I 114th CONGRESS 2d Session H. R. 4689 IN THE HOUSE OF REPRESENTATIVES March 3, 2016 Mr. Boustany introduced the following bill; which was referred to the Committee on Veterans’ Affairs A BILL To amend title 38, United States Code, to authorize the Secretary of Veterans Affairs to enter into contracts with administrative contractors for the processing of claims for hospital care and medical services furnished in non-Department of Veterans Affairs facilities.

1. Short title; findings (a) Short title This Act may be cited as the Timely Payment for Veterans’ Emergency Care Act . (b) Findings Congress finds as follows: (1) There is a need for the Department of Veterans Affairs to improve the timeliness of emergency claims processing for non-Department of Veterans Affairs care. (2) Current Veterans Health Administration (hereinafter referred to as the VHA ) policies require paper medical records be sent to VHA claims processing offices by providers. (3) According to Government Accountability Office testimony to a February 11, 2016, House Veterans’ Affairs Subcommittee on Health hearing on Department of Veterans Affairs Choice Program Consolidation: (A) VHA policy requires that paper claims be manually date-stamped and scanned into the Fee Basis Claims System (FBCS) upon receipt. Electronic claims are imported into the FBCS. If the community provider is required to submit medical documentation for the claim to be processed—which is the case for most types of VA care in the community services—VA can only accept it in paper form, and the medical documentation must also be scanned into FBCS. . (B) A VHA directive states that 90 percent of all claims for VA care in the community must be processed (either paid or rejected) within 30 days of receipt. . (C) Our preliminary work shows that in fiscal year 2015, VHA’s processing of claims for VA care in the community services was significantly less timely than Medicare’s and TRICARE’s claims processing. VHA officials told us that the agency’s fiscal year 2015 data show that VHA processed about 66 percent of claims within the agency’s required timeframe of 30 days or less. In contrast, CMS and DHA data show that in fiscal year 2015, Medicare’s and TRICARE’s claims processing contractors processed about 99 percent of claims within 30 or fewer days of receipt. . (D) However, the difference between VHA’s claims processing timeliness and that of Medicare and TRICARE is likely greater than what VHA’s available data indicate. Specifically, VHA’s data likely overstate the agency’s claims processing timeliness because they do not account for delays in scanning paper claims, which VHA officials told us account for approximately 60 percent of claims for VA care in the community services. . (E) Our preliminary review raises questions about whether staff at VHA’s claims processing locations are following the agency’s policy for promptly scanning paper claims. . (F) According to CMS and DHA officials, the vast majority of Medicare and TRICARE claims are submitted electronically. . (4) According to data compiled by the Veterans Health Administration’s Chief Business Office, there is currently a backlog of over $788,000,000 nationwide for non-Department of Veterans Affairs emergency medical claims. 2. Authority of Secretary of Veterans Affairs to enter into contracts with administrative contractors for the processing of claims for hospital care and medical services furnished in non-Department of Veterans Affairs facilities (a) In general Chapter 17 of title 38, United States Code, is amended by inserting after section 1725 the following new section: 1725A. Authority to enter into contracts with administrative contractors (a) Authority (1) The Secretary may enter into contracts with any eligible entity to serve as an administrative contractor with respect to the performance of any or all of the functions described in paragraph (4) or parts of those functions (or, to the extent provided in a contract, to secure performance thereof by other entities). (2) An entity is eligible to enter into a contract with respect to the performance of a particular function described in paragraph (4) only if— (A) the entity has demonstrated capability to carry out such function; (B) the entity complies with such conflict of interest standards as are generally applicable to Federal acquisition and procurement; (C) the entity has sufficient assets to financially support the performance of such function; (D) the entity has the ability to accept and process electronic filings of medical records; and (E) the entity meets such other requirements as the Secretary may impose. (3) (A) For purposes of this section, the term administrative contractor means an agency, organization, or other person with a contract under this section. (B) With respect to the performance of a particular function in relation to an individual enrolled in the patient enrollment system under section 1705 of this title, the appropriate administrative contractor is the administrative contractor that has a contract under this section with respect to the performance of that function in relation to that individual, or non-Department facility. (4) The functions referred to in this paragraph are the following functions relating to the furnishing of medical care and hospital services in non-Department facilities under section 1725 or 1728 of this title: (A) Determining the amount of the payments required pursuant to this title to be made to a non-Department facility. (B) Making payments described in subparagraph (A) (including receipt, disbursement, and accounting for funds in making such payments). (C) Providing education and outreach to individuals enrolled in the patient enrollment system under section 1705 of this title and providing assistance to those individuals with specific