I

106TH CONGRESS

1ST SESSION H. R. 1347

To provide for a Medicare subvention demonstration project for veterans,

to improve the Department of Defense TRICARE program, and for

other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 25, 1999

Mr. PICKERING (for himself and Mr. MORAN of Kansas) introduced the following bill; which was referred to the Committee on Ways and Means,

and in addition to the Committees on Commerce, Armed Services, and

Veterans’ Affairs, for a period to be subsequently determined by the

Speaker, in each case for consideration of such provisions as fall within

the jurisdiction of the committee concerned

A BILL

To provide for a Medicare subvention demonstration project

for veterans, to improve the Department of Defense

TRICARE program, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Veterans Health Care

5 Improvement Act of 1999’’.
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1 SEC. 2. MEDICARE SUBVENTION DEMONSTRATION

2 PROJECT FOR VETERANS.

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

4 1395 et seq.) is amended by adding at the end the fol5 lowing new section:

6 ‘‘MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR

7 VETERANS

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

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

10 ‘administering Secretaries’ means the Secretary and

11 the Secretary of Veterans Affairs acting jointly.

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

13 The terms ‘demonstration project’ and ‘project’

14 mean the demonstration project carried out under

15 this section.

16 ‘‘(3) DEMONSTRATION SITE.—The term ‘dem17 onstration site’ means a Veterans Affairs medical fa18 cility, including a group of Veterans Affairs medical

19 facilities that provide hospital care or medical serv20 ices as part of a service network or similar organiza21 tion.

22 ‘‘(4) MILITARY RETIREE.—The term ‘military

23 retiree’ means a member or former member of the

24 Armed Forces who is entitled to retired pay.
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1 ‘‘(5) TARGETED MEDICARE-ELIGIBLE VET2 ERAN.—The term ‘targeted medicare-eligible vet3 eran’ means an individual who—

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

5 101(2) of title 38, United States Code) and is

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

7 United States Code;

8 ‘‘(B) has attained age 65;

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

10 this title; and

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

12 B of this title; and

13 ‘‘(ii) if such individual attained age 65 be14 fore the date of enactment of the Veterans’

15 Equal Access to Medicare Act, was so enrolled

16 on such date.

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

18 means the Federal Hospital Insurance Trust Fund

19 established in section 1817 and the Federal Supple20 mentary Medical Insurance Trust Fund established

21 in section 1841.

22 ‘‘(7) VETERANS AFFAIRS MEDICAL FACILITY.—

23 The term ‘Veterans Affairs medical facility’ means a

24 medical facility as defined in section 8101 of title

25 38, United States Code.
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1 ‘‘(b) DEMONSTRATION PROJECT.—

2 ‘‘(1) IN GENERAL.—

3 ‘‘(A) ESTABLISHMENT.—The admin4 istering Secretaries are authorized to establish

5 a demonstration project (under an agreement

6 entered into by the administering Secretaries)

7 under which the Secretary shall reimburse the

8 Secretary of Veterans Affairs, from the trust

9 funds, for medicare health care services fur10 nished to certain targeted medicare-eligible vet11 erans at a demonstration site.

12 ‘‘(B) AGREEMENT.—The agreement en13 tered into under subparagraph (A) shall include

14 at a minimum—

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

16 provided to the participants in the dem17 onstration project established under this

18 section;

19 ‘‘(ii) a description of the eligibility

20 rules for participation in the demonstration

21 project, including any terms and conditions

22 established under subparagraph (C) and

23 any cost-sharing required under subpara24 graph (D);
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1 ‘‘(iii) a description of how the dem2 onstration project will satisfy the require3 ments under this title (including bene4 ficiary protections and quality assurance

5 mechanisms);

6 ‘‘(iv) a description of the demonstra7 tion sites selected under paragraph (2);

8 ‘‘(v) a description of how reimburse9 ment and maintenance of effort require10 ments under subsection (h) will be imple11 mented in the demonstration project;

12 ‘‘(vi) a statement that the Secretary

13 shall have access to all data of the Depart14 ment of Veterans Affairs that the Sec15 retary determines is necessary to conduct

