Medicare health care services covered under this
title.
‘‘(E) ESTABLISHMENT
OF
SERVICE
NET-
WORKS.—
‘‘(i) USE
OF
VA
OUTPATIENT
CLIN-
ICS.—The Secretary of Veterans Affairs, to
the extent practicable, shall use outpatient
clinics of the Department of Veterans Af-
fairs in providing services under the pro-
gram.
‘‘(ii) AUTHORITY
TO
CONTRACT
FOR
SERVICES.—The Secretary of Veterans Af-
fairs may enter into contracts and arrange-
ments with entities (such as private practi-
tioners, providers of services, preferred pro-
vider organizations, and health care plans)
for the provision of services for which the
Secretary of Health and Human Services is
responsible under the program or project
under this section and shall take into ac-
count the existence of qualified practitioners
and providers in the areas in which the
program or project is being conducted.
Under such contracts and arrangements,
such Secretary of Health and Human Serv-
ices may require the entities to furnish such
information as such Secretary may require
to carry out this section.
‘‘(F) DATA MATCH.—
‘‘(i) ESTABLISHMENT OF DATA MATCH-
ING
PROGRAM.—The administering Sec-
retaries shall establish a data matching pro-
gram under which there is an exchange of
information of the Department of Veterans
Affairs and of the Department of Health
and Human Services as is necessary to
identify veterans who are entitled to benefits
under part A or enrolled under part B, or
both, in order to carry out this section. The
provisions of section 552a of title 5, United
States Code, shall apply with respect to
such matching program only to the extent
the administering Secretaries find it fea-
sible and appropriate in carrying out this
section in a timely and efficient manner.
‘‘(ii) 
PERFORMANCE
OF
DATA
MATCH.—The 
administering 
Secretaries,
using the data matching program estab-
lished under clause (i), shall perform a com-
parison in order to identify veterans who
are entitled to benefits under part A or en-
rolled under part B, or both. To the extent
such Secretaries deem appropriate to carry
out this section, the comparison and identi-
fication may distinguish among such veter-
ans by category of veterans, by entitlement
to benefits under this title, or by other char-
acteristics.
‘‘(iii) DEADLINE
FOR
FIRST
DATA
MATCH.—The 
administering 
Secretaries
shall first perform a comparison under
clause (ii) by not later than October 31,
1998.
‘‘(iv) CERTIFICATION
BY
INSPECTOR
GENERAL.—
‘‘(I) IN
GENERAL.—The admin-
istering Secretaries may not conduct
the program unless the Inspector Gen-
eral of the Department of Health and
Human Services certifies to Congress
that the administering Secretaries have
established the data matching program
under clause (i) and have performed a
comparison under clause (ii).
‘‘(II) DEADLINE
FOR
CERTIFI-
CATION.—Not later than December 15,
1998, the Inspector General of the De-
partment of Health and Human Serv-
ices shall submit a report to Congress
containing the certification under sub-
clause (I) or the denial of such certifi-
cation.
‘‘(2) NUMBER
OF
SITES.—The program and
demonstration project shall be conducted in geo-
graphic service areas of the Department of Veterans
Affairs, designated jointly by the administering Sec-
retaries after review of all such areas, as follows:
‘‘(A) PROGRAM SITES.—
‘‘(i) IN GENERAL.—Except as provided
in clause (ii), the program shall be con-
ducted in not more than 3 such areas with
respect to category A Medicare-eligible vet-
erans.
‘‘(ii) ADDITIONAL PROGRAM SITES.—
Subject to the certification required under
subsection (h)(1)(B)(iii), for a year begin-
ning on or after January 1, 2003, the pro-
gram shall be conducted in such areas as
are designated jointly by the administering
Secretaries after review of all such areas.
‘‘(B) PROJECT SITES.—
‘‘(i) IN GENERAL.—The demonstration
project shall be conducted in not more than
3 such areas with respect to category C
Medicare-eligible veterans.
‘‘(ii) MANDATORY SITE.—At least one
of the areas designated under clause (i)
shall encompass the catchment area of a
military medical facility which was closed
pursuant to either the Defense Base Closure
and Realignment Act of 1990 (part A of
title XXIX of Public Law 101–510; 10
U.S.C. 2687 note) or title II of the Defense
Authorization Amendments and Base Clo-
sure and Realignment Act (Public Law
100–526; 10 U.S.C. 2687 note).
