Veterans' Health Care Eligibility Reform Act of 1994

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans' Health Care Eligibility 
Reform Act of 1994''.

SEC. 2. VETERANS HEALTH CARE ELIGIBILITY REFORM.

    Chapter 17 of title 38, United States Code, is amended as follows:
            (1) Section 1701 is amended by adding at the end the 
        following new paragraphs:
            ``(10) The term `continuum of health care' includes 
        specialized treatment and rehabilitative services of the 
        Department, including comprehensive prevention and health 
        screening programs and services to treat needs of disabled 
        veterans with spinal cord dysfunction, blindness, prosthetics, 
        and mental illness.
            ``(11) The term `noninstitutional long-term care' includes 
        the following services:
                    ``(A) Hospital-based home care.
                    ``(B) Adult day health care.
                    ``(C) Fee basis care.
                    ``(D) Hospice care.
                    ``(E) Homemaker services.
                    ``(F) Home health aid.
                    ``(G) Case management services.
                    ``(H) Congregate meals.
                    ``(I) Home delivered meals.
                    ``(J) Senior center services.
                    ``(K) Shopping and transportation services.
                    ``(L) Phone check services.''.
            (2) Section 1710(a)(1) is amended by striking out ``shall 
        furnish'' and all that follows through ``which the'' and 
        inserting in lieu thereof ``shall furnish a continuum of health 
        care (including hospital care, outpatient medical services 
        provided on an outpatient or ambulatory basis, and 
        noninstitutional long-term care) which the''.
            (3) Subchapter II is amended by inserting after section 
        1710 the following new section:
``Sec. 1710A. Institutional long-term care for certain veterans
    ``(a) The Secretary shall provide institutional nursing home care 
to any veteran who is described in subparagraph (A) or (D) of section 
1710(a)(1), or in subparagraph (C) of section 1712(a)(1), of this title 
or who is in receipt of pension from the Secretary.
    ``(b) If a veteran who is provided nursing home care by reason of 
subsection (a) is also eligible for payment for the costs of nursing 
home care under a State plan title XIX of the Social Security Act, the 
Secretary shall be entitled to recover from that State plan the amount 
that the State plan would pay for that care if provided by an 
authorized provider. For purposes of this subsection, the veteran shall 
be deemed to have paid any deductible or copayment otherwise required 
as a condition of payment by the State plan.''.
            (4) Section 1710(d) is amended by inserting ``1710A or'' 
        after ``section''.
            (5) Subchapter III is amended by inserting after section 
        1729 the following new section:
``Sec. 1729A. 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 medical center (or group of medical centers) 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 for a non-service-connected disability 
that is provided to a veteran 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 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 reimbursement a Medicare explanation of 
benefits.
    ``(d) In the case of a veteran whose eligibility for hospital care 
from the Department is by reason of section 1710(a)(2) of this title, 
the Secretary shall, when providing care to the veteran for which the 
Secretary receives reimbursement under this section, require the 
veteran to pay to the Department any applicable deductible or copayment 
that is not covered by Medicare.''.

SEC. 3. PLAN FOR ENTITLEMENT TO INSTITUTIONAL NURSING HOME CARE FOR 
              OTHER VETERANS.

