To amend title XVIII of the Social Security Act to establish a program to provide for medicare reimbursement for health care services provided to certain medicare-eligible veterans in facilities of the Department of Veterans Affairs.

January 16, 2003

Mr. DAYTON introduced the following bill; which was read twice and referred to the Committee on Finance

To amend title XVIII of the Social Security Act to establish a program to provide for medicare reimbursement for health care services provided to certain medicare-eligible veterans in facilities of the Department of Veterans Affairs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Veterans Health Care Reimbursement Act of 2003'.

SEC. 2. ESTABLISHMENT OF MEDICARE REIMBURSEMENT PROGRAM FOR VETERANS.

(a) IN GENERAL- Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the following new section:

`MEDICARE REIMBURSEMENT PROGRAM FOR VETERANS

`SEC. 1897. (a) DEFINITIONS- In this section:

`(1) ADMINISTERING SECRETARIES- The term `administering Secretaries' means the Secretary and the Secretary of Veterans Affairs acting jointly.

`(2) MEDICARE HEALTH CARE SERVICES- The term `medicare health care services' means items or services covered under part A or part B.

`(3) PROGRAM- The term `program' means the program carried out under this section.

`(4) PROGRAM SITE- The term `program site' means a Veterans Affairs medical facility that provides, alone or in conjunction with other facilities under the jurisdiction of the Secretary of Veterans Affairs and affiliated public or private entities--

`(A) in the case of a coordinated care health plan, the health care benefits prescribed in subsection (c)(3) to targeted medicare-eligible veterans residing within the service area; and

`(B) in the case of health care benefits being provided on a fee-for-service basis, the health care benefits prescribed in subsection (d)(2) to targeted medicare-eligible veterans.

`(5) TARGETED MEDICARE-ELIGIBLE VETERAN- The term `targeted medicare-eligible veteran' means an individual who--

`(A) is a veteran (as defined in section 101 of title 38, United States Code) who is enrolled in the annual patient enrollment system under paragraph (4), (5), (6), or (7) of section 1705(a) of title 38, United States Code;

`(B) has attained age 65;

`(C) is entitled to, or enrolled for, benefits under part A; and

`(D) is enrolled for benefits under part B.

`(6) TRUST FUNDS- The term `trust funds' means the Federal Hospital Insurance Trust Fund established in section 1817 and the Federal Supplementary Medical Insurance Trust Fund established in section 1841.

`(7) VETERANS AFFAIRS MEDICAL FACILITY- The term `Veterans Affairs medical facility' means a medical facility as defined in section 8101 of title 38, United States Code.

`(b) PROGRAM-

`(1) IN GENERAL-

`(A) ESTABLISHMENT- The administering Secretaries shall establish a program (under agreements entered into by the administering Secretaries) under which the Secretary shall reimburse the Secretary of Veterans Affairs, from the trust funds, for medicare health care services furnished to targeted medicare-eligible veterans.

`(B) AGREEMENT- Any agreement entered into under this paragraph shall include at a minimum--

`(i) a detailed description of the health care benefits to be provided to the participants of the program;

`(ii) a description of the eligibility rules for participation in the program, any premiums established for a coordinated care health plan, and any cost-sharing arrangements;

`(iii) a description of how the program will satisfy the requirements under this title;

`(iv) a description of the sites selected under paragraph (2) and which model such site will operate under;

`(v) a description of how reimbursement requirements under subsection (i), maintenance of effort requirements under subsection (j), and the annual reconciliation under subsection (k) will be implemented in the program;

`(vi) a statement that the Secretary shall have access to all data of the Department of Veterans Affairs that the Secretary determines is necessary to conduct independent estimates and audits of the maintenance of effort requirement under subsection (j), the annual reconciliation under subsection (k), and related matters required under the program;

`(vii) a statement that the Comptroller General of the United States shall have access to all data of the Department of Veterans Affairs that the Comptroller General determines is necessary to carry out the reporting requirements under subsections (k) or (l);

`(viii) a description of any requirement that the Secretary waives pursuant to subsection (c)(4) or (d)(4); and

`(ix) a certification, provided after review by the administering Secretaries, that any facility or entity described in subsection (a)(4) that is receiving payments by reason of the program has sufficient--

`(I) resources and expertise to provide, consistent with payment requirements under subsection (i), the health care benefits required to be provided to beneficiaries under the program (as established under subsections (c)(3) and (d)(2)); and

`(II) information and billing systems in place to ensure--

`(aa) accurate and timely submission of claims for health care benefits to the Secretary; and

`(bb) that providers of health care services that are not affiliated with the Department of Veterans Affairs are reimbursed by the Secretary of Veterans Affairs in a timely and accurate manner.