16 independent estimates and audits of the

17 maintenance of effort requirement, the an18 nual reconciliation, and related matters re19 quired under the demonstration project;

20 ‘‘(vii) a description of any require21 ment that the Secretary waives pursuant

22 to subsection (d); and

23 ‘‘(viii) a certification, provided after

24 review by the administering Secretaries,

25 that any entity that is receiving payments
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1 by reason of the demonstration project has

2 sufficient—

3 ‘‘(I) resources and expertise to

4 provide, consistent with payments

5 under subsection (h), the full range of

6 benefits required to be provided to

7 beneficiaries under the project; and

8 ‘‘(II) information and billing sys9 tems in place to ensure the accurate

10 and timely submission of claims for

11 benefits and to ensure that providers

12 of services, physicians, and other

13 health care professionals are reim14 bursed by the entity in a timely and

15 accurate manner.

16 ‘‘(C) VOLUNTARY PARTICIPATION.—Par17 ticipation of targeted medicare-eligible veterans

18 in the demonstration project shall be voluntary,

19 subject to the capacity of participating dem20 onstration sites and the funding limitations

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

22 to such terms and conditions as the admin23 istering Secretaries may establish. In the case

24 of a demonstration site described in paragraph

25 (2)(C)(i), targeted medicare-eligible veterans
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1 who are military retirees shall be given pref2 erence for participating in the project conducted

3 at that site.

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

5 Veterans Affairs may establish cost-sharing re6 quirements for veterans participating in the

7 demonstration project. If such cost-sharing re8 quirements are established, those requirements

9 shall be the same as the requirements that

10 apply to targeted medicare-eligible patients at

11 medical centers that are not Veterans Affairs

12 medical facilities.

13 ‘‘(E) DATA MATCH.—

14 ‘‘(i) ESTABLISHMENT OF DATA

15 MATCHING PROGRAM.—The administering

16 Secretaries shall establish a data matching

17 program under which there is an exchange

18 of information of the Department of Vet19 erans Affairs and of the Department of

20 Health and Human Services as is nec21 essary to identify veterans (as defined in

22 section 101(2) of title 38, United States

23 Code) who are entitled to benefits under

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

25 in order to carry out this section. The pro-
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1 visions of section 552a of title 5, United

2 States Code, shall apply with respect to

3 such matching program only to the extent

4 the administering Secretaries find it fea5 sible and appropriate in carrying out this

6 section in a timely and efficient manner.

7 ‘‘(ii) PERFORMANCE OF DATA

8 MATCH.—The administering Secretaries,

9 using the data matching program estab10 lished under clause (i), shall perform a

11 comparison in order to identify veterans

12 who are entitled to benefits under part A

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

14 extent such Secretaries deem appropriate

15 to carry out this section, the comparison

16 and identification may distinguish among

17 such veterans by category of veterans, by

18 entitlement to benefits under this title, or

19 by other characteristics.

20 ‘‘(iii) DEADLINE FOR FIRST DATA

21 MATCH.—Not later than October 31, 1999,

22 the administering Secretaries shall first

23 perform a comparison under clause (ii).

24 ‘‘(iv) CERTIFICATION BY INSPECTOR

25 GENERAL.—
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1 ‘‘(I) IN GENERAL.—The admin2 istering Secretaries may not conduct

3 the program unless the Inspector Gen4 eral of the Department of Health and

5 Human Services certifies to Congress

6 that the administering Secretaries

7 have established the data matching

8 program under clause (i) and have

9 performed a comparison under clause

10 (ii).

11 ‘‘(II) DEADLINE FOR CERTIFI12 CATION.—Not later than December

13 15, 1999, the Inspector General of the

14 Department of Health and Human

15 Services shall submit a report to Con16 gress containing the certification

17 under subclause (I) or the denial of

18 such certification.

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

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graphs (B) and (C), and subsection

22 (g)(1)(D)(ii), the administering Secretaries

23 shall establish a plan for the selection of up to

24 10 demonstration sites located in geographically

25 dispersed locations to participate in the project.
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1 ‘‘(B) CRITERIA.—The administering Secre2 taries shall favor selection of those demonstra3 tion sites that consideration of the following

4 factors indicate are suited to serve targeted

5 medicare-eligible veterans:

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

7 by targeted medicare-eligible veterans for

8 the services to be provided at the dem9 onstration site.

