ment number determined under subsection (e)(1) for
the geographic region.
(2) AMOUNT DETERMINED.—The amount de-
termined under paragraph (1) is an amount equal to
93 percent of the average adjusted per capita cost
determined under section 1876(a)(4) of the Social
Security Act (42 U.S.C. 1395mm(a)(4)) for the
year.
(e) ESTABLISHMENT OF MINIMUM AND MAXIMUM
ENROLLMENT LEVELS.—
(1) MINIMUM.—Based on the best available
data, the Secretaries shall establish a minimum en-
rollment number of medicare-eligible veterans who
are required to enroll in a managed care plan estab-
lished by the Secretary of Veterans Affairs under
subsection (f) during a year for each Veteran Inte-
grated Service Network in which the demonstration
project is conducted before the Department of Veter-
ans Affairs may receive payment under subsection
(d).
(2) MAXIMUM.—The Secretaries shall establish
a maximum number of medicare-eligible veterans for
which payment may be made by the Secretary of
Health and Human Services under subsection (a).
(3) DETERMINATION
OF
BASELINE
COSTS.—
Before the establishment of the demonstration
project, the Secretaries shall establish the minimum
and maximum enrollment numbers so that—
(A) the expenditures by the Department of
Veterans Affairs for such number of medicare-
eligible veterans is equivalent to the projected
expenditures that would have been made by the
Department for such veterans if the demonstra-
tion project had not been established; and
(B) the cost to the medicare program
under the demonstration project does not ex-
ceed the cost that the medicare program would
otherwise incur with respect to the medicare-eli-
gible veterans participating in the demonstra-
tion project in the absence of the project.
(f) ESTABLISHMENT OF MANAGED HEALTH-CARE
PLAN.—
(1) ESTABLISHMENT.—As part of the dem-
onstration project, the Secretary of Veterans Affairs
shall establish and operate a managed health-care
plan through which medicare-eligible veterans who
participate in the demonstration project shall receive
health care. The plan shall be operated by or
through a Department of Veterans Affairs health-
care facility or group of facilities and may include
the provision of health services through other public
or private entities under arrangements made be-
tween that Department facility or group of facilities
and the other public or private entity concerned. The
managed health care plan shall be established and
operated in conformance with standards prescribed
by the Secretary of Veterans Affairs after consulta-
tion with the Secretary of Health and Human Serv-
ices.
(2) ENROLLMENT FEE WAIVER.—The Secretary
of Veterans Affairs shall waive any enrollment fee
applicable to any medicare-eligible veteran enrolled
in the managed care plan under paragraph (1) for
whom reimbursement is provided under subsection
(e).
(3) TREATMENT OF PAYMENTS.—Payments re-
ceived under subsection (e) with respect to care or
services provided to a veteran enrolled in the health-
care plan under this subsection shall be credited to
the applicable Department of Veterans Affairs medi-
cal appropriation and shall be used to pay for the
costs of furnishing care and services under para-
graph (1).
(g) REPORTING REQUIREMENTS.—Not later than 15
months after the establishment of the demonstration
project, and then not later than 90 days after the end of
the demonstration project, the Secretaries shall submit to
Congress a report containing the following:
(1) The number of medicare-eligible veterans
opting to participate in the demonstration project es-
tablished under this section instead of receiving
health benefits through another health insurance
plan (including through the medicare program or
other health care options of the Veterans Health Ad-
ministration).
(2) An analysis of whether, and in what man-
ner, easier access to the Veterans Health Adminis-
tration affects the number of medicare-eligible veter-
ans receiving health benefits under the medicare
program.
(3) A list of the health insurance plans and pro-
grams that were the primary payers for medicare-eli-
gible veterans during the year prior to their partici-
pation in the demonstration project and the distribu-
tion of their previous enrollment in such plans and
programs.
(4) An identification of cost-shifting (if any)
among medical care programs as a result of the
demonstration project and a description of the na-
ture of any such cost-shifting.
(5) An analysis of how the demonstration
project affects the overall accessibility of the Veter-
ans Health Administration and the amount of space
available for point-of-service care and a description
of the unintended effects (if any) upon the normal
treatment priority system.
(6) A description of the difficulties (if any) ex-
perienced by the Department of Veterans Affairs in
managing the demonstration project.
(7) A description of the effects of the dem-
onstration project on readiness and training of facili-
ties of the Veterans Health Administration and the
probable effects of the project on overall Veterans
Health Administration medical readiness and train-
ing.
(8) A description of the effects that the dem-
onstration project, if permanent, would be expected
to have on the overall budget of the Veterans Health
Administration and the budgets of individual treat-
ment facilities.
(9) An analysis of whether the demonstration
project affects the cost to the Department of Veter-
ans Affairs of prescription drugs or the accessibility,
availability, and cost of such drugs to veterans.
(h) REVIEW BY COMPTROLLER GENERAL.—Not later
than December 31 each year in which the demonstration
project is conducted, the Comptroller General shall deter-
mine and submit to the Secretaries and Congress a report
on the extent, if any, to which the costs of the Secretary
of Veterans Affairs under the demonstration project and
the costs of the Secretary of Health and Human Services
under the medicare program have increased as a result
of the project.
(i) DEMONSTRATION PROJECT ADJUSTMENTS FOL-
LOWING REVIEW.—Based on the review prepared under
subsection (h), the Secretaries shall modify the dem-
onstration project at the end of each year to correct for
any discrepancy between cost targets and actual spending
under the demonstration project. From funds available to
the Secretary of Veterans Affairs for the Veterans Health
Administration, the Secretary of Veterans Affairs shall re-
imburse the Secretary of Health and Human Services for
any excess costs incurred by the medicare program in vio-
lation of subsection (e)(3)(B).
Æ