‘‘(ii) the capitated enrollment amount
for such category of veterans’ dependents.
‘‘(2) In setting the capitated enrollment
amounts described in paragraph (1), the Secretary
shall deduct any amount collected for such care from
any party, including amounts recovered from other
agencies of the Federal Government.
‘‘(3) The Secretary shall adjust future certifi-
cations under this subsection to take account of dif-
ferences between actual and projected numbers of
qualified veterans and veterans’ dependents.
‘‘(c) The initial capitated enrollment amounts de-
scribed in subsection (b) shall be determined by the Sec-
retary using the most recent cost data available as of the
time of the determination, adjusted for inflation to the
date of the determination based upon the medical care
consumer price index calculated by the Bureau of Labor
statistics, and taking into account—
‘‘(1) the annual, fully-allocated cost incurred
under prior law in providing care and services at no
charge to veterans and veterans’ dependents;
‘‘(2) an estimate of the annual, fully-allocated
cost to provide the care and services required by this
chapter to be furnished at no charge to veterans and
veterans’ dependents, including an estimate of pro-
jected utilization; and
‘‘(3) an estimate of the annual, fully-allocated
cost to provide a premium discount to veterans who
qualify as entitled under section 1805(a)(1) of this
title and who choose under section 1806(b)(2)(B) of
this title to purchase the comprehensive benefits
package established in section 1808 of this title, in-
cluding an estimate of projected utilization.
‘‘(d) For each fiscal year after the initial capitated
enrollment amounts are established, the capitated enroll-
ment amounts described in subsection (b) shall be deter-
mined by the Secretary using the most recent cost data
available as of the time of the determination, adjusted for
inflation to the date of the determination based upon the
medical care consumer price index calculated by the Bu-
reau of Labor statistics, and taking into account—
‘‘(1) the annual, fully-allocated cost to provide
the care and services required by (this chapter) to
be furnished at no charge to veterans and veterans’
dependents, including an estimate of projected utili-
zation; and
‘‘(2) for purposes of calculating the capitated
enrollment amount in subsection (b)(1)(B), the an-
nual, fully-allocated cost to provide a premium dis-
count under the terms set forth in section 1806(f)
of this title to veterans who qualify as entitled under
section 1805(a)(1) of this title and who choose
under section 1806(b)(2)(B) of this title to purchase
the comprehensive benefits package established in
section 1808 of this title, including an estimate of
projected utilization.
‘‘(e) The Secretary shall include in the calculation of
the capitated annual enrollment amounts the cost of carry-
ing out the prosthetic and other medical research func-
tions of the Department.
‘‘§ 1817. Resource allocation
‘‘(a) The Secretary shall allocate at least 75 percent
of amounts deposited in the Veterans Health Plan Fund
to the Veterans Health Plan or Department facility that
provided the care or services for which payment was made.
In carrying out this subsection, the Secretary is authorized
to create regional revolving health plan funds for each Vet-
erans Health Plan or Department facility.
‘‘(b) The Secretary shall establish procedures for uti-
lizing not more than 25 percent of the amounts deposited
in the Veterans Health Plan Fund to operate and main-
tain the veterans health system and to ensure that Depart-
ment resources and health care services are allocated in
a reasonable, efficient, and equitable manner throughout
the United States.
‘‘(c) A Veterans Health Plan may retain 100 percent
of the proceeds of any contract with non-Department enti-
ties for the use of or access to Department health care
facilities, equipment, or personnel under a medical re-
source-sharing agreement. This subsection does not apply
to contracts for services rendered to veterans under the
provisions of this chapter.
‘‘SUBCHAPTER VI—DELIVERY OF HEALTH
CARE SERVICES
‘‘§ 1818. Responsibilities of the Secretary of Veterans
Affairs
‘‘(a)(1) The Secretary shall administer the veterans
health system through use of the model of medical practice
known as ‘managed care’. In implementing a managed
care system, the Secretary shall, to the extent possible—
‘‘(A) shift the focus of health care provided by
the veterans health system to primary care;
‘‘(B) established enhanced quality assurance
mechanisms; and
‘‘(C) establish utilization review procedures to
prevent inefficient practices.
‘‘(2) The Secretary shall organize veterans hospitals
and other veterans health care facilities and services into
Veterans Health Plans. Each Veterans Health Plan may
cross State lines and more than one Veterans Health Plan
may exist within a State. The Secretary shall establish
procedures to ensure portability of coverage throughout
the veterans health system.
‘‘(3) The Secretary shall establish standards for the
operation of Veterans Health Plans. Such standards
shall—
‘‘(A) require the directors of Veterans Health
Plans to provide to veterans access to the full range
of basic, comprehensive, and supplemental health
care services set forth in sections 1807, 1808, and
1809 of this title under the terms and conditions es-
tablished in this chapter; and
‘‘(B) require the directors of Veterans Health
Plans to establish quality control procedures, includ-
ing—
‘‘(i) the establishment of procedures to as-
sure that the care and services provided to en-
rollees shall be rendered under reasonable
standards of quality of care, consistent with
prevailing professionally recognized standards
of medical practice;
‘‘(ii) the establishment of an ongoing inter-
nal quality assurance program to monitor and
evaluate health care services, including primary
and specialist physician services, and ancillary
and preventive health care services across all in-
stitutional and non-institutional settings; such
program shall include, at a minimum, a written
statement of goals and objectives that empha-
size improved health status in evaluating the
quality of care rendered to enrollees, a written
quality assurance plan describing the structure
and process of quality assurance activities, con-
fidentiality policies and procedures, a system of
evaluation activities, a system for credentialing
providers and performing peer review activities,
and a statement of the duties and responsibil-
ities of physicians responsible for quality assur-
ance activities;
‘‘(iii) the establishment of procedures for
recording the proceedings of formal quality as-
surance program activities and maintaining
documentation in a confidential manner; and
‘‘(iv) the use and maintenance of an ade-
quate patient record system that will facilitate
documentation and retrieval of clinical informa-
tion for evaluating continuity and coordination
of patient care and assessing the quality of
health and medical care provided to enrollees.