10 ‘‘(ii) The demonstration site has suffi11 cient capability in billing and accounting to

12 participate in the project.

13 ‘‘(iii) The demonstration site can dem14 onstrate favorable indicators of quality of

15 care, including patient satisfaction.

16 ‘‘(iv) The demonstration site delivers

17 a range of services required by targeted

18 medicare-eligible veterans.

19 ‘‘(v) The demonstration site meets

20 other relevant factors identified in the

21 plan.

22 ‘‘(C) REQUIRED DEMONSTRATION SITES.—

23 At least 1 of each of the following demonstra24 tion sites shall be selected for inclusion in the

25 demonstration project:
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1 ‘‘(i) DEMONSTRATION SITE NEAR

2 CLOSED BASE.—A demonstration site that

3 is in the same catchment area as a mili4 tary treatment facility referred to in sec5 tion 1074(a) of title 10, United States

6 Code, which was closed pursuant to

7 either—

8 ‘‘(I) the Defense Base Closure

9 and Realignment Act of 1990 (part A

10 of title XXIX of Public Law 101–510;

11 10 U.S.C. 2687 note); or

12 ‘‘(II) title II of the Defense Au13 thorization Amendments and Base

14 Closure and Realignment Act (Public

15 Law 100–526; 10 U.S.C. 2687 note).

16 ‘‘(ii) DEMONSTRATION SITE IN A

17 RURAL AREA.—A demonstration site that

18 serves a predominantly rural population.

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

20 built or existing buildings expanded with funds from

21 the demonstration project.

22 ‘‘(4) DURATION.—The administering Secre23 taries shall conduct the demonstration project dur24 ing the 3-year period beginning on January 1, 2000.
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1 ‘‘(c) CREDITING OF PAYMENTS.—A payment received

2 by the Secretary of Veterans Affairs under the demonstra3 tion project shall be credited to the applicable Department

4 of Veterans Affairs medical appropriation and (within that

5 appropriation) to funds that have been allotted to the

6 demonstration site that furnished the services for which

7 the payment is made. Any such payment received during

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

9 may be obligated by the Secretary of Veterans Affairs dur10 ing the fiscal year during which the payment is received.

11 ‘‘(d) AUTHORITY TO WAIVE CERTAIN MEDICARE RE12 QUIREMENTS.—

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (2), the Secretary may, to the extent nec15 essary to carry out the demonstration project, waive

16 any requirement under this title.

17 ‘‘(2) BENEFICIARY PROTECTIONS FOR MAN18 AGED CARE PLANS.—In the case of a managed care

19 plan established by the Secretary of Veterans Affairs

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

21 with the requirements of part C of this title that re22 late to beneficiary protections and other matters, in23 cluding such requirements relating to the following

24 areas:

25 ‘‘(A) Enrollment and disenrollment.
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1 ‘‘(B) Nondiscrimination.

2 ‘‘(C) Information provided to beneficiaries.

3 ‘‘(D) Cost-sharing limitations.

4 ‘‘(E) Appeal and grievance procedures.

5 ‘‘(F) Provider participation.

6 ‘‘(G) Access to services.

7 ‘‘(H) Quality assurance and external re8 view.

9 ‘‘(I) Advance directives.

10 ‘‘(J) Other areas of beneficiary protections

11 that the Secretary determines are applicable to

12 such project.

13 ‘‘(3) DESCRIPTION OF WAIVER.—If the Sec14 retary waives any requirement pursuant to para15 graph (1), the Secretary shall include a description

16 of such waiver in the agreement described in sub17 section (b)(1)(B).

18 ‘‘(e) INSPECTOR GENERAL.—Nothing in the agree19 ment entered into under subsection (b) shall limit the In20 spector General of the Department of Health and Human

21 Services from investigating any matters regarding the ex22 penditure of funds under this title for the demonstration

23 project, including compliance with the provisions of this

24 title and all other relevant laws.
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1 ‘‘(f) REPORT.—At least 60 days prior to the com2 mencement of the demonstration project, the admin3 istering Secretaries shall submit a copy of the agreement

4 entered into under subsection (b) to the committees of ju5 risdiction in Congress.