‘‘(3) RESTRICTION.—Funds from the program or
demonstration project shall not be used for—
‘‘(A) the construction of any treatment fa-
cility of the Department of Veterans Affairs; or
‘‘(B) the renovation, expansion, or other
construction at such a facility.
‘‘(4) DURATION.—The administering Secretaries
shall conduct and implement the program and the
demonstration project as follows:
‘‘(A) PROGRAM.—
‘‘(i) IN GENERAL.—The program shall
begin on January 1, 2000, in the sites des-
ignated under paragraph (2)(A)(i) and,
subject to subsection (h)(1)(B)(iii)(II), for a
year beginning on or after January 1,
2003, the program may be conducted in
such additional sites designated under
paragraph (2)(A)(ii).
‘‘(ii) LIMITATION ON NUMBER OF VET-
ERANS
COVERED
UNDER
CERTAIN
CIR-
CUMSTANCES.—If for a year beginning on
or after January 1, 2003, the program is
conducted only in the sites designated under
paragraph (2)(A)(i), Medicare health care
services may not be provided under the pro-
gram to a number of category-A Medicare-
eligible veterans that exceeds the aggregate
number of such veterans covered under the
program as of December 31, 2002.
‘‘(B) PROJECT.—The demonstration project
shall begin on January 1, 1999, and end on De-
cember 31, 2001.
‘‘(C) IMPLEMENTATION.—The administering
Secretaries may implement the program and
demonstration project through the publication of
regulations that take effect on an interim basis,
after notice and pending opportunity for public
comment.
‘‘(5) REPORTS.—
‘‘(A) PROGRAM.—By not later than Sep-
tember 1, 1999, the administering Secretaries
shall submit a copy of the agreement entered into
under paragraph (1) with respect to the program
to Congress.
‘‘(B) PROJECT.—By not later than Septem-
ber 1, 1998, the administering Secretaries shall
submit a copy of the agreement entered into
under paragraph (1) with respect to the project
to Congress.
‘‘(6) REPORT ON MAINTENANCE OF LEVEL OF
HEALTH CARE SERVICES.—
‘‘(A) IN GENERAL.—The Secretary of Veter-
ans Affairs may not implement the program at
a site designated under paragraph (2)(A) unless,
by not later than 90 days before the date of the
implementation, the Secretary of Veterans Af-
fairs submits to Congress and to the Comptroller
General of the United States a report that con-
tains the information described in subparagraph
(B). The Secretary of Veterans Affairs shall peri-
odically update the report under this paragraph
as appropriate.
‘‘(B) INFORMATION DESCRIBED.—For pur-
poses of subparagraph (A), the information de-
scribed in this subparagraph is a description of
the operation of the program at the site and of
the steps to be taken by the Secretary of Veterans
Affairs to prevent the reduction of the type or
amount of health care services furnished under
chapter 17 of title 38, United States Code, to vet-
erans who are entitled to benefits under part A
or enrolled under part B, or both, within the geo-
graphic service area of the Department of Veter-
ans Affairs in which the site is located by reason
of the program or project.
‘‘(c) CREDITING OF PAYMENTS.—A payment received
by the Secretary of Veterans Affairs under the program or
demonstration project shall be credited to the applicable De-
partment of Veterans Affairs medical care appropriation
(and within that appropriation). Any such payment re-
ceived during a fiscal year for services provided during a
prior fiscal year may be obligated by the Secretary of Veter-
ans Affairs during the fiscal year during which the pay-
ment is received.
‘‘(d) APPLICATION OF CERTAIN MEDICARE REQUIRE-
MENTS.—
‘‘(1) AUTHORITY.—
‘‘(A) IN
GENERAL.—Except as provided
under subparagraph (B), the program and the
demonstration project shall meet all requirements
of Medicare+Choice plans under part C and reg-
ulations pertaining thereto, and other require-
ments for receiving Medicare payments, except
that the prohibition of payments to Federal pro-
viders of services under sections 1814(c) and
1835(d), and paragraphs (2) and (3) of section
1862(a) shall not apply.
