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106th Congress Report
1st Session HOUSE OF REPRESENTATIVES 106-237
======================================================================
VETERANS' MILLENNIUM HEALTH CARE ACT
_______
July 16, 1999.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Stump, from the Committee on Veterans' Affairs, submitted the
following
R E P O R T
[To accompany H.R. 2116]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred the
bill (H.R. 2116) to amend title 38, United States Code, to
establish a program of extended care services for veterans and
to make other improvements in health care programs of the
Department of Veterans Affairs, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REFERENCES TO TITLE 38,
UNITED STATES CODE.
(a) Short Title.--This Act may be cited as the ``Veterans' Millennium
Health Care Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents; references to title 38, United
States Code.
TITLE I--ACCESS TO CARE
Sec. 101. Extended care services.
Sec. 102. Reimbursement for emergency treatment.
Sec. 103. Eligibility for care of combat-injured veterans.
Sec. 104. Access to care for military retirees.
Sec. 105. Benefits for persons disabled by participation in compensated
work therapy program.
Sec. 106. Pilot program of medical care for certain dependents of
enrolled veterans.
Sec. 107. Enhanced services program at designated medical centers.
Sec. 108. Counseling and treatment for veterans who have experienced
sexual trauma.
TITLE II--PROGRAM ADMINISTRATION
Sec. 201. Medical care collections.
Sec. 202. Health Services Improvement Fund.
Sec. 203. Veterans Tobacco Trust Fund.
Sec. 204. Authority to accept funds for education and training.
Sec. 205. Extension and revision of certain authorities.
Sec. 206. State Home grant program.
Sec. 207. Expansion of enhanced-use lease authority.
Sec. 208. Ineligibility for employment by Veterans Health
Administration of health care professionals who have lost license to
practice in one jurisdiction while still licensed in another
jurisdiction.
TITLE III--MISCELLANEOUS
Sec. 301. Review of proposed changes to operation of medical
facilities.
Sec. 302. Patient services at Department facilities.
Sec. 303. Report on assisted living services.
Sec. 304. Chiropractic treatment.
Sec. 305. Designation of hospital bed replacement building at Ioannis
A. Lougaris Department of Veterans Affairs Medical Center, Reno,
Nevada.
TITLE IV--CONSTRUCTION AND FACILITIES MATTERS
Sec. 401. Authorization of major medical facility projects.
Sec. 402. Authorization of major medical facility leases.
Sec. 403. Authorization of appropriations.
(c) References to Title 38, United States Code.--Except as otherwise
expressly provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a section or
other provision of title 38, United States Code.
TITLE I--ACCESS TO CARE
SEC. 101. EXTENDED CARE SERVICES.
(a) Requirement To Provide Extended Care Services.--(1) Chapter 17 is
amended by inserting after section 1710 the following new section:
``Sec. 1710A. Extended care services
``(a) The Secretary (subject to section 1710(a)(4) of this title and
subsection (c) of this section) shall operate and maintain a program to
provide extended care services to eligible veterans in accordance with
this section. Such services shall include the following:
``(1) Geriatric evaluation.
``(2) Nursing home care (A) in facilities operated by the
Secretary, and (B) in community-based facilities through
contracts under section 1720 of this title.
``(3) Domiciliary services under section 1710(b) of this
title.
``(4) Adult day health care under section 1720(f) of this
title.
``(5) Such other noninstitutional alternatives to nursing
home care, including those described in section 1720C of this
title, as the Secretary considers reasonable and appropriate.
``(6) Respite care under section 1720B of this title.
``(b)(1) In carrying out subsection (a), the Secretary shall provide
extended care services which the Secretary determines are needed (A) to
any veteran in need of such care for a service-connected disability,
and (B) to any veteran who is in need of such care and who has a
service-connected disability rated at 50 percent or more.
``(2) The Secretary, in making placements for nursing home care in
Department facilities, shall give highest priority to veterans (A) who
are in need of such care for a service-connected disability, or (B) who
have a service-connected disability rated at 50 percent or more. The
Secretary shall ensure that a veteran described in this subsection who
continues to need nursing home care shall not after placement in a
Department nursing home be transferred from the facility without the
consent of the veteran, or, in the event the veteran cannot provide
informed consent, the representative of the veteran.
``(c)(1) The Secretary, in carrying out subsection (a), shall
prescribe regulations governing the priorities for the provision of
nursing home care in Department facilities so as to ensure that
priority for such care is given (A) for patient rehabilitation, (B) for
clinically complex patient populations, and (C) for patients for whom
there are not other suitable placement options.
``(2) The Secretary may not furnish extended care services for a non-
service-connected disability other than in the case of a veteran who
has a service-connected disability rated at 50 percent or more unless
the veteran agrees to pay to the United States a copayment for extended
care services of more than 21 days in any year.
``(d)(1) A veteran who is furnished extended care services under this
chapter and who is required under subsection (c)(2) to pay an amount to
the United States in order to be furnished such services shall be
liable to the United States for that amount.
``(2) In implementing subsection (c)(2), the Secretary shall develop
a methodology for establishing the amount of the copayment for which a
veteran described in subsection (c) is liable. That methodology shall
provide for--
``(A) establishing a maximum monthly copayment (based on all
income and assets of the veteran and the spouse of such
veteran);
``(B) protecting the spouse of a veteran from financial
hardship by not counting all of the income and assets of the
veteran and spouse (in the case of a spouse who resides in the
community) as available for determining the copayment
obligation; and
``(C) allowing the veteran to retain a monthly personal
allowance.
``(e)(1) There is established in the Treasury of the United States a
revolving fund known as the Department of Veterans Affairs Extended
Care Fund (hereinafter in this section referred to as the ``fund'').
Amounts in the fund shall be available, without fiscal year limitation
and without further appropriation, exclusively for the purpose of
providing extended care services under subsection (a).
``(2) All amounts received by the Department under this section shall
be deposited in or credited to the fund.''.
(2) The table of sections at the beginning of such chapter is amended
by inserting after the item relating to section 1710 the following new
item:
``1710A. Requirement to provide extended care.''.
(b) Requirement To Increase Extended Care Services.--(1) Not later
than January 1, 2000, the Secretary of Veterans Affairs shall develop
and begin to implement a plan for carrying out the recommendation of
the Federal Advisory Committee on the Future of Long-Term Care to
increase, above the level of extended care services which were provided
as of September 30, 1998--
(A) the options and services for home and community-based
care for eligible veterans; and
(B) the percentage of the Department of Veterans Affairs
medical care budget dedicated to such care.
(2) The Secretary shall ensure that the staffing and level of
extended care services provided by the Secretary nationally in
facilities operated by the Secretary during any fiscal year is not less
than the level of such services provided nationally in facilities
operated by the Secretary during fiscal year 1998.
(c) Adult Day Health Care.--Section 1720(f)(1)(A) is amended to read
as follows:
``(f)(1)(A) The Secretary may furnish adult day health care services
to a veteran enrolled under section 1705(a) of this title who would
otherwise require nursing home care.''
(d) Respite Care Program.--Section 1720B is amended--
(1) in subsection (a), by striking ``eligible'' and inserting
``enrolled'';
(2) in subsection (b)--
(A) by striking ``the term `respite care' means
hospital or nursing home care'' and inserting ``the
term `respite care services' means care and services'';
(B) by striking ``is'' at the beginning of each of
paragraphs (1), (2), and (3) and inserting ``are''; and
(C) by striking ``in a Department facility'' in
paragraph (2); and
(3) by adding at the end the following new subsection:
``(c) In furnishing respite care services, the Secretary may enter
into contract arrangements.''.
(e) Conforming Amendments.--Section 1710 is amended--
(1) in subsection (a)(1), by striking ``may furnish nursing
home care,''; and
(2) in subsection (a)(4), by inserting ``, and the
requirement in section 1710A of this title that the Secretary
provide a program of extended care services,'' after ``medical
services''.
(f) State Homes.--Section 1741(a)(2) is amended by striking ``adult
day health care in a State home'' and inserting ``extended care
services described in any of paragraphs (4) through (6) of section
1710A(a) of this title under a program administered by a State home''.
(g) Effective Date.--(1) Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date of the
enactment of this Act.
(2) Subsection (c)(2) of section 1710A(a) of title 38, United States
Code (as added by subsection (a)), shall take effect on the effective
date of regulations prescribed by the Secretary of Veterans Affairs
under subsections (c)(2) and (d) of such section. The Secretary shall
publish the effective date of such regulations in the Federal Register.
(3) The provisions of section 1710(f) of title 38, United States
Code, shall not apply to any day of nursing home care on or after the
effective date of regulations under paragraph (2).
SEC. 102. REIMBURSEMENT FOR EMERGENCY TREATMENT.
(a) Authority To Provide Reimbursement.--Chapter 17 is amended by
inserting after section 1724 the following new section:
``Sec. 1725. Reimbursement for emergency treatment
``(a) General Authority.--(1) Subject to subsections (c) and (d), the
Secretary may reimburse a veteran described in subsection (b) for the
reasonable value of emergency treatment furnished the veteran in a non-
Department facility.
``(2) In any case in which reimbursement is authorized under
subsection (a)(1), the Secretary, in the Secretary's discretion, may,
in lieu of reimbursing the veteran, make payment of the reasonable
value of the furnished emergency treatment directly--
``(A) to a hospital or other health care provider that
furnished the treatment; or
``(B) to the person or organization that paid for such
treatment on behalf of such veteran.
``(b) Eligibility.--(1) A veteran referred to in subsection (a)(1) is
an individual who is an active Department health-care participant who
is personally liable for emergency treatment furnished the veteran in a
non-Department facility.
``(2) A veteran is an active Department health-care participant if
the veteran--
``(A) is described in any of paragraphs (1) through (6) of
section 1705(a) of this title;
``(B) is enrolled in the health care system established under
such section; and
``(C) received care under this chapter within the 12-month
period preceding the furnishing of such emergency treatment.
``(3) A veteran is personally liable for emergency treatment
furnished the veteran in a non-Department facility if the veteran--
``(A) is financially liable to the provider of emergency
treatment for that treatment;
``(B) has no entitlement to care or services under a health-
plan contract;
``(C) has no other contractual or legal recourse against a
third party that would, in whole or in part, extinguish such
liability to the provider; and
``(D) is not eligible for reimbursement for medical care or
services under section 1728 of this title.
``(c) Limitations on Reimbursement.--(1) The Secretary, in accordance
with regulations prescribed by the Secretary, shall--
``(A) establish the maximum amount payable under subsection
(a);
``(B) delineate the circumstances under which such payments
may be made, to include such requirements on requesting
reimbursement as the Secretary shall establish; and
``(C) provide that in no event may a payment under that
subsection include any amount for which the veteran is not
personally liable.
``(2) Subject to paragraph (1), the Secretary may provide
reimbursement under this section only after the veteran or the provider
of emergency treatment has exhausted without success all claims and
remedies reasonably available to the veteran or provider against a
third party for payment of such treatment.
``(3) Payment by the Secretary under this section, on behalf of a
veteran described in subsection (b), to a provider of emergency
treatment, shall, unless rejected and refunded by the provider within
30 days of receipt, extinguish any liability on the part of the veteran
for that treatment. Neither the absence of a contract or agreement
between the Secretary and the provider nor any provision of a contract,
agreement, or assignment to the contrary shall operate to modify,
limit, or negate the requirement in the preceding sentence.
``(d) Independent Right of Recovery.--(1) In accordance with
regulations prescribed by the Secretary, the United States shall have
the independent right to recover any amount paid under this section
when, and to the extent that, a third party subsequently makes a
payment for the same emergency treatment.
``(2) Any amount paid by the United States to the veteran (or the
veteran's personal representative, successor, dependents, or survivors)
or to any other person or organization paying for such treatment shall
constitute a lien in favor of the United States against any recovery
the payee subsequently receives from a third party for the same
treatment.
``(3) Any amount paid by the United States to the provider that
furnished the veteran's emergency treatment shall constitute a lien
against any subsequent amount the provider receives from a third party
for the same emergency treatment for which the United States made
payment.
``(4) The veteran (or the veteran's personal representative,
successor, dependents, or survivors) shall ensure that the Secretary is
promptly notified of any payment received from any third party for
emergency treatment furnished to the veteran. The veteran (or the
veteran's personal representative, successor, dependents, or survivors)
shall immediately forward all documents relating to such payment,
cooperate with the Secretary in the investigation of such payment, and
assist the Secretary in enforcing the United States right to recover
any payment made under subsection (c)(3).
``(e) Waiver.--The Secretary, in the Secretary's discretion, may
waive recovery of a payment made to a veteran under this section that
is otherwise required by subsection (d)(1) when the Secretary
determines that such waiver would be in the best interest of the United
States, as defined by regulations prescribed by the Secretary.
``(f) Definitions.--For purposes of this section:
``(1) The term `emergency treatment' means medical care or
services furnished, in the judgment of the Secretary--
``(A) when Department or other Federal facilities are
not feasibly available and an attempt to use them
beforehand would not be reasonable;
``(B) when such care or services are rendered in a
medical emergency of such nature that delay would be
hazardous to life or health; and
``(C) until such time as the veteran can be
transferred safely to a Department facility or other
Federal facility.
``(2) The term `health-plan contract' includes any of the
following:
``(A) An insurance policy or contract, medical or
hospital service agreement, membership or subscription
contract, or similar arrangement under which health
services for individuals are provided or the expenses
of such services are paid.
``(B) An insurance program described in section 1811
of the Social Security Act (42 U.S.C. 1395c) or
established by section 1831 of such Act (42 U.S.C.
1395j).
``(C) A State plan for medical assistance approved
under title XIX of such Act (42 U.S.C. 1396 et seq.).
``(D) A workers' compensation law or plan described
in section 1729(a)(2)(A) of this title.
``(E) A law of a State or political subdivision
described in section 1729(a)(2)(B) of this title.
``(3) The term `third party' means any of the following:
``(A) A Federal entity.
``(B) A State or political subdivision of a State.
``(C) An employer or an employer's insurance carrier.
``(D) An automobile accident reparations insurance
carrier.
``(E) A person or entity obligated to provide, or to
pay the expenses of, health services under a health-
plan contract.''.
(b) Conforming Amendments.--(1) Section 1729A(b) is amended--
(A) by redesignating paragraph (6) as paragraph (7); and
(B) by inserting after paragraph (5) the following new
paragraph:
``(6) Section 1725 of this title.''.
(2) The table of sections at the beginning of chapter 17 is amended
by inserting after the item relating to section 1724 the following new
item:
``1725. Reimbursement for emergency treatment.''.
(c) Effective Date.--The amendments made by this section shall take
effect 180 days after the date of the enactment of this Act.
(d) Implementation Reports.--The Secretary of Veterans Affairs shall
include with the budget justification materials submitted to Congress
in support of the Department of Veterans Affairs budget for fiscal year
2002 and for fiscal year 2003 a report on the implementation of section
1725 of title 38, United States Code, as added by subsection (a). Each
such report shall include information on the experience of the
Department under that section and the costs incurred, and expected to
be incurred, under that section.
SEC. 103. ELIGIBILITY FOR CARE OF COMBAT-INJURED VETERANS.
(a) Priority of Care.--Chapter 17 is amended --
(1) in section 1710(a)(2)(D), by inserting ``or who was
injured in combat'' after ``former prisoner of war''; and
(2) in section 1705(a)(3), by inserting ``or who were injured
in combat'' after ``former prisoners of war''.
(b) Definition of Injured in Combat.--Section 1701 is amended by
adding at the end the following new paragraph:
``(10) The term `injured in combat' means wounded in action
as the result of an act of an enemy of the United States or
otherwise wounded in action by weapon fire while directly
engaged in armed conflict (other than as the result of willful
misconduct by the wounded individual).''.
SEC. 104. ACCESS TO CARE FOR MILITARY RETIREES.
(a) Improved Access.--(1) Section 1710(a)(2) is amended--
(A) by striking ``or'' at the end of subparagraph (F);
(B) by striking the period at the end of subparagraph (G) and
inserting ``; or''; and
(C) by adding at the end the following new subparagraph:
``(H) who has retired from active military, naval, or air
service in the Army, Navy, Air Force, or Marine Corps, is
eligible for care under the TRICARE program established by the
Secretary of Defense, and is not otherwise described in
paragraph (1) or in this paragraph.''.
(2) Section 1705(a) is amended--
(A) by redesignating paragraph (7) as paragraph (8);
(B) by inserting after paragraph (6) the following new
paragraph (7):
``(7) Veterans who are eligible for hospital care, medical
services, and nursing home care under section 1710(a)(2)(H) of
this title.''; and
(C) in paragraph (6), by inserting ``(other than subparagraph
(H) of such section)'' before the period at the end.
(b) Interagency Agreement.--(1) The Secretary of Defense shall enter
into an agreement (characterized as a memorandum of understanding or
otherwise) with the Secretary of Veterans Affairs with respect to the
provision of medical care by the Secretary of Veterans Affairs to
eligible military retirees in accordance with the amendments made by
subsection (a). That agreement shall include provisions for
reimbursement of the Secretary of Veterans Affairs by the Secretary of
Defense for medical care provided by the Secretary of Veterans Affairs
to an eligible military retiree and may include such other provisions
with respect to the terms and conditions of such care as may be agreed
upon by the two Secretaries.
(2) Reimbursement under that agreement shall be in accordance with
rates agreed upon by the Secretary of Defense and the Secretary of
Veterans Affairs. Such reimbursement may be made by the Secretary of
Defense or by the appropriate TRICARE Managed Care Support contractor,
as determined in accordance with that agreement.
(3) In entering into the agreement under paragraph (1), particularly
with respect to determination of the rates of reimbursement under
paragraph (2), the Secretary of Defense shall consult with TRICARE
Managed Care Support contractors.
(4) The Secretary of Veterans Affairs may not enter into an agreement
under paragraph (1) for the provision of care in accordance with the
amendments made by subsection (a) with respect to any geographic
service area, or a part of any such area, of the Veterans Health
Administration unless--
(A) in the judgment of that Secretary, the Department of
Veterans Affairs will recover the costs of providing such care
to eligible military retirees; and
(B) that Secretary has certified and documented, with respect
to any geographic service area in which the Secretary proposes
to provide care in accordance with the amendments made by
subsection (a), that such geographic service area, or
designated part of any such area, has adequate capacity
(consistent with the requirements in section 1705(b)(1) of
title 38, United States Code, that care to enrollees shall be
timely and acceptable in quality) to provide such care.
(5) The agreement under paragraph (1) shall be entered into by the
Secretaries not later than nine months after the date of the enactment
of this Act. If the Secretaries are unable to reach agreement, they
shall jointly report, by that date or within 30 days thereafter, to the
Committees on Armed Services and the Committees on Veterans' Affairs of
the Senate and House of Representatives on the reasons for their
inability to reach an agreement and their mutually agreed plan for
removing any impediments to final agreement.
(c) Depositing of Reimbursements.--Amounts received by the Secretary
of Veterans Affairs under the agreement under subsection (b) shall be
deposited in the Department of Veterans Affairs Health Services
Improvement Fund established under section 1729B of title 38, United
States Code, as added by section 202.
(d) Phased Implementation.--(1) The Secretary of Defense shall
include in each TRICARE contract entered into after the date of the
enactment of this Act provisions to implement the agreement under
subsection (b).
(2) The amendments made by subsection (a) and the provisions of the
agreement under subsection (b)(2) shall apply to the furnishing of
medical care by the Secretary of Veterans Affairs in any area of the
United States only if that area is covered by a TRICARE contract that
was entered into after the date of the enactment of this Act.