‘‘(4) The Secretary shall ensure that the payment
schedules established under this chapter, including sched-
ules for premiums, copayments, deductibles, and coinsur-
ance, are uniform throughout the veterans health system,
except that differences among payment schedules shall be
permitted at the Secretary’s discretion based upon (1) the
type of benefits package, whether basic, comprehensive, or
supplemental, as established in sections 1807, 1808, and
1809 of this title; (2) the status of the veteran or veteran’s
dependent receiving the care and services provided under
this chapter; and (3) the type of coverage, whether individ-
ual or family.
‘‘(5) The Secretary may not wholly merge a Veterans
Health Plan with any non-Department health care pro-
vider, network, plan; or system.
‘‘(b) In order to carry out the provisions of the chap-
ter and notwithstanding any other provision of law, the
Secretary may—
‘‘(1) plan and implement administrative reorga-
nization, consolidation, elimination or redistribution
of offices, facilities, functions, or activities of the De-
partment, including the veterans health system and
Department facilities—
‘‘(A) without regard to section 501 of this
title; and
‘‘(B) upon a determination by the Sec-
retary that such reorganization, consolidation,
elimination, or redistribution is cost-effective, is
in the best interests of veterans served by the
veterans health system, and is necessary for the
provision of care and services under this chap-
ter in a timely and efficient manner; and
‘‘(2)(A) without regard to laws or regulations
pertaining to competitive procedures or personnel
preferences or priorities, establish alternative person-
nel systems or procedures for personnel at facilities
operating as or with a Veterans Health Plan; and
‘‘(B) without regard to section 8110(c) of this
title, enter into agreements for direct patient care
services, such as nursing or other services, regard-
less of whether such services were previously per-
formed by Federal employees.
‘‘(c)(1) Notwithstanding any law or regulation per-
taining to competitive procedures, acquisition procedures
or policies, source preferences or priorities, or bid protests,
the Secretary shall have the authority to enter into agree-
ments with non-Department health care plans, insurers,
health care providers, health care professionals, health
care facilities, medical equipment suppliers, and related
entities, to furnish or obtain the health care and medical
resources needed to ensure that the full range of basic,
comprehensive, and supplemental benefits set forth in sec-
tions 1807, 1808, and 1809 of this title is available in
each Veterans Health Plan.
‘‘(2) The Secretary shall establish procedures and
guidance for Veterans Health Plans regarding such agree-
ments, including procedures and guidance for determining
and periodically adjusting the amount paid to each pro-
vider of services with respect to the services provided by
it.
‘‘(3) The Secretary shall maintain full legal and ethi-
cal responsibility for treatment outcomes and quality of
contracted care.
‘‘(d) The Secretary and the directors of the Veterans
Health Plans may contract with outside employers to pro-
vide health care services to employees who are otherwise
eligible for care and services under this chapter in accord-
ance with the terms and conditions set forth in this chap-
ter. In carrying out this subsection, the secretary shall es-
tablish procedures to ensure that employers make pay-
ments to Veterans Health Plans on behalf of eligible vet-
eran employees in the same manner as such employers
make payments to other health care providers and insur-
ers on behalf of other employees.
‘‘(e)(1) The Secretary shall assist Veterans Health
Plans in establishing billing offices and related adminis-
trative resources necessary to collect payment from enroll-
ees, third-party payers, including federally-administered
health programs, individuals obtaining fee-for-service care
in a Veterans Health Plan, and others.
‘‘(2) In order to provide for the administration of
benefits under this chapter with maximum efficiency and
convenience for individuals receiving benefits under this
chapter and for providers of services, the Secretary may
enter into agreements for the provision of administrative
services to Veterans Health Plan. Such administrative
services may include (A) determination of the rates and
payments to be made to providers of services and other
persons; (B) receipt, disbursement, and accounting for
funds in making such payments; and (C) conducting such
audits of the records of providers of services as may be
necessary to assure that proper payments are made.
‘‘(f) The Secretary shall establish criteria and appli-
cation procedures for qualification of veterans as entitled
under section 1805(a)(8) of this title. The Secretary shall
consider the relationship of the cost of the catastrophic
illness or injury to the veteran’s income. A veteran whose
annual income, after payment for the catastrophic illness
or injury, is, or would be, at or below the applicable levels
specified for provision of care at no cost to veterans under
chapter 17 of this title, shall be qualified as entitled under
this subsection. The Secretary shall establish guidelines
for evaluating on an annual basis the continuing need for
an individual’s entitled status under this subsection. The
Secretary may use the authority provided under section
6103 of the Internal Revenue Code to verify the income
of any veteran making an application under this sub-
section.
‘‘(g) The Secretary may carry out promotional, adver-
tising, and marketing activities to inform veterans, veter-
ans’ dependents, and others of the care and services avail-
able in Veterans Health Plans and facilities of the Depart-
ment operating as or within the veterans health system.
‘‘(h) The Secretary may delegate to a director of a
Veterans Health Plan the authority provided to the Sec-
retary under subsections (c), (d), (e), and (g).
