II 113th CONGRESS 1st Session S. 1662 IN THE SENATE OF THE UNITED STATES November 7, 2013 Mr. McConnell introduced the following bill; which was read twice and referred to the Committee on Veterans' Affairs A BILL To provide for the introduction of pay-for-performance compensation mechanisms into contracts of the Department of Veterans Affairs with community-based outpatient clinics for the provision of health care services, and for other purposes.

1. Short title This Act may be cited as the Veterans Health Care Improvement Act of 2013 . 2. Findings Congress makes the following findings: (1) Veterans of the Armed Forces have made tremendous sacrifices in the defense of freedom and liberty. (2) Congress recognizes these great sacrifices and reaffirms America’s strong commitment to its veterans. (3) As part of the on-going congressional effort to recognize the sacrifices made by America’s veterans, Congress has dramatically increased funding for the Department of Veterans Affairs for veterans health care in the years since September 11, 2001. (4) Part of the funding for the Department of Veterans Affairs for veterans health care is allocated toward community-based outpatient clinics (CBOCs). (5) A number of CBOCs are administered by private contractors. (6) CBOCs administered by private contractors operate on a capitated basis. (7) Some current contracts for CBOCs may create an incentive for contractors to enroll as many veterans as possible, without ensuring timely access to high quality health care for such veterans. (8) The top priorities for CBOCs should be to provide quality health care and patient satisfaction for America’s veterans. (9) The Department of Veterans Affairs currently tracks the quality of patient care through its Computerized Patient Record System. However, fees paid to contractors are not currently adjusted automatically to reflect the quality of care provided to patients. (10) A pay-for-performance payment model offers a promising approach to health care delivery by aligning the payment of fees to contractors with the achievement of better health outcomes for patients. (11) The Department of Veterans Affairs should begin to emphasize pay-for-performance in its contracts with CBOCs. 3. Pay-for-performance under Department of Veterans Affairs contracts with community-based outpatient health care clinics (a) Plan required Not later than one year after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to Congress a plan to introduce pay-for-performance measures into contracts which compensate contractors of the Department of Veterans Affairs for the provision of health care services through community-based outpatient clinics (CBOCs). (b) Elements The plan required by subsection (a) shall include the following: (1) Measures to ensure that contracts of the Department for the provision of health care services through CBOCs begin to utilize pay-for-performance compensation mechanisms for compensating contractors for the provision of such services through such clinics, including mechanisms as follows: (A) To provide incentives for clinics that provide high-quality health care. (B) To provide incentives to better assure patient satisfaction. (C) To impose penalties (including termination of contract) for clinics that provide substandard care. (2) Mechanisms to collect and evaluate data on the outcomes of the services generally provided by CBOCs in order to provide for an assessment of the quality of health care provided by such clinics. (3) Mechanisms to eliminate abuses in the provision of health care services by CBOCs under contracts that continue to utilize capitated-basis compensation mechanisms for compensating contractors. (4) Mechanisms to ensure that veterans are not denied care or face undue delays in receiving care. (c) Implementation The Secretary shall commence the implementation of the plan on the date that is 60 days after the date of the submittal of the plan. In implementing the plan, the Secretary may initially carry out one or more pilot programs to assess the feasibility and advisability of mechanisms under the plan. (d) Reports Not later than 180 days after the date of the enactment of this Act and every 180 days thereafter, the Secretary shall submit to Congress a report setting forth the recommendations of the Secretary as to the feasibility and advisability of utilizing pay-for-performance compensation mechanisms in the provision of health care services by the Department by means in addition to CBOCs.