(e) Eligible Military Retirees.--For purposes of subsection (b), an
eligible military retiree is a member of the Army, Navy, Air Force, or
Marine Corps who--
(1) has retired from active military, naval, or air service;
(2) is eligible for care under the TRICARE program
established by the Secretary of Defense;
(3) has enrolled for care under section 1705 of title 38,
United States Code; and
(4) is not described in paragraph (1) or (2) of section
1710(a) of such title (other than subparagraph (H) of such
paragraph (2)), as amended by subsection (a).
SEC. 105. BENEFITS FOR PERSONS DISABLED BY PARTICIPATION IN COMPENSATED
WORK THERAPY PROGRAM.
Section 1151(a)(2) is amended--
(1) by inserting ``(A)'' after ``proximately caused''; and
(2) by inserting before the period at the end the following:
``, or (B) by participation in a program (known as a
`compensated work therapy program') under section 1718 of this
title''.
SEC. 106. PILOT PROGRAM OF MEDICAL CARE FOR CERTAIN DEPENDENTS OF
ENROLLED VETERANS.
(a) In General.--(1) Chapter 17 is amended by inserting after section
1713 the following new section:
``Sec. 1713A. Medical care for certain dependents of enrolled veterans:
pilot program
``(a) The Secretary may, during the program period, carry out a pilot
program to provide primary health care services for eligible dependents
of veterans in accordance with this section.
``(b) For purposes of this section:
``(1) The term `program period' means the period beginning on
the first day of the first month beginning more than 180 days
after the date of the enactment of this section and ending
three years after that day.
``(2) The term `eligible dependent' means an individual who--
``(A) is the spouse or child of a veteran who is
enrolled in the system of patient enrollment
established by the Secretary under section 1705 of this
title; and
``(B) is determined by the Secretary to have the
ability to pay for such care or services either
directly or through reimbursement or indemnification
from a third party.
``(c) The Secretary may furnish health care services to an eligible
dependent under this section only if the dependent (or, in the case of
a minor, the parent or guardian of the dependent) agrees--
``(1) to pay to the United States an amount representing the
reasonable charges for the care or services furnished (as
determined by the Secretary); and
``(2) to cooperate with and provide the Secretary an
appropriate assignment of benefits, authorization to release
medical records, and any other executed documents, information,
or evidence reasonably needed by the Secretary to recover the
Department's charges for the care or services furnished by the
Secretary.
``(d)(1) The health care services provided under the pilot program
under this section may consist of such primary hospital care services
and such primary medical services as may be authorized by the
Secretary. The Secretary may furnish those services directly through a
Department medical facility or, subject to paragraphs (2) and (3),
pursuant to a contract or other agreement with a non-Department
facility (including a health-care provider, as defined in section
8152(2) of this title).
``(2) The Secretary may enter into a contract or agreement to furnish
primary health care services under this section in a non-Department
facility on the same basis as provided under subsections (a) and (b) of
section 1703 of this title or may include such care in an existing or
new agreement under section 8153 of this title when the Secretary
determines it to be in the best interest of the prevailing standards of
the Department medical care program.
``(3) Primary health care services may not be authorized to be
furnished under this section at any medical facility if the furnishing
of those services would result in the denial of, or a delay in
providing, access to care for any enrolled veteran at that facility.
``(e)(1) In the case of an eligible dependent who is furnished
primary health care services under this section and who has coverage
under a health-plan contract, as defined in section 1729(i)(1) of this
title, the United States shall have the right to recover or collect the
reasonable charges for such care or services from such health-plan
contract to the extent that the individual or the provider of the care
or services would be eligible to receive payment for such care or
services from such health-plan contract if the care or services had not
been furnished by a department or agency of the United States.
``(2) The right of the United States to recover under paragraph (1)
shall be enforceable with respect to an eligible dependent in the same
manner as applies under subsections (a)(3), (b), (c)(1), (c)(2), (d),
(f), (h), and (i) of section 1729 of this title with respect to a
veteran.
``(f)(1) Subject to paragraphs (2) and (3), the pilot program under
this section shall be carried out during the program period in not more
than four veterans integrated service networks, as designated by the
Secretary. In designating networks under the preceding sentence, the
Secretary shall favor designation of networks that are suited to serve
dependents of veterans because of--
``(A) the capability of one or more medical facilities within
the network to furnish primary health care services to eligible
dependents while assuring that veterans continue to receive
priority for care and services;
``(B) the demonstrated success of such medical facilities in
billings and collections;
``(C) support for initiating such a pilot program among
veterans in the network; and
``(D) such other criteria as the Secretary considers
appropriate.
``(2) In implementing the pilot program, the Secretary may not
provide health care services for dependents who are children--
``(A) in more than one of the participating networks during
the first year of the program period; and
``(B) in more than two of the participating networks during
the second year of the program period.
``(3) In implementing the pilot program, the Secretary shall give
priority to facilities which operate women veterans' clinics.''.
(2) The table of sections at the beginning of such chapter is amended
by inserting after the item relating to section 1713 the following new
item:
``1713A. Medical care for certain dependents and enrolled veterans:
pilot program.''.
(b) GAO Review and Recommendations.--(1) Beginning six months after
the commencement of the pilot program, the Comptroller General, in
consultation with the Under Secretary for Health of the Department of
Veterans Affairs, shall monitor the conduct of the pilot program.
(2) Not later than 14 months after the commencement of the pilot
program, the Comptroller General shall submit to the Secretary of
Veterans Affairs a report setting forth the Comptroller General's
findings and recommendations with respect to the first 12 months of
operation of the pilot program.
(3)(A) The report under paragraph (2) shall include the findings of
the Comptroller General regarding--
(i) whether the collection of reasonable charges for the care
or services provided reasonably covers the costs of providing
such care and services; and
(ii) whether the Secretary, in carrying out the program, is
in compliance with the limitation in subsection (d)(3) of
section 1713A of title 38, United States Code, as added by
subsection (a).
(B) The report shall include the recommendations of the Comptroller
General regarding any remedial steps that the Secretary should take in
the conduct of the program or in the billing and collection of charges
under the program.
(4) The Secretary, in consultation with, and following receipt of the
report of, the Comptroller General, shall take such steps as may be
needed to ensure that any recommendations of the Comptroller General in
the report under paragraph (2) with respect to billings and
collections, and with respect to compliance with the limitation in
subsection (d)(3) of such section, are carried out.
(5) For purposes of this subsection, the term ``commencement of the
pilot program'' means the date on which the Secretary of Veterans
Affairs begins to furnish services to eligible dependents under the
pilot program under section 1713A of title 38, United States Code, as
added by subsection (a).
SEC. 107. ENHANCED SERVICES PROGRAM AT DESIGNATED MEDICAL CENTERS.
(a) Findings.--Congress makes the following findings:
(1) Historically, health care facilities under the
jurisdiction of the Department of Veterans Affairs have not
consistently been located in proximity to veteran population
concentrations.
(2) Hospital occupancy rates at numbers of Department medical
centers are at levels substantially below a level needed for
efficient operation and optimal quality of care.
(3) The costs of maintaining highly inefficient medical
centers, which were designed and constructed decades ago to
standards no longer considered acceptable, substantially
diminish the availability of resources which could be devoted
to the provision of needed direct care services.
(4) Freeing resources currently devoted to highly inefficient
provision of hospital care could, through contracting for acute
hospital care and establishing new facilities for provision of
outpatient care, yield improved access and service to veterans.
(b) Enhanced Services Program at Designated Medical Centers.--The
Secretary of Veterans Affairs, in carrying out the responsibilities of
the Secretary to furnish hospital care and medical services through
network-based planning, shall establish an enhanced service program at
Department medical centers (hereinafter in this section referred to as
``designated centers'') that are designated by the Secretary for the
purposes of this section. Medical centers shall be designated to
improve access, and quality of service provided, to veterans served by
those medical centers. The Secretary may designate a medical center for
the program only if the Secretary determines, on the basis of a market
and data analysis (which shall include a study of the cost-
effectiveness of the care provided at such center), that the medical
center--
(1) can, in whole or in part, no longer be operated in a
manner that provides hospital or other care efficiently and at
optimal quality because of such factors as--
(A) the current and projected need for hospital or
other care capacity at such center;
(B) the extent to which the facility is functionally
obsolete; and
(C) the cost of operation and maintenance of the
physical plant; and
(2) is located in proximity (A) to one or more community
hospitals which have the capacity to provide primary and
secondary hospital care of appropriate quality to veterans
under contract arrangements with the Secretary which the
Secretary determines are advantageous to the Department, or (B)
to another Department medical center which is capable of
absorbing some or all of the patient workload of such medical
center.
(c) Medical Center Plan.--The Secretary shall, with respect to each
designated center, develop a plan aimed at improving the accessibility
and quality of service provided to veterans. Each plan shall be
developed in accordance with the requirements for strategic network-
based planning described in section 8107 of title 38, United States
Code. In the plan for a designated center, the Secretary shall describe
a program which, if implemented, would allow the Secretary to do any of
the following:
(1) Provide for a Department facility described in subsection
(b)(2)(B) to absorb some or all of the patient workload of the
designated center.
(2) Contract, under such arrangements as the Secretary
determines appropriate, for needed primary and secondary
hospital care for veterans--
(A) who reside in the catchment area of each
designated center;
(B) who are described in paragraphs (1) through (6)
of section 1705(a) of title 38, United States Code; and
(C) whom the Secretary has enrolled for care pursuant
to section 1705 of title 38, United States Code.
(3) Cease to provide hospital care, or hospital care and
other medical services, at such center.
(4) If practicable, lease, under subchapter V of chapter 81
of title 38, United States Code, land and improvements which
had been dedicated to providing care described in paragraph
(3).
(5) Establish, through reallocation of operational funds and
through appropriate lease arrangements or renovations,
facilities for--
(A) delivery of outpatient care; and
(B) services which would obviate a need for nursing
home care or other long-term institutional care.
(d) Employee Protections.--(1) In entering into any contract or lease
under subsection (c), the Secretary shall attempt to ensure that
employees of the Secretary who would be displaced under this section be
given priority in hiring by such contractor, lessee, or other entity.
(2) In carrying out subsection (c)(5), the Secretary shall give
preference to providing services through employee-based delivery
models.
(e) Required Consultation.--In developing a plan under subsection
(c), the Secretary shall obtain the views of veterans organizations,
exclusive employee representatives, and other interested parties and
provide for such organizations and parties to participate in the
development of the plan.
(f) Submission of Plan to Congress.--The Secretary may not implement
a plan described in subsection (c) with respect to a medical center
unless the Secretary has first submitted a report containing a detailed
plan and justification to the appropriate committees of Congress. No
action to carry out such plan may be taken after the submission of such
report until the end of a 45-day period following the date of the
submission of the report, not less than 30 days of which shall be days
during which Congress shall have been in continuous session. For
purposes of the preceding sentence, continuity of a session of Congress
is broken only by adjournment sine die, and there shall be excluded
from the computation of any period of continuity of session any day
during which either House of Congress is not in session during an
adjournment of more than three days to a day certain.
(g) Implementation of Plan.--In carrying out the plan described in
subsection (c), or a modification to that plan following the submission
of such plan to the appropriate committees of Congress, the Secretary--
(1) may, without regard to any limitation under section 1703
of title 38, United States Code, contract for hospital care for
veterans who are--
(A) described in paragraphs (1) through (6) of
section 1705(a) of title 38, United States Code; and
(B) enrolled under subsection (a) of such section
1705;
(2) may enter into any contract under section 8153 of title
38, United States Code;
(3) shall, in exercising the authority of the Secretary under
this section to contract for hospital care, provide for ongoing
oversight and management, by employees of the Department, of
the hospital care furnished such veterans; and
(4) shall, in the case of a designated center which ceases to
provide services under the program--
(A) ensure a reallocation of funds as provided in
subsection (h); and
(B) provide reemployment assistance to employees.
(h) Funds Allocation.--In carrying out subsection (g)(4), the
Secretary shall ensure that not less than 90 percent of the funds that
would have been made available to a designated center to support the
provision of services, but for such mission change, shall be made
available to the appropriate health care region of the Veterans Health
Administration to ensure that the implementation of the plan under
subsection (g) will result in demonstrable improvement in the
accessibility, and quality of service provided, to veterans in the
catchment area of such center.
(i) Specialized Services.--The provisions of this section do not
diminish the obligations of the Secretary under section 1706(b) of
title 38, United States Code.
(j) Report.--Not later than 12 months after implementation of any
plan under subsection (b), the Secretary shall submit to Congress a
report on the implementation of the enhanced service program.
(k) Residual Authority.--Nothing in this section may be construed to
diminish the authority of the Secretary to--
(1) consolidate, eliminate, abolish, or redistribute the
functions or missions of facilities in the Department;
(2) revise the functions or missions of any such facility or
activity; or
(3) create new facilities or activities in the Department.
SEC. 108. COUNSELING AND TREATMENT FOR VETERANS WHO HAVE EXPERIENCED
SEXUAL TRAUMA.
(a) Extension of Period of Program.--Subsection (a) of section 1720D
is amended--
(1) in paragraph (1), by striking ``December 31, 2001'' and
inserting ``December 31, 2002''; and
(2) in paragraph (3), by striking ``December 31, 2001'' and
inserting ``December 31, 2002''.
(b) Mandatory Nature of Program.--(1) Subsection (a)(1) of such
section is further amended by striking ``may provide counseling to a
veteran who the Secretary determines requires such counseling'' and
inserting ``shall operate a program under which the Secretary provides
counseling and appropriate care and services to veterans who the
Secretary determines require such counseling and care and services''.
(2) Subsection (a) of such section is further amended--
(A) by striking paragraph (2); and
(B) by redesignating paragraph (3) (as amended by subsection
(a)(2)) as paragraph (2).
(c) Outreach Efforts.--Subsection (c) of such section is amended--
(1) by inserting ``and treatment'' in the first sentence and
in paragraph (2) after ``counseling'';
(2) by striking ``and'' at the end of paragraph (1);
(3) by redesignating paragraph (2) as paragraph (3); and
(4) by inserting after paragraph (1) the following new
paragraph (2):
``(2) shall ensure that information about the counseling and
treatment available to veterans under this section--
``(A) is revised and updated as appropriate;
``(B) is made available and visibly posted at
appropriate facilities of the Department; and
``(C) is made available through appropriate public
information services; and''.
(d) Report on Implementation of Outreach Activities.--Not later than
six months after the date of the enactment of this Act, the Secretary
of Veterans Affairs shall submit to the Committees on Veterans' Affairs
of the Senate and House of Representatives a report on the Secretary's
implementation of paragraph (2) of section 1720D(c) of title 38, United
States Code, as added by subsection (c). Such report shall include
examples of the documents and other means of communication developed
for compliance with that paragraph.
(e) Study of Expanding Eligibility for Counseling and Treatment.--(1)
The Secretary of Veterans Affairs, in consultation with the Secretary
of Defense, shall conduct a study to determine--
(A) the extent to which former members of the reserve
components of the Armed Forces experienced physical assault of
a sexual nature or battery of a sexual nature while serving on
active duty for training;
(B) the extent to which such former members have sought
counseling from the Department of Veterans Affairs relating to
those incidents; and
(C) the additional resources that, in the judgment of the
Secretary, would be required to meet the projected need of
those former members for such counseling.
(2) Not later than 16 months after the date of the enactment of this
Act, the Secretary of Veterans Affairs shall submit to the Committees
on Veterans' Affairs of the Senate and House of Representatives a
report on the results of the study conducted under paragraph (1).
(f) Oversight of Outreach Activities.--Not later than 14 months after
the date of the enactment of this Act, the Secretary of Veterans
Affairs and the Secretary of Defense shall submit to the appropriate
congressional committees a joint report describing in detail the
collaborative efforts of the Department of Veterans Affairs and the
Department of Defense to ensure that members of the Armed Forces, upon
separation from active military, naval, or air service, are provided
appropriate and current information about programs of the Department of
Veterans Affairs to provide counseling and treatment for sexual trauma
that may have been experienced by those members while in the active
military, naval, or air service, including information about
eligibility requirements for, and procedures for applying for, such
counseling and treatment. The report shall include proposed
recommendations from both the Secretary of Veterans Affairs and the
Secretary of Defense for the improvement of their collaborative efforts
to provide such information.
(g) Report on Implementation of Sexual Trauma Treatment Program.--Not
later than 14 months after the date of the enactment of this Act, the
Secretary of Veterans Affairs shall submit to the Committees on
Veterans' Affairs of the Senate and House of Representatives a report
on the use made of the authority provided under section 1720D of title
38, United States Code, as amended by this section. The report shall
include the following with respect to activities under that section
since the enactment of this Act:
(1) The number of veterans who have received counseling under
that section.
(2) The number of veterans who have been referred to non-
Department mental health facilities and providers in connection
with sexual trauma counseling and treatment.
TITLE II--PROGRAM ADMINISTRATION
SEC. 201. MEDICAL CARE COLLECTIONS.
(a) Limited Authority To Set Copayments.--(1) Section 1722A is
amended--
(A) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively;
(B) by inserting after subsection (a) the following new
subsection (b):
``(b) The Secretary, pursuant to regulations which the Secretary
shall prescribe, may--
``(1) increase the copayment amount in effect under
subsection (a);
``(2) establish a maximum annual pharmaceutical copayment
amount under subsection (a) for veterans who have multiple
outpatient prescriptions; and
``(3) require a veteran, other than a veteran described in
subsection (a)(3), to pay to the United States a reasonable
copayment for sensori-neural aids, electronic equipment, and
any other costly item or equipment furnished the veteran for a
nonservice-connected condition, other than a wheelchair or
artificial limb.''; and
(C) in subsection (c), as redesignated by subparagraph (A)--
(i) by striking ``this section'' and inserting
``subsection (a)''; and
(ii) by adding at the end the following new sentence:
``Amounts collected through use of the authority under
subsection (b) shall be deposited in Department of
Veterans Affairs Health Services Improvement Fund.''.
(2)(A) The heading of such section is amended to read as follows:
``Sec. 1722A. Copayments for medications and certain costly items and
equipment''.
(B) The item relating to such section in the table of sections at the
beginning of chapter 17 is amended to read as follows:
``1722A. Copayments for medications and certain costly items and
equipment.''.
(b) Outpatient Treatment of Category C Veterans.--(1) Section 1710(g)
is amended--
(A) in paragraph (1), by striking ``the amount under
paragraph (2) of this subsection'' and inserting ``in the case
of each outpatient visit the applicable amount or amounts
established by the Secretary by regulation''; and
(B) in paragraph (2), by striking all after ``for an amount''
and inserting ``which the Secretary shall establish by
regulation.''.
SEC. 202. HEALTH SERVICES IMPROVEMENT FUND.
(a) Establishment of Fund.--Chapter 17 is amended by inserting after
section 1729A the following new section:
``Sec. 1729B. Health Services Improvement Fund
``(a) There is established in the Treasury of the United States a
fund to be known as the `Department of Veterans Affairs Health Services
Improvement Fund'.
``(b) Amounts received or collected after the date of the enactment
of this section under any of the following provisions of law shall be
deposited in the fund:
``(1) Section 1713A of this title.
``(2) Section 1722A(b) of this title.
``(3) Section 8165(a) of this title.
``(4) Section 104(c) of the Veterans' Millennium Health Care
Act.
``(c) Amounts in the fund are hereby available, without fiscal year
limitation, to the Secretary for the purposes stated in subparagraphs
(A) and (B) of section 1729A(c)(1) of this title.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by inserting after the item relating to section
1729A the following new item:
``1729B. Health Services Improvement Fund.''.
