I

104TH CONGRESS

2D SESSION H. R. 4068

To establish a demonstration project to provide that the Department of

Veterans Affairs may receive Medicare reimbursement for health care

services provided to certain Medicare-eligible veterans.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 12, 1996

Mr. STUMP (for himself, Mr. MONTGOMERY, Mr. SPENCE, Mr. EVANS, Mr.

EVERETT, Mr. EDWARDS, Mr. BUYER, Mr. TEJEDA, and Mr. HEFLEY)

introduced the following bill; which was referred to the Committee on

Ways and Means, and in addition to the Committees on Commerce, 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 establish a demonstration project to provide that the

Department of Veterans Affairs may receive Medicare

reimbursement for health care 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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Veterans Medicare

5 Subvention Demonstration Project Act’’.
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1 SEC. 2. ESTABLISHMENT OF VETERANS MEDICARE SUB2 VENTION DEMONSTRATION PROJECT.

3 (a) DEFINITIONS.—For purposes of this section:

4 (1) MEDICARE-ELIGIBLE VETERAN.—The term

5 ‘‘medicare-eligible veteran’’ means a veteran who—

6 (A) is entitled to hospital insurance bene7 fits under part A of title XVIII of the Social

8 Security Act (42 U.S.C. 1395c et seq.); and

9 (B) is enrolled in the supplementary medi10 cal insurance program under part B of such

11 title (42 U.S.C. 1395j et seq.).

12 (2) VETERAN.—The term ‘‘veteran’’ has the

13 meaning given that term in section 101(2) of title

14 38, United States Code.

15 (3) VETERAN INTEGRATED SERVICE NET16 WORK.—The term ‘‘Veteran Integrated Service Net17 work’’ means a field component of the Veterans

18 Health Administration that—

19 (A) is based on a geographic area which

20 encompasses a population of veteran bene21 ficiaries and is defined on the basis of natural

22 patient referral patterns; and

23 (B) provides health care through strategic

24 alliances among Department of Veterans Af25 fairs medical centers, clinics, and other sites.
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1 (4) SECRETARIES.—The term ‘‘Secretaries’’

2 means the Secretary of Veterans Affairs and the

3 Secretary of Health and Human Services acting

4 jointly.

5 (b) ESTABLISHMENT OF DEMONSTRATION

6 PROJECT.—

7 (1) ESTABLISHMENT.—The Secretary of Veter8 ans Affairs and the Secretary of Health and Human

9 Services shall jointly establish a demonstration

10 project to provide the Department of Veterans Af11 fairs with reimbursement, in accordance with this

12 section, from the medicare program under title

13 XVIII of the Social Security Act (42 U.S.C. 1395 et

14 seq.) for health care services provided to medicare15 eligible veterans who participate in the demonstra16 tion project and receive the health care services

17 through a managed care plan established by the Sec18 retary of Veterans Affairs under subsection (f).

19 (2) LOCATION OF DEMONSTRATION PROJECT.—

20 The Secretaries shall conduct the demonstration

21 project in not more than three Veteran Integrated

22 Service Networks.

23 (3) DURATION.—The Secretaries shall conduct

24 the demonstration project during the three-year pe25 riod beginning on January 1, 1997.
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1 (c) EXPANSION OF DEMONSTRATION PROJECT.—The

2 Secretaries shall include in the demonstration project a

3 provision for expanding the demonstration project to in4 corporate health care services provided to medicare-eligible

5 veterans under fee-for-service arrangements if the Sec6 retaries determine that such expansion of the demonstra7 tion project is feasible and advisable.

8 (d) PAYMENT TO DEPARTMENT OF VETERANS AF9 FAIRS.—

10 (1) PAYMENT REQUIRED.—The Secretary of

11 Health and Human Services shall make monthly

12 payments to the Department of Veterans Affairs

13 from the Federal Hospital Insurance Trust Fund

14 and the Federal Supplementary Medical Insurance

15 Trust Fund (allocated by the Secretary of Health

16 and Human Services between each Trust Fund

17 based on the relative weight that benefits from each

18 Trust Fund contribute to the required payment) in

19 an amount equal to one-twelfth of the amount deter20 mined under subsection (b) for each medicare-eligi21 ble veteran enrolled during the year in a managed

22 care plan established by the Secretary of Veterans

23 Affairs under subsection (f), but only if such veter24 an’s enrollment is in excess of the minimum enroll-
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1 ment number determined under subsection (e)(1) for

2 the geographic region.

3 (2) AMOUNT DETERMINED.—The amount de4 termined under paragraph (1) is an amount equal to

5 93 percent of the average adjusted per capita cost

6 determined under section 1876(a)(4) of the Social

7 Security Act (42 U.S.C. 1395mm(a)(4)) for the

8 year.

9 (e) ESTABLISHMENT OF MINIMUM AND MAXIMUM

10 ENROLLMENT LEVELS.—

11 (1) MINIMUM.—Based on the best available

12 data, the Secretaries shall establish a minimum en13 rollment number of medicare-eligible veterans who

14 are required to enroll in a managed care plan estab15 lished by the Secretary of Veterans Affairs under

16 subsection (f) during a year for each Veteran Inte17 grated Service Network in which the demonstration

18 project is conducted before the Department of Veter19 ans Affairs may receive payment under subsection

20 (d).

