who is enrolled in a health plan that is not operated by
the Department may be provided the items and services
in the comprehensive benefit package by a VA health plan
operating in that regional alliance area only if (except as
provided in subsection (b)) the plan is reimbursed for the
cost of the care provided in accordance with the Health
Security Act.
‘‘(b) The Secretary may not impose on or collect from
a veteran described in subsection (a) a cost-share charge
of any kind in the case of treatment for a service-con-
nected disability requiring a specialized treatment capacity
that is not widely available in the community and for
which the Department has particular expertise.
‘‘SUBCHAPTER IV—FINANCIAL MATTERS
‘‘§ 1831. Premiums, copayments, etc.
‘‘(a) In the case of a veteran described in subsection
(b) who is a VA enrollee, the Secretary may not impose
or collect from the veteran a cost-share charge of any kind
(whether a premium, copayment, deductible, coinsurance
charge, or other charge). The Secretary shall make such
arrangements as necessary with health alliances in order
to carry out this subsection.
‘‘(b) The veterans referred to in subsection (a) are
the following:
‘‘(1) Any veteran with a service-connected dis-
ability.
‘‘(2) Any veteran whose discharge or release
from the active military, naval or air service was for
a disability incurred or aggravated in the line of
duty.
‘‘(3) Any veteran who is in receipt of, or who,
but for a suspension pursuant to section 1151 of
this title (or both such a suspension and the receipt
of retired pay), would be entitled to disability com-
pensation, but only to the extent that such a veter-
an’s continuing eligibility for such care is provided
for in the judgment or settlement provided for in
such section.
‘‘(4) Any veteran who is a former prisoner of
war.
‘‘(5) Any veteran of the Mexican border period
or World War I.
‘‘(6) Any veteran who is unable to defray the
expenses of necessary care as determined under sec-
tion 1722(a) of this title.
‘‘(c) In the case of a VA enrollee who is not described
in subsection (b), the Secretary shall charge premiums
and establish copayments, deductibles, and coinsurance
amounts. The premium rate, and the rates for deductibles
and copayments, for each VA health plan shall be estab-
lished by that health plan based on rules established by
the health alliance under which it is operating.
‘‘(d) In the case of a veteran with a service-connected
disability who is enrolled in a VA health plan and who
has net earnings from self-employment, the Secretary
shall, under regulations prescribed by the Secretary, pro-
vide for a reduction in any premium payment (or alliance
credit repayment) owed by the veteran under section 6126
or 6111 of the Health Security Act by virtue of the veter-
an’s net earnings from self-employment.
‘‘§ 1832. Medicare coverage and reimbursement
‘‘(a) For purposes of any program administered by
the Secretary of Health and Human Services under title
XVIII of the Social Security Act, a Department facility
shall be deemed to be a Medicare provider.
‘‘(b)(1) A VA health plan shall be considered to be
a Medicare HMO.
‘‘(2) For purposes of this section, the term ‘Medicare
HMO’ means an eligible organization under section 1876
of the Social Security Act.
‘‘(c) In the case of care provided to a veteran other
than a veteran described in section 1831(b) of this title
who is eligible for benefits under the Medicare program
under title XVIII of the Social Security Act, the Secretary
of Health and Human Services shall reimburse a VA
health plan or Department health-care facility providing
services as a Medicare provider or Medicare HMO in the
same amounts and under the same terms and conditions
as that Secretary reimburses other Medicare providers or
Medicare HMOs, respectively. The Secretary of Health
and Human Services shall include with each such reim-
bursement a Medicare explanation of benefits.
‘‘(d) When the Secretary provides care to a veteran
for which the Secretary receives reimbursement under this
section, the Secretary shall require the veteran to pay to
the Department any applicable deductible or copayment
that is not covered by Medicare.
‘‘§ 1833. Recovery of cost of certain care and services
‘‘(a) In the case of an individual provided care or
services through a VA health plan who has coverage under
a supplemental health insurance policy pursuant to part
2 of subtitle E of title I of the Health Security Act or
under any other provision of law, or who has coverage
under a Medicare supplemental health insurance plan (as
defined in the Health Security Act) or under any other
provision of law, the Secretary has the right to recover
or collect charges for care or services (as determined by
the Secretary, but not including care or services for a serv-
ice-connected disability) from the party providing that cov-
erage to the extent that the individual (or the provider
of the care or services) would be eligible to receive pay-
ment for such care or services from such party if the care
or services had not been furnished by a department or
agency of the United States.
