II 

110TH CONGRESS 

2D SESSION S. 3216 

To provide for the introduction of pay-for-performance compensation mechanisms into contracts of the Department of Veterans Affairs with community-based outpatient clinics for the provision of health care services, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 26, 2008 

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

referred to the Committee on Veterans’ Affairs 

A BILL 

To provide for the introduction of pay-for-performance compensation mechanisms into contracts of the Department 

of Veterans Affairs with community-based outpatient 

clinics for the provision of health care services, 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 2008’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 


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1 (1) Veterans of the Armed Forces have made 

2 tremendous sacrifices in the defense of freedom and 

3 liberty. 

4 (2) Congress recognizes these great sacrifices 

5 and reaffirms America’s strong commitment to its 

6 veterans. 

7 (3) As part of the on-going congressional effort 

8 to recognize the sacrifices made by America’s vet9 erans, Congress has dramatically increased funding 

10 for the Department of Veterans Affairs for veterans 

11 health care in the years since September 11, 2001. 

12 (4) Part of the funding for the Department of 

13 Veterans Affairs for veterans health care is allocated 

14 toward community-based outpatient clinics 

15 (CBOCs). 

16 (5) Many CBOCs are administered by private 

17 contractors. 

18 (6) CBOCs administered by private contractors 

19 operate on a capitated basis. 

20 (7) Some current contracts for CBOCs may 

21 create an incentive for contractors to sign up as 

22 many veterans as possible, without ensuring timely 

23 access to high quality health care for such veterans. 


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1 (8) The top priorities for CBOCs should be to 

2 provide quality health care and patient satisfaction 

3 for America’s veterans. 

4 (9) The Department of Veterans Affairs cur5 rently tracks the quality of patient care through its 

6 Computerized Patient Record System. However, fees 

7 paid to contractors are not currently adjusted auto8 matically to reflect the quality of care provided to 

9 patients. 

10 (10) A pay-for-performance payment model of11 fers a promising approach to health care delivery by 

12 aligning the payment of fees to contractors with the 

13 achievement of better health outcomes for patients. 

14 (11) The Department of Veterans Affairs 

15 should begin to emphasize pay-for-performance in its 

16 contracts with CBOCs. 

17 SEC. 3. PAY-FOR-PERFORMANCE UNDER DEPARTMENT OF 

18 VETERANS AFFAIRS CONTRACTS WITH COM19 MUNITY-BASED OUTPATIENT HEALTH CARE 

20 CLINICS. 

21 (a) PLAN REQUIRED.—Not later than one year after 

22 the date of the enactment of this Act, the Secretary of 

23 Veterans Affairs shall submit to Congress a plan to intro24 duce pay-for-performance measures into contracts which 

25 compensate contractors of the Department of Veterans AfVerDate Aug 31 2005 02:56 Jul 01, 2008 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3216.IS S3216

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1 fairs for the provision of health care services through com2 munity-based outpatient clinics (CBOCs). 

3 (b) ELEMENTS.—The plan required by subsection (a) 

4 shall include the following: 

5 (1) Measures to ensure that contracts of the 

6 Department for the provision of health care services 

7 through CBOCs begin to utilize pay-for-performance 

8 compensation mechanisms for compensating contrac9 tors for the provision of such services through such 

10 clinics, including mechanisms as follows: 

11 (A) To provide incentives for clinics that 

12 provide high-quality health care. 

13 (B) To provide incentives to better assure 

14 patient satisfaction. 

15 (C) To impose penalties (including termi16 nation of contract) for clinics that provide sub17 standard care. 

18 (2) Mechanisms to collect and evaluate data on 

19 the outcomes of the services generally provided by 

20 CBOCs in order to provide for an assessment of the 

21 quality of health care provided by such clinics. 

22 (3) Mechanisms to eliminate abuses in the pro23 vision of health care services by CBOCs under con24 tracts that continue to utilize capitated-basis com25 pensation mechanisms for compensating contractors. 


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1 (c) IMPLEMENTATION.—The Secretary shall com2 mence the implementation of the plan required by sub3 section (a) unless Congress enacts an Act, not later than 

4 60 days after the date of the submittal of the plan, prohib5 iting or modifying implementation of the plan. In imple6 menting the plan, the Secretary may initially carry out 

7 one or more pilot programs to assess the feasability and 

8 advisability of mechanisms under the plan. 

9 (d) REPORTS.—Not later than 180 days after the 

10 date of the enactment of this Act and every 180 days 

11 thereafter, the Secretary shall submit to Congress a report 

12 setting forth the recommendations of the Secretary as to 

13 the feasability and advisability of utilizing pay-for-per14 formance compensation mechanisms in the provision of 

15 health care services by the Department by means in addi16 tion to CBOCs. 

Æ 


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