    (a) Establishment of Plan.--The Secretary of Veterans Affairs shall 
develop a plan to implement (over a specified period of years) the 
provision of institutional long-term care for any veteran described in 
subsection (b). The plan may provide for the provision of institutional 
long-term care through facilities of the Department of Veterans Affairs 
or through a long-term care insurance contract, or a combination 
thereof. In specifying benefits, or a proposed range of benefits, under 
the plan, the Secretary shall consider a representative range of the 
different types of health benefits provisions (which include cost-
sharing) typically offered as long-term institutional care coverage in 
the small employer health coverage market.
    (b) Covered Veterans.--The plan shall propose to cover any veteran 
not covered by section 1710A of title 38, United States Code, as added 
by section 2, who--
            (1) has a service-connected disability rated at less than 
        50 percent;
            (2) has an annual income (as determined under section 1503 
        of such title) that does not exceed three times the maximum 
        annual rate of pension that would be applicable to the veteran 
        if the veteran were eligible for pension under section 1521(d) 
        of such title;
            (3) has a catastrophic nonservice-connected disability (as 
        defined by the Secretary); or
            (4) requires institutional long-term care as a follow up to 
        inpatient care, as authorized under section 1720 of this title.
    (c) Premiums and Copayments.--The plan shall include the 
establishment of a schedule of premiums and copayments for care 
provided through Department of Veterans Affairs institutional care 
programs in effect on the day before the date of the enactment of this 
Act. The plan shall specify a range of premiums and copayments that 
would apply based upon different combinations of levels of payments by 
the Government, copayments, and premiums, as specified in the plan.
    (d) Long-Term Care Insurance Contract.--For purposes of this 
section, the term `long-term care insurance contract' means any 
insurance contract issued if--
            (1) the only insurance protection provided under the 
        contract is coverage of institutional long-term care services 
        (as specified in the contract) and benefits incidental to such 
        coverage,
            (2) the maximum benefit under the policy for expenses 
        incurred for any day does not exceed $200,
            (3) the contract does not cover expenses incurred for 
        services or items to the extent that such expenses are 
        reimbursable under title XVIII of the Social Security Act or 
        would be so reimbursable but for the application of a 
        deductible or coinsurance amount,
            (4) the contract is guaranteed renewable,
            (5) the contract does not have any cash surrender value, 
        and
            (6) all refunds of premiums, and all policyholder dividends 
        or similar amounts, under the contract are to be applied as a 
        reduction in future premiums or to increase future benefits.
    (e) Report to Congress.--Not later than September 30, 1996, the 
Secretary shall submit to Congress a report on the plan. The report 
shall include--
            (1) a cost analysis, including a range of premiums and 
        copayments and Government cost-sharing;
            (2) a discussion of the cost of establishing a long-term 
        care insurance program for veterans described in subsection (b) 
        using contract authority (if such contract authority is 
        provided by law); and
            (3) a draft of legislation to make any necessary changes in 
        law to enable the Department to implement the plan.

SEC. 4. ENROLLMENT SYSTEM FOR OTHER PERSONS.

    (a) In General.--(1) Title 38, United States Code, is amended by 
inserting after chapter 17 the following new chapter:

