II 

108TH CONGRESS 

2D SESSION S. 2484

To amend title 38, United States Code, to simplify and improve pay provisions 

for physicians and dentists, to authorize alternate work schedules and 

executive pay for nurses. 

IN THE SENATE OF THE UNITED STATES 

JUNE 1, 2004

Mr. SPECTER (by request) introduced the following bill; which was read twice 

and referred to the Committee on Veterans Affairs 

A BILL

To amend title 38, United States Code, to simplify and 

improve pay provisions for physicians and dentists, to 

authorize alternate work schedules and executive pay for 

nurses.

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 ‘‘Department of Vet5 erans Affairs Health Care Personnel Enhancement Act of 

6 2003’’. 
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1 SEC. 2. REFERENCES TO TITLE 38, UNITED STATES CODE. 

2 Except as otherwise expressly provided, whenever in 

3 this Act an amendment is expressed in terms of an amend4 ment to a section or other provision, the reference shall 

5 be considered to be made to a section or other provision 

6 of title 38, United States Code. 

7 SEC. 3. IMPROVEMENT AND SIMPLIFICATION OF PAY PRO8 VISIONS FOR PHYSICIANS AND DENTISTS. 

9 (a) Chapter 74 is amended—

10 (1) In section 7404b—

11 (A) by striking ‘‘(1)’’ after ‘‘(b)’’; 

12 (B) by striking the list of position grades 

13 under the caption, ‘‘PHYSICIAN AND DENTIST

14 SCHEDULE’’ and inserting in lieu thereof the 

15 following: 

16 ‘‘Physician grade. 

17 Dentist grade.’’; and 

18 (C) by striking paragraph (2) in its en19 tirety; 

20 (2) In section 7404(c) by striking ‘‘special’’; 

21 and 

22 (3) By striking Subchapter III in its entirety 

23 and inserting in lieu thereof the following sections: 
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1 ‘‘SUBCHAPTER III—PAY FOR PHYSICIANS AND 

2 DENTISTS 

3 ‘‘§ 7431. Pay authority 

4 ‘‘(a) In order to recruit and retain highly qualified 

5 physicians and dentists in the Veterans Health Adminis6 tration, the Secretary shall establish and periodically ad7 just the rates of pay for physicians and dentists based 

8 upon the factors specified in subsection (b). Total pay 

9 shall be benchmarked to representative salaries of non-De10 partment physicians, dentists, and health care clinician11 executives. 

12 ‘‘(b) Pay for physicians and dentists employed in the 

13 Veterans Health Administration shall have three compo14 nents: 

15 ‘‘(1) BASE PAY.—This shall be a uniform pay 

16 band applicable nationwide. The minimum rate shall 

17 be the maximum rate for Chief grade in the Vet18 erans Health Administration Physician and Dentist 

19 Pay Schedule in effect on the day before the date 

20 of enactment of this Act. The maximum rate may 

21 not exceed the rate of basic pay authorized by sec22 tion 5316 of title 5 for Level V of the Executive 

23 Schedule. The Secretary shall adjust annually the 

24 minimum rate by the same percentage as the adjust25 ment under section 5303 of title 5 in the rates of 
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1 pay for the General Schedule, and the maximum 

2 rate in accordance with section 5318 of title 5. Ad3 ministration facilities, under regulations prescribed 

4 by the Secretary, may set individual base pay any5 where within the pay band. 

6 ‘‘(2) MARKET PAY.—This shall be a variable 

7 pay band based on geographic area, specialty, as8 signment, personal qualifications, and individual ex9 perience, and shall be established and adjusted lo10 cally in accordance with regulations prescribed under 

11 subsection (c). Administration facilities will set indi12 vidual market pay in accordance with regulations 

13 prescribed by the Secretary. The Under Secretary 

14 for Health shall periodically review and recommend 

15 to the Secretary adjustments to the market pay 

16 band based on published healthcare workforce em17 ployment and compensation data. The Secretary 

18 may adjust the market pay band periodically based 

19 on the recommendations of the Under Secretary and 

20 in response to changing health-care labor trends. 

21 ‘‘(3) PERFORMANCE PAY.—

22 ‘‘(A) There shall be a variable pay band 

23 linked to the physician’s or dentist’s achieve24 ment of specific corporate goals and individual 

25 performance objectives. Physicians and dentists 
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1 other than those specified in subsection (f)(1) 

2 shall not be eligible for this component during 

3 the first year of appointment. The amount pay4 able to a physician or dentist for this compo5 nent may vary based on individual achievement. 