21 (2) MAXIMUM.—The Secretaries shall establish

22 a maximum number of medicare-eligible veterans for

23 which payment may be made by the Secretary of

24 Health and Human Services under subsection (a).
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1 (3) DETERMINATION OF BASELINE COSTS.—

2 Before the establishment of the demonstration

3 project, the Secretaries shall establish the minimum

4 and maximum enrollment numbers so that—

5 (A) the expenditures by the Department of

6 Veterans Affairs for such number of medicare7 eligible veterans is equivalent to the projected

8 expenditures that would have been made by the

9 Department for such veterans if the demonstra10 tion project had not been established; and

11 (B) the cost to the medicare program

12 under the demonstration project does not ex13 ceed the cost that the medicare program would

14 otherwise incur with respect to the medicare-eli15 gible veterans participating in the demonstra16 tion project in the absence of the project.

17 (f) ESTABLISHMENT OF MANAGED HEALTH-CARE

18 PLAN.—

19 (1) ESTABLISHMENT.—As part of the dem20 onstration project, the Secretary of Veterans Affairs

21 shall establish and operate a managed health-care

22 plan through which medicare-eligible veterans who

23 participate in the demonstration project shall receive

24 health care. The plan shall be operated by or

25 through a Department of Veterans Affairs health-
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1 care facility or group of facilities and may include

2 the provision of health services through other public

3 or private entities under arrangements made be4 tween that Department facility or group of facilities

5 and the other public or private entity concerned. The

6 managed health care plan shall be established and

7 operated in conformance with standards prescribed

8 by the Secretary of Veterans Affairs after consulta9 tion with the Secretary of Health and Human Serv10 ices.

11 (2) ENROLLMENT FEE WAIVER.—The Secretary

12 of Veterans Affairs shall waive any enrollment fee

13 applicable to any medicare-eligible veteran enrolled

14 in the managed care plan under paragraph (1) for

15 whom reimbursement is provided under subsection

16 (e).

17 (3) TREATMENT OF PAYMENTS.—Payments re18 ceived under subsection (e) with respect to care or

19 services provided to a veteran enrolled in the health20 care plan under this subsection shall be credited to

21 the applicable Department of Veterans Affairs medi22 cal appropriation and shall be used to pay for the

23 costs of furnishing care and services under para24 graph (1).
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1 (g) REPORTING REQUIREMENTS.—Not later than 15

2 months after the establishment of the demonstration

3 project, and then not later than 90 days after the end of

4 the demonstration project, the Secretaries shall submit to

5 Congress a report containing the following:

6 (1) The number of medicare-eligible veterans

7 opting to participate in the demonstration project es8 tablished under this section instead of receiving

9 health benefits through another health insurance

10 plan (including through the medicare program or

11 other health care options of the Veterans Health Ad12 ministration).

13 (2) An analysis of whether, and in what man14 ner, easier access to the Veterans Health Adminis15 tration affects the number of medicare-eligible veter16 ans receiving health benefits under the medicare

17 program.

18 (3) A list of the health insurance plans and pro19 grams that were the primary payers for medicare-eli20 gible veterans during the year prior to their partici21 pation in the demonstration project and the distribu22 tion of their previous enrollment in such plans and

23 programs.

24 (4) An identification of cost-shifting (if any)

25 among medical care programs as a result of the
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1 demonstration project and a description of the na2 ture of any such cost-shifting.

3 (5) An analysis of how the demonstration

4 project affects the overall accessibility of the Veter5 ans Health Administration and the amount of space

6 available for point-of-service care and a description

7 of the unintended effects (if any) upon the normal

8 treatment priority system.

9 (6) A description of the difficulties (if any) ex10 perienced by the Department of Veterans Affairs in

11 managing the demonstration project.

12 (7) A description of the effects of the dem13 onstration project on readiness and training of facili14 ties of the Veterans Health Administration and the

15 probable effects of the project on overall Veterans

16 Health Administration medical readiness and train17 ing.

18 (8) A description of the effects that the dem19 onstration project, if permanent, would be expected

20 to have on the overall budget of the Veterans Health

21 Administration and the budgets of individual treat22 ment facilities.

23 (9) An analysis of whether the demonstration

24 project affects the cost to the Department of Veter-
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1 ans Affairs of prescription drugs or the accessibility,

2 availability, and cost of such drugs to veterans.

3 (h) REVIEW BY COMPTROLLER GENERAL.—Not later

4 than December 31 each year in which the demonstration

5 project is conducted, the Comptroller General shall deter6 mine and submit to the Secretaries and Congress a report

7 on the extent, if any, to which the costs of the Secretary

8 of Veterans Affairs under the demonstration project and

9 the costs of the Secretary of Health and Human Services

10 under the medicare program have increased as a result

11 of the project.

12 (i) DEMONSTRATION PROJECT ADJUSTMENTS FOL13 LOWING REVIEW.—Based on the review prepared under

14 subsection (h), the Secretaries shall modify the dem15 onstration project at the end of each year to correct for

16 any discrepancy between cost targets and actual spending

17 under the demonstration project. From funds available to

18 the Secretary of Veterans Affairs for the Veterans Health

19 Administration, the Secretary of Veterans Affairs shall re20 imburse the Secretary of Health and Human Services for

21 any excess costs incurred by the medicare program in vio22 lation of subsection (e)(3)(B).

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