`(C) SEPARATE AGREEMENTS FOR COORDINATED CARE AND FEE-FOR-SERVICE- The administering Secretaries shall enter into separate agreements with regard to program sites operating under a coordinated care health plan model and a fee-for-service model, and shall include in each agreement only such information that is applicable to that model.

`(2) LOCATION OF PROGRAM SITES- The program shall be conducted at any program site that is designated by the Secretary of Veterans Affairs.

`(3) RESTRICTIONS-

`(A) ONLY 1 MODEL AT A SITE- A program site may not operate under both a coordinated care health plan model and a fee-for-service model.

`(B) RESTRICTION ON NEW OR EXPANDED FACILITIES- No new Veterans Affairs medical facilities may be built or expanded with funds from the program.

`(4) COMMENCEMENT OF PROJECT- The administering Secretaries shall commence the demonstration project not later than 6 months after the date of enactment of the Veterans Health Care Reimbursement Act of 2003.

`(5) TERMINATION- If determined appropriate, the Secretary of Veterans Affairs may terminate the program.

`(6) REPORT- At least 30 days prior to the commencement of the program (for both the coordinated care health plan model and the fee-for-service model), the administering Secretaries shall submit a copy of any agreement entered into under paragraph (1) to the committees of jurisdiction of Congress.

`(c) COORDINATED CARE HEALTH PLAN MODEL-

`(1) IN GENERAL- The Secretary of Veterans Affairs shall establish and operate coordinated care health plans in order to provide the health care benefits prescribed in paragraph (3) to targeted medicare-eligible veterans enrolled in the program under this section consistent with the Medicare+Choice program under part C.

`(2) OPERATION BY OR THROUGH A PROGRAM SITE- Any coordinated care health plan established in accordance with paragraph (1) shall be operated by or through a program site.

`(3) HEALTH CARE BENEFITS-

`(A) IN GENERAL- Subject to subparagraph (B), the Secretary of Veterans Affairs shall prescribe the health care benefits to be provided to a targeted medicare-eligible veteran enrolled in a coordinated care health plan under the program.

`(B) MINIMUM BENEFITS- The benefits prescribed by the Secretary of Veterans Affairs pursuant to subparagraph (A) shall include at least all medicare health care services that are required to be provided by a Medicare+Choice organization under part C.

`(4) MEDICARE REQUIREMENTS-

`(A) IN GENERAL-

`(i) REQUIREMENTS- Except as provided under clause (ii), a coordinated care health plan operating under the program shall meet all requirements applicable to a Medicare+Choice plan under part C and regulations pertaining thereto, and any other requirements for receiving payments under this title, except that the prohibition of payments to Federal providers of services under sections 1814(c) and 1835(d),

and paragraphs (2) and (3) of section 1862(a), shall not apply.

`(ii) WAIVER- Except with respect to any requirement described in subparagraph (B), the Secretary is authorized to waive any requirement described in clause (i), or approve equivalent or alternative ways of meeting such a requirement, but only if such waiver or approval--

`(I) reflects the unique status of the Department of Veterans Affairs as an agency of the Federal Government; and

`(II) is necessary to carry out, or improve the efficiency of, the program.

`(B) BENEFICIARY PROTECTIONS AND OTHER MATTERS- A coordinated care health plan shall comply with the requirements of the Medicare+Choice program under part C that relate to beneficiary protections and other related matters, including such requirements relating to the following areas:

`(i) Enrollment and disenrollment.

`(ii) Nondiscrimination.

`(iii) Information provided to beneficiaries.

`(iv) Cost-sharing limitations.

`(v) Appeal and grievance procedures.

`(vi) Provider participation.

`(vii) Access to services.

`(viii) Quality assurance and external review.

`(ix) Advance directives.