‘‘§ 1819. Responsibilities of Veterans Health Plans
and Veterans Health Plan Directors
‘‘(a) Veterans Health Plan directors must enroll all
veterans and veterans’ dependents in accordance with the
provisions of this chapter—
‘‘(1) without engaging in practices that have
the effect of attracting or limiting enrollees on the
basis of personal characteristics such as preexisting
health conditions, health status, anticipated needs
for health care, age, occupation, race, national ori-
gin, sex, language, socioeconomic status, or disabil-
ity;
‘‘(2) without imposing waiting periods before
coverage begins;
‘‘(3) without denying or delaying coverage
based upon pre-existing conditions.
‘‘(b) For the purpose of carrying out the provisions
of this chapter, Veterans Health Plan directors may, sub-
ject to procedures established by the Secretary and with-
out regard to laws or regulations pertaining to competitive
procedures, acquisition procedures or policies, source pref-
erences or priorities, or bid protests—
‘‘(1) enter into agreements with health care
plans, insurers, health care providers, health care fa-
cilities, and medical equipment suppliers to furnish
or obtain any health care or medical resource; and
‘‘(2) enter into contracts for the procurement of
any item commercially available at a cost of less
than $300,000.
‘‘(c) Whenever necessary to carry out the provisions
of this chapter, Veterans Health Plan directors may—
‘‘(1) without regard to laws or regulations per-
taining to competitive procedures or personnel pref-
erences or priorities, establish alternative personnel
systems or procedures for personnel at facilities op-
erating as or with a Veterans Health Plan; and
‘‘(2) without regard to section 8110(c) of this
title, enter into contracts for direct patient care
services, such as nursing or other services, regard-
less of whether such services were previously per-
formed by Federal employees.
‘‘SUBCHAPTER VII—STATE HEALTH CARE
SYSTEMS
‘‘§ 1820. State health care reform
‘‘A Veterans Health Plan shall be considered a quali-
fied provider or carrier under any State health care reform
plan, law, or regulation.
‘‘§ 1821. Applicability of State law
‘‘(a) The provisions of this chapter and the provisions
of any contract entered into under this chapter, relating
to the nature or extent of coverage or benefits, including
payments with respect to benefits, shall supersede and
preempt any State law or local law, or any regulation is-
sued thereunder, that relates to health insurance or health
plans to the extent that such law or regulations is incon-
sistent with such provisions of this chapter.
‘‘(b) The Secretary may require Veterans Health
Plans to follow any State or local law or regulation as de-
scribed in subsection (a) upon a finding that application
of such law or regulation is in the best interests of individ-
uals enrolled in the Veterans Health Plan, or will assist
the Veterans Health Plan in achieving or maintaining a
competitive position within the State or locality.
‘‘SUBCHAPTER VIII—GENERAL PROVISIONS
‘‘§ 1822. Budget reporting requirements
‘‘The Secretary shall submit to Congress within one
year of the effective date of this chapter and annually
thereafter, a report on—
‘‘(1) total expenditures under this chapter;
‘‘(2) the fully-allocated cost to the Government
to provide care and services at no charge to entitled
veterans;
‘‘(3) the fully-allocated cost to the Government
to provide care and services at no charge to eligible
veterans;
‘‘(4) the fully-allocated cost to the Government
to provide care and services at no charge to veter-
ans’ dependents;
‘‘(5) the amount of—
availability, or unusual nature, are either unique in
the medical community or are subject to maximum
utilization only through mutual use.
‘‘(3) The term Veterans Health Plan means a
plan that provides the health care benefits contained
in the basic, comprehensive, and supplemental bene-
fits packages established in sections 1807, 1808, and
1809 of this title, respectively, subject to the terms
and conditions set forth in chapters 17 and 18 of
this title.
‘‘(4) The term veterans health system includes
all medical and health care facilities, personnel, and
operations under the jurisdiction of the Secretary or
under contract with the Department to provide med-
ical and health care services to veterans and veter-
ans dependents under the provisions of chapters 17
and 18 of this title.’’.
SEC. 5. TECHNICAL AND CONFORMING AMENDMENTS TO
CHAPTER 17 OF TITLE 38, UNITED STATES
CODE.
(a) DEPENDENTS RECEIVING MEDICAL SERVICES.—
Section 1701 of title 38, United Stats Code, is amended
in subsection (6)(B)—
(1) by striking, in the last sentence, ‘‘the last
section of’’; and
(2) by striking, in the last sentence, ‘‘(b)’’ after
‘‘1713’’.
(b) EXTENSION
OF CONTRACTING AUTHORITY.—
Section 1703 of title 38, United States Code, is amend-
ed—
(1) in subsection (a)—
(A) by striking ‘‘When Department facili-
ties are not capable of furnishing economical
hospital care or medical services because of geo-
graphical inaccessibility or are not capable of
furnishing the care or services required,’’ and
beginning the sentence with ‘‘The Secretary’’;
(B) by striking ‘‘following’’ and inserting
‘‘health care services provided under chapters
17 and 18 of this title’’; and
(C) by striking paragraphs (1) through
(8);
(2) in subsection (b)—
(A) by striking ‘‘In the case of any veteran
for whom’’ and inserting ‘‘Where’’; and
(B) by striking ‘‘a provision of’’; and
(3) in subsection (c), by striking ‘‘this section,
sections 1712A, 1720, 1720A, and 1732’’ and in-
serting ‘‘chapters 17 and 18’’.
