SECTION 1. AUTHORITY TO ESTABLISH AND OPERATE MANAGED HEALTH-CARE 
              PLANS.

    (a) In General.--Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1704 the following new section:
``Sec. 1705. Establishment of managed health-care plans
    ``(a) In carrying out responsibilities under this title with 
respect to the delivery of health care, the Secretary may establish and 
operate managed health-care plans. Any such plan shall be operated by 
or through a Department health-care facility or group of facilities and 
may include the provision of health services through other public or 
private entities under arrangements made between that Department 
facility or group of facilities and the other public or private entity 
concerned. Any such managed health care plan under this section shall 
be established and operated in conformance with standards prescribed by 
the Secretary after consultation with the Secretary of Health and Human 
Services.
    ``(b) The Secretary, as part of the standards prescribed under 
subsection (a), shall prescribe the minimum health care benefits to be 
provided under the plan to veterans enrolled in the plan. Those 
benefits shall include at least those health benefits covered under 
parts A and B of the Medicare program under title XVIII of the Social 
Security Act.
    ``(c) The Secretary may establish an enrollment system to enroll 
veterans (other than veterans described in section 1710(a)(1) of this 
title) in any plan established under subsection (a).
    ``(d) The Secretary, notwithstanding sections 1710(f) and 1712(f) 
of this title, may establish such cost-sharing requirements for 
veterans enrolled in a plan under this section as the Secretary 
considers appropriate to cover costs of providing benefits under the 
plan that are not paid by the Medicare program under title XVIII of the 
Social Security Act. Such cost-sharing requirements may include an 
enrollment premium, copayment charges, and deductibles.
    ``(e) Payments received under subsection (d) and under section 
1729A of this title with respect to care or services provided to a 
veteran enrolled in a health-care plan under this section shall be 
credited to the applicable Department medical appropriation and shall 
be used to pay for the costs of furnishing care and services under 
subsection (a).
    ``(f) The Secretary may not in any fiscal year operate a plan under 
subsection (a) at a Department facility unless the director of that 
facility has certified to the Under Secretary for Health that 
sufficient medical care funds have been allotted to that facility for 
that fiscal year to enable the director to provide needed hospital care 
and medical services authorized under this chapter to veterans 
described in section 1710(a)(1) of this title in the number that, in 
the judgment of the director, are likely to require that care and 
services from that facility during that fiscal year.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1704 the following new item:

``1705. Establishment of managed health-care plans.''.

SEC. 2. REQUIREMENT FOR PAYMENT FOR CERTAIN SERVICES PROVIDED BY 
              DEPARTMENT FACILITIES.

    (a) In General.--Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1729 the following new section:
``Sec. 1729A. Medicare payment for certain veterans
    ``(a) Notwithstanding any other provision of law, the Secretary of 
Health and Human Services shall make payments during a year to a 
Department managed health care plan on behalf of veterans (other than 
veterans described in section 1710(a)(1) of this title) who are 
Medicare-eligible individuals and are enrolled in such plan during the 
year under similar terms as the Secretary makes payments under title 
XVIII of the Social Security Act to other eligible managed care health 
plans.
    ``(b)(1) For purposes of subsection (a), a managed health care plan 
organized and operated under section 1705 of this title--
            ``(A) which provides care to Medicare-eligible veterans 
        (other than veterans described in section 1710(a)(1) of this 
        title); and
            ``(B) for which there is a certification in effect under 
        paragraph (2),
shall be deemed to be a certified Medicare Choice organization under 
section 1857 of the Social Security Act.
    ``(2) The Secretary shall certify to the Secretary of Health and 
Human Services each year a list of all Department managed health care 
plans established under section 1705 of this title which the Secretary 
finds conform to the standards prescribed under such section.
    ``(c) For purposes of this section--
            ``(1) the term `Medicare program' means the health 
        insurance program under title XVIII of the Social Security Act;
            ``(2) the term `Medicare-eligible veteran' means a veteran 
        who is entitled to benefits under the Medicare program; and
            ``(3) the term `Medicare Choice organization' means a 
        managed health care organization under part C of title XVIII of 
        the Social Security Act.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1729 the following new item:

``1729A. Medicare payment for certain veterans.''.
    (c) Effective Date.--Section 1729A of title 38, United States Code, 
as added by subsection (b), shall apply with respect to care provided 
after the date of the enactment of this Act.
Output: Authorizes the Secretary of Veterans Affairs, in carrying out responsibilities with respect to the delivery of health care for veterans and their beneficiaries, to establish and operate managed health care plans through a Department of Veterans Affairs health care facility or group of such facilities or through arrangements with public or private entities.  Directs the Secretary to prescribe the minimum health care benefits to be provided to veterans enrolled in the plan, which shall include at least those benefits covered under parts A and B of the Medicare Program (title XVIII of the Social Security Act).  Authorizes the Secretary to establish cost-sharing requirements for veterans enrolled in such a plan, including premiums, copayments, and deductibles.  Requires the director of a Department health care facility to certify, before the operation of a plan at such facility, that sufficient medical care funds have been allotted to such facility to provide the needed services. 
Directs the Secretary of Health and Human Services (HHS Secretary) to make payments during a year to a Department managed health care plan on behalf of veterans who are Medicare-eligible individuals and are enrolled in the managed health care plan, under similar terms as the HHS Secretary makes payments under Medicare to other eligible managed health care plans.  Directs the Secretary to certify to the HHS Secretary each year a list of all Department managed health care plans which conform to the standards required for such payments.