‘‘(b) The provisions of subsections (b) through (f) of
section 1729 of this title shall apply with respect to claims
by the United States under subsection (a) in the same
manner as they apply to claims under subsection (a) of
that section.
‘‘§ 1834. Health Plan Fund
‘‘(a) There is hereby established in the Treasury a
revolving fund to be known as the ‘Department of Veter-
ans Affairs Health Plan Fund’.
‘‘(b) Any amount received by the Department by rea-
son of the furnishing of health care by a VA health plan
to an individual other than a veteran described in section
1831(b) of this title or the enrollment of an individual
other than such a veteran with a VA health plan (includ-
ing amounts received as premiums, premium discount pay-
ments, copayments or coinsurance, and deductibles,
amounts received as third-party reimbursements, and
amounts received as reimbursements from another health
plan for care furnished to one of its enrollees) shall be
credited to the revolving fund.
‘‘(c) Amounts in the revolving fund are hereby made
available for the expenses of the delivery by a VA health
plan of the items and services in the comprehensive benefit
package and any supplemental benefits package or policy
offered by that health plan.
‘‘§ 1835. Guaranteed funding of Government costs
‘‘(a) The Secretary of the Treasury shall deposit into
the Department of Veterans Affairs Health Plan Fund on
the first day of each fiscal year quarter, from amounts
not otherwise appropriated, the amount certified to the
Secretary under subsection (b) with respect to the fiscal
year quarter beginning on that date. The first such deposit
shall be made with respect to the first fiscal year quarter
during which the Secretary operates a VA health plan
under the Health Security Act.
‘‘(b) Not later than 30 days before the beginning of
each fiscal year quarter, the Secretary of Veterans Affairs
shall certify to the Secretary of the Treasury the amount
determined for that quarter under subsection (c).
‘‘(c)(1) The amount to be certified to the Secretary
of the Treasury under subsection (b) for any fiscal year
quarter is the product of—
‘‘(A) the projected number of VA enrollees de-
scribed in section 1831(b) of this title as of the be-
ginning of that fiscal year quarter, and
‘‘(B) the capitated enrollment amount for that
fiscal year determined under subsection (d).
‘‘(2) The Secretary shall adjust future certifications
under this subsection to take account of differences be-
tween the actual number of veterans described in section
1831(b) of this title enrolled for a fiscal year quarter and
the projected number used in the certification for that
quarter pursuant to paragraph (1).
‘‘(d)(1) The Secretary shall determine the capitated
enrollment amount for purposes of subsection (c). The ini-
tial capitated enrollment amount shall be determined as
the amount equal to—
‘‘(A) the annual full cost (as defined in OMB
Circular A–25, issued on July 8, 1993) that has
been incurred by the Department in providing those
services that are specified to be included in the com-
prehensive benefit package, based upon the most re-
cent cost data available as of the time of the deter-
mination, adjusted for inflation to the date of the
determination based upon the medical care consumer
price index calculated by the Bureau of Labor Sta-
tistics, divided by
‘‘(B) the total number of veterans described in
section 1831(b) of this title who received those
services.
‘‘(2) The Secretary shall include in the total annual
cost for purposes of paragraph (1)(A) the amount appro-
priated for fiscal year 1994 for the medical and prosthetic
research functions of the Veterans Health Administration.
‘‘(3) The Secretary shall develop the methodology for
determining the initial capitated enrollment amount under
paragraph (1) in consultation with the Comptroller Gen-
eral of the United States. If the Comptroller General dis-
agrees with the methodology proposed to be used by the
Secretary, the Comptroller General shall promptly notify
the Committees on Veterans’ Affairs of the Senate and
House of Representatives. The determination of that
amount shall be made not later than June 1, 1995.
‘‘(4) The initial capitated enrollment amount, as ad-
justed annually for inflation based upon the medical care
consumer price index calculated by the Bureau of Labor
Statistics, shall apply for the first five fiscal years during
which the Secretary operates a VA health plan.
‘‘(5)(A) Not later than the end of the third fiscal year
during which the Secretary operates a VA health plan, the
Secretary shall submit to the Committees on Veterans’ Af-
fairs of the Senate and House of Representatives a report
on what actions, if any, would be necessary in order for
the Department to change the annual capitated enrollment
amount by the end of the fifth such year from the initial
amount determined under paragraph (1) to an amount de-
termined using the method described in subparagraph (B),
or to amounts determined using some other methodology,
without a reduction in quality of care.
‘‘(B) The method for determining the annual
capitated enrollment amount for purposes of the study
under this paragraph is to determine the average premium
that would be payable under the Health Security Act for
individuals enrolled in health plans other than VA health
plans which have enrollment populations with dispro-
portionate numbers of persons with similar demographic
and patient-risk characteristics to the population of VA
enrollees.’’.