(c) DELETION OF CONFLICTING HOSPITAL CARE,
DENTAL CARE AND REIMBURSEMENT PROVISIONS.—Sec-
tion 1710 of title 38, United States Code, is amended—
(1) by striking, in the catchline, ‘‘hospital,’’ and
the comma after ‘‘nursing home’’;
(2) in subsection (a)(1), by striking ‘‘shall fur-
nish hospital care, and’’;
(3) in subsection (a)(2), by striking ‘‘hospital
care and’’;
(4) in subsection (a)(3)—
(A) by striking ‘‘hospital care and’’; and
(B) by striking ‘‘may furnish such hospital
care in accordance with section 1703 of this
title and’’;
(5) in subsection (c)—
(A) by striking, in the first sentence, ‘‘hos-
pital care or’’, ‘‘facilities’’, and ‘‘in addition to
treatment incident to the disability for which
such veteran is hospitalized,’’;
(B) by striking ‘‘The Secretary may fur-
nish dental services’’ and all that follows:
(6) 
in 
the 
last 
sentence 
of 
subsection
(e)(1)(A)(ii), by striking ‘‘hospital care and’’;
(7) in subsection (e)(1)(B), by striking ‘‘hos-
pital care and’’;
(8) in subsection (e)(1)(C), by striking ‘‘hos-
pital care and’’;
(9) in subsection (e)(2), by striking ‘‘Hospital
and’’;
(10) in subsection (e)(3)—
(A) by striking ‘‘Hospital and’’; and
(B) by striking ‘‘and medical services’’;
(11) in subsection (f)(1), by striking ‘‘hospital
care or’’;
(12) in the first sentence of subsection (f)(2),
by striking ‘‘hospital care or’’;
(13) in subsection (f)(2)(A)(i), by inserting
‘‘under chapters 17 and 18’’ before the semicolon;
(14) in subsection (f)(2)(B), by striking ‘‘$10
for every day the veteran receives hospital care
and’’;
(15) by striking all of subsection (f)(3)(A) and
redesignating subparagraph (B) as subparagraph
(A);
(16) in subsection (f)(3)(C), by redesignating
subsection (C) and (B);
(17) in subsection (f)(3)(B)(i) (as redesignated
by paragraph (16) of this section)—
(A) by striking ‘‘inpatient Medicare’’; and
(B) by striking ‘‘this subsection and’’ and
inserting ‘‘section 1811(a) or section 1812(f) of
this title, or’’;
(18) in subsection (f)(3)(B)(ii) (as redesignated
by paragraph (16) of this section)—
(A) by striking ‘‘subparagraph (A)(ii) of
this paragraph’’ and inserting ‘‘section 1811(a)
or section 1812(f) of this title’’; and
(B) by striking ‘‘inpatient Medicare’’ and
inserting ‘‘required’’;
(19) in subsection (f)(3)(D)—
(A) by redesignating subparagraph (D) as
subparagraph (C);
(B) by striking, in the first sentence, ‘‘this
section’’ and inserting ‘‘chapter 18 of this
title’’;
(20) in subsection (f)(3)(E)—
(A) by redesignating subparagraph (E) as
subparagraph (D);
(B) by inserting ‘‘section 1811(a) or sec-
tion 1812(f) for hospital care furnished under
chapter 18 or under’’ before ‘‘this subsection
for’’;
(C) by striking ‘‘hospital care or’’ before
‘‘nursing home care furnished under this sec-
tion’’;
(D) by striking ‘‘under section 1712(a) of
this title’’;
(E) by striking ‘‘this subsection’’ after
‘‘total amount paid by the veteran under’’ and
inserting ‘‘section 1811(a) or section 1812(f) of
this title’’;
(F) by inserting ‘‘under this subsection
for’’ before ‘‘nursing home care furnished dur-
ing that period’’; and
(G) by striking ‘‘under section 1712(f) of
this title’’;
(21) in subsection (f)(3)(F)—
(A) by redesignating subparagraph (F) as
subparagraph (E);
(B) by inserting ‘‘section 1811(a) or sec-
tion 1812(f) of this title or under’’ before ‘‘this
subsection’’; and
(C) by striking ‘‘or section 1712(f) of this
title’’; and
(22) by striking all of subsection (f)(4) and re-
designating paragraph (5) as paragraph (4).
(d) DELETION OF CONFLICTING ELIGIBILITY AND
REIMBURSEMENT PROVISIONS; CLARIFICATION OF CER-
TAIN SPECIALIZED MEDICAL SERVICES.—Section 1712 of
title 38, United States Code, is amended—
(1) by striking, in the catchline, ‘‘outpatient’’
and inserting ‘‘certain medical and dental’’ before
‘‘services’’;
(2) in subsection (a)(1)—
(A) by striking ‘‘Except as provided in
subsection (b) of this section,’’ and beginning
the sentence with ‘‘The Secretary shall’’;
(B) by striking ‘‘on an ambulatory basis
such’’ and inserting ‘‘the’’ before ‘‘medical serv-
ices’’; and
(C) by inserting ‘‘set forth in subsection
(4) of this paragraph,’’ before ‘‘as the Secretary
determines’’;
(3) in subsection (a)(2)—
(A) by striking ‘‘on an ambulatory or out-
patient basis’’; and
(B) by inserting ‘‘set forth in subsection
(4) of this paragraph,’’ before ‘‘for a purpose
described’’;
(4) in subsection (a)(3)—
(A) by striking ‘‘on an ambulatory or out-
patient basis’’; and
(B) by inserting ‘‘set forth in subsection
(4) of this paragraph,’’ before ‘‘which the Sec-
retary determines’’;
(5) by striking the first sentence of subsection
(a)(4), and inserting the following: ‘‘For purposes of
this paragraph, medical services means prosthetic
and orthotic services and appliances, including—
‘‘(A) wheelchairs;
‘‘(B) artificial limbs;
‘‘(C) trusses;
‘‘(D) special clothing made necessary by
the wearing of prosthetic or orthotic appliances;
and
‘‘(E) such similar appliances and related
supplies or services as the Secretary determines
to be reasonable and necessary.’’;
(6) by striking subsections (a)(5)(A) and
(a)(5)(B); and redesignating subsections (a)(6) and
(a)(7) as (a)(5) and (a)(6), respectively; and
(7) by striking subsections (f) and (i).