6 ‘‘(g) MANAGED HEALTH CARE.—

7 ‘‘(1) MANAGED HEALTH CARE PLANS.—

8 ‘‘(A) IN GENERAL.—The Secretary of Vet9 erans Affairs may establish and operate man10 aged health care plans at demonstration sites.

11 ‘‘(B) REQUIREMENTS.—Any managed

12 health care plan established in accordance with

13 subparagraph (A) shall be operated by or

14 through a Veterans Affairs medical facility, or

15 a group of Veterans Affairs medical facilities,

16 and may include the provision of health care

17 services by public and private entities under ar18 rangements made between the Department of

19 Veterans Affairs and the other public or private

20 entity concerned. Any such managed health

21 care plan shall be established and operated in

22 conformance with standards prescribed by the

23 administering Secretaries.

24 ‘‘(C) MINIMUM BENEFITS.—The admin25 istering Secretaries shall prescribe the min-
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1 imum health care benefits to be provided under

2 a managed health care plan to veterans enrolled

3 in the plan, which benefits shall include at least

4 all health care services covered under the medi5 care program under this title.

6 ‘‘(D) INCLUSION IN NUMBER OF DEM7 ONSTRATION SITES.—

8 ‘‘(i) IN GENERAL.—Subject to clause

9 (ii), if the Secretary of Veterans Affairs

10 elects to establish a managed health care

11 plan under this section, the establishment

12 of such plan is a selected demonstration

13 site for purposes of applying the numerical

14 limitation under subsection (b)(2).

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

16 Veterans Affairs shall not establish more

17 than 4 managed health care plans under

18 this section.

19 ‘‘(2) DEMONSTRATION SITE REQUIREMENTS.—

20 The Secretary of Veterans Affairs may establish a

21 managed health care plan under paragraph (1)

22 using 1 or more demonstration sites and other pub23 lic or private entities only after the Secretary of Vet24 erans Affairs submits to Congress a report setting

25 forth a plan for the use of such sites and entities.
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1 The plan may not be implemented until the Sec2 retary of Veterans Affairs has received from the In3 spector General of the Department of Veterans Af4 fairs, and has forwarded to Congress, certification of

5 each of the following:

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

7 Veterans Health Administration (currently

8 known as the Decision Support System) is oper9 ational and is providing reliable cost informa10 tion on care delivered on an inpatient and out11 patient basis at such sites and entities.

12 ‘‘(B) The demonstration sites and entities

13 have developed a credible plan (on the basis of

14 market surveys, data from the Decision Support

15 System, actuarial analysis, or other appropriate

16 methods and taking into account the level of

17 payment under subsection (h) and the costs of

18 providing covered services at the sites and enti19 ties) to minimize, to the extent feasible, the risk

20 that appropriated funds allocated to the sites

21 and entities will be required to meet the obliga22 tion of the sites and entities to targeted medi23 care-eligible veterans under the demonstration

24 project.
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1 ‘‘(C) The demonstration sites and entities

2 collectively have available capacity to provide

3 the contracted benefits package to a sufficient

4 number of targeted medicare-eligible veterans.

5 ‘‘(D) The Veterans Affairs medical facility

6 administering the health plan has sufficient sys7 tems and safeguards in place to minimize any

8 risk that instituting the managed care model

9 will result in reducing the quality of care deliv10 ered to participants in the demonstration

11 project or to other veterans receiving care under

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

13 38, United States Code.

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

15 Affairs shall maintain such reserves as may be nec16 essary to ensure against the risk that appropriated

17 funds, allocated to demonstration sites and public or

18 private entities participating in the demonstration

19 project through a managed health care plan under

20 this section, will be required to meet the obligations

21 of those sites and entities to targeted medicare-eligi22 ble veterans.