SEC. 203. VETERANS TOBACCO TRUST FUND.
(a) Findings.--Congress finds the following:
(1) Smoking related illnesses, including cancer, heart
disease, and emphysema, are highly prevalent among the more
than 3,000,000 veterans who use the Department of Veterans
Affairs health care system annually.
(2) The Department of Veterans Affairs estimates that it
spent $3,600,000,000 in 1997 to treat smoking-related illnesses
and that over the next five years it will spend $20,000,000,000
on such care.
(3) Congress established the Department of Veterans Affairs
in furtherance of its constitutional power to provide for the
national defense in order to provide benefits and services to
veterans of the uniformed services.
(4) There is in the Department of Veterans Affairs a health
care system which has as its primary function to provide a
complete medical and hospital service for the medical care and
treatment of such veterans as can be served through available
appropriations.
(5) The Federal Government, including the Department of
Veterans Affairs, has lacked the means to prevent the onset of
smoking-related illnesses among veterans and has had no
authority to deny needed treatment to any veteran on the basis
that an illness is or might be smoking-related.
(6) With some 20 percent of its health care budget absorbed
in treating smoking-related illnesses, the Department of
Veterans Affairs health care system has lacked resources to
provide needed nursing home care, home care, community-based
ambulatory care, and other services to tens of thousands of
other veterans.
(7) The network of academically affiliated medical centers of
the Department of Veterans Affairs provides a unique system
within which outstanding medical research is conducted and
which has the potential to expand significantly ongoing
research on tobacco-related illnesses.
(8) It is in the public interest for Congress to enact
legislation requiring that a portion of any amounts received
from manufacturers of tobacco products be used to meet the
costs of (A) treatment for diseases and adverse health effects
associated with the use of tobacco products by those who served
their country in uniform, and (B) medical and health services
research relating to prevention and treatment of, and
rehabilitation from, tobacco addiction and diseases associated
with tobacco use.
(b) Establishment of Trust Fund.--(1) Chapter 17 is amended by
inserting after section 1729B, as added by section 202(a), the
following new section:
``Sec. 1729C. Veterans Tobacco Trust Fund
``(a) There is established in the Treasury of the United States a
trust fund to be known as the `Veterans Tobacco Trust Fund', consisting
of such amounts as may be appropriated, credited, or donated to the
trust fund.
``(b) If a lawsuit is brought by the United States against the
tobacco manufacturers seeking recovery of costs incurred or to be
incurred by the United States that are attributable to tobacco-related
illnesses, there shall be credited to the trust fund from any amount
recovered by the United States pursuant to that lawsuit, without
further appropriation, the amount that bears the same ratio to the
amount recovered as the amount of the Department's costs for health
care attributable to tobacco-related illnesses for which recovery is
sought in the suit bears to the total amount sought by the United
States in the suit.
``(c) After September 30, 2004, amounts in the trust fund shall be
available, without fiscal year limitation, to the Secretary of Veterans
Affairs for the following purposes:
``(1) Furnishing medical care and services under this
chapter, to be available during any fiscal year for the same
purposes and subject to the same limitations (other than with
respect to the period of availability for obligation) as apply
to amounts appropriated from the general fund of the Treasury
for that fiscal year for medical care.
``(2) Conducting medical research, rehabilitation research,
and health systems research, with particular emphasis on
research relating to prevention and treatment of, and
rehabilitation from, tobacco addiction and diseases associated
with tobacco use.''.
(2) The table of sections at the beginning of such chapter is amended
by inserting after the item relating to section 1729B, as added by
section 202(b), the following new item:
``1729C. Veterans Tobacco Trust Fund.''.
SEC. 204. AUTHORITY TO ACCEPT FUNDS FOR EDUCATION AND TRAINING.
(a) Establishment of Nonprofit Corporations at Medical Centers.--
Section 7361(a) is amended--
(1) by inserting ``and education'' after ``research'';
(2) by adding at the end the following: ``Such a corporation
may be established to facilitate either research or education
or both research and education.''.
(b) Purpose of Corporations.--Section 7362 is amended--
(1) in the first sentence, by inserting ``and education and
training as described in sections 7302, 7471, 8154, and
1701(6)(B) of this title'' after ``of this title''; and
(2) in the second sentence--
(A) by inserting ``or education'' after ``research'';
and
(B) by striking ``that purpose'' and inserting
``these purposes''.
(c) Board of Directors.--Section 7363(a) is amended--
(1) in subsection (a)(1), by striking all after ``medical
center, and'' and inserting ``as appropriate, the assistant
chief of staff for research for the medical center and the
associate chief of staff for education for the medical center,
or, in the case of a facility at which such positions do not
exist, those officials who are responsible for carrying out the
responsibilities of the medical center director, chief of
staff, and, as appropriate, the assistant chief of staff for
research and the assistant chief for education; and'';
(2) in subsection (a)(2), by inserting ``or education, as
appropriate'' after ``research''; and
(3) in subsection (c), by inserting ``or education'' after
``research''.
(d) Approval of Expenditures.--Section 7364 is amended by adding at
the end the following new subsection:
``(c)(1) A corporation established under this subchapter may not
spend funds for an education activity unless the activity is approved
in accordance with procedures prescribed by the Under Secretary for
Health.
``(2) The Under Secretary for Health shall prescribe policies and
procedures to guide the expenditure of funds by corporations under
paragraph (1) consistent with the purpose of such corporations as
flexible funding mechanisms.''.
SEC. 205. EXTENSION AND REVISION OF CERTAIN AUTHORITIES.
(a) Readjustment Counseling Program.--Section 1712A(a)(1)(B)(ii) is
amended by striking ``2000'' and inserting ``2003''.
(b) Committee on Mentally Ill Veterans.--Section 7321(d)(2) is
amended by striking ``three'' and inserting ``five''.
(c) Committee on Post-Traumatic Stress Disorder.--Section 110 of
Public Law 98-528 (38 U.S.C. 1712A note) is amended--
(1) in subsection (e)(1), by striking ``March 1, 1985'' and
inserting ``March 1, 2000''; and
(2) in subsection (e)(2), by striking ``February 1, 1986''
and inserting ``February 1, 2001''.
(d) Extension of Authority To Make Grants.--Section 3(a)(2) of the
Homeless Veterans Comprehensive Service Programs Act of 1992 (38 U.S.C.
7721 note) is amended by striking ``September 30, 1999'' and inserting
``September 30, 2002''.
(e) Authority To Make Grants for Homeless Veterans.--Section 3(b)(2)
of the Homeless Veterans Comprehensive Service Programs Act of 1992 (38
U.S.C. 7721 note) is amended by striking ``and no more than 20 programs
which incorporate the procurement of vans as described in paragraph
(1)''.
SEC. 206. STATE HOME GRANT PROGRAM.
(a) General Regulations.--Section 8134 is amended--
(1) by redesignating subsection (b) as subsection (c);
(2) by striking the matter in subsection (a) preceding
paragraph (2) and inserting the following:
``(a)(1) The Secretary shall prescribe regulations for the purposes
of this subchapter.
``(2) In those regulations, the Secretary shall prescribe for each
State the number of nursing home and domiciliary beds for which
assistance under this subchapter may be furnished. Such regulations
shall be based on projected demand for such care 10 years after the
date of the enactment of the Veterans Millennium Health Care Act by
veterans who at such time are 65 years of age or older and who reside
in that State. In determining such projected demand, the Secretary
shall take into account travel distances for veterans and their
families.
``(3)(A) In those regulations, the Secretary shall establish criteria
under which the Secretary shall determine, with respect to an
application for assistance under this subchapter for a project
described in subparagraph (B) which is from a State that has a need for
additional beds as determined under subsections (a)(2) and (d)(1),
whether the need for such beds is most aptly characterized as great,
significant, or limited. Such criteria shall take into account the
availability of beds already operated by the Secretary and other
providers which appropriately serve the needs which the State proposes
to meet with its application.
``(B) This paragraph applies to a project for the construction or
acquisition of a new State home facility, to a project to increase the
number of beds available at a State home facility, and a project to
replace beds at a State home facility.
``(4) The Secretary shall review and, as necessary, revise
regulations prescribed under paragraphs (2) and (3) not less often than
every four years.
``(b) The Secretary shall prescribe the following by regulation:'';
(3) by redesignating paragraphs (2) and (3) of subsection
(b), as designated by paragraph (2), as paragraphs (1) and (2);
(4) in subsection (c), as redesignated by paragraph (1), by
striking ``subsection (a)(3)'' and inserting ``subsection
(b)(2)''; and
(5) by adding at the end the following new subsection:
``(d)(1) In prescribing regulations to carry out this subchapter, the
Secretary shall provide that in the case of a State that seeks
assistance under this subchapter for a project described in subsection
(a)(3)(B), the determination of the unmet need for beds for State homes
in that State shall be reduced by the number of beds in all previous
applications submitted by that State under this subchapter, including
beds which have not been recognized by the Secretary under section 1741
of this title.
``(2)(A) Financial assistance under this subchapter for a renovation
project may only be provided for a project for which the total cost of
construction is in excess of $400,000 (as adjusted from time to time in
such regulations to reflect changes in costs of construction).
``(B) For purposes of this paragraph, a renovation project is a
project to remodel or alter existing buildings for which financial
assistance under this subchapter may be provided and does not include
maintenance and repair work which is the responsibility of the
State.''.
(b) Applications With Respect to Projects.--Section 8135 is amended--
(1) in subsection (a)--
(A) by striking ``set forth--'' in the matter
preceding paragraph (1) and inserting ``set forth the
following:'';
(B) by capitalizing the first letter of the first
word in each of paragraphs (1) through (9);
(C) by striking the comma at the end of each of
paragraphs (1) through (7) and inserting a period; and
(D) by striking ``, and'' at the end of paragraph (8)
and inserting a period;
(2) by redesignating subsections (b), (c), (d), and (e) as
subsections (c), (d), (e), and (f), respectively;
(3) by inserting after subsection (a) the following new
subsection (b):
``(b)(1) Any State seeking to receive assistance under this
subchapter for a project that would involve construction or acquisition
of either nursing home or domiciliary facilities shall include with its
application under subsection (a) the following:
``(A) Documentation (i) that the site for the project is in
reasonable proximity to a sufficient concentration and
population of veterans who are 65 years of age and older, and
(ii) that there is a reasonable basis to conclude that the
facilities when complete will be fully occupied.
``(B) A financial plan for the first three years of operation
of such facilities.
``(C) A five-year capital plan for the State home program for
that State.
``(2) Failure to provide adequate documentation under paragraph
(1)(A) or to provide an adequate financial plan under paragraph (1)(B)
shall be a basis for disapproving the application.'';
(4) in subsection (c), as redesignated by paragraph (2)--
(A) in paragraph (1), by striking ``for a grant under
subsection (a) of this section'' in the matter
preceding subparagraph (A) and inserting ``under
subsection (a) for financial assistance under this
subchapter'';
(B) in paragraph (2)--
(i) by striking ``the construction or
acquisition of'' in subparagraph (A); and
(ii) by striking subparagraphs (B), (C), and
(D) and inserting the following:
``(B) An application from a State for a project at an
existing facility to remedy a condition or conditions that have
been cited by an accrediting institution, by the Secretary, or
by a local licensing or approving body of the State as being
threatening to the lives or safety of the patients in the
facility.
``(C) An application from a State that has not previously
applied for award of a grant under this subchapter for
construction or acquisition of a State nursing home.
``(D) An application for construction or acquisition of a
nursing home or domiciliary from a State that the Secretary
determines, in accordance with regulations under this
subchapter, has a great need for the beds to be established at
such home or facility.
``(E) An application from a State for renovations to a State
home facility other than renovations described in subparagraph
(B).
``(F) An application for construction or acquisition of a
nursing home or domiciliary from a State that the Secretary
determines, in accordance with regulations under this
subchapter, has a significant need for the beds to be
established at such home or facility.
``(G) An application that meets other criteria as the
Secretary determines appropriate and has established in
regulations.
``(H) An application for construction or acquisition of a
nursing home or domiciliary from a State that the Secretary
determines, in accordance with regulations under this
subchapter, has a limited need for the beds to be established
at such home or facility.''; and
(C) in paragraph (3), by striking subparagraph (A)
and inserting the following:
``(A) may not accord any priority to a project for the
construction or acquisition of a hospital; and''.
(c) Transition.--The provisions of sections 8134 and 8135 of title
38, United States Code, as in effect on June 1, 1999, shall continue in
effect after such date with respect to applications described in
section 8135(b)(2)(A) of such title, as in effect on that date, that
are identified on the list that (1) is described in section 8135(b)(4)
of such title, as in effect on that date, and (2) was established by
the Secretary of Veterans Affairs on October 29, 1998.
(d) Effective Date for Initial Regulations.--The Secretary of
Veterans Affairs shall prescribe the initial regulations under
subsection (a) of section 8134 of title 38, United States Code, as
added by subsection (a), not later than April 30, 2000.
SEC. 207. EXPANSION OF ENHANCED-USE LEASE AUTHORITY.
(a) Authority.--Section 8162(a)(2) is amended--
(1) by striking ``only if the Secretary'' and inserting
``only if--
``(A) the Secretary'';
(2) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively, and realigning
those clauses so as to be four ems from the left margin;
(3) by striking the period at the end of clause (iii), as so
redesignated, and inserting ``; or''; and
(4) by adding at the end the following:
``(B) the Secretary determines that the implementation of a
business plan proposed by the Under Secretary for Health for
applying the consideration under such a lease to the provision
of medical care and services would result in a demonstrable
improvement of services to eligible veterans in the geographic
service-delivery area within which the property is located.''.
(b) Term of Enhanced-Use Lease.--Section 8162(b) is amended--
(1) in paragraph (2), by striking ``may not exceed--'' and
all that follows and inserting ``may not exceed 75 years.'';
and
(2) by striking paragraph (4) and inserting the following:
``(4) The terms of an enhanced-use lease may provide for the
Secretary to--
``(A) obtain facilities, space, or services on the leased
property; and
``(B) use minor construction funds for capital contribution
payments.''.
(c) Designation of Property Proposed To Be Leased.--(1) Subsection
(b) of section 8163 is amended--
(A) by striking ``include--'' and inserting ``include the
following:'';
(B) by capitalizing the first letter of the first word of
each of paragraphs (1), (2), (3), (4), and (5);
(C) by striking the semicolon at the end of paragraphs (1),
(2), and (3) and inserting a period; and
(D) by striking subparagraphs (A), (B), and (C) of paragraph
(4) and inserting the following:
``(A) would--
``(i) contribute in a cost-effective manner
to the mission of the Department;
``(ii) not be inconsistent with the mission
of the Department;
``(iii) not adversely affect the mission of
the Department; and
``(iv) affect services to veterans; or
``(B) would result in a demonstrable improvement of
services to eligible veterans in the geographic
service-delivery area within which the property is
located.''.
(2) Subparagraph (E) of subsection (c)(1) of that section is amended
by striking clauses (i), (ii), and (iii) and inserting the following:
``(i) would--
``(I) contribute in a cost-effective manner
to the mission of the Department;
``(II) not be inconsistent with the mission
of the Department;
``(III) not adversely affect the mission of
the Department; and
``(IV) affect services to veterans; or
``(ii) would result in a demonstrable improvement of
services to eligible veterans in the geographic
service-delivery area within which the property is
located.''.
(d) Use of Proceeds.--Section 8165(a) is amended--
(1) by striking paragraph (1) and inserting the following:
``(a)(1) Funds received by the Department under an enhanced-use lease
and remaining after any deduction from those funds under subsection (b)
shall be deposited in the Department of Veterans Affairs Health
Services Improvement Fund established under section 1729B of this
title. The Secretary shall make available to the designated health care
region of the Veterans Health Administration within which the leased
property is located not less than 75 percent of the amount deposited in
the fund attributable to that lease.''; and
(2) by adding at the end the following new paragraph:
``(3) For the purposes of paragraph (1), the term `designated health
care region of the Veterans Health Administration' means a geographic
area designated by the Secretary for the purposes of the management of,
and allocation of resources for, health care services provided by the
Veterans Health Administration.''.
(e) Repeal of Termination Provision.--(1) Section 8169 is repealed.
(2) The table of sections at the beginning of chapter 81 is amended
by striking the item relating to section 8169.
(f) Repeal of Obsolete Provisions.--Section 8162 is amended--
(1) by striking the last sentence of subsection (a)(1); and
(2) by striking subsection (c).
SEC. 208. INELIGIBILITY FOR EMPLOYMENT BY VETERANS HEALTH
ADMINISTRATION OF HEALTH CARE PROFESSIONALS WHO
HAVE LOST LICENSE TO PRACTICE IN ONE JURISDICTION
WHILE STILL LICENSED IN ANOTHER JURISDICTION.
Section 7402 is amended by adding at the end the following new
subsection:
``(f) A person may not be employed in a position under subsection (b)
(other than under paragraph (4) of that subsection) if--
``(1) the person is or has been licensed, registered, or
certified (as applicable to such position) in more than one
State; and
``(2) either--
``(A) any of those States has terminated such
license, registration, or certification for cause; or
``(B) the person has voluntarily relinquished such
license, registration, or certification in any of those
States after being notified in writing by that State of
potential termination for cause.''.
TITLE III--MISCELLANEOUS
SEC. 301. REVIEW OF PROPOSED CHANGES TO OPERATION OF MEDICAL
FACILITIES.
Section 8110 of title 38, United States Code, is amended by adding at
the end the following new subsections:
``(d) The Secretary may not in any fiscal year close more than 50
percent of the beds within a bed section (of 20 or more beds) of a
Department medical center unless the Secretary first submits to the
Committees on Veterans' Affairs of the Senate and the House of
Representatives a report providing a justification for the closure. No
action to carry out such closure may be taken after the submission of
such report until the end of the 21-day period beginning on the date of
the submission of the report.
``(e) The Secretary shall submit to the Committees on Veterans'
Affairs of the Senate and the House of Representatives, not later than
January 20 of each year, a report documenting by network for the
preceding fiscal year the following:
``(1) The number of medical service and surgical service
beds, respectively, that were closed during that fiscal year
and, for each such closure, a description of the changes in
delivery of services that allowed such closure to occur.
``(2) The number of nursing home beds that were the subject
of a mission change during that fiscal year and the nature of
each such mission change.
``(f) For purposes of this section:
``(1) The term `closure', with respect to beds in a medical
center, means ceasing to provide staffing for, and to operate,
those beds. Such term includes converting the provision of such
bed care from care in a Department facility to care under
contract arrangements.
``(2) The term `bed section', with respect to a medical
center, means psychiatric beds (including beds for treatment of
substance abuse and post-traumatic stress disorder),
intermediate, neurology, and rehabilitation medicine beds,
extended care (other than nursing home) beds, and domiciliary
beds.
``(3) The term `justification', with respect to closure of
beds, means a written report that includes the following:
``(A) An explanation of the reasons for the
determination that the closure is appropriate and
advisable.
``(B) A description of the changes in the functions
to be carried out and the means by which such care and
services would continue to be provided to eligible
veterans.
``(C) A description of the anticipated effects of the
closure on veterans and on their access to care.''.
SEC. 302. PATIENT SERVICES AT DEPARTMENT FACILITIES.
(a) Scope of Services.--Section 7803 is amended--
(1) in subsection (a)--
(A) by striking ``(a)'' before ``The canteens''; and
B) by striking ``in this subsection;'' and all that
follows through ``the premises'' and inserting ``in
this section''; and
(2) by striking subsection (b).