issues, concerns, or problems. (D) Providing consultative services to institutions, agencies, and other persons to enable them to establish and maintain fiscal records necessary for purposes of this title. (E) Communicating to non-Department facilities any information or instructions furnished to the administrative contractor by the Secretary, and facilitating communication between such facilities and the Secretary. (F) Performing the functions relating to non-Department facility education, training, and technical assistance. (G) Performing such other functions as are necessary to carry out the purposes of this title. (5) Except to the extent inconsistent with a specific requirement of this section, the Federal Acquisition Regulation applies to contracts under this section. (b) Contracting requirements (1) (A) Except as provided in laws with general applicability to Federal acquisition and procurement or in subparagraph (B), the Secretary shall use competitive procedures when entering into contracts with administrative contractors under this section, taking into account performance quality as well as price and other factors. (B) The Secretary may renew a contract with an administrative contractor under this section from term to term without regard to section 5 of title 41, United States Code, or any other provision of law requiring competition, if the administrative contractor has met or exceeded the performance requirements applicable with respect to the contract and contractor, except that the Secretary shall provide for the application of competitive procedures under such a contract not less frequently than once every 5 years. (C) The Secretary may transfer functions among administrative contractors consistent with the provisions of this paragraph. The Secretary shall ensure that performance quality is considered in such transfers. The Secretary shall provide public notice (whether in the Federal Register or otherwise) of any such transfer (including a description of the functions so transferred, a description of the non-Department facilities affected by such transfer, and contact information for the contractors involved). (D) The Secretary shall provide incentives for administrative contractors to provide quality service and to promote efficiency. (2) No contract under this section shall be entered into with any administrative contractor unless the Secretary finds that such administrative contractor will perform its obligations under the contract efficiently and effectively and will meet such requirements as to financial responsibility, legal authority, quality of services provided, and other matters as the Secretary finds pertinent. (3) (A) (i) The Secretary shall develop contract performance requirements to carry out the specific requirements applicable under this title to a function described in subsection (a)(4) and shall develop standards for measuring the extent to which a contractor has met such requirements. Such requirements shall include specific performance duties expected of a medical director of an administrative contractor, including requirements relating to professional relations and the availability of such director to conduct medical determination activities within the jurisdiction of such a contractor. (ii) In developing such performance requirements and standards for measurement, the Secretary shall consult with non-Department facilities, veterans service organizations, and organizations and agencies performing functions necessary to carry out the purposes of this section with respect to such performance requirements. (iii) The Secretary shall make such performance requirements and measurement standards available to the public. (B) The Secretary shall include, as one of the standards developed under subparagraph (A), non-Department facility and veteran satisfaction levels. (C) All contractor performance requirements shall be set forth in the contract between the Secretary and the appropriate administrative contractor. Such performance requirements— (i) shall reflect the performance requirements published under subparagraph (A), but may include additional performance requirements; (ii) shall be used for evaluating contractor performance under the contract; and (iii) shall be consistent with the written statement of work provided under the contract. (4) The Secretary shall not enter into a contract with an administrative contractor under this section unless the contractor agrees— (A) to furnish to the Secretary such timely information and reports as the Secretary may find necessary in performing the functions of the Secretary under this title; and (B) to maintain such records and afford such access thereto as the Secretary finds necessary to assure the correctness and verification of the information and reports under subparagraph (A) and otherwise to carry out the purposes of this title. (5) A contract with an administrative contractor under this section may require the administrative contractor, and any of its officers or employees certifying payments or disbursing funds pursuant to the contract, or otherwise participating in carrying out the contract, to give surety bond to the United States in such amount as the Secretary may deem appropriate. (c) Terms and conditions A contract with any administrative contractor under this section may contain such terms and conditions as the Secretary finds necessary or appropriate and may provide for advances of funds to the administrative contractor for the making of payments by it under subsection (a)(4)(B). (d) Limitation on liability of administrative contractors and certain officers (1) No individual designated pursuant to a contract under this section as a certifying officer shall, in the absence of the reckless disregard of the individual’s obligations or the intent by that individual