23 ‘‘(h) PAYMENTS BASED ON REGULAR MEDICARE

24 PAYMENT RATES.—

25 ‘‘(1) PAYMENTS.—
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1 ‘‘(A) IN GENERAL.—Subject to the suc2 ceeding provisions of this subsection, the Sec3 retary shall reimburse the Secretary of Vet4 erans Affairs for services provided under the

5 demonstration project at the following rates:

6 ‘‘(i) NONCAPITATION.—Except as pro7 vided in clause (ii) and subject to subpara8 graphs (B) and (D), at a rate equal to 95

9 percent of the amounts that otherwise

10 would be payable under this title on a

11 noncapitated basis for such services if the

12 demonstration site was not part of this

13 demonstration project, was participating in

14 the medicare program, and imposed

15 charges for such services.

16 ‘‘(ii) CAPITATION.—Subject to sub17 paragraphs (B) and (D), in the case of

18 services provided to an enrollee under a

19 managed health care plan established

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

21 percent of the amount paid to a

22 Medicare+Choice organization under part

23 C with respect to such an enrollee.

24 ‘‘(iii) OTHER CASES.—In cases in

25 which a payment amount may not other-
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1 wise be readily computed under clauses (i)

2 or (ii), the Secretaries shall establish rules

3 for computing equivalent or comparable

4 payment amounts.

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

6 In computing the amount of payment under

7 subparagraph (A), the following shall be ex8 cluded:

9 ‘‘(i) DISPROPORTIONATE SHARE HOS10 PITAL ADJUSTMENT.—Any amount attrib11 utable to an adjustment under section

12 1886(d)(5)(F) of the Social Security Act

13 (42 U.S.C. 1395ww(d)(5)(F)).

14 ‘‘(ii) DIRECT GRADUATE MEDICAL

15 EDUCATION PAYMENTS.—Any amount at16 tributable to a payment under subsection

17 (h) of such section.

18 ‘‘(iii) PERCENTAGE OF INDIRECT

19 MEDICAL EDUCATION ADJUSTMENT.—40

20 percent of any amount attributable to the

21 adjustment under subsection (d)(5)(B) of

22 such section.

23 ‘‘(iv) PERCENTAGE OF CAPITAL PAY24 MENTS.—67 percent of any amounts at-
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1 tributable to payments for capital-related

2 costs under subsection (g) of such section.

3 ‘‘(C) PERIODIC PAYMENTS FROM MEDI4 CARE TRUST FUNDS.—Payments under this

5 subsection shall be made—

6 ‘‘(i) on a periodic basis consistent

7 with the periodicity of payments under this

8 title; and

9 ‘‘(ii) in appropriate part, as deter10 mined by the Secretary, from the trust

11 funds.

12 ‘‘(D) ANNUAL LIMIT ON MEDICARE PAY13 MENTS.—The amount paid to the Department

14 of Veterans Affairs under this subsection for

15 any year for the demonstration project may not

16 exceed $50,000,000.

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

18 TO MAINTAIN EFFORT.—

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

20 the medicare program under this title costs pre21 viously assumed by the Department of Veterans

22 Affairs for the provision of medicare-covered

23 services to targeted medicare-eligible veterans,

24 the payment amount under this subsection for
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1 the project for a fiscal year shall be reduced by

2 the amount (if any) by which—

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

4 for targeted veterans (as defined in sub5 paragraph (B)) for the fiscal year ending

6 in such year, is less than

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

8 for targeted veterans for fiscal year 1998.

9 ‘‘(B) VA EFFORT LEVEL FOR TARGETED

10 VETERANS DEFINED.—For purposes of sub11 paragraph (A), the term ‘VA effort level for

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

13 amount, as estimated by the administering Sec14 retaries, that would have been expended under

15 the medicare program under this title for VA16 provided medicare-covered services for targeted

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

18 that fiscal year if benefits were available under

19 the medicare program for those services. Such

20 amount does not include expenditures attrib21 utable to services for which reimbursement is

22 made under the demonstration project.

23 ‘‘(C) VA-PROVIDED MEDICARE-COVERED

24 SERVICES FOR TARGETED VETERANS.—For

25 purposes of subparagraph (B), the term ‘VA-
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1 provided medicare-covered services for targeted

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

3 services—

4 ‘‘(i) that are provided during the fis5 cal year by the Department of Veterans

6 Affairs to targeted medicare-eligible vet7 erans;

8 ‘‘(ii) that constitute hospital care and

9 medical services under chapter 17 of title

10 38, United States Code; and

11 ‘‘(iii) for which benefits would be

12 available under the medicare program

13 under this title if they were provided other

14 than by a Federal provider of services that

15 does not charge for those services.