6 The performance component paid to any physi7 cian or dentist other than those specified in 

8 subsection (f)(1) will be in accordance with reg9 ulations prescribed by the Secretary and may 

10 not exceed $10,000 in a year. 

11 ‘‘(B) In accordance with regulations pre12 scribed by the Secretary, ten percent of the 

13 benchmark total pay for physicians and dentists 

14 specified in subsection (f)(1) shall be linked to 

15 the physician’s or dentist’s achievement of spe16 cific corporate goals and individual performance 

17 objectives as a performance component. Admin18 istration facilities may set the performance pay 

19 in accordance with regulations prescribed by the 

20 Secretary. 

21 ‘‘(c) Compensation paid under this subchapter shall 

22 be considered pay for all purposes, included but not lim23 ited to retirement benefits under chapters 83 and 84 of 

24 title 5, United States Code, and other benefits. Notwith25 standing the preceding sentence, amounts paid for per-
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1 formance pay under subsection (b)(3)(A) shall not be con2 sidered pay for retirement benefits under chapters 83 and 

3 84 of title 5, United States Code. 

4 ‘‘(d) Any decrease in pay that results from an adjust5 ment to the market or performance component of a physi6 cian’s or dentist’s total compensation does not constitute 

7 an adverse action. 

8 ‘‘(e) In no case may the total amount of compensa9 tion paid to a physician or dentist under this title in any 

10 one year exceed the amount of annual compensation (ex11 cluding expenses) specified in section 102 of title 3, United 

12 States Code. 

13 ‘‘(f) COVERED POSITIONS.—

14 ‘‘(1) This subsection applies to physicians and 

15 dentists in the following positions: Chiefs of Staff or 

16 equivalent facility-level and Network-level clinical 

17 management positions (including Network Clinical 

18 Service Managers), facility and Network or Regional 

19 executive positions (including Network Service Line 

20 Coordinators and Medical Center/Health Care Sys21 tem Directors), Central Office executive positions, 

22 and such other positions under this title as the Sec23 retary may determine in accordance with regulations 

24 prescribed in accordance with section 7434(a). 
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1 ‘‘(2) Notwithstanding the special relationships 

2 of the Veterans Health Administration with affili3 ated institutions under section 7302, physicians and 

4 dentists serving in covered positions and receiving 

5 compensation under this subchapter may not receive 

6 any compensation on or after the date specified in 

7 regulations issued by the Secretary, through employ8 ment or contract with, or negotiate or accept any 

9 offer of employment from, any institution or other 

10 entity that is affiliated with the VA medical center 

11 to which they are assigned, or affiliated with a VA 

12 medical center which falls under their official re13 sponsibilities. This limitation shall include receiving 

14 compensation through or from practice groups or 

15 any other entities associated with the affiliated insti16 tution(s), or from entities under contract with the 

17 affiliated institution(s). Compensation includes any18 thing of monetary value, including but not limited to 

19 honoraria, salary, and any fringe benefits such as: 

20 tuition waiver, insurance protection, contributions to 

21 a retirement fund, payment for books, below-market 

22 interest loans, or employee discounts. Nothing in 

23 this section precludes physicians and dentists in cov24 ered positions from holding uncompensated appoint-
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1 ments as other than officer, director, or trustee with 

2 affiliated institutions in furtherance of section 7302. 

3 ‘‘(3) Subject to any conditions the Secretary 

4 may be regulation prescribe, the Secretary may, on 

5 a case-by-case basis, suspend or waive the limitation 

6 in paragraph (2) to an individual physician or den7 tist, when necessary and appropriate to carry out 

8 the purposes of section 7302, to assist communities 

9 or practice groups to meet medical needs which oth10 erwise would not be met, or where the Secretary de11 termines that suspension or waiver would be in the 

12 best interest of the United States. The Secretary 

13 shall make any suspension or wavier made pursuant 

14 to this paragraph in writing. 

15 ‘‘§ 7432. Transition to new pay system 

16 ‘‘(a) All current special pay agreements entered into 

17 under the provisions of this subchapter in effect on the 

18 day before the date of enactment of this Act shall termi19 nate on the date of enactment of this Act. Any physician 

20 or dentist in receipt of special pay on that date shall con21 tinue to be compensated as if such agreement were still 

22 in effect until the date specified in regulations issued by 

23 the Secretary implementing this new subchapter. 