(b) Technical Amendments.--(1) Paragraphs (1) and (11) of section
7802 are each amended by striking ``hospitals and homes'' and inserting
``medical facilities''.
(2) Section 7803, as amended by subsection (a), is amended--
(A) by striking ``hospitals and homes'' each place it appears
and inserting ``medical facilities''; and
(B) by striking ``hospital or home'' and inserting ``medical
facility''.
SEC. 303. REPORT ON ASSISTED LIVING SERVICES.
Not later than April 1, 2000, the Secretary of Veterans Affairs shall
submit to the Committees on Veterans Affairs of the Senate and House of
Representatives a report on the feasibility of establishing a pilot
program to assist veterans in receiving needed assisted living
services. The Secretary shall include in such report recommendations
on--
(1) the services and staffing that should be provided to a
veteran receiving assisted living services under such a pilot
program;
(2) the appropriate design of such a pilot program; and
(3) the issues that such a pilot program should be designed
to address.
SEC. 304. CHIROPRACTIC TREATMENT.
(a) Establishment of Program.--(1) Within 120 days after the date of
the enactment of this Act, the Under Secretary for Health of the
Department of Veterans Affairs, after consultation with chiropractors,
shall establish a policy for the Veterans Health Administration
regarding the role of chiropractic treatment in the care of veterans
under chapter 17 of title 38, United States Code.
(b) Definitions.--For purposes of this section:
(1) The term ``chiropractic treatment'' means the manual
manipulation of the spine performed by a chiropractor for the
treatment of such musculo-skeletal conditions as the Secretary
considers appropriate.
(2) The term ``chiropractor'' means an individual who--
(A) is licensed to practice chiropractic in the State
in which the individual performs chiropractic services;
and
(B) holds the degree of doctor of chiropractic from a
chiropractic college accredited by the Council on
Chiropractic Education.
SEC. 305. DESIGNATION OF HOSPITAL BED REPLACEMENT BUILDING AT IOANNIS
A. LOUGARIS DEPARTMENT OF VETERANS AFFAIRS MEDICAL
CENTER, RENO, NEVADA.
The hospital bed replacement building under construction at the
Ioannis A. Lougaris Department of Veterans Affairs Medical Center in
Reno, Nevada, is hereby designated as the ``Jack Streeter Building''.
Any reference to that building in any law, regulation, map, document,
record, or other paper of the United States shall be considered to be a
reference to the Jack Streeter Building.
TITLE IV--CONSTRUCTION AND FACILITIES MATTERS
SEC. 401. AUTHORIZATION OF MAJOR MEDICAL FACILITY PROJECTS.
The Secretary of Veterans Affairs may carry out the following major
medical facility projects, with each project to be carried out in the
amount specified for that project:
(1) Renovation to provide a domiciliary at Orlando, Florida
in a total amount not to exceed $2,400,000, to be derived only
from funds appropriated for Construction, Major Projects, for a
fiscal year before fiscal year 2000 that remain available for
obligation.
(2) Surgical addition at the Kansas City, Missouri,
Department of Veterans Affairs medical center, in an amount not
to exceed $13,000,000.
SEC. 402. AUTHORIZATION OF MAJOR MEDICAL FACILITY LEASES.
The Secretary of Veterans Affairs may enter into leases for medical
facilities as follows:
(1) Lease of an outpatient clinic, Lubbock, Texas, in an
amount not to exceed $1,112,000.
(2) Lease of a research building, San Diego, California, in
an amount not to exceed $1,066,500.
SEC. 403. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to the
Secretary of Veterans Affairs for fiscal year 2000 and for fiscal year
2001--
(1) for the Construction, Major Projects, account $13,000,000
for the project authorized in section 401(2); and
(2) for the Medical Care account, $2,178,500 for the leases
authorized in section 402.
(b) Limitation.--The project authorized in section 401(2) may only be
carried out using--
(1) funds appropriated for fiscal year 2000 or fiscal year
2001 pursuant to the authorization of appropriations in
subsection (a);
(2) funds appropriated for Construction, Major Projects, for
a fiscal year before fiscal year 2000 that remain available for
obligation; and
(3) funds appropriated for Construction, Major Projects, for
fiscal year 2000 for a category of activity not specific to a
project.
Introduction
H.R. 2116 addresses a spectrum of issues reviewed by the
Committee in hearings and through other oversight mechanisms
over the course of this year.
The Committee's hearing on February 11, on the Department's
budget for fiscal year 2000 set an important framework for its
oversight and legislative agenda this year.
On February 24, 1999, the Committee's Subcommittee on
Health held a hearing to develop in greater depth an
understanding of the VA Medical Care budget for fiscal year
2000 and the fiscal state of the VA health care system. Those
testifying at the hearing included: Dr. Thomas Garthwaite, the
VA's Deputy Under Secretary for Health; William (Ted) Galey,
M.D., Director VISN 20; Mr. James Farsetta, Director VISN 3;
Ms. Laura Miller, Director VISN 10; Mr. Thomas Trujillo, former
Director of VISN 18; Mr. Nick Bacon, Director of the Arkansas
Department of Veterans Affairs; Mr. Dennis Cullinan, Director,
National Legislative Service, Veterans of Foreign Wars; Ms.
Jacqueline Garrick, Deputy Director, National Veterans Affairs
and Rehabilitation Commission, The American Legion; Mr. Richard
A. Wannemacher, Jr., Associate National Legislative Director,
Disabled American Veterans; Mr. Harley L. Thomas, Associate
Legislative Director, Paralyzed Veterans of America; Ms.
Veronica A'zera, Legislative Director, AMVETS; and Mr. George
C. Duggins, National President, Vietnam Veterans of America.
Thereafter, the Subcommittee on Health held oversight
hearings on issues central to future planning for VA health
care. On March 10, 1999, the Subcommittee took testimony on the
Veterans Health Administration's management of its capital
assets. Among those testifying at that hearing were Mr. Stephen
P. Backhus, Director, Veterans' Affairs and Military Health
Care Issues, Health, Education, and Human Services Division,
General Accounting Office; Dr. Daniel H. Winship, Dean, Loyola
University, Chicago Stritch School of Medicine; Dr. Thomas
Garthwaite, the VA's Deputy Under Secretary for Health.
On April 22, 1999, the Subcommittee on Health received
testimony on the future of VA's long-term care program. Those
testifying at this hearing included: Dr. Kenneth W. Kizer, the
VA's Under Secretary for Health; Dr. Judith A. Salerno, Chief
Consultant of VA's Geriatrics and Extended Care Strategic
Healthcare Group; Dr. John Rowe, Chairman, Federal Advisory
Committee on the Future of VA Long-Term Care; Mr. Robert Shaw,
President, National Association of State Veterans Homes; Pamela
Zingeser of Birch and Davis; Kathleen Greve, VA's Chief of
State Home Construction; Mr. Steve Watson, Administrator of the
Ocala Harborside Healthcare Nursing Home, and Mr. Rick Jelinek,
Senior Vice President, Managed Care Solutions.
Following up on its prior hearings and oversight work, the
Subcommittee developed, and on May 19, 1999, received testimony
on a draft bill entitled the Veterans' Millennium Health Care
Act and on a second draft bill to establish a pilot program for
the care of certain veterans' dependents. Among those
testifying at this hearing were: Dr. Kenneth W. Kizer, the VA's
Under Secretary for Health; Mr. John R. Vitikacs, Assistant
Director, Veterans Affairs and Rehabilitation Commission, The
American Legion; Mr. Dennis M. Cullinan, National Legislative
Director, Veterans of Foreign Wars; Mr. Richard A. Wannemacher,
Jr., Associate National Legislative Director, Disabled American
Veterans; Mr. Larry D. Rhea, Deputy Director of Legislative
Affairs, Non Commissioned Officers Association; Mr. Harley L.
Thomas, Associate National Legislative Director, Paralyzed
Veterans of America; Colonel Robert F. Norton, USA (Ret.),
Deputy Director of Government Relations, The Retired Officers
Association; Mr. John J. Daly, Legislative Assistant, The
Retired Enlisted Association; and Mr. Rick Weidman, Legislative
Director, Vietnam Veterans of America.
In light of the testimony on May 19, substantial changes
were made to the draft legislation. On June 9, the Subcommittee
on Health held a meeting to consider the revised draft,
captioned the Chairman's mark of the Veterans' Millennium
Health Care Act. This draft bill was approved by the
Subcommittee with an amendment offered by the Ranking Member of
the Health Subcommittee, Rep. Luis Gutierrez. The amendment
would provide for a one-year extension of VA's sexual trauma
counseling program (through 2002) and for mandating that VA
operate that program. The Subcommittee recommended that the
legislation, subsequently introduced as H.R. 2116, be referred
for consideration by the Full Committee.
Summary of the Reported Bill
I. Long-term care reform
These provisions would:
(1) Lmandate that VA operate and maintain a national
program of extended care services and would specify that that
program must include geriatric evaluations, nursing home care
(in-house and contract), adult day health care, domiliciary
care and respite;
(2) Lrequire VA to maintain nationally the level of ``in-
house'' extended care services provided as of September 30,
1998;
(3) Lrequire VA, in addition to maintaining such capacity,
to develop and begin to implement by January 1, 2000 a plan for
carrying out the recommendation of the Federal Advisory
Committee on the Future of Long-Term Care that VA should
increase both home and community-based care options as well as
the percentage of the medical care budget dedicated to such
care;
(4) Lmandate VA to provide needed extended care services
in the case of veterans who are 50 percent service-connected or
in need of such care for a service-connected condition; and
provide such veterans highest priority for placement in VA
nursing homes;
(5) Lprovide, in the case of a veteran in need of extended
care services for a nonservice-connected condition (other than
a veteran described in paragraph (4) above), that VA shall--
(a) Lin providing nursing home care in VA facilities,
give priority to placements (i) to rehabilitate
patients, (ii) for unique patient populations (such as
Alzheimers' disease), and (iii) for patients with no
other good placement options;
(b) Lestablish a copayment policy (applicable to
extended care of more than 21 days in a year) which
would be based on the following principles applied in
State veterans' homes:
L(i) the establishment of a maximum monthly
copayment;
L(ii) the payment requirement would be based
on an ability-to-pay formula tied to income and
assets of a veteran and spouse;
L(iii) provision would be made to protect the
veteran's spouse (if she/he lives in the
community) from financial hardship by exempting
at least part of the couple's income and assets
from consideration in determining the copayment
obligation; and
L(iv) providing for the veteran to retain a
monthly personal allowance.
(6) Lestablish a revolving fund in the Treasury in which
to deposit copayments under paragraph (5)(b) to be used to
expand extended care services, as described in paragraph (3)
above;
(7) LLift the six-month limit on VA providing adult day
health care;
(8) LAuthorize VA to furnish respite care services under
contract in the veteran's home or in any other setting;
(9) LAuthorize VA to expand the scope of the State home
program to encompass all extended care services;
(10) LRevise the priority system for the award of grants
under the State home construction program (A) to provide a
higher priority for renovation projects than accorded under
current law (with highest priority for projects to remedy life-
safety problems), (B) for applications for bed-producing
projects, prioritize based on the relative need for adding new
beds (with higher priority to states with great need vs. those
with moderate or limited need, and taking into account existing
VA and community nursing home beds), and (C) to ``grandfather''
those VA-approved projects for which states have provided
funding in advance; and
(11) LRequire VA to report to Congress on the feasibility
of a pilot program to provide veterans assisted living
services.
II. Improved access through facility realignment
These provisions would:
(1) LRequire VA to establish enhanced-service programs to
improve access and quality of service provided at medical
centers which (A) are no longer providing high quality,
efficient hospital care based on such factors as (i) current
and projected need for the service, (ii) functional
obsolescence, and (iii) aging physical plant, and (B) could
obtain needed hospital care services from a nearby VA facility
or under reasonable contract arrangements;
(2) Lprovide for the development of an enhanced service
plan at a designated center (to be based on strategic network
planning) that would allow for--
(a) Lceasing to provide hospital (or other) care at
the medical center;
(b) Lcontracting or otherwise arranging for the
provision of needed hospital or other care;
(c) Llong-term leasing of buildings or grounds which
are no longer needed;
(d) Lretaining locally operational savings as well as
the proceeds of long-term leases to be used to
establish and operate modern clinics and/or extended
care services;
(e) Lproviding re-employment assistance to those
displaced;
(3) Lrequire VA to provide for veterans organizations,
employee unions, and other interested parties to participate in
developing an enhanced service plan;
(4) Lprovide that such a plan may in no way diminish the
VA's obligation to maintain specialized medical programs;
(5) Lprovide that VA cannot implement an enhanced service
plan without first submitting the proposed plan and
justification to Congress, and waiting for a period of 45 days;
(6) Lexpand VA's authority to enter into enhanced-use
leases by
(a) Lauthorizing VA to enter into a long-term lease
of property when that would enable it (as demonstrated
in a business plan) to apply the proceeds of the lease
to demonstrably improve services in that geographic
area (such as by using such monies to lease and operate
a new outpatient clinic);
(b) Lextending the duration of such a lease term for
up to 75 years (to encourage maximum return);
(c) Lproviding that funds from enhanced use or other
long-term leases shall be deposited in a new Health
Services Improvement Fund (with not less than 75
percent of the proceeds to be made available to the
network where the property is located); and
(d) Lauthorizing VA to use minor construction funds
(rather than medical care funds alone) to meet costs
involved in such leasing.
III. Eligibility reform
These provisions would:
(1) Lprovide specific authority for VA care and treatment
for veterans who have sustained an injury in combat recognized
by the award of the Purple Heart, and would provide them the
same priority as former POW's and veterans who are 10 or 20
percent service-connected;
(2)(a) provide specific authority for VA care and treatment
for those TRICARE-eligible military retirees who are not
otherwise eligible for VA care as ``category A'' veterans (this
legislation would make them category A veterans with priority
immediately below ``group 6'');
(b) require VA and DoD to enter into an implementing
agreement under which DoD would reimburse VA at rates to be
agreed upon by the Secretaries, but which must be sufficient
for VA to recover the costs of treating such retirees;
(c) limit VA from entering into an agreement to provide
care to these veterans in any area unless VA would recover its
costs and has certified and documented that it has the capacity
to provide such care; and
(d) provide for phased implementation.
IV. Enhanced revenues
These provisions would:
(1) Ldirect VA to establish a copayment policy applicable
to extended care services, as described in section I(5)(b),
above, with revenues to be used to expand home and community-
based extended care;
(2) Lsubject to the current statutory exemptions, authorize
VA, though regulations which VA may promulgate, to (a) increase
the copayment amount on prescription drugs; and (b) establish
reasonable copayments on hearing aids, eyeglasses, electronic
equipment, and other costly items or equipment furnished a
veteran for a nonservice-connected condition (but specifically
exempt wheelchairs and artificial limbs from any copayment
requirement);
(3) Lestablish that new revenues under the bill (other than
those for extended care services and in paragraph (5) below)
would be for deposit into a new Health Services Improvement
Fund, which would be free of any requirement that such amounts
must be made available for expenditure in appropriations acts;
(4) Ldirect the Secretary to establish a more appropriate
copayment, or schedule of copayments, applicable to outpatient
care provided to category C veterans (in lieu of the current
requirement that the copayment is 20 percent of the average
cost of an outpatient visit); and
(5) Lrequire (if the United States prevails in a suit
against tobacco companies to recover costs incurred to the
Government attributable to tobacco-related illnesses) that (a)
VA shall retain the proportionate amount of the recovery
attributable to VA's costs of providing care for tobacco-
related illnesses, and (b) such funds are to be deposited in a
trust fund in the Treasury to be available after fiscal year
2004 for furnishing medical care and conducting research.
V. Other Program Improvements
(1) LProvide compensation under title 38, United States
Code, section 1151 and, health care coverage to a veteran who
suffers disability or death as a result of participation in a
VA compensated work therapy program;
(2) LExtend, through December 31, 2002, eligibility for
Vet Center counseling to Vietnam-era veterans;
(3) LExtend, until September 30, 2002, VA's authority to
make grants to assist homeless veterans, and strike limits on
the number of vans which such grants may support;
(4) LExtend the requirement that VA maintain special
committees relating to post-traumatic stress disorder and to
the care of the seriously chronically mentally ill;
(5) LAuthorize VA nonprofit corporations to accept
donations to support VA continuing education needs;
(6) LClarify the authority of VA's canteen service to sell
items to outpatients and for use off the premises.
(7) LAuthorize VA to establish and make reasonable
emergency care payments for ``category A'' (priority 1-6)
veterans who (a) have no health insurance or other medical care
coverage, and (b) are enrolled in the VA health care system and
have received VA care within the twelve months before the
emergency treatment.
(8) LAuthorize VA to establish a three-year pilot program
in up to four networks to provide primary care services
(subject to reimbursement) to dependents of veterans.
(9) LRequire VA to report to Congress on proposed closures
within a fiscal year of 50 percent or more of the beds in
certain bed sections at any VA medical center, and to notify
Congress annually by network of closures and mission changes in
other bed sections.
(10) LRequire VA to establish a policy on the role of
chiropractic treatment in the Department's care of veterans.
(11) LProvide that VA may not employ a health care
professional if a state has terminated for cause the
individual's license to practice.
(12) LExtend by one year VA's authority to provide sexual
trauma counseling, and direct that the VA operate the program
during that period.
(13) LAuthorize two major construction projects and two
major medical facility leases.
(14) LName a new replacement hospital building at the Reno,
Nevada VA medical center for a veteran who is the most
decorated combat veteran in that State.
Background and Discussion
Three years ago, this Committee developed and held hearings
on legislation to reform VA rules governing eligibility for
care. That ``eligibility reform'' legislation, Public Law 104-
262, paved the way for a major shift--from primary reliance on
VA hospital care to less costly outpatient care. It also
resulted in vastly improved access for many veterans.
That legislation was described as a first step on a path to
reform of the VA health care system. With H.R. 2116, the
Committee takes another very significant step in tackling some
of the major challenges facing VA. In addressing in this
legislation many of the key issues discussed in hearings over
the course of this year, the Committee offers a blueprint to
help position VA to meet pressing veterans' needs in the new
millennium.
Overall, the bill has four central themes: (1) to provide
new direction to address veterans' long-term care needs; (2) to
expand veterans' access to care; (3) to close gaps in current
eligibility law; and (4) to establish needed reforms to improve
the VA health care system.
LONG-TERM CARE
The Department of Veterans Affairs has long recognized the
aging of America's World War II and Korean War veterans as a
major challenge for its health care system. Aging veterans'
access to acute-care services has expanded significantly since
the publication in 1984 of a VA needs assessment entitled
``Caring for the Older Veteran''. In contrast, VA extended care
and long-term care programs have not experienced comparable
growth. Thus, veterans who have enjoyed markedly improved
access to ambulatory or hospital care have been at greater risk
with respect to needed nursing home care or alternatives to
institutional care.
The VA's fiscal year 2000 budget cited the need to increase
spending for community-based long-term care. However, rather
than presenting a realistic plan for expanding the delivery of
such services, that budget effectively proposed a dramatic
reduction in VA's real spending power. As documented in the
Committee's budget hearings earlier this year, the
Administration's ``plan'' for VA health care for the coming
fiscal year is for reductions in services; its budget provides
no plausible strategy or mechanism to expand long-term care.
While VA may be faulted for years of skirting its
responsibility to plan and budget for veterans' long-term care
needs, its policy of decentralizing decisionmaking authority
has compounded the problem.