‘‘(B) WAIVER.—Except as provided in
paragraph (2), the Secretary of Health and
Human Services is authorized to waive any re-
quirement described under subparagraph (A), or
approve equivalent or alternative ways of meet-
ing such a requirement, but only if such waiver
or approval—
‘‘(i) reflects the unique status of the
Department of Veterans Affairs as an agen-
cy of the Federal Government; and
‘‘(ii) is necessary to carry out the pro-
gram or demonstration project.
‘‘(2) BENEFICIARY
PROTECTIONS
AND
OTHER
MATTERS.—The program and the demonstration
project shall comply with the requirements of part C
of this title that relate to beneficiary protections and
other matters, including such requirements relating to
the following areas, to the extent not inconsistent with
subsection (b)(1)(B)(iii):
‘‘(A) Enrollment and disenrollment.
‘‘(B) Nondiscrimination.
‘‘(C) Information provided to beneficiaries.
‘‘(D) Cost-sharing limitations.
‘‘(E) Appeal and grievance procedures.
‘‘(F) Provider participation.
‘‘(G) Access to services.
‘‘(H) Quality assurance and external re-
view.
‘‘(I) Advance directives.
‘‘(J) Other areas of beneficiary protections
that the administering Secretaries determine are
applicable to such program or project.
‘‘(e) INSPECTOR GENERAL.—Nothing in the agreement
entered into under subsection (b) shall limit the Inspector
General of the Department of Health and Human Services
from investigating any matters regarding the expenditure
of funds under this title for the program and demonstration
project, including compliance with the provisions of this
title and all other relevant laws.
‘‘(f) VOLUNTARY PARTICIPATION.—Participation of a
category A Medicare-eligible veteran in the program or cat-
egory C Medicare-eligible veteran in the demonstration
project shall be voluntary.
‘‘(g) PAYMENTS BASED ON REGULAR MEDICARE PAY-
MENT RATES.—
‘‘(1) IN
GENERAL.—Subject to the succeeding
provisions of this subsection, the Secretary of Health
and Human Services shall reimburse the Secretary of
Veterans Affairs for services provided under the pro-
gram or demonstration project at a rate equal to 95
percent of the amount paid to a Medicare+Choice or-
ganization under part C of this title with respect to
such an enrollee. In cases in which a payment
amount may not otherwise be readily computed, the
Secretary of Health and Human Services shall estab-
lish rules for computing equivalent or comparable
payment amounts.
‘‘(2) EXCLUSION
OF
CERTAIN
AMOUNTS.—In
computing the amount of payment under paragraph
(1), the following shall be excluded:
‘‘(A) SPECIAL PAYMENTS.—Any amount at-
tributable to an adjustment under subparagraphs
(B) and (F) of section 1886(d)(5) and subsection
(h) of such section.
‘‘(B) 
PERCENTAGE
OF
CAPITAL
PAY-
MENTS.—An amount determined by the admin-
istering Secretaries for amounts attributable to
payments for capital-related costs under sub-
section (g) of such section.
‘‘(3) PERIODIC
PAYMENTS
FROM
MEDICARE
TRUST FUNDS.—Payments under this subsection shall
be made—
‘‘(A) on a periodic basis consistent with the
periodicity of payments under this title; and
‘‘(B) in appropriate part, as determined by
the Secretary of Health and Human Services,
from the trust funds.
‘‘(4) CAP ON REIMBURSEMENT AMOUNTS.—The
aggregate amount to be reimbursed under this sub-
section pursuant to the agreement entered into be-
tween the administering Secretaries under subsection
(b) is as follows:
‘‘(A) PROGRAM.—With respect to category A
Medicare-eligible 
veterans, 
such 
aggregate
amount shall not exceed—
‘‘(i) for 2000, a total of $50,000,000;
‘‘(ii) for 2001, a total of $75,000,000;
and
‘‘(iii) subject to subparagraph (B), for
2002 and each succeeding year, a total of
$100,000,000.
‘‘(B) EXPANSION
OF
PROGRAM.—If for a
year beginning on or after January 1, 2003, the
program is conducted in sites designated under
subsection (b)(2)(A)(ii), the limitation under
subparagraph (A)(iii) shall not apply to the pro-
gram for such a year.
‘‘(C) PROJECT.—With respect to category C
Medicare-eligible 
veterans, 
such 
aggregate
amount shall not exceed a total of $50,000,000
for each of calendar years 1999 through 2001.