24 ‘‘(b) Physicians and dentists appointed or reassigned 

25 on or after the date of enactment of this Act, but before 
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1 implementation of this subchapter shall be compensated 

2 in accordance with sections 7404, 7405, 7433, 7434, 

3 7435, and 7436, as applicable, in effect on the day before 

4 the date of enactment of this Act. Any such physician or 

5 dentist shall continue to be compensated at the applicable 

6 rates until such date specified in regulations issued by the 

7 Secretary implementing the new pay system. No special 

8 pay agreement will be required of any physician or dentist 

9 receiving such pay. 

10 ‘‘(c) During the period from the date of enactment 

11 of this Act through the date of implementation of this sub12 chapter, physicians and dentists paid pursuant to this sec13 tion shall be subject to paragraphs (1), (2), (4), (5), and 

14 (6) of subsection (b) of section 7438 in effect on the day 

15 before the date of enactment of this Act. 

16 ‘‘(d) The amount of pay paid under this subchapter 

17 for a physician or dentist appointed before the effective 

18 date of regulations implementing this subchapter shall be 

19 not less than the amount of base pay and special pay such 

20 physician or dentist received under this title on the day 

21 before such effective date. 

22 ‘‘(e) Special pay subject to the provisions of section 

23 7438, as in effect before the date of enactment of this 

24 section, or subject to subsection (c), paid to Veterans 

25 Health Administration physicians and dentists appointed 
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1 before the effective date of regulations implementing this 

2 subchapter and who separate after such effective date, 

3 shall be fully creditable for purposes of computing benefits 

4 under chapters 83 and 84 of title 5. 

5 ‘‘§ 7433. Pay for Under Secretary for Health 

6 ‘‘(a) Section 5314 of title 5 establishes the base pay 

7 for the Under Secretary for Health at Level III of the 

8 Executive Schedule. 

9 ‘‘(b) In addition to base pay under section 5314 of 

10 title 5, the Under Secretary for Health shall be eligible 

11 for Market Pay under section 7431(b)(2). 

12 ‘‘(c) TRANSITION.—The current special pay agree13 ment of the Under Secretary for Health entered into 

14 under the provisions of this subchapter in effect on the 

15 day before the date of enactment of this Act shall termi16 nate on the date of enactment of this Act. The incumbent 

17 Under Secretary for Health on the date of enactment of 

18 this Act shall continue to receive special pay as if such 

19 agreement were still in effect until the date specified in 

20 regulations issued by the Secretary implementing this new 

21 subchapter. Any Under Secretary for Health appointed on 

22 or after the date of enactment of this Act, but before the 

23 date specified in regulations issued by the Secretary imple24 menting this new subchapter, shall receive special pay in 

25 accordance with sections 7432(d)(2), 7433, and 7437(a) 
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1 in effect on the day before the date of enactment of this 

2 Act. 

3 ‘‘§ 7434. Administrative provisions 

4 ‘‘(a) After receiving the recommendations of the 

5 Under Secretary for Health, the Secretary, pursuant to 

6 the authority in section 7421(a), shall prescribe regula7 tions implementing the physician and dentist pay system 

8 established in this new subchapter. Such regulations shall 

9 include the method for computing the pay for all physi10 cians and dentists in the Veterans Health Administration 

11 under this title. 

12 ‘‘(b) Eighteen months after the Secretary issues reg13 ulations implementing this subchapter and annually there14 after for the next ten years, the Secretary shall provide 

15 to the Committees on Veterans’ Affairs of the Senate and 

16 House of Representatives a report on the implementation 

17 of the authorities under this subchapter. Each report shall 

18 include: 

19 ‘‘(1) a description of the rates of pay in effect 

20 during the preceding fiscal year with a comparison 

21 to the rates in effect during the previous fiscal year 

22 by facility and by specialty; 

23 ‘‘(2) the number of physicians and dentists who 

24 left employment with the Veterans Health Adminis25 tration during the preceding year; 
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1 ‘‘(3) the number of unfilled physician and den2 tist positions in each specialty in the Veterans 

3 Health Administration, the average and maximum 

4 lengths of time that such positions have been un5 filled, and a summary of the reasons that such posi6 tions remain unfilled; and 

7 ‘‘(4) an assessment of the impact of implemen8 tation of this subchapter on efforts to recruit and re9 tain physicians and dentists in the Veterans Health 

10 Administration. 

11 In addition, the first two reports following implementation 

12 of this subchapter shall also include a comparison of staff13 ing levels, contract expenditures, and average salary of 

14 physicians and dentists by facility and specialty for the 

15 preceding and previous fiscal years.’’. 