Since its decentralization in 1995, the Veterans Health
Administration (VHA) has undergone enormous change. Long-term
care programs have been affected by changes in workload and
policy. Twenty-two network directors nationwide now make
decisions about policy and funding that were once made at VA
Headquarters. National service chiefs who once made decisions
about various programs became ``consultants''. In their new
roles, consultants could offer only advice about program
management.
Coinciding with the implications of these organizational
changes, tighter budgets created additional challenges for VHA.
Many viewed the payment methodology under VA's new funding
allocation mechanism as a disincentive to operating long-term
nursing home care programs. Nursing home care, which VA
officials came to see as a ``discretionary'' program, became
vulnerable to cost-cutting, and Headquarters, by design, had
little ability to affect network decisions.
A survey of VA chiefs of staff initiated by the Committee's
Ranking Member last year documented these and other changes
which have affected VA long-term care programs. Among its
findings, the survey documented that many medical centers have
changed the mission of their nursing home units, offering post-
acute restorative, rehabilitative, and palliative care, rather
than ongoing care for age-associated problems. The survey also
found that the number of beds VA funds or operates devoted to
providing long-term care had dropped.
The Committee believes that, while VA has demonstrated some
improvements in quality and increased the number of new
veterans it treats, decentralization has also led to troubling
shifts in long-term care delivery patterns. The result has been
marked variability--from network to network--in veterans'
access to VA nursing home care and nursing home care
alternatives.
It is untenable that VA network or facility directors
should dismantle critically needed care programs on the basis
that nursing home care is costly or that Congress has somehow
invited VA officials to exercise the discretion to provide or
not provide such care.
Veterans' advocates have rightly called for a legislative
response to this disturbing situation. But formulating such
legislation requires a measured, balanced hand. That effort
must acknowledge budget constraints as well as other areas of
unmet or only partially-met need. It must also recognize that
the formidable costs associated with long-term care create
access barriers for Americans at large.
This Committee has for some time pressed the Department to
formulate a plan to provide for veterans' long-term care needs.
In response, the Under Secretary for Health established a
Federal Advisory Committee on the Future of VA Long-Term Care
early in 1997. Among its charges, the Advisory Committee was
asked to evaluate access to long-term care for veterans,
appropriate models for service delivery, and the VA's
appropriate investment in long-term care. The Committee's
findings and recommendations were published in June 1998 in
``VA Long-Term Care At The Crossroads: Report of the Federal
Advisory Committee on the Future of VA Long-Term Care.'' Unlike
VA's 1984 report, ``Caring for Older Veterans,'' which assessed
veterans' needs but failed to provide a strategy for meeting
them, the advisory committee's report frankly acknowledged that
its charge was to take account of budget constraints in
formulating a plan for the future of VA long-term care.
Among its recommendations, the Advisory Committee called on
VA to establish performance measures, financial incentives and
broad national guidance for VA long-term care. VA now operates
or funds three nursing home programs; the Committee recommended
that VA maintain a core of VA-delivered services, but meet
additional service goals through contracting and use of the
State home program.
The Advisory Committee also recommended VA triple the
percentage of the VA health care budget devoted to home and
community based long-term care services and double the
proportion of long-term care spending invested in home care,
community-based services, and ``enriched housing'' programs. It
recommended establishing a ``grandfather'' clause for patients
who have resided in VA facilities for more than 1000 days.
Notwithstanding its receipt of this report last year from an
Advisory Committee, the Department has been slow to adopt or
otherwise act on those recommendations.
The reported bill builds on the Advisory Committee's
findings and recommendations, but goes considerably further.
The bill squarely addresses the notion that VA long-term care
programs are simply ``discretionary''. This notion holds that--
because the Secretary ``may'' provide such care to veterans
(rather than ``shall'' provide, subject to the availability of
resources)--the Secretary (or his subordinates) may also opt
not to provide such services. If the Secretary has the
authority not to provide such services to all veterans in need,
some officials apparently reason, he must also be free not to
operate such programs. While such reasoning is spurious, it has
clearly taken hold among those whose decisions are apparently
colored by the high cost of operating these programs. It is
most disturbing that this misconception is held at the highest
levels of the Department, as reflected in the recent testimony
of VA's chief physician:
Dr. KIZER. . . . [U]nder the law we are mandated to
provide acute care services. Long-term care is a
discretionary item.
* * * * * * *
[T]oday under the law, long-term care is considered a
discretionary program, not on the same footing as acute
care service. And in an era of severe budget
limitations and constraints, some of the changes that
have been seen with regard to the service of long-term
care should really come as no surprise given the
inequity between how those are treated under the law.
And we hope that as a result of this and continuing
dialogue, we will achieve parity for long-term care and
acute care, and the statutory recognition that these
are merely different points along a continuum of care
that should be provided for, not only veterans, but by
all health plans.'' (Subcommittee on Health, Hearing on
Long-Term Care, April 22, 1999)
It is important that Congress set to rest the notion that
its actions have created a legal chasm requiring VA to provide
acute care, on the one hand, while permitting it not to provide
long-term care, on the other. The reported bill, accordingly,
would bury the myth that VA medical centers may cease to
provide nursing home care, for example, as a matter of
budgetary or programmatic discretion. To the contrary, the bill
makes clear that extended care (as defined in new section
1710A) is as much an element of VA's medical care mission as is
ambulatory or other acute care. However, given the implications
of a Congressional Budget Office cost estimate of any
legislation which employs the phrase ``the Secretary shall
provide . . . '' specified services, this measure does not
state that VA shall provide extended care services to all
veterans whom it enrolls for VA care. At the same time, that
omission is not intended to signal that VA has a greater
obligation to provide acute care services than long-term care,
or that VA must deploy its resources so as to maximize the
number who receive acute care services, while limiting the
number to whom it provides long-term care. With respect to the
April 22 testimony quoted above, nothing in this bill (or
chapter 17 of title 38, United States Code, as so amended)
would bar the Secretary from limiting the number of veterans
enrolled (under section 1705 of title 38) to a population which
could receive a complete continuum of care.
The reported bill would, however, make several significant
changes to lift limits that may now impede VA from providing a
needed continuum of care or that limit VA from providing care
in the most appropriate mode. The measure directs VA to develop
a plan for, and begin to carry out, the Advisory Committee's
recommendation to expand home and community-based care options
for veterans needing long-term care through an increase in
spending on such services. The measure would also adopt the
Advisory Committee's recommendation regarding the assignment of
priorities for nursing home placements. But it would go further
to direct that highest priority for such placements should go
to veterans in need of such care for a service-connected
disability and to those in need of such care who have a
service-connected disability rated 50 percent or greater. H.R.
2116 also directs VA to provide extended care services, as
needed, to these service-connected veterans. Such direction
should not effect a substantial change from current practice,
which has long recognized the debt owed both the service-
connected veteran needing care for a service-connected
disability as well as the veteran with profound service-
incurred health problems. By way of increasing VA's flexibility
to meet veterans' long-term care needs, the measure would lift
a six-month limitation in current law on provision of adult day
health care. It would also authorize VA to provide respite care
(now limited to care in VA facilities) through contract
arrangements. VA could, accordingly, provide respite care in
the veteran's home (which in the view of the Advisory Committee
represents the preferred location), in community nursing homes,
or in other residential care facilities.
With these provisions, the reported bill makes it clear
that VA has broad authority to provide extended care services,
through VA facilities and staff and under contract
arrangements, as appropriate. (As VA medical care
appropriations are in the nature of ``discretionary spending'',
however, it should be noted that these provisions do not
establish an entitlement to care as such.)
With respect to VA's authority, however, the Subcommittee
heard testimony at its April 22 hearing which suggests that it
may be cost-effective for VA to explore contracting for ``care
coordination and management'' of non-institutionalized veterans
in need of long-term care services. The Committee learned that
there are entities experienced in long-term care management
under Medicaid or similar long-term care programs which may be
able to provide VA such services. The Committee would encourage
the Department to consider the development of a pilot program,
giving first priority for participation to service-connected
veterans needing such care for service-connected conditions or
with service-connected conditions rated 50 percent or more. The
Committee envisions a contractor managing the delivery of
services under such a pilot. This would include ``leveraging''
available VA services (such as outpatient treatment, a home
improvement/structural alteration grant, and respite care, for
example) while contracting for or providing directly other
services which VA is authorized to provide but may not have the
capacity to do so (to include such noninstitutional
alternatives to nursing home care as VA has determined
appropriate under section 101).
Cost-sharing
The Committee is cognizant that there are budget
implications associated with its long-term care provisions. It
is important to note that other provisions of the reported bill
provide means of offsetting those costs. (See, for example,
section 107(c)(5)(B).) Section 101 specifically directs the
Secretary to establish copayments applicable to provision of
extended care services (as defined in section 101) of 21 days
or more in any year for a nonservice-connected disability. The
measure would specifically exempt only veterans who have a
service-connected disability rated 50 percent or greater from
responsibility for such cost-sharing.
The Committee believes that the adoption of such a policy
is not only a reasonable component of its effort to address
veterans' long-term care needs, but a step that should be taken
as a matter of equity. Under current law, largely arbitrary
circumstances often dictate whether similarly-situated veterans
will receive entirely cost-free VA nursing home care or bear
very substantial costs of care--either in a State veterans'
home or through a required spend-down of assets to qualify for
Medicaid. All but three states participate in the State home
program, and in all but one State veterans are required to make
payments toward the cost of their care, up to a prescribed
maximum and subject to ability to pay.
In 1986, Congress established co-payments for VA and
contract community nursing home care applicable to veterans who
do not qualify for priority care as so-called ``category A''
beneficiaries. Amendments enacted in 1990 subjected such
veterans to an additional $5-a-day copayment for nursing home
care. In 1992, the General Accounting Office published a report
exploring whether VA could more extensively offset some of the
costs of long-term care. GAO noted that in fiscal year 1990,
when VA spent some $1.3 billion to provide nursing home and
domiciliary care, VA offset less than one-tenth of one percent
of its costs through copayments, which totalled $260,389. GAO,
in studying the experience in State veterans' homes, found that
seven of the eight State homes it visited required veterans to
contribute to their care by means of a co-payment, and that co-
payments were collected from 90 percent of their veteran
residents. GAO also found that 39 of the (then) 40 states with
veterans homes required veterans to contribute to the cost of
their care. Of the 39, 16 set variable copayments based on
incomes and assets, 15 set variable copayments based only on
incomes, and 8 charged a fixed copayment regardless of incomes
or assets.
In its study, GAO found that states used only financial
criteria for exempting some veterans from cost-sharing, but
that states used stricter criteria in determining a veteran's
ability to make copayments than the ``means test'' threshold
(then set at $18,171 for a single veteran) in VA. GAO noted
that none of the homes they visited automatically classifies a
veteran as unable to pay if he or she received a VA pension or
was eligible for Medicaid. Two of the eight states, for
example, required single veterans to make at least minimal
copayments if their annual incomes exceeded $2400 and $1080,
respectively. Among the eight, GAO reported that the maximum
daily copayments were, respectively, $92.56, $90.60, $79.40,
$77.56, $66.14, $29.59, $18.74, and $5. In setting the
applicable copayment for any particular veteran, each state
surveyed had provisions to protect the veteran's spouse by
excluding the principal residence and a portion of the
veteran's income from computation towards co-payment. And all
eight excluded a specified amount of the veteran's monthly
income from the copayment computation as a personal needs
allowance.
GAO concluded that in the face of rising health care costs,
Congress ``may wish to consider changing the current policy for
charging veterans for care in VA and community facilities to
help offset increased operating costs, fund care for more
veterans, or both.'' The Committee concurs with this
recommendation, and the reported bill, accordingly, makes
provision that such copayments are to be deposited into a new
revolving fund to be used exclusively to provide extended care
services. In so providing, the Committee intends that such
copayments would help offset the costs of expanding home and
community-based long-term care as required under section 101(b)
of the reported bill and any other new costs under section 101.
While section 101 vests some discretion in the Secretary to
develop a methodology for establishing copayment amounts, it
directs that such a methodology provide for variable copayments
(based on all family income and assets). The measure also
requires that the copayment policy provide (in the case where
the veteran has a spouse who resides in the community) for
protecting the spouse from financial hardship by not counting
all of the income and assets as available for determining the
copayment obligation, and allow the veteran to retain a monthly
personal allowance. The Committee does not intend that the
copayment be simply a symbolic or token payment. It is intended
to help offset the significant costs of VA long-term care
programs, and to address the inequity in current law, described
above. Thus, it is the Committee's intention that VA implement
a copayment methodology under which the maximum copayment
amount would not be less than the median figure among the
maximum amounts employed by the various states which require a
copayment.
State homes
Perhaps the most important partners in VA's efforts to
provide for the long-term care needs of eligible veterans are
the states, which provide care through 95 State veterans homes.
The State home program is a longstanding Federal-state
partnership under which the VA provides both grant support (of
up to 65 percent of cost) for the construction and renovation
of homes and per diem payments to cover up to 50 percent of the
cost of caring for eligible veterans in these homes. Forty-
three states are operating homes under the program, up from 35
in 1988; four states which do not have State homes have
recently been awarded grants or filed applications. Over the
last decade the State homes have expanded from some 18,400 beds
to 24,000.
The increased participation of states in the program owes
much to provisions of Public Law 99-576, enacted in 1986.
Public Law 99-576 revised provisions of law under which VA had
previously administered the program. Under then-existing law,
VA maintained that it had no basis to differentiate among and
establish priorities by which to rank or weight applications.
Accordingly, the Department awarded grants in the order in
which applications (which met the statutory criteria) were
received. This ``first-come/first served'' system, however, was
seen as a disincentive to states which had not participated in
the program. Notwithstanding the benefits of constructing and
operating State-operated extended-care beds in previously non-
participating states, such states' applications might be years
away from receipt of grant support, in a queue behind earlier-
filed (but not necessarily more worthy) applications. Public
Law 99-576, accordingly, revised the enabling law for the State
home construction program. Among its changes, the law
established a framework for VA to assign priorities to State
home applications. The law directed VA to accord highest
priority to applications for which the state has made available
its share of funds for the project. Second priority was to go
to applications from states that do not have any State home
facilities, third to states that have the greatest need for
nursing home or domiciliary beds, and fourth to applications
meeting any other criteria determined by VA.
The changes established by Public Law 99-576 were
successful in realizing that law's goals, with both many more
states participating in the program and a substantial increase
in the number of new State home beds. The law had unintended
consequences, however. With the high priority given in the law
(and its implementing regulations) to bed-producing projects,
state applications for renovation of existing homes have
necessarily been given a lower priority. Thus, even renovations
needed to remedy conditions which may threaten patient safety
have consistently fallen below bed-producing projects. With the
requirement in existing law that the Secretary publish a list
of approved applications in the order of their priority on the
basis of which to grant awards, these renovation projects have
consistently been ``outranked'' and gone unfunded. Thus, even
states which have appropriated their share of funds for such
projects have seen them languish.
Both the states and the Department of Veterans Affairs have
recognized the need to revise existing law. While the National
Association of State Veterans Homes (NASVH) has proposed a
legislative remedy, the VA has been more cautious in embracing
any specific legislative solution. Last year the Department
contracted with a consultant to conduct a study of the program
and to develop recommendations for changes in the
prioritization methodology. The Subcommittee heard testimony on
April 22 on these issues from the contractor, Birch & Davis
Associates, Inc.; Department officials; an NASVH
representative; and a representative of the nursing home
industry.
The reported bill addresses many concerns raised by these
parties. In its review of the program, the consultant, for
example, identified a number of issues inherent in the current
prioritization methodology reflected in VA's regulations
governing the grant program. The consultant reported that:
[several] issues emanate from the fact that bed need is
measured in terms of the maximum bed capacity or bed
supply the VA would help finance if Congress
appropriated the money. Veterans are assumed to need
these beds, and their need is assumed to be uniform
nationally. Unmet need is said to exist whenever a
state does not have the maximum bed capacity that the
VA would fund, regardless of the availability of
suitable beds in VA facilities, community nursing and
domiciliary homes, or existing State homes. The maximum
bed capacity that the VA will fund is 4 nursing home
beds per 1,000 veterans and 2 domiciliary beds per
1,000 veterans. We found no empirical justification for
these bed standards. Second, bed need is measured in
terms of the entire veteran population rather than
veterans who are likely to utilize beds in State homes
. . . Third, unmet bed need is predicated on the number
of veterans residing in a state at the time a grant
request is submitted rather than the number of veterans
who are likely to seek care during a home's useful life
. . . Fourth, unmet bed need plays a role in the
assignment of priorities to grant requests submitted by
states with an unmet bed need at or above 91 per cent
of the maximum allowable or ``fundable'' capacity.
Unmet bed need has no bearing on the priority assigned
to other grant requests, however.
The reported bill directs the Secretary to prescribe new
regulations (and thus revise its current regulation at 38 Code
of Federal Regulations, section 17.211) to set the number of
beds for each state for which grant assistance may be provided.
The Committee expects that VA will consult with the NASVH in
developing such regulations. The bill specifies that such
regulations are to based on projected demand for such care (ten
years from date of enactment) on the part of veterans who at
such time are 65 or older, and that in projecting such demand,
VA is to take account of travel distance for veterans and their
families. (In so specifying, the Committee intends that such
regulations take account of situations where, for example, a
state may already have a substantial number of State nursing
home beds, but such facility or facilities are remote from a
major population center. In such a case, the existence of
nursing home bed capacity at a great distance from such
population center should not preclude the state from
establishing additional State home beds if needed to serve that
population center.)
The reported bill also calls for the Secretary to establish
the criteria (based on each state's relative need for
additional beds) by which VA would determine whether, with
respect to applications for bed-producing projects, the state's
need for additional beds is most aptly characterized as
``great'', ``significant'', or only ``limited''. This
characterization would determine the relative priority of any
bed-producing project under the revised prioritization
methodology established under the bill. In establishing these
criteria, VA is to take into account the availability of VA-
operated beds and community nursing home beds which would
appropriately serve the needs for nursing home care or
domiciliary care, as pertinent. (The reference to
``appropriately'' serving such needs reflects the Committee's
view that levels and quality of care may differ substantially
from institution to institution. Accordingly, excess capacity
in one domain (involving a lower level or substantially lower
quality of care) should not necessarily be construed to
``appropriately'' serve veterans' need for a particular level
of care.
The Committee is also aware that there is variability in
VA's long-term care resources from network to network. The
Committee anticipates, accordingly, that in a state where, for
example, VA provides little or no long-term care in VA nursing
homes (and relies to a greater extent than in other networks
and other states on the State home program to meet that need),
there should be recognition of a greater relative need for
State-operated nursing home beds in that state than in other
states in which VA meets a greater ``market share'' of such
long-term nursing home care needs.
Rather than adopting the proposal that a first-come/first
served principle be reestablished, the Committee seeks to
retain priorities, but to reorder those priorities to achieve a
better balance between bed-producing projects and renovations,
and to prioritize within those categories as well. In addition,
the measure would require clearer direction to the states on a
number of issues. Among these, the bill would require clearer
distinctions be drawn between the states' obligations to keep a
home in good maintenance and repair, on the one hand, and a
renovation project which may be the subject of grant support,
on the other. The measure would also place stricter control on
the states in siting new State home facilities to ensure that
future State home projects are located in reasonable proximity
to veteran population centers.
In the Committee's view, section 206 should help strengthen
the State home program and thereby maintain a valuable Federal/
state partnership in support of veterans.