16 ‘‘(3) ASSURING NO INCREASE IN COST TO MEDI17 CARE PROGRAM.—

18 ‘‘(A) MONITORING EFFECT OF DEM19 ONSTRATION PROGRAM ON COSTS TO MEDICARE

20 PROGRAM.—

21 ‘‘(i) IN GENERAL.—The Secretaries,

22 in consultation with the Comptroller Gen23 eral, shall closely monitor the expenditures

24 made under the medicare program for tar25 geted medicare-eligible veterans during the
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1 period of the demonstration project com2 pared to the expenditures that would have

3 been made for such veterans during that

4 period if the demonstration project had not

5 been conducted.

6 ‘‘(ii) ANNUAL REPORT BY THE COMP7 TROLLER GENERAL.—Not later than De8 cember 31 of each year during which the

9 demonstration project is conducted, the

10 Comptroller General shall submit to the

11 Secretaries and the appropriate committees

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

13 to which the costs of the Secretary under

14 the medicare program under this title in15 creased during the preceding fiscal year as

16 a result of the demonstration project.

17 ‘‘(B) REQUIRED RESPONSE IN CASE OF IN18 CREASE IN COSTS.—

19 ‘‘(i) IN GENERAL.—If the admin20 istering Secretaries find, based on subpara21 graph (A), that the expenditures under the

22 medicare program under this title in23 creased (or are expected to increase) dur24 ing a fiscal year because of the demonstra-
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1 tion project, the administering Secretaries

2 shall take such steps as may be needed—

3 ‘‘(I) to recoup for the medicare

4 program the amount of such increase

5 in expenditures; and

6 ‘‘(II) to prevent any such in7 crease in the future.

8 ‘‘(ii) STEPS.—Such steps—

9 ‘‘(I) under clause (i)(I), shall in10 clude payment of the amount of such

11 increased expenditures by the Sec12 retary of Veterans Affairs from the

13 current medical care appropriation of

14 the Department of Veterans Affairs to

15 the trust funds; and

16 ‘‘(II) under clause (i)(II), shall

17 include suspending or terminating the

18 demonstration project (in whole or in

19 part) or lowering the amount of pay20 ment under paragraph (1)(A).

21 ‘‘(i) EVALUATION AND REPORTS.—

22 ‘‘(1) INDEPENDENT EVALUATION.—

23 ‘‘(A) IN GENERAL.—The administering

24 Secretaries shall arrange for an independent en25 tity with expertise in the evaluation of health
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1 care services to conduct an evaluation of the

2 demonstration project.

3 ‘‘(B) CONTENTS.—The evaluation con4 ducted under subparagraph (A) shall include an

5 assessment, based on the agreement entered

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

7 ‘‘(i) The cost to the Department of

8 Veterans Affairs of providing care to vet9 erans under the project.

10 ‘‘(ii) Compliance of participating dem11 onstration sites with applicable measures

12 of quality of care, compared to such com13 pliance for other medicare-participating

14 medical centers that are not Veterans Af15 fairs medical facilities.

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

17 participation of the demonstration sites in

18 the program with the reimbursements pro19 vided for services of such sites.

20 ‘‘(iv) Any savings or costs to the

21 medicare program under this title from the

22 project.

23 ‘‘(v) Any change in access to care or

24 quality of care for targeted medicare-eligi25 ble veterans participating in the project.
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1 ‘‘(vi) Any effect of the project on the

2 access to care and quality of care for tar3 geted medicare-eligible veterans not par4 ticipating in the project and other veterans

5 not participating in the project.

6 ‘‘(vii) The provision of services under

7 managed health care plans under sub8 section (g), including the circumstances (if

9 any) under which the Secretary of Vet10 erans Affairs uses reserves described in

11 paragraph (3) of such subsection and the

12 Secretary of Veterans Affairs’ response to

13 such circumstances (including the termi14 nation of managed health care plans re15 quiring the use of such reserves).