                   ``CHAPTER 18--VA GROUP HEALTH PLAN

``Sec.
``1801. Definitions.
``1802. VA Group Health Plan.
``1803. Enrollment.
``1804. Limitation on preexisting conditions.
``1805. Plan to be self supporting.
``1806. Annual report.
``Sec. 1801. Definitions
    ``For purposes of this chapter:
            ``(1) The term `eligible veteran' means any veteran other 
        than a veteran eligible for health care under section 
        1710(a)(1) of this title.
            ``(2) The term `VA enrollee' means an individual enrolled 
        in the VA Group Health Plan.
``Sec. 1802. VA Group Health Plan
    ``(a) The Secretary shall administer a program of health insurance 
under this chapter to be known as the VA Group Health Plan. The 
Secretary may provide such insurance directly or may contract with an 
insurance provider in the private sector for the provision of such 
insurance. The plan may be established as a single, nation-wide plan or 
as a composite of regional health insurance plans.
    ``(b) The Secretary shall establish and carry out the VA Group 
Health Plan as a managed-care plan and so that it meets the following 
requirements:
            ``(1) The plan shall be designed to be self-sustaining 
        through required premiums, copayments, deductibles, and other 
        charges, and without appropriated funds.
            ``(2) The plan shall provide such benefits as the Secretary 
        determines.
    ``(c) The Secretary may award contracts under this section for the 
operation of the VA Group plan.
    ``(d) The Secretary may provide treatment in Department facilities 
for any enrollee, if cost effective.
``Sec. 1803. Enrollment
    ``(a) The following individuals are eligible to enroll in the VA 
Group Health Plan:
            ``(1) Any eligible veteran.
            ``(2) The spouse or child of any veteran.
    ``(b)(1) The Secretary of Veterans Affairs shall establish an 
enrollment (and disenrollment) process for the VA Group Health Plan in 
accordance with this subsection. Such process shall be established in 
consultation with veterans and other individuals to be served by the 
plan.
    ``(2) For each eligible veteran, when the veteran first becomes 
eligible to enroll in the VA Group Health Plan, there shall be an 
initial enrollment period (of not less than 30 days) during which the 
veteran may enroll in the plan.
    ``(3) The Secretary shall establish an annual period, of not less 
than 30 days, during which eligible veterans may enroll in the VA Group 
Health Plan.
    ``(4) If a veteran enrolls in the VA Group Health Plan, the veteran 
may at the same time enroll, as a family enrollment, the veteran's 
spouse and children in the plan.
    ``(5) In the case of individuals who through marriage, divorce, 
birth or adoption of a child, or similar circumstances, experience a 
change in family composition, the Secretary shall provide for a special 
enrollment period in which the individual is permitted to change the 
individual or family basis of coverage. The circumstances under which 
such special enrollment periods are required and the duration of such 
periods shall be specified by the Secretary.
    ``(6) The Secretary shall provide for a special transitional 
enrollment period during which eligible individuals may first enroll.
    ``(c) Enrollment of the spouse (including a child of the spouse) 
and any dependent child of an eligible veteran shall be considered to 
be timely if a request for enrollment is made either--
            ``(1) within 30 days of the date of the marriage or of the 
        date of the birth or adoption of a child, if family coverage is 
        available as of such date, or
            ``(2) within 30 days of the date family coverage is first 
        made available.
    ``(d) Family coverage shall become effective not later than the 
first day of the first month beginning after the date of the marriage 
or the date of birth or adoption of the child (as the case may be).
    ``(e) The Secretary may terminate coverage for nonpayment of 
premiums.
    ``(f) Coverage of a spouse under a policy under this chapter may 
not be canceled by reason of the death of the veteran unless the 
surviving spouse remarries.
``Sec. 1804. Limitation on preexisting conditions
    ``(a) The VA Group Health Plan may not impose (and an insurer under 
that plan may not require the Secretary impose through a waiting period 
for coverage under the plan or similar requirement) a limitation or 
exclusion of benefits relating to treatment of a condition based on the 
fact that the condition preexisted the effective date of the plan with 
respect to an individual if--
            ``(1) the condition relates to a condition that was not 
        diagnosed or treated within three months before the date of 
        coverage under the plan;
            ``(2) the limitation or exclusion extends over more than 
        six months after the date of coverage under the plan;
            ``(3) the limitation or exclusion applies to an individual 
        who, as of the date of birth, was covered under the plan; or
            ``(4) the limitation or exclusion relates to pregnancy.
In the case of an individual who is eligible for coverage under a plan 
but for a waiting period imposed by the employer, in applying 
paragraphs (1) and (2), the individual shall be treated as having been 
covered under the plan as of the earliest date of the beginning of the 
waiting period.
    ``(b)(1) The Secretary, for purposes of the VA Group Health Plan, 
shall waive any period applicable to a preexisting condition for 
similar benefits with respect to an individual to the extent that the 
individual, before the date of such individual's enrollment in such 
plan, was covered for the condition under any other health plan that 
was in effect before such date.
    ``(2) Paragraph (1) shall no longer apply if there is a continuous 
period of more than 60 days (or, in the case of an individual who loses 
coverage under a group health plan due to termination of employment, 
six months) on which the individual was not covered under a group 
health plan.
    ``(3) In applying paragraph (2), any waiting period imposed by an 
employer before an employee is eligible to be covered under a plan 
shall be treated as a period in which the employee was covered under a 
group health plan.
``Sec. 1805. Plan to be self supporting
    ``The Secretary shall administer the VA Group Health Plan so as to 
ensure that no appropriated funds are required for the operation of the 
plan (other than as necessary for startup and transition costs). The 
Secretary shall establish such premiums, copayments, and other charges 
for the plan as necessary.
``Sec. 1806. Annual report
    ``(a) The Secretary shall submit to Congress an annual report on 
the VA Group Health Plan. The report shall provide information on 
prices, health outcomes, and enrollee satisfaction under the plan and 
any other information the Secretary considers appropriate concerning 
the quality of the plan, including a breakdown of the portion of 
premiums under the plan that are attributable to the overhead 
operations of the plan.
    ``(b) The report shall be submitted each year before the annual 
general enrollment period. The Secretary shall make such report 
available to other interested persons.''.
    (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. VA Group Health Plan..................................   1801.''.
    (b) Initial Report.--The initial report of the Secretary of 
Veterans Affairs under section 1806 of title 38, United States Code, as 
added by subsection (a), shall be submitted no later than September 30, 
1995. The report shall include a cost analysis for the plan and a range 
of premiums and copayments that may be implemented under the plan.