IMPROVED ACCESS TO CARE
Enhanced Services Program
Paralleling the experience of medical care in the private
sector, the VA health care system has undergone a major
transformation in recent years. Until recently, VA has been
primarily a hospital-based system. Now, however, most VA care
is delivered on an outpatient basis, with more and more VA care
delivered closer to where veterans live. Many factors have
enabled VA to make these changes. Among them, a reduction of
over 25,000 acute care beds since September 1994 has permitted
VA to shift much of its workload from the hospital ward to the
ambulatory care arena. Along with other changes, it has also
freed up resources to permit VA to establish more than 200
community-based outpatient clinics since October 1996. With
these changes, VA over the last four years has seen an increase
of 9 million ambulatory care visits and a 31.7 percent decline
in hospital admissions.
While the pace of VA's transformation has not been without
problems, the changes have renewed focus, within VA and
without, on the infrastructure of VA's health care system. Seen
from the perspective of veterans' health care needs on the
brink of a new millennium, VA's health care ``real estate''
represents at once both a national expression of the country's
commitment to veterans and at the same time something of an
anachronism. VA delivers care at 181 major delivery locations,
but over 40 percent of its 4,700 buildings have been in
operation for more than 50 years; almost 200 of them were built
before 1900. (As the General Accounting Office has noted, many
organizations in the private sector consider 40-50 years to
represent the useful life of a building.)
Many of VA's facilities were designed to provide care in a
very different manner than the way care is provided today. As
the VA health care system was being developed, hospitals were
designed to provide most of the care patients needed, care
which typically required long lengths of stay. Such buildings,
however, lacked physician examination rooms where ambulatory
care is delivered; they were designed without sensitivity to
patient privacy. While VA has maintained these old structures
and made renovations to keep them operational and safe, many
are functionally obsolete. Historically, VA hospitals were not
consistently sited near veteran population centers. To the
contrary, facilities to care for an illness like tuberculosis
or mental illness, which at the time was thought to require a
tranquil, rural location, are situated in relatively remote
locations. The rural location once thought beneficial to
treating these illnesses is now a liability, complicating the
recruitment of scarce medical specialists, nurses, and
technicians. Today, occupancy rates at numbers of those
hospitals are substantially below levels needed for efficient
operation and optimal quality of care. Maintaining highly
inefficient hospitals, which were designed and constructed
decades ago to standards no longer deemed acceptable,
substantially diminishes the availability of funds needed to
strengthen care-delivery in facilities which should be
retained.
Despite its aging infrastructure and a backlog of major
construction proposals initiated by VA medical centers
estimated to be in the billions, VA budget plans have for
several years clearly given major construction work a very low
priority. (In contrast to major construction budgets of more
than $500 million earlier in this decade, VA sought major
medical construction funding of $121 million in fiscal year
1998, $84 million in fiscal year 1999, and $73 million in
fiscal year 2000. Merely maintaining this infrastructure has
huge costs. In testimony presented to the Subcommittee on
Health, the General Accounting Office projected that one of
every four VA medical care dollars is spent on maintaining and
operating VA's thousands of buildings. GAO warned that VA is
likely to spend billions of dollars over the next five years to
operate hundreds of unneeded buildings.
Congress cannot simply ignore VA's management of its
capital assets. Until recently, however, it appeared that VA
itself was ignoring that responsibility. As GAO reported to the
Subcommittee on Health in a March 10, 1999 hearing, ``VHA's
planning focuses on individual needs of assets at its 181
[major] delivery locations, even though most locations operate
in markets that also include other VA locations.'' GAO
recommended that VA should instead be focusing its capital
asset planning not on individual facilities as such but on
``markets''. GAO urged VA to focus particularly on those 40
areas (or ``markets'') in which VA has multiple delivery sites
(from 2 to 9) and on those 66 markets in which there is a
single VHA facility. GAO expressed the view that VA's 40
multiple-facility markets offer great opportunity for ``asset
restructuring and benefit enhancements for veterans'' because
they have 115 major delivery sites in which utilization is
significantly below inpatient capacity and these sites
``compete with other VA locations to serve rapidly declining
veteran populations.''
Of VHA's 40 multiple-location markets, GAO estimated that
VHA spends about $2.7 billion annually to operate and maintain
3,000 buildings and 10,000 acres in these markets, and plans to
invest over $1.2 billion to improve these assets over the next
five years. GAO testified that this ``represents a drain on
VHA's health care resources because most locations in these
markets have delivery capacity that VHA considers functionally
obsolete'', including substandard inpatient and outpatient
capacity, and safety concerns.
Illustrating the situation of multiple sites in a single
market, the Subcommittee on Health heard testimony from the
dean of a medical school affiliated with one of VA's four
medical centers in Chicago. Dr. Daniel Winship, a former senior
official in the Veterans Health Administration, and Dean of
Loyola University Stritch Medical School, stated that ``by any
objective measure . . . [the area] does not need four VA
medical centers. I am confident it could do acceptably well
with two, probably more optimally with three . . . The VA can
take a lesson from other health care systems . . . , i.e.,
savings gained by real elimination of duplications and
redundancies . . . and, yes, even closure of unneeded
facilities can be applied to more rapidly and completely
creating ambulatory sites for care. This strategy is NOT one of
closing the system. Rather, it will replace an archaic,
decrepit, inefficient delivery system with a new, better, cost
effective one. Quality will improve, access will improve . . .
[VA managers] must be allowed to let go of practices which will
lead to the demise of the system.'' This view generally mirrors
the findings of the GAO, which in an April 1998 report
concluded that closing a VA hospital in Chicago would save
millions and enhance access to services. (GAO/HEHS-98-64, April
16, 1998).
VA medical center mission changes and even hospital
closures have been under discussion for at least a decade, but
the subject is no longer simply hypothetical. As recently as
last summer, the Paralyzed Veterans of America for the first
time called on VA in a resolution ``to develop a plan within
one year to close down VAMCs which are no longer needed''. The
resolution's clear goal is that the savings achieved by such
closures be redirected to improve delivery of needed care.
For years, VA evaded serious consideration of closing
inefficient hospitals, despite widespread hospital closures in
the private sector. Ironically, the first VA hospital closure
in decades came about not through the persuasiveness of health
planners, but as a result of an earthquake. The lessons of that
experience are telling, however. The closure of the Martinez,
California VA Medical Center and the decision not to build a
replacement hospital--but instead to establish a full-service
ambulatory clinic--are widely recognized as having resulted in
improving care-delivery. The subsequent decision, rejecting
proposed construction of a replacement hospital in northern
California, and relying instead on multi-site contracts for
hospital care, provide an important case study. This experience
and subsequent mission-changes at other facilities across the
country suggest a model, provided for in the reported bill, for
improving VA care-delivery.
Some have proposed adoption of a ``Base Realignment and
Closure Commission'' (BRAC) model. But the nature of the BRAC
process--from enacting such legislation, to establishing a
commission, conducting exhaustive system and facility review
and analysis, and carrying out required community hearings--
would take years to reach and carry out final decisions. It is
also a process which takes authority away from officials
responsible to Congress for meeting veterans' health care needs
and vests it in a commission dedicated simply to closing
facilities.
The distinction between a BRAC model and this legislation
was aptly summarized by Dr. Kenneth Kizer, testifying on May
19, 1999 before the Subcommittee on Health on the draft
legislation subsequently introduced as H.R. 2116:
Dr. KIZER: The analogy to the BRAC is a fatally flawed
analogy. It is one that contaminates the thinking in
the whole process here. BRAC is about taking something
away. And despite what the words of BRAC may mean, what
it has meant is taking something away from a community.
When we talk about realignment of VA facilities, what
we are talking about is how can we get the best health
care return on investment for the limited dollars that
we have. It is not about taking health care away.
The reported bill gives real meaning to that concept, in
requiring specifically that any hospital or medical center
closure must enhance patient care in that area through
reinvestment of operating funds and capital in new facilities
or services, such as a new, full-service outpatient clinic or
community-based clinics, for example.
In the context of discussions about a ``closure
commission'', the reported bill very clearly identifies the
Department charged with responsibility to meet veterans' health
care needs as the appropriate entity to identify VHA' core
infrastructure needs. VA clearly has authority under current
law to take such actions, but it has not done so in a broad-
based manner. The reported bill provides a framework for the
requisite analysis, planning, participation, and review so
central to this difficult subject.
As GAO has testified, VA must begin by asking the right
questions. It must look methodically and in-depth at geographic
areas or ``markets'' in which it operates facilities--not
narrowly and arbitrarily at individual facilities. VA
contracted for such a market analysis in considering veterans'
needs for hospital care in northern California, and ultimately
concluded, prudently in the Committee's view, that construction
of a $211 million hospital at Travis Air Force Base was not its
best option. As GAO noted, VA initiated a market-based
assessment in Chicago in response to GAO's recommendation.
The intent underlying section 107 is to provide a
framework--not now provided for under law or published policy--
for VA to realign its health care infrastructure. This
provision aims to substitute a statutory structure for ad hoc
decisionmaking, and to provide stakeholders and VA
administrators confidence that there is a credible path to make
needed system changes and safeguards against error.
Section 107 underscores that capital asset management and
facility realignment--where it can improve access and quality
of service to the veteran--are responsibilities of the
Secretary. The measure outlines a two-pronged framework for
exercising that responsibility. Consistent with GAO's
recommendations, it envisions a data-driven analysis of
pertinent VA ``markets'' (as described in GAO's testimony).
Such an analysis would answer at least two basic questions with
respect to any such market. First, are one or more VA medical
centers--in whole or in part--unable to be operated efficiently
(and to provide care of high quality) because of such factors
as the cost of operating and maintaining an aging physical
plant, its functional obsolescence, and limited need for such
care capacity? A second question follows only if the preceding
is answered affirmatively. If so, then the bill asks whether
that inefficiency is so great that it would be demonstrably
beneficial in terms of patient care, in VA's judgment, to cease
operating that facility (or cease providing a particular level
or levels of care there), and either provide for one or more
other VA facilities in proximity to it to absorb some or all of
the patient workload, or contract with one or more community
hospitals which have the capacity and capability to provide
care of appropriate quality. (Thus, even assuming that a
particular VA facility is demonstrably ``inefficient'', this
measure effectively rules out consideration of closure if
alternative options provide no net benefit. For example, the
bill would not seek the closure of an ``inefficient'' rural
facility if such closure meant VA would provide care through
contract arrangements with a community facility where care is
clearly of markedly inferior quality.
Where such a market analysis leads VA officials to conclude
that a mission change or facility closure is warranted and can
result in improved access to and quality of care, section 107
provides VA tools to achieve the best possible outcome for
veterans and protections for affected VA employees. Consistent
with the discussion above--that this bill is not aimed at
closing facilities, but at enhancing services--its focus is on
the establishment of ``enhanced services programs'' and the
development of a plan in each instance to achieve it. To that
end, the bill requires in the case of a medical center or
centers designated as a site for an enhanced service program,
that VA is to provide for the participation of veterans
organizations and employee unions in the development of such
plans. Central to the development of such plan and to
materially improving access and care quality is the requirement
that operating funds (as well as funds under an ``enhanced use
lease'' of VA property under section 207) be reinvested. In
that manner, the closure of an obsolete hospital can ``fund''
the establishment of a full service VA outpatient clinic or
series of smaller clinics, for example. Importantly, the
measure also provides not only contracting authority to ensure
that a service capability is not lost, but the requirement that
in such contracting VA maintain ongoing oversight and care-
management of patients placed in community hospitals.
Rather than a hospital closure provision, section 107
provides new protections for veterans, employees, and other
stakeholders, and greater confidence that vital decisions
regarding VA health care will result not only in a more
efficient health care system, but a better one.
Reimbursement for emergency treatment
Section 102 of the reported bill would authorize VA to make
reasonable payments for emergency treatment which non-VA
facilities have provided certain enrolled veterans who have no
medical insurance and no other recourse for payment. VA advises
that, under current law, it lacks authority (other than through
the mechanism of a contract) to pay for emergency care of a
nonservice-connected condition. In the Committee's view,
uninsured veterans who have a high priority for VA care
(``category A'' veterans), have relied on VA as their primary
health-care provider, and have no other recourse for payment
should not incur extraordinary costs in medical emergencies
where a VA facility is not reasonably accessible.
The Committee is aware that many uninsured individuals
often use emergency rooms as a source of primary care. The
reported bill is clearly not intended to cover such care. To
that end, section 102 defines emergency care narrowly to cover
only situations in which to delay treatment would be hazardous
to life or health (and does not cover care rendered after the
patient's condition has been stabilized). The measure also
provides ample authority for VA to effectively and efficiently
administer this authority to ensure that scarce resources are
not inappropriately paid out on claims not contemplated under
this section. VA should make provision in its implementing
regulations for an appropriate screening requirement. For
example, VA could require providers of care to contact the
Department within a specified period to obtain ``clearance'' or
confirmation that it is providing true emergency treatment to a
veteran. (Since such a communication could not reasonably
address the other elements inherent in establishing eligibility
under this provision, it could not provide a basis for a VA
commitment to reimburse for the treatment. Thus any such
``clinical clearance'' would remain subject to an appropriate
VA determination that the other conditions specified in the
bill had been met.) It would serve, however, to provide the
necessary clinical determination that treatment is being
rendered in a true medical emergency. At the same time, it
would also serve to put the provider on notice of the
importance--in light of the limits on VA coverage for emergency
care under the measure and the VA's interest that the veteran
not be billed for services--of transferring the veteran to a VA
treatment facility at such time as a transfer can be safely
accomplished.
The Committee also strongly believes that to ensure even-
handed and efficient administration of this clinical review and
clearance process, VA should consider establishing a central
processing office or function that could carry out that
process, rather than having the function performed at a medical
center or VISN level. Indeed, the Committee believes it would
be reasonable and prudent for VA to use a single centralized
office to administer the entire emergency care reimbursement
process.
In adopting the emergency care provision in the bill, the
Committee recognized the significant potential cost of such a
measure if limitations were not imposed. To contain costs, the
Committee has taken steps to ensure that VA will pay for this
non-VA care only when a veteran has no other recourse for
payment for the care. The Committee intends that VA truly be a
payer of last resort.
The Committee recognizes that for VA to be a payer of last
resort, it must ascertain before authorizing any payment under
this section that a veteran has no medical insurance whatsoever
or any other medical coverage. It must also ascertain that the
veteran or provider (as pertinent) has exhausted all other
possible claims and remedies reasonably available against a
third party which may be liable for payment of the emergency
care (such as in the case of a work-related injury or a motor
vehicle accident, for example). In the interest of ensuring
that scarce VA medical care funds are protected, the Committee
expects that VA will act aggressively in this regard both in
the development of implementing policies as well as in the day-
to-day management of this new authority, to ensure that it is
obtaining all needed information from both the veteran and the
provider of care.
In that regard, the Committee understands that as part of
its enrollment process the VA now seeks information from
veterans on insurance coverage. With the enactment of section
102, obtaining complete information on health insurance
coverage is not only essential to the success of VA's current
collection efforts, but would help ensure sound administration
of this proposed new authority. It is not clear, in that
connection, that the current policy fully elicits such
information, however. Moreover, it does not identify other
benefit programs for which a veteran may be eligible, including
Medicare and Medicaid. The Committee recommends, accordingly,
that the Department expand and strengthen its efforts to obtain
all necessary information regarding health insurance and
benefits coverage. In the Committee's view, such effort should
be undertaken as part of the enrollment process (rather than in
the context of an individual or entity filing a claim for
reimbursement when there may be a greater incentive for less
than full disclosure).
The reported bill further provides that VA will promulgate
regulations which would establish the basis under which it
would make payments for ``the reasonable value'' of non-VA
emergency treatment. It is the Committee's view that in setting
such payment regulations VA should avoid a policy which gives
providers of emergency care a windfall. In that connection, the
Committee takes notice of the frequency with which providers of
emergency care ``write off'' such debts in cases where the debt
is deemed uncollectable or the costs of collection exceed the
likely recovery. VA serves a population which is substantially
elderly, indigent, and chronically ill. Given that this bill
covers a subset of this population which has no private or
public medical insurance or coverage, it stands to reason that
in most instances under current law providers would write off
the debts arising from the provision of emergency care to these
veterans. The Committee thus envisions that VA would establish
rates that are significantly below those paid under the
Medicare or Medicaid system (or under 38 United States Code,
section 1728). Such lower rates should also provide a
significant incentive to the providers of care to actively try
and obtain reimbursement from those other benefit programs
before seeking reimbursement from VA. As a further incentive to
the providers of care, the bill also provides that they must
accept VA's payment as payment in full.
The reported bill also limits reimbursement for emergency
treatment to enrolled veterans who have actually received some
VA treatment in the preceding twelve months. That requirement
is intended to ensure that the emergency treatment benefit is
available only to veterans who rely on VA for their care, not
those who have simply enrolled for VA care but typically obtain
their care elsewhere. In including the provision, the Committee
recognizes that situations may arise where a veteran has sought
VA care in the previous twelve months, but has been unable to
obtain care solely due to a VA scheduling problem or error. In
this limited situation, the Committee contemplates that VA
regulations might permit the Secretary to waive the treatment
requirement if to deny reimbursement on that basis would be
unfair to and likely to subject the veteran to personal
expense. The Committee would anticipate that such waivers would
be considered and used very sparingly.
In the event that the Department has made payment for
emergency treatment under the terms of the bill and
subsequently learns of a third party which is liable, the
measure would provide a remedy. If a third party makes payment
for care that VA has also paid, the bill would make VA's
payment an enforceable lien against any recovery the payee has
received from that third party.
With the adoption of section 102, the Committee proposes to
vest the Secretary with important new spending authority. In
crafting the provision, the Committee has been very cognizant
of the budget pressures already facing the VA health care
system. Given existing program demands and budget constraints,
the Committee has incorporated significant limitations into
this measure to contain costs and avoid unwarranted outlays. A
failure to establish meaningful administrative controls,
however, could jeopardize that goal. The Committee is very
concerned, accordingly, that in implementing, and designing
appropriate administrative mechanisms for this important new
authority the Department give the fullest consideration to the
importance of instituting appropriate safeguards and controls.
To that end, the Committee strongly encourages the Department
to contract for appropriate consultant support to develop
strong implementing regulations and shape sound mechanisms and
controls to carry out this authority.
Enhanced revenues
Through its long years of service to America's veterans,
the VA health care system has found support primarily as a
system which is both dedicated to the care and rehabilitation
of service-connected veterans and serves as a ``safety net''
for other veterans who lack medical insurance or other health
care options. Consistent with this mission, Congress has long
authorized VA to provide cost-free care.
Current law sets only very limited cost-sharing
requirements on veterans. Only one category of veterans is
subject to copayment requirements for outpatient care, hospital
care and nursing home care. That requirement applies only to
those who are not service-connected, have no special
eligibility for care (such as status as a former prisoner of
war or in-service exposure to radiation or other such hazards),
and whose income exceeds the thresholds established under the
law's ``means test'' formula. For other veterans, however, the
only cost-sharing requirement under existing law is a modest $2
copayment for each 30-day supply of medication furnished on an
outpatient basis for treating a nonservice-connected condition.
The requirement does not apply to veterans who are 50 percent
or more service-connected disabled, or to those with low
incomes.