16 ‘‘(viii) Any effect that the demonstra17 tion project has on the enrollment in

18 Medicare+Choice plans offered by

19 Medicare+Choice organizations under part

20 C of this title in the established site areas.

21 ‘‘(ix) Any additional elements that the

22 independent entity determines is appro23 priate to assess regarding the demonstra24 tion project.
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1 ‘‘(C) ANNUAL REPORTS.—The independent

2 entity conducting the evaluation under subpara3 graph (A) shall submit reports on such evalua4 tion to the administering Secretaries and to the

5 committees of jurisdiction in the Congress as

6 follows:

7 ‘‘(i) INITIAL REPORT.—The entity

8 shall submit the initial report not later

9 than 12 months after the date on which

10 the demonstration project begins operation.

11 ‘‘(ii) SECOND ANNUAL REPORT.—The

12 entity shall submit the second annual re13 port not later than 30 months after the

14 date on which the demonstration project

15 begins operation.

16 ‘‘(iii) FINAL REPORT.—The entity

17 shall submit the final report not later than

31 18 ⁄2 years after the date on which the dem19 onstration project begins operation.

20 ‘‘(2) REPORT ON EXTENSION AND EXPANSION

OF DEMONSTRATION PROJECT.—Not later than 31 21 ⁄2

22 years after the date on which the demonstration

23 project begins operation, the administering Secre24 taries shall submit to Congress a report

25 containing—
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1 ‘‘(A) their recommendation as to—

2 ‘‘(i) whether to extend the demonstra3 tion project or make the project perma4 nent;

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

6 cover additional demonstration sites and to

7 increase the maximum amount of reim8 bursement (or the maximum amount of re9 imbursement permitted for managed health

10 care plans under this section) under the

11 project in any year; and

12 ‘‘(iii) whether the terms and condi13 tions of the project should be continued (or

14 modified) if the project is extended or ex15 panded; and

16 ‘‘(B) a detailed description of any costs as17 sociated with their recommendation made pur18 suant to clauses (i) and (ii) of subparagraph

19 (A).’’.

20 SEC. 3. IMPROVEMENT OF TRICARE PROGRAM.

21 (a) IMPROVEMENT OF TRICARE PROGRAM.—(1)

22 Chapter 55 of title 10, United States Code, is amended

23 by inserting after section 1097a the following new section:
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1 ‘‘§ 1097b. TRICARE: comparability of benefits with

2 benefits under Federal Employees Health

3 Benefits program; other requirements

4 and authorities

5 ‘‘(a) COMPARABILITY OF BENEFITS.—The Secretary

6 of Defense shall, to the maximum extent practicable, en7 sure that the health care coverage available through the

8 TRICARE program is substantially similar to the health

9 care coverage available under similar health benefits plans

10 offered under the Federal Employees Health Benefits pro11 gram established under chapter 89 of title 5.

12 ‘‘(b) PORTABILITY OF BENEFITS.—The Secretary of

13 Defense shall provide that any covered beneficiary enrolled

14 in the TRICARE program may receive benefits under that

15 program at facilities that provide benefits under that pro16 gram throughout the various regions of that program.

17 ‘‘(c) PATIENT MANAGEMENT.—(1) The Secretary of

18 Defense shall, to the maximum extent practicable, mini19 mize the authorization or certification requirements im20 posed upon covered beneficiaries under the TRICARE

21 program as a condition of access to benefits under that

22 program.

23 ‘‘(2) The Secretary of Defense shall, to the maximum

24 extent practicable, utilize practices for processing claims

25 under the TRICARE program that are similar to the best

26 industry practices for processing claims for health care
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1 services in a simplified and expedited manner. To the max2 imum extent practicable, such practices shall include elec3 tronic processing of claims.

4 ‘‘(d) REIMBURSEMENT OF HEALTH CARE PRO5 VIDERS.—(1) Subject to paragraph (2), the Secretary of

6 Defense may increase the reimbursement provided to

7 health care providers under the TRICARE program above

8 the reimbursement otherwise authorized such providers

9 under that program if the Secretary determines that such

10 increase is necessary in order to ensure the availability of

11 an adequate number of qualified health care providers

12 under that program.