(e) EXTENSION OF CONTRACTING AUTHORITY; CON-
FORMANCE OF ELIGIBILITY AND NOTIFICATION REQUIRE-
MENTS; ELIMINATION OF LIMITATIONS ON FACILITY RE-
ORGANIZATION AND CLOSURE.—Section 1712A of title
38, United States Code, is amended—
(1) in subsection (a)(1), by striking ‘‘, within
the limits of Department facilities,’’;
(2) in subsection (b)(1)—
(A) by striking, in the first sentence, ‘‘,
within the limits of Department facilities,’’;
(B) by striking, in the first sentence, ‘‘on
an outpatient basis under the conditions speci-
fied in section 1712(a)(5)(B)’’ and inserting ‘‘in
accordance with the criteria established in chap-
ter 18’’;
(C) by striking, in the second sentence,
‘‘For the purposes of furnishing such mental
health services, the counseling’’ and inserting
‘‘Any hospital care and other medical services
considered necessary on the basis of the assess-
ment’’;
(D) by striking, in the second and third
sentences, ‘‘considered to have been furnished
by the Department as a part of hospital care.
Any hospital care and other medical services
considered necessary on the basis of the assess-
ment furnished under subsection (a) of this sec-
tion shall be’’;
(E) by striking ‘‘this chapter’’ and insert-
ing ‘‘chapter 18’’ after ‘‘eligibility criteria oth-
erwise set forth in; and
(F) by striking ‘‘(including the eligibility
criteria set forth in section 1711(b) of this
title)’’.
(3) in subsection (c)(1), by striking ‘‘and’’ at
the end of the paragraph;
(4) in subsection (c)(2), by striking ‘‘and’’ at
the end of the paragraph;
(5) by inserting after subsection (c)(2) the fol-
lowing paragraph:
‘‘(3) advise such individual of such individual’s
eligibility to obtain services pursuant to the provi-
sions of chapter 18.’’;
(6) in subsection (e)(1)—
(A) by inserting ‘‘otherwise’’ before ‘‘avail-
able to the Secretary’’; and
(B) 
by 
striking 
‘‘(under 
sections
1712(a)(1)(B) and 1703(a)(2) of this title) in
furnishing medical services to veterans suffering
from total service-connected disabilities’’ and in-
serting ‘‘under chapters 17 and 18’’;
(7) by striking subsection (e)(3);
(8) in subsection (g)—
(A) by striking paragraph (1) and redesig-
nating paragraph (2) as paragraph (1); and
(B) in paragraph (1)(B)(i)(II) (as redesig-
nated by this paragraph), by striking ‘‘and’’ at
the end of the paragraph;
(C) in paragraph (1)(B)(ii) (as redesig-
nated by this paragraph), by striking the period
at the end of the paragraph and inserting ‘‘;
and;
(D) in paragraph (1)(B) (as redesignated
by this paragraph), by inserting a new para-
graph (1)(B)(iii) as follows:
‘‘(iii) a national plan for ensuring the
continued availability and effective furnish-
ing of readjustment counseling services to
eligible veterans needing such services.’’;
(E) by striking paragraphs (3)(A) and
(3)(B);
(F) by redesignating paragraph (3)(c) as
paragraph (2);
(G) in paragraph (2) (as redesignated by
this paragraph)—
(i) by striking ‘‘(B) after ‘‘‘subpara-
graph’’ and inserting ‘‘(iii)’’;
(ii) by striking ‘‘center’’ and inserting
‘‘region’’; and
(iii) by redesignating clause ‘‘(i)’’ as
paragraph ‘‘(2)(A)’’;
(H) in paragraph (2)(A) (as redesignated
by this paragraph)—
(i) by striking ‘‘area served by the
center’’ and inserting ‘‘region’’;
(ii) by striking ‘‘relationships’’ and in-
serting ‘‘relationship’’;
(iii) by striking ‘‘such center and the
general Department facility’’ and inserting
‘‘Department and contract facilities’’;
(iv) by striking clause (ii); and
(v) by redesignating clause (iii) as
paragraph (2)(B);
(I) in paragraph (2)(B) (as redesignated
by this paragraph)—
(i) by striking ‘‘area served by the
center’’ and inserting ‘‘region’’; and
(ii) by redesignating clause (iv) as
paragraph (2)(C);
(J) in paragraph (2)(C) (as redesignated
by this paragraph)—
(i) by striking ‘‘, the center and’’; and
(ii) by striking clauses (v), (vi), (vii),
and (viii);
(K) by inserting paragraph (2)(D) as fol-
lows:
‘‘(D) Such other factors as the Secretary
determines to be relevant to the evaluation de-
scribed in subparagraph (B) of this para-
graph.’’; and
(L) by deleting paragraphs (4) and (5);
and
(9) by deleting subsection (i).
(f) USE OF CONTRACT PROVIDERS.—Section 1712B
of title 38, Untied States Code, is amended by striking
‘‘facilities’’ and inserting ‘‘resources’’.