Cost-sharing requirements in title 38 have their origin in
the context of budget reconciliation deliberations. Uncertainty
regarding the current budget has been a critical factor in
bringing the subject of cost-sharing into renewed focus. In
submitting a budget for fiscal year 2000 which proposed no
increase in funding, the Administration acknowledged that VA
would face a funding shortfall of more than $1 billion. VA has
conceded that it has no plan whatsoever to operate under such a
funding shortfall, that there are no identified ``management
efficiencies'' that could achieve cost-savings of that
magnitude (other than reductions and cuts which would have a
severe impact on patient care), and that network directors
would simply be tasked to develop and execute plans to operate
under such a constrained budget. At a budget hearing held by
the Subcommittee on Health, a panel of network directors
acknowledged that the level of funding proposed by the
Administration would require massive reductions in workforce
and ``draconian cuts'' in services, programs, and potentially
even closure of needed facilities. While this Committee is
clearly on record in support of a $1.7 billion increase above
the Administration's request for fiscal year 2000, the severe
reductions anticipated under that budget raise the prospect
that many nonservice-connected veterans who now enjoy free or
nearly cost-free VA care could lose access to VA services
entirely. In that regard, the Committee notes the marked
contrast between cost-sharing in the VA health care system and
the requirements applicable to military retirees under DoD
medical programs, health plans offered under the Federal
Employee Health Benefits Program, and other health plans.
Retirees who enroll under DoD's TRICARE Prime plan are
liable for copayments for many medical services in addition to
office visits, including a $9 copayment for each 30-day
prescription, a $12 copayment for a home health care visit, and
20 percent of the contractor fee for durable medical equipment.
Cost sharing is used extensively in health plans in the
private sector. A survey of copayment trends in 1996-7 found
the most common copayment among members of the American
Association of Health Plans to be $10 for a primary care visit
and prescription drug copayments in the range of $5 to $10 per
prescription. Many managed care plans vary copayments for
pharmacy benefit according to the brand of drug ordered, with a
lower copayment often required for generic drugs than for brand
name medications. A recent news account highlights that those
with other health-care options would, for example, face managed
care plan prescription copayments of $5 for generic drugs, $15
to $20 for a brand-name drug on a plan's formulary, and up to
$40 for a brand-name non-formulary drug (Wall Street Journal,
January 12, 1999).
In the Committee's view, authorizing the Secretary to set
reasonable copayment increases on prescription drugs is a
reasonable policy in the face of VA's mounting pharmaceutical
costs--approaching $2 billion annually. Notwithstanding an
aggressive pharmacy benefits management policy, VA's pharmacy
costs have nearly doubled since copayments were instituted some
nine years ago. In that regard, as VA's Under Secretary for
Health noted in discussing prescription copayments at its May
19 hearing, VA has become a very attractive provider--
particularly because of the availability of free or very low-
cost prescription drugs--to numbers of veterans who have other
health care coverage, notably Medicare. The insight of VA's
Under Secretary for Health on this point, as reflected in a
colloquy at a May 19 Subcommittee hearing, is illuminating:
Mr. STEARNS: Do you have any indication whether
Medicare-eligible veterans are turning to VA for
prescription drugs?
Dr. KIZER: I can't quantify it in precise dollars,
but it is a generally recognized phenomenon that is
occurring across the country and for very
understandable reasons. It is a hell of a deal to go to
the VA for your drugs. I would expect that it is in the
hundreds of millions of dollars range.
As with pharmaceuticals, VA has faced dramatically
increased costs in prosthetics, with an annual budget now
approaching $500 million. Since the enactment of Public Law
104-262, which eased restrictions on providing needed
prosthetics, VA costs have been increasing at a rate of some 18
percent annually. VA is providing large numbers of veterans
hearing aids, eyeglasses and other devices which would either
not be covered under other health plans or would be subject to
significant out-of-pocket costs under copayment or deductible
provisions. In contrast, nonservice-connected veterans,
receiving a benefit not previously available (other than as
needed in connection with hospitalization), bear no cost. The
bill authorizes the Secretary to establish reasonable
copayments on sensori-neural aids (such as hearing aids and
eyeglasses), electronic equipment, and any other item or
equipment (other than a wheelchair or artificial limb)
furnished for a nonservice-connected condition.
The Committee believes it is necessary that the Secretary
implement the cost-sharing policy authorized in the reported
bill. As the VA health care system in many areas has been under
strain to serve the many new nonservice-connected veterans who
have sought care, and has sought authority to provide new
services such as emergency care, it is unrealistic for it to
pursue such policies without the assurance of offsetting
revenues. The Committee seeks improvements in veterans' access
to care and in the quality of that care. Section 201 provides a
mechanism to help achieve those objectives.
The Committee notes that the Secretary has relatively broad
discretion under section 201. In exercising that discretion,
however, the Committee believes the Secretary should take into
account the payments required of military retirees under the
TRICARE program as well as practices under other health plans,
while exercising caution that copayments not be set so high as
to result in veterans not seeking needed care and services
(particularly in connection with rehabilitative programs). The
Secretary should also give consideration to revising the manner
in which existing copayments, particularly on prescription
drugs, are administered. The failure to require such copayments
at the time drugs are dispensed to the patient is a major
factor underlying the poor collections' record in this area. At
a time that veterans with other health care coverage appear
increasingly to seek VA care for prescription drugs, VA must
give greater consideration to securing these payments.
The Committee notes as well that the cost-sharing
provisions of the reported bill would enable VA to reassess
prior policy regarding medications which have been viewed as
``quality of life'' drugs. The Under Secretary for Health has
issued a policy regarding one such drug, Viagra, which is not
included on the VA formulary. VA's policy poses the dilemma
that such a drug may be denied to even a service-connected
veteran for whom it may be prescribed to overcome a service-
connected condition, while other Federal programs have
authorized furnishing the medications. To the extent that VA
policy has been based on, or influenced by, the high cost of
this drug, the proposed new copayment authority would provide a
foundation for the Secretary to set higher copayments for
particularly costly ``quality of life'' drugs prescribed for
the treatment of a nonservice-connected condition.
While the current VA cost-sharing burden on care of
nonservice-connected conditions of category A veterans is very
low, the copayments applicable to routine treatment afforded
so-called ``category C'' veterans is extraordinarily high.
Under current law, such veterans are liable to pay an amount
for each outpatient visit equal to 20 percent of the estimated
average cost of an outpatient visit to a VA facility. The
Committee understands that the current requirement under that
provision subjects the veteran to a $45 copayment, without
regard to whether the patient is seen for a routine office
visit or for ambulatory surgery. Notwithstanding that veterans
who are liable for such copayments are deemed under law to be
able ``to defray the expenses of necessary care'', this
amount--in the case of routine office visits, in particular--
may in many cases approach the full cost for the episode of
treatment. Requiring so high a copayment for a routine, primary
care visit appears to the Committee to be unreasonable. Section
201 of the reported bill would require the Secretary to
establish a new copayment policy with respect to so-called
category C outpatient visits. The Committee recommends that the
Secretary not set a single copayment amount, but consider
practices within the health care industry to differentiate
between primary care and specialty clinic visits.
Section 202 of the reported bill would establish a new fund
in the Treasury for deposit of payments under section 201 and
other specific categories of payments provided for under this
act. Amounts in the fund would be available without fiscal year
limitation (and without any requirement that such funds be
specifically appropriated) for providing care and treatment to
veterans. The Committee envisions that such payments would help
in covering the cost of the new emergency treatment authority,
opening new community-based clinics, and covering the
increasing costs of drugs and prosthetics.
Military retirees
Section 104 of the reported bill addresses a longstanding
concern regarding military retirees' access to medical care.
With the downsizing and closure of military treatment
facilities and other changes in DoD health care programs, many
who made a career of military service have voiced frustration
at what they view as a broken promise, an assurance of free
medical care at military treatment facilities. Over the years,
some retirees--eligible for government care as veterans--have
turned to the VA. Historically, however, military retirees'
career status and years of service have afforded them no
special eligibility for VA medical care. Specifically, retirees
who have no service-connected disabilities, have no other
special eligibility status (such as is accorded former
prisoners of war or those exposed to herbicides during the
Vietnam War), and whose income exceeds the law's ``means test''
threshold have generally had limited access to VA medical
services. This legislation reflects a recognition that the VA
health care system can and should be an option for retirees who
do not otherwise have a priority for VA care.
Congress has historically sought to maximize opportunities
for closer coordination and sharing between the VA and DoD
health care programs. With the enactment in 1982 of the
Veterans' Administration and Department of Defense Health
Resources Sharing and Emergency Operations Act, Public Law 97-
174, Congress established a framework to stimulate increased
sharing of health care resources between VA and DoD in an
effort to minimize duplication and underuse of those resources.
That law sought to encourage medical facilities of the
respective departments to provide services on a reimbursable
basis to primary beneficiaries of the other department.
Congress expanded this concept further with the enactment
in title II of the Veterans Health Care Act of 1992 of a
provision authorizing VA to treat DoD beneficiaries as a
subcontractor to DoD contractors. As the Subcommittee on Health
learned in a field hearing in Boise, Idaho on June 30, 1998,
the existence of a contract between a TRICARE contractor and a
VA medical facility does not ensure that the contractor refers
any patients to VA. Notwithstanding both repeated requests from
VA to ``activate'' this contract and the urging of the Chairman
of the Subcommittee on Health, the contractor has not availed
itself of VA's services.
In short, notwithstanding the mechanisms in law to expand
interdepartmental sharing of health care resources and
increased reliance on VA facilities to treat DoD beneficiaries,
VA reports that TRICARE contractors have not made extensive use
of VA as a provider. VA data for fiscal year 1999, for example,
show that for the first six months of the fiscal year TRICARE
reimbursements to VA facilities nationwide totalled only $2.3
million.
This Committee recognizes that, with the implementation of
the TRICARE program, the Department of Defense has established
a national system that links the health care resources of the
military services with networks of civilian health care
professionals. All active duty members and their families,
retirees and their families, and survivors who are not eligible
for Medicare may participate in at least one of the three
TRICARE options.
This legislation is not intended to damage the TRICARE
program or to interfere with the Department of Defense's
ability to maximize the use of military treatment facilities in
order to provide cost effective services and support readiness
training. The Secretaries of the Departments of Veterans
Affairs and Defense shall take account of these requirements
when negotiating the terms of the memorandum of agreement
implementing this provision. Indeed, the number of those both
eligible and likely to avail themselves of such benefits would
not be large, in the Committee's view. Of the approximately 1.8
million military retirees, 54 percent are 65 or older, and thus
not TRICARE-eligible, and accordingly, not eligible under this
proposal. Some 218,000 of the approximately 885,000 TRICARE
eligibles are disability retired, and thus already eligible for
priority VA care. Another large cohort--estimated at almost
200,000--have compensable service-connected disabilities; they
too, as well as a significant number of retired enlisted
personnel whose income falls below the law's ``means test''
threshold, are already eligible for priority VA care. These
retirees, all eligible for VA care under section 1710(a)(1) and
(2), would not be covered by this provision. While the number
eligible under this provision is estimated at less than
400,000, several considerations diminish the likelihood of
widespread utilization of this benefit.
Only a fraction of retirees eligible for VA care live close
enough to VA facilities to actually seek to use them. Of that
number, the limitations associated with receiving care from VA
under this provision may further diminish utilization among
retirees, most of whom already have provider relationships
under TRICARE. For example, the legislation would not give
retirees' dependents access to VA care. The Committee believes
that an individual with dependents would be somewhat unlikely
to alter an arrangement where his or her family gets its care
from a single plan to an arrangement where the retiree receives
care from VA while the dependents get their care elsewhere.
Similarly, the rules associated with enrolling for VA care
would likely create disincentives that would diminish the
likelihood that retirees would enroll in significant numbers.
For example, a decision to enroll with VA for care is effective
for only a single year at a time, and a retiree's priority for
VA enrollment under this provision would still be relatively
low. It would be somewhat unlikely, therefore, for a retiree to
opt out of a care plan which provided satisfactory care to
enroll with VA given that VA care might not be ``open'' to the
retiree in the second or following years.
These considerations offer some basis for assessing the
impact of this legislation on the TRICARE program. Not only
would the numbers seeking VA care not be large, but it appears
most likely that those who might seek VA care under this new
mechanism would do so cautiously, given its potential for
change in access from year to year. It would appear more
likely, accordingly, that individuals participating in TRICARE
Standard, for example, who have the option of choosing any
physician, would elect to receive some services from VA under
the reported bill, than for an individual who had been enrolled
in TRICARE Prime to switch out of that plan altogether for a
previously untested alternative. In light of these
considerations, the Committee encourages the VA to limit its
enrollment efforts on military retirees who participate in the
TRICARE ``Standard'' and ``Extra'' options rather than on
``Prime'' enrollees.
This section directs the respective Secretaries to enter
into an agreement to implement this provision. The agreement
must make provision for reimbursing VA at rates to be
negotiated by the Secretaries. The section also makes clear
that VA may not enter into an agreement with DoD with respect
to any VA network or part of a network unless the Department
would recover the costs of providing care to military retirees
under this section, and unless VA has certified and documented
(and so reports to Congress) that it has the capacity to
provide such care in such areas.
This section includes a provision which permits
reimbursement under the memorandum of agreement to be made by
the Secretary of Defense or by a Department of Defense TRICARE
Managed Care Support contractor. This provision is intended
only to minimize disruptions in the management of the
Department of Defense TRICARE Managed Care Support Contracts,
by providing a mechanism to avoid instituting a bid price
adjustment to these contracts. This provision is not intended
to replicate or in any way interfere with any arrangements the
managed care support contractors may already have with VA
treatment facilities participating as network providers in the
TRICARE managed care networks.
The Committee contemplates that the implementing VA-DoD
agreement would include other provisions needed to effectuate
the purposes of the section. Among these are provisions which
the Committee believes would be necessary to ensure ongoing
health care coverage for retirees. Under law, VA can offer a
veteran an opportunity to enroll for only a year at a time
(subject to the possibility that resource limitations in the
following year might not permit re-enrollment). The Committee
urges that provision be made in the implementing agreement to
address that contingency to ensure that a retiree who elects to
receive care from VA under this section is not precluded from
subsequently re-enrolling for TRICARE coverage in the event
that a funding shortfall precludes VA from re-enrolling the
individual in a subsequent year.
The section also provides for a phased implementation
process, given existing DoD TRICARE Managed Care Support
Contracts. Thus, the enhanced priority afforded certain
military retirees under section 104 would take effect in any
area of the country only if that area is covered by a TRICARE
contract which is entered into after the date of enactment or
by an existing TRICARE contract, the terms of which have been
extended after the date of enactment. The measure also directs
DoD to include in each TRICARE contract entered into or
extended after the date of enactment provisions to implement
the required VA-DoD agreement.
Pilot program for veterans' dependents
Section 106 of the reported bill would authorize the
Secretary to carry out a three-year pilot program in up to four
of VA's networks to provide primary care services (subject to
reimbursement) to dependents of veterans.
As this Committee works to maintain and strengthen an
independent health care system for America's veterans, it has
from time to time identified untested ideas, and where they
have merit, proposed time-limited programs or pilot programs.
Last year, representatives of The American Legion urged the
Subcommittee on Health to consider authorizing a pilot program
targeted at veterans' dependents. It proposed that such an
initiative could benefit the VA health care system. In the
Legion's view, it could bring VA new revenues, helping to meet
the goal of the Under Secretary for Health that ten percent of
VA health care revenues come from non-appropriated funds. It
could improve the effectiveness of existing programs--such as
women's clinics--by increasing utilization, and hence quality,
of such services. And it could help sustain the health of
veterans as their caregivers receive good care.
VA treatment of non-veterans, with appropriate safeguards
to avoid displacing veterans, is no longer a remarkable
phenomenon. Under provisions of law in effect since 1992,
numbers of VA facilities provide treatment to DoD dependents,
including children. Under the CHAMPVA program authorized under
section 1713 of title 38, United States Code, dependents and
survivors of certain veterans are eligible for care under a
program modelled on the former Civilian Health and Military
Program of the Uniformed Services (CHAMPUS). Significantly,
section 1713 provides that in ``cases in which Department
medical facilities are equipped to provide the care and
treatment,'' VA may treat these patients in VA facilities. A
number of facilities which have the capacity provide such care
directly. Still other VA facilities provide services ranging
from primary care to diagnostic studies to non-veterans under
so-called ``sharing'' agreements. The revenues from such
sharing agreements and TRICARE contracts help support the
treatment of veterans.
Section 106 proposes a pilot to permit VA managers to test
the concept of treating certain veterans' dependents. To help
foster the success of this proposal, the measure provides
specific direction on where such programs should be mounted. In
contrast to other pilot programs authorized or directed in law,
section 106 includes no requirement for siting this initiative
in geographically-dispersed locations. Of more significance
regarding this proposal, the Committee notes the variability
from network to network and facility to facility in VA's
capacity to enroll (and provide services to) additional primary
care patients (without displacing or delaying care to veterans)
and in VA's success in billing and collecting from third-party
payers. Both elements would be critical to the pilot's success,
and should therefore be key elements in selecting the
participating networks. By way of further clarification, the
Committee does not envision that the pilot would necessarily be
mounted throughout an entire network. More likely, the program
might start at limited numbers of facilities, and if successful
and deemed feasible, might be expanded within a participating
network during the program period. The measure reflects a
preference for selecting facilities for participation which
operate women veterans' clinics. While the existence of such a
clinic would not be a requirement for participation, giving
priority to such facilities, particularly for the start-up
phase, would help realize the pilot's potential. In
establishing that priority, the Committee underscores its
intention that the operation of this program reflect fiscal
prudence. In that regard, the Committee envisions that, to the
extent possible, the costs of providing such services will be
on the margin (adding new patients without employing additional
staff, for example), and that the program will be administered
so that VA not ``lose money''. The Committee seeks to avoid a
situation where the medical care appropriation substantially
subsidizes dependents' care. To that end, the measure provides
for GAO monitoring, to include determining whether the
collection of reasonable charges reasonably covers the marginal
costs (as applicable) of providing care and services.
The Committee recognizes that unlike veterans who are
liable only for a portion of the cost of their VA medical care,
dependents under this measure must agree to pay an amount
representing VA's reasonable charges for that care as
determined by the Secretary. (In that regard, the Committee
believes that participation in the pilot program should be
limited to individuals who have health care coverage, and
expects VA to take measures (to include verification with the
carrier) to ensure the person has health coverage.) In order to
maximize VA's recoveries from such health plans, the Committee
envisions that VA's reasonable charges under this bill will be
the same as those utilized for third party health-plans under
section 1729 of title 38.
In considering the issue of balance billing to dependents
(their remaining liability after payment by their health-plan),
the Committee notes that individuals in the private sector are
often protected against such personal liability by provider
agreements which compel the provider to accept the plan's
payment as payment in full. Furthermore, under section 1729 of
title 38, United States Code, as well as this bill, health
plans are protected against VA charges that they can
demonstrate are above the amount they usually pay for such
services in the private sector.
VA is unlike private sector providers who often negotiate
agreements with health-plans that eliminate balance billing to
the patient. VA's authority to collect from health plans and
patients is statutory, not contractual. Thus, with respect to
the issue of balance billing, insured dependents could be
placed at a disadvantage when obtaining medical care from VA.
The Committee envisions that the Secretary will give
consideration to issuing regulations that minimize or eliminate
that disadvantage to dependents. The Committee also envisions
that the Secretary's regulations will address appropriate
adjustments to VA's charges to a dependent in instances where,
for example, the dependent's plan denies coverage.
PROGRAM ADMINISTRATION
Enhanced-use Leasing
One of the tools the Committee contemplates VA would deploy
in carrying out enhanced services programs under section 107 is
long-term leasing under subchapter V of chapter 81 of title 38,
United States Code. Congress, in Public Law 102-86, authorized
VA to enter into long-term (up to 35 years) agreements--which
it termed ``enhanced-use leases''--under which VA could permit
development of non-VA uses or activities on VA property,
provided that such uses are not inconsistent with VA's mission
and the overall objective of the lease enhances a VA mission.