`(x) Other areas of beneficiary protections that the Secretary determines are applicable to a coordinated care health plan operating under the program under this section.

`(d) FEE-FOR-SERVICE MODEL-

`(1) IN GENERAL- The Secretary of Veterans Affairs shall establish and operate a program site in order to provide, on a fee-for-service basis, the medicare health care services prescribed in paragraph (2) to targeted medicare-eligible veterans under the program in a manner consistent with this title.

`(2) HEALTH CARE BENEFITS- The administering Secretaries shall prescribe the medicare health care services available to a targeted medicare-eligible veteran at a program site operating under a fee-for-service model.

`(3) COST-SHARING- The Secretary of Veterans Affairs shall establish cost-sharing requirements for targeted medicare-eligible veterans that receive medicare health care services under a fee-for-service model at a program site. Such cost-sharing requirements shall be the same as those required under this title.

`(4) MEDICARE REQUIREMENTS-

`(A) IN GENERAL- Except as provided under subparagraph (B), any entity or health care provider that provides medicare health care services under the program on a fee-for-service basis shall meet all of the requirements under this title, except that the prohibition of payments to Federal providers of services under sections 1814(c) and 1835(d), and paragraphs (2) and (3) of section 1862(a), shall not apply.

`(B) WAIVER- The Secretary is authorized to waive any requirement described under subparagraph (A), or approve equivalent or alternative ways of meeting such a requirement, but only if such waiver or approval--

`(i) reflects the unique status of the Department of Veterans Affairs as an agency of the Federal Government; and

`(ii) is necessary to carry out, or improve the efficiency of, the program.

`(5) VERIFICATION OF ELIGIBILITY-

`(A) IN GENERAL- The Secretary of Veterans Affairs shall establish procedures for determining whether an individual is eligible to receive medicare health care services on a fee-for-service basis under the program.

`(B) RESTRICTION- No payments shall be made under this section for any medicare health care service provided to an individual on a fee-for-service basis under the program unless the individual has been determined to be eligible for the service pursuant to the procedures established under subparagraph (A).

`(e) VOLUNTARY PARTICIPATION- Participation of a targeted medicare-eligible veteran in the program shall be voluntary, subject to the capacity of participating program sites and any annual limitation on medicare payments specified by the administering Secretaries in subsection (i)(4), and shall be subject to such terms and conditions as the administering Secretaries may establish.

`(f) CREDITING OF PAYMENTS- A payment received by the Secretary of Veterans Affairs under the program shall be credited to the appropriation of the Department of Veterans Affairs for Medical Care. Amounts credited to that appropriation for services furnished by a program site shall be credited to amounts in the appropriation that are available for the Veterans Integrated Services Network (VISN) in which the program site is located. Amounts so credited for a Veterans Integrated Services Network shall be available for the furnishing of health care and services by any Veterans Affairs medical facility in the Veterans Integrated Services Network. Amounts so credited shall be available in accordance with the preceding sentence without fiscal year limitation.

`(g) WAIVER OF CERTAIN VA REQUIREMENTS- Notwithstanding any other provision of law, the Secretary of Veterans Affairs shall furnish medicare health care services to targeted medicare-eligible veterans pursuant to the program.

`(h) INSPECTOR GENERAL- Nothing in any agreement entered into under subsection (b)(1) shall limit the Inspector General of the Department of Health and Human Services from investigating any matters regarding the expenditure of funds under this title for the program, including compliance with the provisions of this title and all other relevant laws.

`(i) PAYMENTS BASED ON REGULAR MEDICARE PAYMENT RATES-

`(1) AMOUNT- Subject to the succeeding provisions of this subsection and subsection (k), the Secretary shall reimburse the Secretary of Veterans Affairs for health care benefits provided under the program at the following rates:

`(A) COORDINATED CARE HEALTH PLANS- In the case of health care benefits provided under the program to a targeted medicare-eligible veteran enrolled in a coordinated care health plan, at a rate equal to 95 percent of the amount paid to a Medicare+Choice organization under part C for an enrollee in a Medicare+Choice plan offered by such organization (as risk adjusted under section 1853(a)(1)(B)).

