘(i) on a periodic basis consistent

11 with the periodicity of payments under this

12 title; and

13 ‘‘(ii) in appropriate part, as deter14 mined by the Secretary, from the trust

15 funds.

16 ‘‘(D) ANNUAL LIMIT ON MEDICARE PAY17 MENTS.—The amount paid to the Department

18 of Veterans Affairs under this subsection for

19 any year for the demonstration project may not

20 exceed $50,000,000.

21 ‘‘(2) REDUCTION IN PAYMENT FOR VA FAILURE

22 TO MAINTAIN EFFORT.—

23 ‘‘(A) IN GENERAL.—To avoid shifting onto

24 the Medicare program under this title costs pre25 viously assumed by the Department of Veterans
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1 Affairs for the provision of Medicare-covered

2 services to targeted Medicare-eligible veterans,

3 the payment amount under this subsection for

4 the project for a fiscal year shall be reduced by

5 the amount (if any) by which—

6 ‘‘(i) the amount of the VA effort level

7 for targeted veterans (as defined in sub8 paragraph (B)) for the fiscal year ending

9 in such year, is less than

10 ‘‘(ii) the amount of the VA effort level

11 for targeted veterans for fiscal year 1998.

12 ‘‘(B) VA EFFORT LEVEL FOR TARGETED

13 VETERANS DEFINED.—For purposes of sub14 paragraph (A), the term ‘VA effort level for

15 targeted veterans’ means, for a fiscal year, the

16 amount, as estimated by the administering Sec17 retaries, that would have been expended under

18 the Medicare program under this title for VA19 provided Medicare-covered services for targeted

20 veterans (as defined in subparagraph (C)) for

21 that fiscal year if benefits were available under

22 the Medicare program for those services. Such

23 amount does not include expenditures attrib24 utable to services for which reimbursement is

25 made under the demonstration project.
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1 ‘‘(C) VA-PROVIDED MEDICARE-COVERED

2 SERVICES FOR TARGETED VETERANS.—For

3 purposes of subparagraph (B), the term ‘VA4 provided Medicare-covered services for targeted

5 veterans’ means, for a fiscal year, items and

6 services—

7 ‘‘(i) that are provided during the fis8 cal year by the Department of Veterans

9 Affairs to targeted Medicare-eligible veter10 ans;

11 ‘‘(ii) that constitute hospital care and

12 medical services under chapter 17 of title

13 38, United States Code; and

14 ‘‘(iii) for which benefits would be

15 available under the Medicare program

16 under this title if they were provided other

17 than by a Federal provider of services that

18 does not charge for those services.

19 ‘‘(3) ASSURING NO INCREASE IN COST TO MEDI20 CARE PROGRAM.—

21 ‘‘(A) MONITORING EFFECT OF DEM22 ONSTRATION PROGRAM ON COSTS TO MEDICARE

23 PROGRAM.—

24 ‘‘(i) IN GENERAL.—The Secretaries,

25 in consultation with the Comptroller Gen-
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1 eral, shall closely monitor the expenditures

2 made under the Medicare program for tar3 geted Medicare-eligible veterans during the

4 period of the demonstration project com5 pared to the expenditures that would have

6 been made for such veterans during that

7 period if the demonstration project had not

8 been conducted.

9 ‘‘(ii) ANNUAL REPORT BY THE COMP10 TROLLER GENERAL.—Not later than De11 cember 31 of each year during which the

12 demonstration project is conducted, the

13 Comptroller General shall submit to the

14 Secretaries and the appropriate committees

15 of Congress a report on the extent, if any,

16 to which the costs of the Secretary under

17 the Medicare program under this title in18 creased during the preceding fiscal year as

19 a result of the demonstration project.

20 ‘‘(B) REQUIRED RESPONSE IN CASE OF IN21 CREASE IN COSTS.—

22 ‘‘(i) IN GENERAL.—If the administer23 ing Secretaries find, based on subpara24 graph (A), that the expenditures under the

25 Medicare program under this title in-
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1 creased (or are expected to increase) dur2 ing a fiscal year because of the demonstra3 tion project, the administering Secretaries

4 shall take such steps as may be needed—

5 ‘‘(I) to recoup for the Medicare

6 program the amount of such increase

7 in expenditures; and

8 ‘‘(II) to prevent any such in9 crease in the future.