SEC. 5. MANAGED CARE SYSTEM OF HEALTH DELIVERY.

    (a) Chapter 73 of title 38, United States Code, is amended by 
inserting after section 7306 the following new sections:
``Sec. 7307. Managed care
    ``(a) The Secretary shall administer the health programs of the 
Veterans Health Administration through use of the model of medical 
practice known as `managed care'.
    ``(b) In implementing a managed care system, the Under Secretary 
shall, to the extent possible--
            ``(1) shift the focus of care provided by the Veterans 
        Health Administration to primary care;
            ``(2) establish enhanced quality assurance mechanisms; and
            ``(3) establish utilization review procedures to prevent 
        inefficient practices.
``Sec. 7308. Veterans Service Areas
    ``The Secretary shall organize the health care delivery services 
and resources of the Veterans Health Administration into geographic 
regions to be known as Veterans Service Areas.''.
    (b) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 7306 the 
following new items:

``7307. Managed care.
``7308. Veterans Service Areas.''.
    (c) If, as of the date of the enactment of this Act, the position 
of Under Secretary for Health of the Department of Veterans Affairs is 
vacant, the provisions of section 7308 of title 38, United States Code, 
as added by subsection (a), shall not take effect until an individual 
is appointed to that position.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of 
Veterans Affairs for each of fiscal years 1995 through 1999 (in 
constant fiscal year 1995 dollars)--
            (1) $200,000,000 to acquire medical equipment to relieve 
        the existing medical equipment backlog in Department of 
        Veterans Affairs medical facilities; and
            (2) $500,000,000 for improvements of infrastructure, 
        patient care amenities, primary care services, and personnel 
        and for medical facility construction projects (subject to 
        section 8104 of title 38, United States Code).

Summary: Veterans' Health Care Eligibility Reform Act of 1994 - Defines "continuum of health care" and "noninstitutional long-term care" under veterans' health care provisions.  Directs the Secretary of Veterans Affairs to provide a continuum of health care to veterans eligible for veterans' benefits. 
(Sec. 2) Directs the Secretary to provide institutional nursing home care to certain disabled veterans or those in receipt of a veterans' pension.  Allows for recovery of nursing home care costs by the Secretary if the veteran is also eligible for such care through a State plan under title XIX (Medicaid) of the Social Security Act. 
Designates a Department of Veterans Affairs facility as a Medicare provider for purposes of any program administered by the Secretary of Health and Human Services (HHS) under title XVIII (Medicare) of the Social Security Act.  Declares a Department medical center as a Medicare HMO.  Directs the HHS Secretary to reimburse a Department facility or medical center for providing services as a Medicare provider in the case of care for a non-service-connected disability of a veteran eligible for Medicare benefits. 
(Sec. 3) Directs the Secretary to develop a plan to implement the provision of institutional long-term care for veterans who:  (1) have a service-connected disability of less than 50 percent; (2) have an annual income below a formulated amount; (3) have a catastrophic nonservice-connected disability; or (4) require such care as a follow-up to inpatient care.  Outlines, with respect to such care, provisions concerning:  (1) premiums and copayments for covered veterans; (2) the issuance of a long-term care insurance contract; and (3) a report from the Secretary to the Congress on the costs of the plan and the insurance contract and legislation required for plan implementation. 
(Sec. 4) Directs the Secretary to administer a program of health insurance known as the VA Group Health Plan as a managed-care plan meeting specified requirements.  Allows any eligible veteran and his or her spouse or child to be enrolled in the Plan. Provides Plan enrollment requirements.  Prohibits the Plan from imposing a limitation or exclusion of benefits relating to treatment for certain preexisting conditions.  Directs the Secretary to administer the Plan so that no appropriated funds are required for Plan operation.  Requires an annual report to the Congress by the Secretary on Plan operation, as well as an initial report. 
(Sec. 5) Directs the Secretary to administer the health programs of the Veterans Health Administration (VHA) through use of a managed care medical practice model, with limitations.  Directs the Secretary to organize the VHA health care delivery and resources into geographic regions known as veterans service areas. 
(Sec. 6) Authorizes appropriations to the Secretary for FY 1995 through 1999 for:  (1) acquiring medical equipment to relieve existing medical equipment backlogs in Department facilities; and (2) infrastructure improvement, patient care amenities, primary care services and personnel, and medical facility construction projects.