`(B) FEE-FOR-SERVICE MODEL- In the case of a medicare health care service prescribed in subsection (d)(2) that is provided at a program site operating under a fee-for-service model, at a rate equal to 95 percent of the amounts that otherwise would be payable under

this title on a noncapitated basis for such service if the program site was not part of the program under this section, was participating in the medicare program, and imposed charges for such service.

`(2) EXCLUSION OF CERTAIN AMOUNTS- In computing the amount of payment under paragraph (1), the following amounts shall be excluded:

`(A) DISPROPORTIONATE SHARE HOSPITAL ADJUSTMENT- Any amount attributable to an adjustment under section 1886(d)(5)(F).

`(B) DIRECT GRADUATE MEDICAL EDUCATION PAYMENTS- Any amount attributable to a payment under section 1886(h).

`(C) INDIRECT MEDICAL EDUCATION ADJUSTMENT- Any amount attributable to the adjustment under section 1886(d)(5)(B).

`(D) PERCENTAGE OF CAPITAL PAYMENTS- 67 percent of any amounts attributable to payments for capital-related costs under medicare payment policies under section 1886(g).

`(3) PERIODIC PAYMENTS FROM MEDICARE TRUST FUNDS- Payments under this subsection shall be made--

`(A) on a periodic basis consistent with the periodicity of payments under this title; and

`(B) in appropriate part, as determined by the Secretary, from the trust funds.

`(4) ANNUAL LIMIT ON MEDICARE PAYMENTS TO BE DETERMINED BY ADMINISTERING SECRETARIES- The aggregate amount that may be paid to the Department of Veterans Affairs under this subsection for enrollees in coordinated care health plans for a year and for health care benefits provided on a fee-for-service basis at a program site in that year shall be equal to an amount determined appropriate by the administering Secretaries.

`(j) MAINTENANCE OF EFFORT-

`(1) IN GENERAL- The Secretary may not reimburse the Secretary of Veterans Affairs, from the trust funds, for medicare health care services furnished under the program to targeted medicare-eligible veterans at a program site in a fiscal year until the expenditures during that year by the Department of Veterans Affairs for such services provided at that site to individuals that meet the definition of a targeted medicare-eligible veteran under subsection (a)(5) (without regard to subparagraph (D) of such subsection) exceeds such expenditures at the site for such services provided to applicable veterans during fiscal year 1998.

`(2) APPLICABLE VETERAN DEFINED- For purposes of paragraph (1), the term `applicable veteran' means an individual who--

`(A) is a veteran (as defined in section 101 of title 38, United States Code) who is eligible for care and services under section 1710(a)(3) of title 38, United States Code;

`(B) has attained age 65; and

`(C) is entitled to, or enrolled for, benefits under part A.

`(3) RULE OF CONSTRUCTION- The criteria for eligibility for health care benefits furnished to veterans by the Secretary of Veterans Affairs is established under chapter 17 of title 38, United States Code, and nothing in this section shall be construed to add additional criteria for such eligibility.

`(k) ANNUAL RECONCILIATION TO ASSURE NO INCREASE IN COSTS TO MEDICARE PROGRAM-

`(1) MONITORING EFFECT OF PROGRAM ON COSTS TO MEDICARE PROGRAM-

`(A) IN GENERAL- The administering Secretaries, in consultation with the Comptroller General of the United States, shall closely monitor the expenditures made under the medicare program under this title for targeted medicare-eligible veterans at each program site during a fiscal year compared to the expenditures that would have been made for such veterans during that year if the program had not been conducted.

`(B) ANNUAL REPORTS BY THE COMPTROLLER GENERAL- Not later than 6 months after the end of each fiscal year in which the program is operated, the Comptroller General of the United States shall submit to the administering Secretaries and the appropriate committees of Congress a report on the extent, if any, to which the costs of the Secretary under the medicare program under this title for each program site increased as a result of the program under this section during the fiscal year to which the report applies.

`(2) REQUIRED RESPONSE IN CASE OF INCREASE IN COSTS-

`(A) IN GENERAL- If the administering Secretaries find, based on paragraph (1), that the expenditures under the medicare program under this title for each program site increased (or are expected to increase) during a fiscal year because of the program under this section, the administering Secretaries shall take such steps as may be needed--

`(i) to recoup for the medicare program the amount of such increase in expenditures; and

`(ii) to prevent any such increase in any succeeding fiscal year.