10 ‘‘(ii) STEPS.—Such steps—

11 ‘‘(I) under clause (i)(I), shall in12 clude payment of the amount of such

13 increased expenditures by the Sec14 retary of Veterans Affairs from the

15 current medical care appropriation of

16 the Department of Veterans Affairs to

17 the trust funds; and

18 ‘‘(II) under clause (i)(II), shall

19 include suspending or terminating the

20 demonstration project (in whole or in

21 part) or lowering the amount of pay22 ment under paragraph (1)(A).

23 ‘‘(i) EVALUATION AND REPORTS.—

24 ‘‘(1) INDEPENDENT EVALUATION.—
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1 ‘‘(A) IN GENERAL.—The administering

2 Secretaries shall arrange for an independent en3 tity with expertise in the evaluation of health

4 care services to conduct an evaluation of the

5 demonstration project.

6 ‘‘(B) CONTENTS.—The evaluation con7 ducted under subparagraph (A) shall include an

8 assessment, based on the agreement entered

9 into under subsection (b), of the following:

10 ‘‘(i) The cost to the Department of

11 Veterans Affairs of providing care to veter12 ans under the project.

13 ‘‘(ii) Compliance of participating dem14 onstration sites with applicable measures

15 of quality of care, compared to such com16 pliance for other Medicare-participating

17 medical centers that are not Veterans Af18 fairs medical facilities.

19 ‘‘(iii) A comparison of the costs of

20 participation of the demonstration sites in

21 the program with the reimbursements pro22 vided for services of such sites.

23 ‘‘(iv) Any savings or costs to the

24 Medicare program under this title from the

25 project.
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1 ‘‘(v) Any change in access to care or

2 quality of care for targeted Medicare-eligi3 ble veterans participating in the project.

4 ‘‘(vi) Any effect of the project on the

5 access to care and quality of care for tar6 geted Medicare-eligible veterans not par7 ticipating in the project and other veterans

8 not participating in the project.

9 ‘‘(vii) The provision of services under

10 managed health care plans under sub11 section (g), including the circumstances (if

12 any) under which the Secretary of Veter13 ans Affairs uses reserves described in para14 graph (3) of such subsection and the Sec15 retary of Veterans Affairs’ response to

16 such circumstances (including the termi17 nation of managed health care plans re18 quiring the use of such reserves).

19 ‘‘(viii) Any effect that the demonstra20 tion project has on the enrollment in

21 Medicare+Choice plans offered by

22 Medicare+Choice organizations under part

23 C of this title in the established site areas.

24 ‘‘(ix) Any additional elements that the

25 independent entity determines is appro-
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1 priate to assess regarding the demonstra2 tion project.

3 ‘‘(C) ANNUAL REPORTS.—The independent

4 entity conducting the evaluation under subpara5 graph (A) shall submit reports on such evalua6 tion to the administering Secretaries and to the

7 committees of jurisdiction in the Congress as

8 follows:

9 ‘‘(i) INITIAL REPORT.—The entity

10 shall submit the initial report not later

11 than 12 months after the date on which

12 the demonstration project begins operation.

13 ‘‘(ii) SECOND ANNUAL REPORT.—The

14 entity shall submit the second annual re15 port not later than 30 months after the

16 date on which the demonstration project

17 begins operation.

18 ‘‘(iii) FINAL REPORT.—The entity

19 shall submit the final report not later than

31 20 ⁄2 years after the date on which the dem21 onstration project begins operation.

22 ‘‘(2) REPORT ON EXTENSION AND EXPANSION

OF DEMONSTRATION PROJECT.—Not later than 31 23 ⁄2

24 years after the date on which the demonstration
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1 project begins operation, the administering Secretar2 ies shall submit to Congress a report containing—

3 ‘‘(A) their recommendation as to—

4 ‘‘(i) whether to extend the demonstra5 tion project or make the project perma6 nent;

7 ‘‘(ii) whether to expand the project to

8 cover additional demonstration sites and to

9 increase the maximum amount of reim10 bursement (or the maximum amount of re11 imbursement permitted for managed health

12 care plans under this section) under the

13 project in any year; and

14 ‘‘(iii) whether the terms and condi15 tions of the project should be continued (or

16 modified) if the project is extended or ex17 panded; and

18 ‘‘(B) a detailed description of any costs as19 sociated with their recommendation made pur20 suant to clauses (i) and (ii) of subparagraph

21 (A).’’.

Æ