to defraud the United States, be liable with respect to any payments certified by the individual under this section. (2) No disbursing officer shall, in the absence of the reckless disregard of the officer’s obligations or the intent by that officer to defraud the United States, be liable with respect to any payment by such officer under this section if it was based upon an authorization (which meets the applicable requirements for such internal controls established by the Comptroller General of the United States) of a certifying officer designated as provided in paragraph (1) of this subsection. (3) (A) No administrative contractor shall be liable to the United States for a payment by a certifying or disbursing officer unless, in connection with such payment, the administrative contractor acted with reckless disregard of its obligations under its administrative contract or with intent to defraud the United States. (B) Nothing in this subsection shall be construed to limit liability for conduct that would constitute a violation of sections 3729 through 3731 of title 31, United States Code. (4) (A) Subject to subparagraphs (B) and (D), in the case of an administrative contractor (or a person who is a director, officer, or employee of such a contractor or who is engaged by the contractor to participate directly in the claims administration process) who is made a party to any judicial or administrative proceeding arising from or relating directly to the claims administration process under this title, the Secretary may, to the extent the Secretary determines to be appropriate and as specified in the contract with the contractor, indemnify the contractor and such persons. (B) The Secretary may not provide indemnification under subparagraph (A) insofar as the liability for such costs arises directly from conduct that is determined by the judicial proceeding or by the Secretary to be criminal in nature, fraudulent, or grossly negligent. If indemnification is provided by the Secretary with respect to a contractor before a determination that such costs arose directly from such conduct, the contractor shall reimburse the Secretary for costs of indemnification. (C) Indemnification by the Secretary under subparagraph (A) may include payment of judgments, settlements (subject to subparagraph (D)), awards, and costs (including reasonable legal expenses). (D) A contractor or other person described in subparagraph (A) may not propose to negotiate a settlement or compromise of a proceeding described in such subparagraph without the prior written approval of the Secretary to negotiate such settlement or compromise. Any indemnification under subparagraph (A) with respect to amounts paid under a settlement or compromise of a proceeding described in such subparagraph are conditioned upon prior written approval by the Secretary of the final settlement or compromise. (E) Nothing in this paragraph shall be construed— (i) to change any common law immunity that may be available to an administrative contractor or person described in subparagraph (A); or (ii) to permit the payment of costs not otherwise allowable, reasonable, or allocable under the Federal Acquisition Regulation. (e) Requirements for information security (1) An administrative contractor that performs the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) shall implement a contractor-wide information security program to provide information security for the operation and assets of the contractor with respect to such functions under this title. An information security program under this paragraph shall meet the requirements for information security programs imposed on Federal agencies under paragraphs (1) through (8) of section 3544(b) of title 44, United States Code (other than the requirements under paragraphs (2)(D)(i), (5)(A), and (5)(B) of such section). (2) (A) Each year an administrative contractor that performs the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) shall undergo an evaluation of the information security of the contractor with respect to such functions under this title. The evaluation shall— (i) be performed by an entity that meets such requirements for independence as the Inspector General of the Department of Health and Human Services may establish; and (ii) test the effectiveness of information security control techniques of an appropriate subset of the contractor’s information systems (as defined in section 3502(8) of title 44, United States Code) relating to such functions under this title and an assessment of compliance with the requirements of this subsection and related information security policies, procedures, standards and guidelines, including policies and procedures as may be prescribed by the Director of the Office of Management and Budget and applicable information security standards promulgated under section 11331 of title 40, United States Code. (B) (i) The results of independent evaluations under subparagraph (A) shall be submitted promptly to the Inspector General of the Department and to the Secretary. (ii) The Inspector General of the Department shall submit to Congress annual reports on the results of such evaluations, including assessments of the scope and sufficiency of such evaluations. (f) Incentives To improve contractor performance in non-Department facility education and outreach The Secretary shall use specific claims payment error rates or similar methodology of administrative contractors in the processing or reviewing of claims in order to give such contractors an incentive to implement effective education and outreach programs for non-Department facilities. . (b) Clerical amendment The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 1725 the following new item: 1725A. Authority to enter into contracts with administrative contractors. .