(1) There is a need for the Department of Vet-
erans Affairs to improve the timeliness of emergency 
claims processing for non-Department of Veterans 
Affairs care. 
(2) Current Veterans Health Administration 
(hereinafter referred to as the ‘‘VHA’’) policies re-
quire paper medical records be sent to VHA claims 
processing offices by providers. 
(3) According to Government Accountability Of-
fice testimony to a February 11, 2016, House Vet-
erans’ Affairs Subcommittee on Health hearing on 
Department of Veterans Affairs Choice Program 
Consolidation: 
(A) ‘‘VHA policy requires that paper 
claims be manually date-stamped and scanned 
into the Fee Basis Claims System (FBCS) 
upon receipt. Electronic claims are imported 
into the FBCS. If the community provider is 
required to submit medical documentation for 
the claim to be processed—which is the case for 
most types of VA care in the community serv-
ices—VA can only accept it in paper form, and 
the medical documentation must also be 
scanned into FBCS.’’. 
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(B) ‘‘A VHA directive states that 90 per-
cent of all claims for VA care in the community 
must be processed (either paid or rejected) 
within 30 days of receipt.’’. 
(C) ‘‘Our preliminary work shows that in 
fiscal year 2015, VHA’s processing of claims 
for VA care in the community services was sig-
nificantly less timely than Medicare’s and 
TRICARE’s claims processing. VHA officials 
told us that the agency’s fiscal year 2015 data 
show that VHA processed about 66 percent of 
claims within the agency’s required timeframe 
of 30 days or less. In contrast, CMS and DHA 
data show that in fiscal year 2015, Medicare’s 
and TRICARE’s claims processing contractors 
processed about 99 percent of claims within 30 
or fewer days of receipt.’’. 
(D) ‘‘However, the difference between 
VHA’s claims processing timeliness and that of 
Medicare and TRICARE is likely greater than 
what VHA’s available data indicate. Specifi-
cally, VHA’s data likely overstate the agency’s 
claims processing timeliness because they do 
not account for delays in scanning paper claims, 
which VHA officials told us account for ap-
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proximately 60 percent of claims for VA care in 
the community services.’’. 
(E) ‘‘Our preliminary review raises ques-
tions about whether staff at VHA’s claims proc-
essing locations are following the agency’s pol-
icy for promptly scanning paper claims.’’. 
(F) ‘‘According to CMS and DHA officials, 
the vast majority of Medicare and TRICARE 
claims are submitted electronically.’’. 
(4) According to data compiled by the Veterans 
Health Administration’s Chief Business Office, there 
is currently a backlog of over $788,000,000 nation-
wide for non-Department of Veterans Affairs emer-
gency medical claims. 
SEC. 2. AUTHORITY OF SECRETARY OF VETERANS AFFAIRS 
TO ENTER INTO CONTRACTS WITH ADMINIS-
TRATIVE CONTRACTORS FOR THE PROC-
ESSING OF CLAIMS FOR HOSPITAL CARE AND 
MEDICAL SERVICES FURNISHED IN NON-DE-
PARTMENT OF VETERANS AFFAIRS FACILI-
TIES. 
(a) IN GENERAL.—Chapter 17 of title 38, United 
States Code, is amended by inserting after section 1725 
the following new section: 
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‘‘§ 1725A. Authority to enter into contracts with ad-
ministrative contractors 
‘‘(a) AUTHORITY.—(1) The Secretary may enter into 
contracts with any eligible entity to serve as an adminis-
trative contractor with respect to the performance of any 
or all of the functions described in paragraph (4) or parts 
of those functions (or, to the extent provided in a contract, 
to secure performance thereof by other entities). 
‘‘(2) An entity is eligible to enter into a contract with 
respect to the performance of a particular function de-
scribed in paragraph (4) only if— 
‘‘(A) the entity has demonstrated capability to 
carry out such function; 
‘‘(B) the entity complies with such conflict of 
interest standards as are generally applicable to 
Federal acquisition and procurement; 
‘‘(C) the entity has sufficient assets to finan-
cially support the performance of such function; 
‘‘(D) the entity has the ability to accept and 
process electronic filings of medical records; and 
‘‘(E) the entity meets such other requirements 
as the Secretary may impose. 
‘‘(3)(A) For purposes of this section, the term ‘ad-
ministrative contractor’ means an agency, organization, or 
other person with a contract under this section. 
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‘‘(B) With respect to the performance of a particular 
function in relation to an individual enrolled in the patient 
enrollment system under section 1705 of this title, the ‘ap-
propriate’ administrative contractor is the administrative 
contractor that has a contract under this section with re-
spect to the performance of that function in relation to 
that individual, or non-Department facility. 
‘‘(4) The functions referred to in this paragraph are 
the following functions relating to the furnishing of med-
ical care and hospital services in non-Department facilities 
under section 1725 or 1728 of this title: 
‘‘(A) Determining the amount of the payments 
required pursuant to this title to be made to a non- 
Department facility. 
‘‘(B) Making payments described in subpara-
graph (A) (including receipt, disbursement, and ac-
counting for funds in making such payments). 
‘‘(C) Providing education and outreach to indi-
viduals enrolled in the patient enrollment system 
under section 1705 of this title and providing assist-
ance to those individuals with specific issues, con-
cerns, or problems. 
‘‘(D) Providing consultative services to institu-
tions, agencies, and other persons to enable them to 
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establish and maintain fiscal records necessary for 
purposes of this title. 
‘‘(E) Communicating to non-Department facili-
ties any information or instructions furnished to the 
administrative contractor by the Secretary, and fa-
cilitating communication between such facilities and 
the Secretary. 
‘‘(F) Performing the functions relating to non- 
Department facility education, training, and tech-
nical assistance. 
‘‘(G) Performing such other functions as are 
necessary to carry out the purposes of this title. 
‘‘(5) Except to the extent inconsistent with a specific 
requirement of this section, the Federal Acquisition Regu-
lation applies to contracts under this section. 
‘‘(b) CONTRACTING REQUIREMENTS.—(1)(A) Except 
as provided in laws with general applicability to Federal 
acquisition and procurement or in subparagraph (B), the 
Secretary shall use competitive procedures when entering 
into contracts with administrative contractors under this 
section, taking into account performance quality as well 
as price and other factors. 
‘‘(B) The Secretary may renew a contract with an 
administrative contractor under this section from term to 
term without regard to section 5 of title 41, United States 
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