SEC. 2. ESTABLISHMENT OF MEDICARE SUBVENTION FOR
VETERANS.
Section 1862 of the Social Security Act (42 U.S.C.
1395y) is amended by inserting after subsection (c) the
following new subsection:
‘‘(d) MEDICARE SUBVENTION FOR VETERANS.—
‘‘(1) ESTABLISHMENT OF PROCEDURE FOR RE-
IMBURSEMENT.—
‘‘(A) IN
GENERAL.—The administering
Secretaries shall establish a procedure under
which the Secretary shall reimburse the Sec-
retary of Veterans Affairs, from the trust
funds, for medicare health care services fur-
nished to medicare-eligible veterans.
‘‘(B) 
REQUIREMENTS.—Under 
the
procedure—
‘‘(i) the administering Secretaries
shall certify, that any Department of Vet-
erans Affairs medical facility that fur-
nishes medicare health care services for
which the Secretary of Veterans Affairs is
reimbursed under this subsection has
sufficient—
‘‘(I) resources and expertise to
provide the health care benefits re-
quired to be provided to beneficiaries;
and
‘‘(II) information and billing sys-
tems in place to ensure accurate and
timely submission of claims for health
care benefits to the Secretary;
‘‘(ii) the Secretary shall have access to
all data of the Department of Veterans Af-
fairs that the Secretary determines is nec-
essary to verify accuracy in billing and
claims information; and
‘‘(iii) the Secretary shall waive re-
quirements for conditions of participation
otherwise applicable to a provider of serv-
ices, physician, practitioner, supplier, or
facility under this title in the case of a De-
partment of Veterans Affairs medical facil-
ity consistent with paragraph (3).
‘‘(C) RESTRICTION ON NEW OR EXPANDED
FACILITIES.—No new Veterans Affairs medical
facilities may be built or expanded with funds
received under this subsection.
‘‘(2) COST-SHARING.—The amount of reim-
bursement for medicare health care services to the
Secretary of Veterans Affairs for medicare health
care services shall be reduced by amounts attrib-
utable to applicable deductible, coinsurance, and
cost-sharing requirements under this title.
‘‘(3) MEDICARE REQUIREMENTS.—
‘‘(A) WAIVER.—The Secretary shall waive
any requirements referred to in paragraph
(1)(B)(iii) (relating to requirements for condi-
tions of participation) in the case of a Depart-
ment of Veterans Affairs medical facility, or ap-
prove equivalent or alternative ways of meeting
such a requirement, but only if such waiver or
approval—
‘‘(i) reflects the unique status of the
Department of Veterans Affairs as an
agency of the Federal Government; and
‘‘(ii) is necessary to carry out, or im-
prove the efficiency of, to provide for reim-
bursement for medicare health care serv-
ices under this subsection.
‘‘(B) WAIVER
OF
PROHIBITION
ON
PAY-
MENTS
TO
FEDERAL
PROVIDERS
OF
SERV-
ICES.—The prohibition of payments to Federal
providers of services under sections 1814(c) and
1835(d), and paragraphs (2) and (3) of sub-
section (a), shall not apply.
‘‘(4) VERIFICATION OF ELIGIBILITY.—
‘‘(A) IN GENERAL.—The Secretary of Vet-
erans Affairs shall establish procedures for de-
termining whether an individual is a medicare-
eligible veteran.
‘‘(B) RESTRICTION.—No reimbursement
shall be made under this subsection for any
medicare health care service provided to an in-
dividual unless the individual has been deter-
mined to be a medicare-eligible veteran pursu-
ant to the procedures established under sub-
paragraph (A).
‘‘(5) DATA
REQUIREMENTS.—Reimbursements
for medicare health care services furnished to medi-
care-eligible veterans may not be made until such
time as the administering Secretaries certify to Con-
gress that the—
‘‘(A) cost accounting and related trans-
action systems of the Veterans Health Adminis-
tration provide cost information and encounter
data regarding health care delivered at each
Department of Veterans Affairs medical facility
on an inpatient and outpatient basis; and
‘‘(B) cost information and encounter data
provided by such systems is accurate, reliable,
and consistent across all facilities.
‘‘(6) PAYMENTS BASED ON REGULAR MEDICARE
PAYMENT RATES.—
‘‘(A) AMOUNT.—Subject to the succeeding
provisions of this paragraph, the Secretary shall
reimburse the Secretary of Veterans Affairs for
health care benefits provided to medicare-eligi-
ble veterans at a rate equal to 100 percent of
the amounts that otherwise would be payable
under this title on a noncapitated basis for such
service if the Department of Veterans Affairs
medical facility were a provider of services, were
participating in the medicare program, and im-
posed charges for such service.
‘‘(B) EXCLUSION OF CERTAIN AMOUNTS.—
In computing the amount of payment under
subparagraph (A), the following amounts shall
be excluded:
‘‘(i) DISPROPORTIONATE SHARE HOS-
PITAL ADJUSTMENT.—Any amount attrib-
utable to an adjustment under section
1886(d)(5)(F).