16 (b) The title and list of sections for Subchapter III 

17 in the table of sections at the beginning of Chapter 74 

18 is amended to read as follows:

‘‘SUBCHAPTER III—PAY FOR PHYSICIANS AND DENTISTS

‘‘Sec. 7431. Pay authority. 

‘‘Sec. 7432. Transition to new pay system. 

‘‘Sec. 7433. Pay for Under Secretary for Health. 

‘‘Sec. 7434. Administrative provisions.’’.

19 SEC. 4. ALTERNATE WORK SCHEDULES. 

20 (a) Chapter 74 is amended by adding a new section 

21 7456a:
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1 ‘‘§ 7456a. Alternate work schedules 

2 ‘‘(a) COVERAGE.—This section applies to registered 

3 nurses appointed under this chapter. 

4 ‘‘(b) 36/40 WORK SCHEDULE.—

5 ‘‘(1) Subject to paragraph (2), if the Secretary 

6 determines it be necessary in order to obtain or re7 tain the services of registered nurses at any Depart8 ment health-care facility, the Secretary may provide, 

9 in the case of nurses employed at such facility, that 

10 such nurses who work three regularly scheduled 12-

11 hour tours of duty within a workweek shall be con12 sidered for all purposes (except computation of full13 time equivalent employees for the purposes of deter14 mining compliance with personnel ceilings) to have 

15 worked a full 40-hour basic workweek. 

16 ‘‘(2)(A) Basic and additional pay for a reg17 istered nurse who is considered under paragraph (1) 

18 to have worked a full 40-hour basic workweek shall 

19 be subject to subparagraphs (B) and (C). 

20 ‘‘(B) The hourly rate of basic pay for such a 

21 nurse for service performed as part of a regularly 

22 scheduled 36-hour tour of duty within the workweek 

23 shall be derived by dividing the nurse’s annual rate 

24 of basic pay by 1,872. 

25 ‘‘(C)(i) Such a nurse who performs a period of 

26 service in excess of such nurse’s regularly scheduled 
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1 36-hour tour of duty within a workweek is entitled 

2 to overtime pay under section 7453(e) of this title, 

3 or other applicable law, for officially ordered or ap4 proved service performed in excess of eight hours on 

5 a day other than a day on which such nurse’s regu6 larly scheduled three 12-hour tours fall, or in excess 

7 of 12 hours for any day included in the regularly 

8 scheduled 36-hour tour of duty, or in excess of 40 

9 hours during an administrative workweek. 

10 ‘‘(ii) Except as provided in subparagraph (i), a 

11 registered nurse to whom this subsection is applica12 ble is not entitled to additional pay under section 

13 7453 of this title, or other applicable law, for any 

14 period included in a regularly scheduled 12-hour 

15 tour of duty. 

16 ‘‘(3) A nurse who works a 36/40 work schedule 

17 described in this subsection who is absent on ap18 proved sick leave or annual leave during a regularly 

19 scheduled 12-hour tour of duty shall be charged for 

20 such leave at a rate of ten hours of leave for nine 

21 hours of absence. 

22 ‘‘(c) 7/7 WORK SCHEDULE.—

23 ‘‘(1) Subject to paragraph (2), if the Secretary 

24 determines it be necessary in order to obtain or re25 tain the services of registered nurses at any Depart-
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1 ment health-care facility, the Secretary may provide, 

2 in the case of nurses employed at such facility, that 

3 such nurses who work seven regularly scheduled 10-

4 hour tours of duty, with seven days off duty, within 

5 a two-week pay period, shall be considered for all 

6 purposes (except computation of full-time equivalent 

7 employees for the purposes of determining compli8 ance with personnel ceilings) to have worked a full 

9 80 hours for the pay period. 

10 ‘‘(2)(A) Basic and additional pay for a reg11 istered nurse who is considered under paragraph (1) 

12 to have worked a full 80-hour pay period shall be 

13 subject to subparagraphs (B) and (C). 

14 ‘‘(B) The hourly rate of basic pay for such a 

15 nurse for service performed as part of a regularly 

16 scheduled 70-hour tour of duty within the pay period 

17 shall be derived by dividing the nurse’s annual rate 

18 of basic pay by 1,820. 

19 ‘‘(C)(i) Such a nurse who performs a period of 

20 service in excess of such nurse’s regularly scheduled 

21 70-hour tour of duty within a pay period is entitled 

22 to overtime pay under section 7453(e) of this title, 

23 or other applicable law, for officially ordered or ap24 proved service performed in excess of eight hours on 

25 a day other than a day on which such nurse’s regu-
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1 larly scheduled seven 10-hour tours fall, or in excess 

2 of 10 hours for any day included in the regularly 

3 scheduled 70-hour tour of duty, or in excess of 80 

4 hours during a pay period. 