`(B) STEPS- Such steps--

`(i) under subparagraph (A)(i), shall include payment of an amount equal to the amount of such increased expenditures by the Secretary of Veterans Affairs from the current appropriation for Medical Care of the Department of Veterans Affairs to the trust funds; and

`(ii) under subparagraph (A)(ii), shall include suspending or terminating the program (in whole or in part) or reducing the amount of payment under subsection (i).

`(l) GAO EVALUATION AND ADDITIONAL REPORTS-

`(1) EVALUATION-

`(A) IN GENERAL- The Comptroller General of the United States shall conduct an evaluation of the program, including--

`(i) an evaluation of program sites operating under a coordinated care health plan model and under a fee-for-service model; and

`(ii) where appropriate, a comparison of such models.

`(B) CONTENTS- Any evaluation conducted under subparagraph (A) shall include an assessment, based on the agreements entered into under subsection (b)(1), of the following:

`(i) Any savings or costs to the medicare program under this title resulting from the program.

`(ii) Compliance of participating program sites with applicable measures of quality of care, compared to such compliance by other entities that participate in the medicare program and are not Veterans Affairs medical facilities.

`(iii) Compliance by the Department of Veterans Affairs with the requirements under this title.

`(iv) The number of targeted medicare-eligible veterans opting to receive health care benefits under the program instead of receiving such benefits through another health insurance plan (including health care benefits under this title).

`(v) A comparison of the costs of participation of the program sites in the program with the reimbursements for health care services provided by such sites.

`(vi) Any impact the program has on the access to health care services, or the quality of such services, for--

`(I) targeted medicare-eligible veterans receiving health care benefits under the program; and

`(II) veterans (including targeted medicare-eligible veterans) that are not receiving health care benefits under the program.

`(vii) Any impact the program has on private health care providers and on beneficiaries under this title that are not receiving health care benefits under the program.

`(viii) Any effect that the program has on the enrollment in Medicare+Choice plans offered by Medicare+Choice organizations under part C in the established program site areas.

`(ix) Any impact that the exclusion of the amounts described in subsection (i)(2) from the reimbursement amounts under the program has on the Department of Veterans Affairs or on targeted medicare-eligible veterans.

`(x) A description of the difficulties (if any) experienced by--

`(I) the Department of Veterans Affairs in managing the program; or

`(II) the Department of Health and Human Services in overseeing the program.

`(xi) Any additional elements specified in the agreements entered into under subsection (b)(1).

`(xii) Any additional elements that the Comptroller General of the United States determines are appropriate to assess regarding the program.

`(2) BIANNUAL REPORTS- Not later than the date that is the 2-year anniversary of the commencement of the program and biannually thereafter (for as long as the program is being conducted), the Comptroller General of the United States shall submit reports on the evaluation conducted under subparagraph (A) to the administering Secretaries and to the committees of jurisdiction of Congress.

`(m) REPORTS BY ADMINISTERING SECRETARIES ON PROGRAM OPERATION AND CHANGES-

`(1) ANNUAL REPORT- The administering Secretaries shall submit to the committees of jurisdiction of Congress an annual report on the program and its impact on costs and the provision of health services under this title and title 38, United States Code.

`(2) REPORT BEFORE MAKING CERTAIN PROGRAM CHANGES-

`(A) IN GENERAL- The administering Secretaries shall submit to the committees of jurisdiction of Congress a report at least 60 days before--

`(i) adding or changing the designation of a site under subsection (b)(2);

`(ii) waiving any requirement under subsection (c)(4) or (d)(4) that was not described in any agreement under subsection (b)(1) or previous report under this subsection;

`(iii) making other significant changes in the operation of the program; or

`(iv) terminating the agreement under subsection (b)(5).

`(B) EXPLANATION- Each report under subparagraph (A) shall include justifications for the changes or termination to which the report refers.'.

(b) SENSE OF CONGRESS- It is the sense of Congress that the amount of funds appropriated for the Department of Veterans Affairs for Medical Care in any fiscal year beginning after the date of enactment of this Act should not be reduced because of the implementation of the Medicare Reimbursement Program for Veterans under section 1897 of the Social Security Act (as added by subsection (a)).

END