(g) CONFORMANCE OF BENEFITS FOR CERTAIN VET-
ERANS’ DEPENDENTS.—Section 1713 of title 38, United
States Code, is amended—
(1) in subsection (a), by striking ‘‘subsection
(b) of this section’’ and inserting ‘‘chapter 18’’ after
‘‘the provisions of’’; and
(2) by striking subsection (b).
(h) CONFORMANCE OF HOSPITAL CARE BY OTHER
FEDERAL AGENCIES WITH CHAPTER 18.—Section 1716
of title 38, United States Code, is amended by striking
‘‘this chapter’’ and inserting ‘‘chapters 17 and 18’’ after
‘’entitled to hospitalization from the Department under’’.
(i) CONFORMANCE OF ELIGIBILITY REQUIREMENTS
FOR HOME HEALTH SERVICES.—Section 1717 of title 38,
United States Code, is amended in subsection (a)—
(1) in paragraph (1), by striking ‘‘As part of
medical services furnished to a veteran under section
1712(a) of this title,’’ and beginning the sentence
with ‘‘The Secretary may furnish’’;
(2) in paragraph (2)(A), by striking ‘‘in the
case of medical services furnished under paragraph
(1) of section 1712(a)’’ and inserting ‘‘for (i) a vet-
eran for a service connected disability (including a
disability that was incurred or aggravated in line of
duty and for which the veteran was discharged or re-
leased from the active military, naval, or air service),
(ii) a veteran who qualifies as entitled under section
1805(a)(1) of this title and has a service-connected
disability rated at fifty (50) percent or greater, and
(iii) a veteran who qualifies as entitled under section
1805(a)(5)’’; and
(3) in paragraph (2)(B), by striking ‘‘in the
case of medical services furnished under any other
provision of section 1712’’ and inserting ‘‘for a vet-
eran who qualifies as eligible under section
1805(b)’’.
(j) CONFORMANCE OF ELIGIBILITY REQUIREMENTS
FOR THERAPEUTIC AND REHABILITATIVE ACTIVITIES.—
Section 1718 of title 38, United States Code, is amended
by striking subsection (e).
(k) CONFORMANCE OF NURSING HOME AND ADULT
DAY CARE WITH CHAPTER 18 CRITERIA.—Section 1720
of title 38, United States Code, is amended—
(1) in subsection (a)(4), by inserting ‘‘or who is
furnished hospital or domiciliary care by the Sec-
retary under the provisions of chapter 18,’’ after
‘‘Alaska of Hawaii’’; and
(2) in subsection (f)(1)(A)(ii), by striking ‘‘is el-
igible 
for 
medical 
services 
under 
section
1712(a)(1)(B) of this title’’ and inserting ‘‘qualifies
as entitled under section 1805(a)(1) of this title and
has a service-connected disability rated at fifty (50)
percent or greater’’ after ‘‘a veteran who’’.
(l) CONFORMANCE OF ELIGIBILITY AND NOTIFICA-
TION REQUIREMENTS FOR SUBSTANCE ABUSE TREAT-
MENT; ELIMINATION OF CONTRACTING LIMITATIONS.—
Section 1720A of title 38, United States Code, is amend-
ed—
(1) in subsection (a)(1), by striking out ‘‘this
chapter’’ and inserting ‘‘chapters 17 and 18’’ after
‘‘medical and rehabilitative services under’’;
(2) in subsection (c)—
(A) in paragraph (1), by striking out
‘‘and’’ at the end of the paragraph;
(B) in paragraph (2), by inserting ‘‘; and’’
at the end of the paragraph; and
(C) by inserting the following new para-
graph (3):
‘‘(3) advise such individual of such individual’s
eligibility to obtain services pursuant to the provi-
sions of chapter 18 of this title.’’; and
(3) by striking subsections (e) and (g).
(m) CONFORMANCE WITH CHAPTER 18 BENEFITS;
ELIMINATION OF CONTRACTING LIMITATIONS.—Section
1720B of title 38, United States Code, is amended—
(1) in subsection (a), by striking ‘‘1710’’ and
inserting ‘‘1806’’ after ‘‘to receive care under sec-
tion’’; and
(2) in subsection (b)(2), by striking ‘‘in a De-
partment facility’’.
(n) ELIMINATION OF CONTRACTING LIMITATIONS;
CONFORMANCE WITH CHAPTER 18 BENEFITS.—Section
1720D of title 38, United States Code, is amended—
(1) in subsection (a)(1)(3), by inserting a pe-
riod after ‘‘a qualified mental health professional’’
and striking out all that follows; and
(2) in subsection (b)(2)(C), by inserting ‘‘or
chapter 18’’ after ‘‘under this chapter’’.
(o) EXTENSION
OF RULEMAKING AUTHORITY
TO
CHAPTER 18.—Section 1721 of title 38, United States
Code, is amended by inserting ‘‘or under a Veterans
Health Plan as set forth in chapter 18 of this title’’ imme-
diately before the end of the first sentence.
(p) CONFORMANCE WITH CHAPTER 18 ELIGIBILITY
CRITERIA.—Section 1722 of title 38, United States Code,
is amended—
(1) in subsection (a), by inserting ‘‘and
1805(a)(6)’’ after ‘‘section 1710(a)(1)(I); and
(2) in subsection(f)(3)—
(A) by striking out ‘‘section 1710(a) or
1712(f)’’ and inserting ‘‘chapter 17’’ after
‘‘case or services under’’; and
(B) by inserting ‘‘or the year in which the
veteran enrolls in a Veterans Health Plan under
chapter 18 of this title’’ immediately before the
end of the sentence.