5 ‘‘(ii) Except as provided in subparagraph (i), a 

6 registered nurse to whom this subsection is applica7 ble is not entitled to additional pay under section 

8 7453 of this title, or other applicable law, for any 

9 period included in a regularly scheduled 10-hour 

10 tour of duty. 

11 ‘‘(3) A nurse who works a 7/7 work schedule 

12 described in this subsection who is absent on ap13 proved sick leave or annual leave during a regularly 

14 scheduled 12-hour tour of duty shall be charged for 

15 such leave at a rate of eight hours of leave for seven 

16 hours of absence. 

17 ‘‘(d) 9-MONTH WORK SCHEDULE.—The Secretary 

18 may authorize a registered nurse appointed under section 

19 7405, with the nurse’s written consent, to work full-time 

20 for nine months with three months off duty, within a fiscal 

21 year, and be paid at 75 percent of the full-time rate for 

22 such nurse’s grade for each pay period of such fiscal year. 

23 Such employee shall be considered a .75 full-time equiva24 lent employee in computing full-time equivalent employees 

25 for the purposes of determining compliance with personnel 
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1 ceilings. Service on this schedule shall be considered part2 time service for purposes of computing benefits under 

3 chapters 83 and 84 of title 5. 

4 ‘‘(e) The Secretary shall prescribe regulations for the 

5 implementation of this section.’’. 

6 (b) The title and list of sections for Subchapter IV 

7 in the table of sections at the beginning of Chapter 74 

8 is amended to read as follows: 

‘‘SUBCHAPTER IV—PAY FOR NURSES AND OTHER HEALTH-CARE PERSONNEL

‘‘Sec. 7451. Nurses and other health-care personnel: competitive pay. 

‘‘Sec. 7452. Nurses and other health-care personnel: administration of pay. 

‘‘Sec. 7453. Nurses: additional pay. 

‘‘Sec. 7454. Physician assistants and other health care professionals: additional 

pay. 

‘‘Sec. 7455. Increases in rates of basic pay. 

‘‘Sec. 7456. Nurses: special rules for weekend duty. 

‘‘Sec. 7456a. Alternate work schedules. 

‘‘Sec. 7457. On-call pay. 

‘‘Sec. 7458. Recruitment and retention bonus pay.’’. 

9 SEC. 5. NURSE EXECUTIVE SPECIAL PAY. 

10 (a) Section 7452 is amended by adding at the end 

11 thereof: 

12 ‘‘(g)(1) In order to recruit and retain highly qualified 

13 Department nurse executives, the Secretary, in accordance 

14 with regulations the Secretary shall prescribe, shall pay 

15 special pay to the nurse executive at each Department 

16 health-care facility or at Central Office. 

17 ‘‘(2) Special pay paid under paragraph (1) shall be 

18 a minimum of $10,000 and a maximum of $25,000. The 

19 amount paid to each nurse executive shall be based on fac20 tors such as the grade of the nurse executive position, the 
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1 scope and complexity of the nurse executive position, the 

2 nurse executive’s personal qualifications, the characteris3 tics of the health-care facility, e.g., tertiary, single site or 

4 multi-site, nature and number of specialty care units, dem5 onstrated recruitment and retention difficulties, and such 

6 other factors the Secretary deems appropriate. 

7 ‘‘(3) Special pay paid under paragraph (1) shall be 

8 in addition to any other pay (including basic pay) and al9 lowances to which the nurse executive is entitled, and shall 

10 be considered pay for all purposes, including but not lim11 ited to retirement benefits under chapters 83 and 84 of 

12 title 5, United States Code, and other benefits, but shall 

13 not be considered basic pay for purposes of adverse actions 

14 under subchapter V.’’. 

15 SEC. 6. EFFECTIVE DATE. 

16 The amendments to title 38, United States Code, 

17 contained herein shall take effect on the first day of the 

18 first pay period on or after the later of April 1, 2004, 

19 or six months after the date of enactment. 

20 SEC. 7. ADMINISTRATIVE PROVISION. 

21 (a) Chapter 74 is amended by adding a new section 

22 7427: 
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1 ‘‘§ 7427. Functions 

2 ‘‘The functions assigned to the Secretary and other 

3 officers of the Department of Veterans Affairs under this 

4 chapter are vested in their discretion.’’

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