(2) The table of chapters at the beginning of
part II of title 38, United States Code, is amended
by inserting after the item relating to chapter 17 the
following new item:
‘‘18. Benefits and Eligibility Under Health Security Act ........................ 1801.’’.
(b) PRESERVATION OF EXISTING BENEFITS FOR FA-
CILITIES
NOT
OPERATING
AS HEALTH
PLANS.—(1)
Chapter 17 of title 38, United States Code, is amended
by inserting after section 1704 the following new section:
‘‘§ 1705. Facilities not operating within health plans;
veterans not eligible to enroll in health
plans
‘‘The provisions of this chapter shall apply with re-
spect to the furnishing of care and services—
‘‘(1) by any facility of the Department that is
not operating as or within a health plan certified as
a health plan under the Health Security Act; and
‘‘(2) by any facility of the Department (whether
or not operating as or within a health plan certified
as a health plan under the Health Security Act) in
the case of a veteran who is not an eligible individ-
ual within the meaning of section 1001 of the
Health Security Act.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 1704 the following new item:
‘‘1705. Facilities not operating within health plans; veterans not eligible to en-
roll in health plans.’’.
SEC. 2. ORGANIZATION OF DEPARTMENT OF VETERANS AF-
FAIRS FACILITIES AS HEALTH PLANS.
(a) IN GENERAL.—Chapter 73 of title 38, United
States Code, is amended—
(1) by redesignating subchapter IV as sub-
chapter V; and
(2) by inserting after subchapter III the follow-
ing new subchapter:
‘‘SUBCHAPTER IV—PARTICIPATION AS PART OF
NATIONAL HEALTH CARE REFORM
‘‘§ 7341. Organization of health care facilities as
health plans
‘‘(a) The Secretary shall organize health plans and
operate Department facilities as or within health plans
under the Health Security Act. The Secretary shall pre-
scribe regulations establishing standards for the operation
of Department health care facilities as or within health
plans under that Act. In prescribing those standards, the
Secretary shall assure that they conform, to the maximum
extent practicable, to the requirements for health plans
generally set forth in part 1 of subtitle E of title I of the
Health Security Act.
‘‘(b) Within a geographic area or region, health care
facilities of the Department located within that area or
region may be organized to operate as a single health plan
encompassing all Department facilities within that area or
region or may be organized to operate as several health
plans.
‘‘(c) In carrying out responsibilities under the Health
Security Act, a State (or a State-established entity)—
‘‘(1) may not impose any standard or require-
ment on a VA health plan that is inconsistent with
this section or any regulation prescribed under this
section or other Federal laws regarding the oper-
ation of this section; and
‘‘(2) may not deny certification of a VA health
plan under the Health Security Act on the basis of
a conflict between a rule of a State or health alliance
and this section or regulations prescribed under this
section or other Federal laws regarding the oper-
ation of this section.
‘‘§ 7342. Health care resource agreements
‘‘(a) A VA health plan or the director of a Depart-
ment of Veterans Affairs’ health care facility that is oper-
ating as or within a VA health plan may, without regard
to section 1703 of this title or any other law or regulation
pertaining to competitive procedures, acquisition proce-
dures or policies (other than contract dispute settlement
procedures), or bid protests, enter into agreements with
health care plans, insurers, and health care providers, and
with any other entity or individual, to furnish or obtain
any health-care resource, as that term is defined in section
8152 of this title.
‘‘(b) Any proceeds to the Government received from
an agreement under subsection (a) shall be credited to the
Department of Veterans Affairs Health Plan Fund estab-
lished under section 1834 of this title and to funds that
have been allotted to the facility that furnished the re-
source involved.
‘‘§ 7343. Administrative and personnel flexibility
‘‘(a) In order to carry out this subchapter, the Sec-
retary may—
‘‘(1) subject to section 1822(b) of this title,
carry out administrative reorganizations of the De-
partment without regard to those provisions of sec-
tion 510 of this title following subsection (a) of that
section; and
‘‘(2) when the Secretary finds it is cost-effective
or necessary in order to provide health care services
in a timely manner—
‘‘(A) enter into contracts for procurement
of any commercially available item at a cost of
under $100,000 without regard to any provision
of law or regulation (i) requiring competitive
procedures; (ii) mandating or giving priority to
any source of supply; or (iii) pertaining to pro-
tests; and
‘‘(B) enter into contracts without regard to
section 8110(c) of this title for the performance