(q) CONFORMANCE OF COPAYMENT REQUIREMENT;
RETENTION
OF PROCEEDS
BY
THE DEPARTMENT
OF
VETERANS AFFAIRS.—Section 1722A of title 38, United
States Code, is amended—
(1) in subsection (a)(1)—
(A) by striking, in the first sentence,
‘‘shall’’ and inserting ‘‘may’’;
(B) by striking ‘‘$2’’ and inserting ‘‘a co-
payment’’ after ‘‘United States’’; and
(C) by striking the second sentence.
(2) in subsection (a)(2), by inserting ‘‘fully-allo-
cated’’ before ‘‘cost to the Secretary’’; and
(3) in subsection (b), by striking ‘‘Medical-Care
Cost Recovery Fund’’ and inserting ‘‘Health Plan
Fund established under section 1815 of this title’’.
(r) CHAPTER 18 CLOTHING BENEFIT.—Section 1723
of title 38, United States Code, is amended by inserting
‘‘or otherwise receiving care under chapters 17 and 18 of
this title,’’ after the first comma.
(s) EXTENSION OF REIMBURSEMENT FOR PERSONAL
LOSS TO CONTRACT FACILITIES.—Section 1726 of title
38, United States Code, is amended by inserting the fol-
lowing sentence at the end: ‘‘The Secretary shall include
in any contract with a non-Department facility a provision
for reimbursement of veterans and their dependents in
contracted health care facilities for any loss of personal
effects sustained by fire, earthquake, or other natural dis-
aster while such effects were stored in designated locations
in such facilities.’’.
(t) CONFORMANCE WITH CHAPTER 18 BENEFITS.—
Section 1727 of title 38, United States Code, is amend-
ed—
(1) by striking out ‘‘this chapter’’ and inserting
‘‘chapters 17 and 18’’ after ‘‘provided for in’’; and
(2) by striking out ‘‘in this chapter’’ and insert-
ing ‘‘therein’’ after ‘‘the service requirements con-
tained’’.
(u) CLARIFICATION OF VETERAN REIMBURSEMENT
POLICY.—Section 1728 of title 38, United States Code,
is amended in subsection (a)—
(1) by striking ‘‘entitled to hospital care or
medical services under this chapter’’ and ‘‘reimburse
veterans’’;
(2) by striking out ‘‘such’’ after ‘‘reasonable
value of’’ and inserting ‘‘hospital’’;
(3) by inserting ‘‘medical’’ before ‘‘services (in-
cluding travel’’;
(4) by striking ‘‘from sources other than the
Department’’ and inserting ‘‘beyond payment other-
wise required under chapters 17 and 18 of this title’’
after ‘‘have made payment,’’; and
(5) in paragraph (3), by inserting ’’, con-
tracted,’’ before ‘‘or other Federal facilities’’.
(v) EXTENSION
OF THIRD-PARTY RECOVERY
TO
CHAPTER 18 SERVICES; REPLACEMENT
OF MEDICAL-
CARE COST RECOVERY FUND WITH VETERANS HEALTH
PLAN FUND; RETENTION OF THIRD-PARTY PAYMENTS
BY THE DEPARTMENT OF VETERANS AFFAIRS.—Section
1729 of title 38, United States Code, is amended—
(1) in subsection (a)(1)—
(A) by inserting ‘‘or a veteran’s depend-
ent’’ before ‘‘is furnished care’’; and
(B) by striking ‘‘this chapter’’ and insert-
ing ‘‘chapters 17 and 18’’ before ‘‘for a non-
service-connected disability’’;
(2) in subsection (g)—
(A) by striking paragraph (1) and redesig-
nating paragraph (2) as paragraph (1); and
(B) in paragraph (1) (as redesignated
under this paragraph), by striking ‘‘Fund’’ and
inserting ‘‘Department of Veterans Affairs
Health Plan Fund established under section
1815 of this title’’; and
(C) by striking paragraphs (3) and (4).
(w) CONFORMANCE WITH CHAPTER 18 CRITERIA
AND BENEFITS.—Section 1741 of title 38, United States
Code, is amended—
(1) in subsection (a)(2), by striking in the last
sentence ‘‘in a Department facility’’ and inserting
‘‘under sections 1710, 1720 and 1809(b) of this
title’’; and
(2) in subsection (c)—
(A) by striking ‘‘and’’ and inserting a
comma after ‘‘sections 1710’’; and
(B) by inserting ‘‘and 1809(b)’’ after
‘‘1720’’.
(x) EXTENSION OF SICKLE CELL ANEMIA SERVICES
TO CHAPTER 18.—Section 1751 of title 38, United States
Code, is amended by striking ‘‘chapter’’ and inserting
‘‘title’’ after ‘‘under the provisions of this’’.
SEC. 6. TECHNICAL AND CONFORMING AMENDMENTS TO
TITLE 38, UNITED STATES CODE.
(a) CONFORMANCE WITH CHAPTER 18 ELIGIBILITY
CRITERIA.—Section 106 of title 38, United States Code,
is amended, in subsection (b), by striking ‘‘chapter 17’’
and inserting ‘‘chapters 17 and 18’’ after ‘‘for purposes
of determining service-connection of a disability under’’.
(b) EXTENSION OF RECOVERY EXEMPTION TO CHAP-
TER 18 BENEFITS.—Section 2651 of title 38, United
States Code, is amended, in subsection (c), by inserting
‘‘or 18’’ after ‘‘under the provisions of chapter 17’’.