13 ‘‘(2) The amount of reimbursement provided under

14 paragraph (1) with respect to a health care service may

15 not exceed the lesser of—

16 ‘‘(A) the amount equal to the local usual and

17 customary charge for the service in the service area

18 (as determined by the Secretary) in which the serv19 ice is provided; or

20 ‘‘(B) the amount equal to 115 per cent of the

21 CHAMPUS maximum allowable charge for the serv22 ice.

23 ‘‘(e) AUTHORITY FOR CERTAIN THIRD-PARTY COL24 LECTIONS.—(1) A medical treatment facility of the uni25 formed services under the TRICARE program may collect
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1 from a third-party payer the reasonable charges for health

2 care services described in paragraph (2) that are incurred

3 by the facility on behalf of a covered beneficiary under

4 that program to the extent that the beneficiary would be

5 eligible to receive reimbursement or indemnification from

6 the third-party payer if the beneficiary were to incur such

7 charges on the beneficiary’s own behalf.

8 ‘‘(2) The reasonable charges described in this para9 graph are reasonable charges for services or care covered

10 by the medicare program under title XVIII of the Social

11 Security Act.

12 ‘‘(3) The collection of charges, and the utilization of

13 amounts collected, under this subsection shall be subject

14 to the provisions of section 1095 of this title. The term

15 ‘reasonable costs’, as used in that section shall be deemed

16 for purposes of the application of that section to this sub17 section to refer to the reasonable charges described in

18 paragraph (2).

19 ‘‘(f) CONSULTATION.—The Secretary of Defense

20 shall carry out any actions under this section after con21 sultation with the other administering Secretaries.’’.

22 (2) The table of sections at the beginning of such

23 chapter is amended by inserting after the item relating

24 to section 1097a the following new item:

‘‘1097b. TRICARE: comparability of benefits with benefits under Federal Employees Health Benefits program; other requirements and authorities.’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 subsection (a) shall take effect one year after the date of

3 the enactment of this Act.

4 (c) REPORT ON IMPLEMENTATION.—(1) Not later

5 than 6 months after the date of the enactment of this Act,

6 the Secretary of Defense, in consultation with the other

7 administering Secretaries, shall submit to Congress a re8 port assessing the effects of the implementation of the re9 quirements and authorities set forth in section 1097b of

10 title 10, United States Code (as added by subsection (a)).

11 (2) The report shall include the following:

12 (A) An assessment of the cost of the implemen13 tation of such requirements and authorities.

14 (B) An assessment whether or not the imple15 mentation of any such requirements and authorities

16 will result in the utilization by the TRICARE pro17 gram of the best industry practices with respect to

18 the matters covered by such requirements and au19 thorities.

20 (3) In this subsection, the term ‘‘administering Secre21 taries’’ has the meaning given that term in section

22 1072(3) of title 10, United States Code.
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1 SEC. 4. SENSE OF CONGRESS REGARDING PROCESSING OF

2 CLAIMS FOR VETERANS’ BENEFITS.

3 (a) FINDINGS.—The Congress makes the following

4 findings:

5 (1) Despite advances in technology, tele6 communications, and training, the Department of

7 Veterans Affairs currently requires 20 percent more

8 time to process claims for veterans’ benefits than the

9 Department required to process such claims in 1997.

10 (2) The Department does not currently process

11 claims for veterans’ benefits in a timely manner.

12 (b) SENSE OF CONGRESS.—It is the sense of the

13 Congress to urge the Secretary of Veterans Affairs to—

14 (1) review the program, policies, and procedures

15 of the Veterans Benefits Administration of the De16 partment of Veterans Affairs in order to identify

17 areas in which the Administration does not currently

18 process claims for veterans’ benefits in a manner

19 consistent with the objectives set forth in the Na20 tional Performance Review (including objectives re21 garding timeliness of Executive branch activities);

22 (2) initiate any actions necessary to ensure that

23 the Administration processes claims for such bene24 fits in a manner consistent with such objectives; and
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1 (3) report to the Congress by June 1, 1999, on

2 measures taken to improve processing time for vet3 erans’ claims.

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