‘‘(h) MAINTENANCE OF EFFORT.—
‘‘(1) MONITORING
EFFECT
OF
PROGRAM
AND
DEMONSTRATION PROJECT ON COSTS TO MEDICARE
PROGRAM.—
‘‘(A) IN GENERAL.—The administering Sec-
retaries, in consultation with the Comptroller
General of the United States, shall closely mon-
itor the expenditures made under this title for
category A and C Medicare-eligible veterans com-
pared to the expenditures that would have been
made for such veterans if the program and dem-
onstration project had not been conducted. The
agreement entered into by the administering Sec-
retaries under subsection (b) shall require the
Department of Veterans Affairs to maintain
overall the level of effort for services covered
under this title to such categories of veterans by
reference to a base year as determined by the ad-
ministering Secretaries.
‘‘(B) DETERMINATION
OF
MEASURE
OF
COSTS OF MEDICARE HEALTH CARE SERVICES.—
‘‘(i) IMPROVEMENT
OF
INFORMATION
MANAGEMENT SYSTEM.—Not later than Oc-
tober 1, 2001, the Secretary of Veterans Af-
fairs shall improve its information manage-
ment system such that, for a year beginning
on or after January 1, 2002, the Secretary
of Veterans Affairs is able to identify costs
incurred by the Department of Veterans Af-
fairs in providing Medicare health care
services to Medicare-eligible veterans for
purposes of meeting the requirements with
respect to maintenance of effort under an
agreement under subsection (b)(1)(A).
‘‘(ii) IDENTIFICATION
OF
MEDICARE
HEALTH CARE SERVICES.—The Secretary of
Health and Human Services shall provide
such assistance as is necessary for the Sec-
retary of Veterans Affairs to determine
which health care services furnished by the
Secretary of Veterans Affairs qualify as
Medicare health care services.
‘‘(iii) CERTIFICATION BY HHS INSPEC-
TOR GENERAL.—
‘‘(I) 
REQUEST
FOR
CERTIFI-
CATION.—The Secretary of Veterans
Affairs may request the Inspector Gen-
eral of the Department of Health and
Human Services to make a certifi-
cation to Congress that the Secretary of
Veterans Affairs has improved its man-
agement system under clause (i) such
that the Secretary of Veterans Affairs
is able to identify the costs described in
such clause in a reasonably reliable
and accurate manner.
‘‘(II) REQUIREMENT FOR EXPAN-
SION OF PROGRAM.—The program may
be conducted in the additional sites
under paragraph (2)(A)(ii) and cover
such additional category A Medicare
eligible veterans in such additional
sites only if the Inspector General of
the Department of Health and Human
Services has made the certification de-
scribed in subclause (I).
‘‘(III) DEADLINE
FOR
CERTIFI-
CATION.—Not later than the date that
is the earlier of the date that is 60
days after the Secretary of Veterans Af-
fairs requests a certification under sub-
clause (I) or June 1, 2002, the Inspec-
tor General of the Department of
Health and Human Services shall sub-
mit a report to Congress containing
the certification under subclause (I) or
the denial of such certification.
‘‘(C) MAINTENANCE
OF
LEVEL
OF
EF-
FORT.—
‘‘(i) REPORT BY SECRETARY OF VET-
ERANS
AFFAIRS
ON
BASIS
FOR
CALCULA-
TION.—Not later than the date that is 60
days after the date on which the administer-
ing Secretaries enter into an agreement
under subsection (b)(1)(A), the Secretary of
Veterans Affairs shall submit a report to
Congress and the Comptroller General of the
United States explaining the methodology
used and basis for calculating the level of ef-
fort of the Department of Veterans Affairs
under the program and project.
‘‘(ii) REPORT BY COMPTROLLER GEN-
ERAL.—Not later than the date that is 180
days after the date described in clause (i),
the Comptroller General of the United
States shall submit to Congress and the ad-
ministering Secretaries a report setting
forth the Comptroller General’s findings,
conclusion, and recommendations with re-
spect to the report submitted by the Sec-
retary of Veterans Affairs under clause (i).
‘‘(iii) RESPONSE
BY
SECRETARY
OF
VETERANS AFFAIRS.—The Secretary of Vet-
erans Affairs shall submit to Congress not
later than 60 days after the date described
in clause (ii) a report setting forth such