(c) EXTENSION OF CHAPTER 18 BENEFITS TO VET-
ERANS ELIGIBLE FOR TRAINING AND REHABILITATION.—
Section 3104 of title 38, United States Code, is amended,
in subsection (a)(9), by striking ‘‘chapter 17’’ and insert-
ing ‘‘chapters 17 and 18’’ after ‘‘services described in’’.
(d) CONFORMING REFERENCE TO CHAPTER 18 BEN-
EFITS.—Section 3485 of title 38, United States Code, is
amended, in subsection (a)(1), by striking ‘‘chapter 17’’
and inserting ‘‘chapters 17 and 18’’ after ‘‘(C) the provi-
sion of hospital and domiciliary care and medical treat-
ment under’’.
(3) FALSE CLAIMS UNDER CHAPTER 18.—Section
3803 of title 38, United States Code, is amended, in sub-
section (c)(2)(C)(viii), by inserting ‘‘18’’ after ‘‘under
chapters 11, 13, 15, 17’’ and before ‘‘and 21’’.
(f) CONFORMING REFERENCE TO CHAPTER 18.—
Section 3903 of title 38, United States Code, is amended
in subsection (e)(1) by inserting ‘‘or 18’’ after ‘‘eligible
for care under chapter 17’’.
(g) RECOVERY
OF INTEREST
AND OTHER COSTS
UNDER CHAPTER 18.—Section 5315 of title 38, United
States Code, is amended in subsection (a)(2) by striking
‘‘chapter 17’’ and inserting ‘‘chapters 17 and 18’’ after
‘‘from the provision of care or services under’’.
(h) SUSPENSION OF PENSION REDUCTION FOR VET-
ERANS RECEIVING REHABILITATIVE SERVICES UNDER
CHAPTER 18.—Section 5503 of title 38, United States
Code, is amended in subsection (a)(1)(D) by inserting ‘‘or
18’’ after ‘‘rehabilitation services, under chapter 17’’.
(i) EXTENSION OF NON-DISCRIMINATION RULE TO
CHAPTER 18.—Section 7333 of title 38, United States
Code, is amended by inserting in subsection (a) ‘‘or 18’’
after ‘‘under chapter 17’’.
(j) EXTENSION OF CONTRACTING AUTHORITY.—Sec-
tion 8102 of title 38, United States Code, is amended by
inserting in subsection (a) ‘‘or contract for’’ after ‘‘The
Secretary shall provide’’.
(k) ELIMINATION OF ACQUISITION RESTRICTIONS.—
Section 8103 of title 38, United States Code, is amended
by striking in subsection (d)(1) ‘‘of not more than three’’
after ‘‘for the acquisition of’’.
(l) ELIMINATION OF INEFFICIENT OPERATING RE-
QUIREMENTS.—Section 8110 of title 38, United States
Code, is amended—
(1) by striking all of subsection (a)(1) and in-
serting the following:
‘‘(a)(1) The Secretary shall establish the total num-
ber of hospital beds and nursing home beds in medical
facilities over which the Secretary has direct jurisdiction
for the care and treatment of Veterans Health Plan enroll-
ees. The Secretary shall establish the total number of such
beds so as to maintain a contingency capacity to assist
the Department of Defense in time of war or national
emergency to care for the casualties of such war or na-
tional emergency. The Secretary shall provide, in such a
manner as to ensure the immediate acceptance and timely
and complete care of patients, for sufficient beds and
other treatment capacities to accommodate, and provide
care to, Veterans Health Plan enrollees applying for ad-
mission and found to be in need of hospital care or medical
services under chapter 17 or 18 of this title.’’;
(2) in subsection (a)(2)—
(A) by striking ‘‘maintain the’’ and insert-
ing ‘‘provide’’ after ‘‘The Secretary shall’’;
(B) by striking ‘‘of all Department medical
facilities’’ after ‘‘and treatment capacities’’; and
(C) by striking ‘‘section 1712 of’’ after
‘‘furnished pursuant to’’; and
(3) by striking paragraph (5).
(m) ELIMINATION OF INEFFICIENT OPERATING RE-
STRICTIONS.—Section 8111 of title 38, United States
Code, is amended by striking in subsection (a) from ‘‘re-
sult (1) in a permanent reduction’’ through ‘‘to be oper-
ated and maintained or’’ after ‘‘enter into an agreement
that would’’ and before ‘‘in any way subordinate or trans-
fer’’.
(n) ELIMINATION OF RESTRICTIONS ON CONTRACT-
ING AUTHORITY; CHAPTER 18 HOSPITAL SERVICES.—
Section 8111A of title 38, United States Code, is amend-
ed—
(1) in subsection (b)(2)(A), by striking ‘‘at a
department facility under subsection (f) of section
1712 of this title’’ after ‘‘is receiving medical serv-
ices’’; and
(2) in subsection (b)(2)(B)—
(A) by striking in clause (i) ‘‘section 1710
of’’ after ‘‘hospital care under’’; and
(B) by striking in clause (ii) ‘‘such sec-
tion’’ and inserting ‘‘this title’’ after ‘‘for hos-
pital care under’’.
(o) ELIMINATION OF RESTRICTIONS ON CONTRACT-
ING AUTHORITY; PAYMENT PROVISIONS FOR CHAPTER 18
BENEFITS.—Section 8153 of title 38, United States Code,
is amended—
(1) by striking subsection (c); and
(2) by inserting in subsection (d) ‘‘or 18’’ after
‘‘not eligible for such care or services under chapter
17’’.
SEC. 7. EFFECTIVE DATE.
The provisions of this Act shall take effect two years
after the date of the enactment of this Act.
Æ