The measure authorizes VA, in return for the lease, to accept
any combination of monetary consideration, services, facilities
or other benefits deemed to be ``fair consideration''.
Enhanced-use leasing has offered VA an opportunity to
benefit from capital assets that the agency is not using to
provide care or services to veterans. This authority has
permitted VA to partner with private sector enterprises to
develop new uses ranging from child care centers to cost-
effective laundry, energy generation, and parking projects. One
medical center at Indianapolis will lease a facility to a
private nursing home which will provide discounted care to
veterans among its other patients.
The Committee believes, however, given the capital
resources at VA's disposal, that long-term leasing could be
used even more extensively to enhance health care delivery to
veterans. VA estimates that it owns and operates a physical
plant of more than 22,000 acres of land, 4,700 buildings, and
140 million square feet of owned or leased space at more than
1200 sites. Exactly how much of this plant is necessary for
mission-critical service delivery is unknown. However, in its
March 10, 1999 testimony to the Subcommittee on Health, the
General Accounting Office estimated that VA spends
approximately a quarter of its appropriated dollars on asset
ownership-much of it on ``underused and inefficient
buildings''.
In its budget for VA for fiscal year 2000, the
Administration proposed legislation under which VA would
``sell, transfer, or exchange excess and underutilized
properties'' in up to 30 locations. The Administration failed
to submit such legislation, and its assumptions remain unclear
to the Committee. Although VA developed some considerable
experience and sophistication in long-term leasing and
associated development of VA property, VA has little or no
experience in sale or other disposal of its capital assets.
Moreover, it is not at all clear to the Committee that the
Administration's goals in proposing such authority--to generate
revenue from unneeded VA capital assets, and apply such revenue
to improve VA care--cannot be realized through long-term
leasing arrangements similar to those VA has successfully
employed under its existing authority. The reported bill, in
section 207, would expand VA's leasing authority to accomplish
that goal.
Accordingly, the key elements of section 207 would make
several changes to VA's enabling law on enhanced-use leasing.
First, it would extend the maximum term of leasing from the
current 35 years to 75 years. The Committee understands that
the current 35-year maximum term is at variance with standard
commercial lending practices, and even with the requirements of
other Federal agencies. Based on expert advice, the Committee
believes that extending the maximum term to 75 years would
enable VA to tailor leases to real property development
practice, market consideration, and thus realize maximum
benefit to VA.
The measure would also provide the Secretary the latitude
to enter into such a long-term lease--not simply to enhance VA
property with an activity that contributes to the VA mission--
but to realize the broader goal of improving services to
veterans in the area. That is, this leasing authority could be
used to accomplish the purpose described above--to generate
revenue from unneeded VA capital assets, and apply such revenue
to improve VA care. To that end, section 207 would require a
finding, based on a business plan, that applying the
consideration under such a lease to the VA's provision of
medical care and services would result in a demonstrable
improvement of services to veterans in the network in which the
property is located. To assure such an outcome, section 207
also calls for depositing any funds VA receives from a lease
under subchapter V, of chapter 81 of title 38, United States
Code, into a new fund (to be used for furnishing VA medical
care and services as authorized under chapter 17) established
under section 202 of the reported bill.
The measure would also amend existing law (title 38, United
States Code, section 8162(b)(4)) which limits VA to using
medical care monies to fund any costs associated with leasing
under that section. Section 207 of the reported bill would
permit VA to use minor construction funds as needed under the
terms of these leasing arrangements. This provision would give
the Department additional flexibility to allocate funds so as
to provide the greatest benefit or return.
While the Committee believes section 207 would be
beneficial in enabling VA to reinvest savings from unneeded
property into improved health care delivery, it does not
contemplate that such leasing authority would be used to
``privatize'' the very services VA is currently providing at a
facility. The Committee will monitor the implementation of this
authority to ensure it is not used for such purpose.
Bed Closure Reporting
The Committee has become increasingly concerned over the
impact that closing inpatient beds is having on veterans with
complex health problems which may require ongoing, costly care
(such as psychiatric care, intensive rehabilitation, and
subacute care for other chronic conditions). Over the years, VA
has developed special expertise in these areas. It is not
clear, however, that the steady transformation of VA health
care from a bed-based model to reliance on ambulatory care is
taking adequate account of such special patient needs. With the
accompanying decentralization of authority to 22 network
directors, and mere consultant role played by clinical experts
in VA's headquarters, the Committee lacks a satisfactory
mechanism to monitor the impact of these changes on VA patients
or to be assured that the special needs of often voiceless
patients are being met despite bed closures.
Information from direct care providers and veterans calls
into question whether adequate steps are being taken from
network to network to ensure that the clinical expertise which
had resided in VA's inpatient mental health and rehabilitative
care units is available to veterans who must now depend on
community and ambulatory programs. One troubling indicator-a
declining number of so-called ``dual diagnosis'' patients being
treated for both substance abuse problems and mental illness--
suggests that the answer to that question is ``no''. With their
multiple needs for resource-intensive, specialized care, these
veterans present a special challenge. A decline in the number
of these patients suggests that system changes may be causing
some of VA's most-in-need patients to ``fall between the
cracks''.
Section 301 would establish new reporting requirements
associated with certain proposed bed closures. This provision
is not intended to proscribe bed closures but to institute what
the Committee believes is a needed safeguard. The Committee is
not opposed to well-planned alternatives to inpatient care. The
Committee has found Intensive Psychiatric Community Care
programs operating at more than twenty VA medical centers to
exemplify a well conceived, cost-effective alternative to
inpatient care. What is troubling, however, are closures of
specialized inpatient beds which are undertaken simply to avoid
costs and without developing adequate alternatives.
The Committee is pleased that VA has outlined a plan to
manage more aggressively its mental health programs. Aware of
the pressures its field managers now face in managing costly
care under fiscal restraints, the Under Secretary reported on
plans to direct field managers to report any significant
changes in behavioral health program operations to his office
for approval. This would be a welcome intervention and could
diminish the need for Congressional reports in the future.
Sexual Trauma Counseling
On April 23, 1998, the Subcommittee on Health of the
Committee on Veterans' Affairs, held a hearing at which it
heard testimony on the VA's sexual trauma counseling program.
Witnesses at the hearing included officials from VA, the
Department of Defense (DoD), the General Accounting Office
(GAO) and AMVETS, a national veterans' service organization;
Vietnam Veterans of America also submitted testimony.
In providing testimony assessing the program, GAO found
that VA has made impressive headway since implementing the
program in 1993. In particular, GAO cited VA's extensive
efforts in educating staff to deal with sexual trauma and in
performing outreach that has produced significant program
growth. Witnesses attested to the need for the program. VA
testified that between 15-20 percent of women veterans reported
being raped or sexually assaulted during military service,
while 35-50 percent reported sexual harassment of some sort. In
1995, DoD reported that 55 percent of women in service claimed
at least one incident of sexual harassment in the past year.
GAO reported that symptoms experienced by sexually-traumatized
women include post-traumatic stress disorder, stress, impaired
concentration, and nightmares.
In recognition of the ongoing need for VA to provide these
services, Congress, in Public Law 105-368, extended the program
for three years through December 31, 2001. With the ``benefit''
of an additional year's perspective, however, the Committee has
concerns as it relates to this program regarding the
uncertainty and potential inadequacy of funding for the coming
fiscal year. With the possibility of a serious funding problem,
the Committee is concerned that VA might consider scaling back
or even ceasing to provide sexual trauma counseling. Based on
its reading of similar provisions of law, VA could construe the
program to be ``merely discretionary''. Clearly, this is not
the intent of the Committee, and, accordingly, the reported
bill would provide both that VA ``shall'' operate this program
and that the program be extended for an additional year.
Questions have also arisen over the course of the program
as to the scope of eligibility for this benefit. The VA's
General Counsel addressed those questions in a precedent
opinion of July 1, 1997 (VAOPGCADV 17-97). Among its holdings,
the General Counsel concluded that ``[b]ecause VA provides
sexual trauma counseling and care pursuant to title 38, United
States Code, section 1720D only for sexual trauma-related
disabilities which the Department determines are incurred in
service, the minimum length of service requirement in section
5303A does not apply to the provision of these benefits.'' In
light of that precedent, with which the Committee concurs,
there is no need to amend section 1720D, as some advocates have
suggested, to provide specifically that the two-year service
requirement in section 5303A does not apply. As regards another
facet of that decision, the Committee has seen only minimal
information regarding the scope of any similar problems in the
reserve components of the armed forces. The reported bill,
accordingly, calls on VA to conduct a study regarding the
extent of such problems in the reserves, the extent to which
former reservists have sought sexual trauma counseling from VA,
and the resource implications associated with expanding
eligibility for such counseling to former members of the
reserves.
Under current law (section 1720D of title 38, United States
Code), VA, in addition to providing counseling, may provide
appropriate care and services to a veteran for an injury,
illness, or other psychological condition that VA determines to
be the result of a battery, assault or sexual harassment. In
general, section 1720D provides authority for mental health
care; the scope of practice under that provision is limited in
nature. It is not a general treatment authority and does not
enlarge the scope of treatment VA is otherwise authorized to
provide an eligible veteran. Section 108 of the reported bill
would not enlarge the scope of VA's treatment authority under
section 1720D or permit VA to change the scope of its practice
under that section.
Compensated Work Therapy Program
The Compensated Work Therapy Program (CWT) is a therapeutic
program which VA employs in the rehabilitation of veteran-
patients. Veterans are paid for work performed on contracts
with governmental and industrial entities. This work-based
model helps veterans re-enter the work force while enabling
them to increase self confidence and improve their ability to
adjust appropriately to the work setting. VA data indicate that
some 85 percent admitted to the program have substance abuse
problems; 56 percent are homeless, and 44 percent have been
diagnosed with major psychiatric disability. The program has
enjoyed success in assisting these often challenging patients
in making the transition from medical settings into the
community by developing the capacity for work and increasing
their self-esteem.
Over 13,000 veterans were treated in 100 different CWT
programs throughout the country in fiscal year 1997. These
veterans earned over $29 million for work performed on more
than 3,100 contracts. The traditional CWT setting was in the
nature of a sheltered workshop environment at the VA medical
center. Work may range from simple collating tasks to
fabrication of elaborate electromechanical subassemblies or
machine shop operations using technologically sophisticated
equipment. VA employs a second model, in the nature of a
``transitional work experience,'' in which participants work at
industry sites (including VA medical centers and other Federal
agency settings). The latter mode has proven highly effective
in helping veterans transition to full employment.
The Committee has become aware that as the ``transitional
work experience'' component of the program has grown, more
program participants are placed at risk of work-related injury
for which they can receive no compensation. Although the
Committee is not aware of the occurrence of any such on-the-job
injuries, the risk is very real with therapeutic work
opportunities being provided in manufacturing settings, at
construction sites, and at other locations having inherent
risks.
In the event of work-related injury while participating in
a CWT program, participants are not entitled to any workers'
compensation benefits. As participants in a CWT program,
veterans are not considered ``employees'' of either the United
States, or of the private entity where they may work. Rather,
their status is as patients and the work they are performing is
a form of medical treatment. To ensure that these participants
in the work therapy program are protected financially in the
event of work-related injury, the reported bill would make them
eligible for compensation benefits under title 38, United
States Code, section 1151 without regard to whether the injury
was the result of negligence.
In proposing to provide CWT participants with such
financial protection in the event of injury, the Committee is
proposing the same remedy as Congress took three years ago in
an analogous situation. In that instance it provided such
protection to participants in VA's Vocational Rehabilitation
Program. Under that program, as under the CWT program,
participants work in community settings where they are at risk
for injury. In 1996, Congress provided that veterans injured
while working in the vocational rehabilitation program could
receive compensation benefits under title 38, United States
Code, section 1151 without regard to whether the injury was the
result of negligence. The reported bill would provide the same
coverage to CWT program participants.
Licensure of health care professionals
The law governing the qualifications of physicians,
dentists, and most other categories of health care
practitioners employed by the Department of Veterans Affairs
currently requires, with respect to licensure, that a VHA
practitioner have a full, active, and unrestricted license
(registration or certification, as applicable) in a state. The
law does not require these practitioners (except social
workers) to be licensed in the state in which they work for the
Department. Historically, such flexibility in VHA's employment
qualifications has permitted the Department to assign and
transfer its health care professionals throughout the
nationwide system as needed to meet changing staffing
requirements.
The Committee has become aware, however, that this
particular flexibility can, in the rare instance, lead to an
undesired result. A VHA health care professional who is
licensed (registered or certified) by more than one state
remains qualified for VHA employment even when one of those
licenses is terminated for cause as long as the individual
maintains other active, full, and unrestricted license. In
contrast VHA health care practitioners licensed in only one
state automatically become ineligible for VHA employment in the
event their license is terminated for cause.
Section 208 of the reported bill would make any
practitioner who is licensed to practice in more than one state
ineligible for VHA employment if the practitioner has or had
one of those licenses terminated for cause. It would further
make a practitioner ineligible for VHA employment if the
practitioner licensed by more than one state voluntarily
relinquishes one of those licenses upon learning that it may be
terminated for cause.
The Committee has a long record of concern regarding issues
of care-quality in the VA, and believes this provision is
needed to ensure patient safety and quality of care.
Chiropractic care
Disabling back pain is a prevalent health problem in the
United States. ``Back pain is one of the most frequent reasons
that patients visit primary care physicians and is the second
most common reason for time taken off from work.'' (Carey TS et
al. New England Journal of Medicine 1995;333:913-7). A 1997
survey of U.S. adults found that 11 percent of U.S. adults
chose chiropractic treatment (principally for low back pain);
on average, they visited chiropractors ten times per year
(Eisenberg DM et al. Journal of the American Medical
Association 1998;280:1569-75). Back problems were not only the
most frequently reported health problem (24.0 percent), but
also a problem for which a large proportion of patients (47.6
percent) used ``alternative'' therapy. Thus, while still an
``alternative'' therapy, chiropractic is also becoming
``mainstream'' (Cherkin DC, Mootz RD. Agency for Health Care
Policy and Research. 1997).
While still controversial, substantial scientific evidence
supports the use of chiropractic treatment of low back pain.
``. . . [T]here is as much or more evidence for the
effectiveness of spinal manipulation as for other non-surgical
treatments for back pain'' (AHCPR 1997). ``That spinal
manipulation is a somewhat effective symptomatic therapy for
some patients with low back pain is, I believe, no longer in
dispute'' (Shekelle PG. New England Journal of Medicine
1998;339:1074-5). The effectiveness of chiropractic
manipulation has been most clearly demonstrated in the
acceleration of short-term recovery from acute low back pain.
In addition, several studies indicate that patient satisfaction
in the relief of low back pain is as great or greater with
chiropractic than with other approaches, even when volunteer
patients are randomly assigned to a treatment approach.
In 1995, the annual national cost attributable to back pain
was $25 billion for medical services alone. A 1997 survey
indicated that approximately 56 percent of chiropractic
services in the U.S. were completely or partially covered by
insurance (including Medicare and Medicaid), a proportion that
grew substantially since the prior survey in 1990. Perhaps
because of the frequency of visits incurred, chiropractic
treatment of low back pain has generally been found to be more
expensive than primary care treatment, but comparable to
treatment by orthopedic surgeons (Carey et al. New England
Journal of Medicine 1995;333:913-7).
In 1985, Congress required the VA to conduct a pilot
program ``to evaluate the therapeutic benefits and cost-
effectiveness of furnishing certain chiropractic services to
veterans eligible for medical services . . . '' (Public Law 99-
166). Unfortunately, as indicated in the program evaluation
report (Department of Veterans Affairs, 1990), the law
restricted the patient population to a small and
unrepresentative fraction of the low back pain patients.
Further, it did not cover the cost of the range of standard
chiropractic services; thus, it did not represent standard
chiropractic methods. Participation criteria were so
restrictive that, during the course of the pilot program, three
of ten VAMCs had to drop out of the program because they could
not recruit sufficient numbers of patients. While the study
design projected a study population of 700, only 204 patients
finished the study, and recruitment of these patients required
more time than provided by law. Furthermore, because patients
were allowed to choose a therapeutic approach (i.e., usual VA
care or chiropractic care) and were not randomly assigned to
one treatment or the other, the pilot program could not
effectively evaluate the therapeutic benefits of the
chiropractic approach, as required by the law. Notwithstanding
its limitations the pilot program suggested that patients with
chronic, recurrent, unresolved low back pain had similar
outcomes whether treated under medical or chiropractic
approaches. However, it raised questions about cost-
effectiveness in that treatment costs over a three-month period
were greater with the chiropractic manipulation than with
(outpatient) medical treatment.
The Committee recognizes the growing use of complementary
health care in traditional medical practice, and notes that,
despite the above-described medical literature, VA has made
only the most limited use of chiropractic care.
In recognition of evolving medical practice, section 304 of
the reported bill would require VA to establish a policy which
would permit greater access to chiropractic care, particularly
in rural and medically underserved areas. VA should consult
with Doctors of Chiropractic to assist VHA in the development
and implementation of its chiropractic treatment policy.
Nonprofits corporations to foster education
Under a provision of Public Law 100-322, VA has established
nonprofit research corporations at 73 VA medical centers to
accept and administer gifts and grants to carry out clinically-
relevant research. The corporations have played a significant
role in support of the VA research program. In 1998, for
example, they received $100 million for VA research activities,
funds which would not otherwise have been available to VA. The
Committee views these corporations as an extremely important
mechanism to further VA's research mission.
Given this proven mechanism for administering grants and
other funds, the Committee finds merit in expanding the ambit
of such corporations to further VA's responsibilities in the
area of medical education. That is, just as the nonprofit
corporation has proven a flexible funding mechanism for
research, the Committee supports the creation of new
corporations, or the expansion of existing ones, to administer
gifts and grants for appropriate educational purposes. Under
such a mechanism, VA can readily avail itself of funds to
support continuing medical education needs of its employees
(which VA itself may not have sufficient funds to support),
such as training, and related travel, for technicians in the
use of new medical equipment. The National Association of
Veterans' Research and Education Foundations estimates its
member corporations could reasonably expect to receive some $15
to 20 million annually in support for such VA-approved
activities.
Assisted Living
The June 1998 Report of the Federal Advisory Committee on
the Future of VA Long-Term Care, VA Long-Term Care at the
Crossroads, noted that assisted living programs might be an
appropriate and cost-saving option for VA patients. The report
also noted that VA financial support of assisted living is not
authorized by law. The Committee recommended that the VA ``. .
. take advantage of this remarkable development in selected
long-term care markets.'' The report acknowledged, however,
that the term ``assisted care'' was not well defined in terms
of even its most basic characteristic, i.e., the care provided.
In response to the Chairman's questioning regarding the
Federal Advisory Committee report at the Subcommittee's April
22 hearing, VA Under Secretary for Health Dr. Kenneth Kizer
released a draft document entitled ``A Strategic Plan for Long-
Term Care Provided by the Veterans Health Administration.''
Addressing the issue of assisted living as a VA program, the
plan proposed in one brief statement to ``initiate a request
for new legislative authority for payment or copayment of
facilitated residential living (assisted living) for eligible
veterans.'' The plan included no information regarding VA
choices among the wide range of assisted living program options
currently available in the U.S. or the processes by which the
VA would conduct a program appropriate for its user population.
A recent GAO report (GAO/HEHS-99-27), Assisted Living.
Quality-of-Care and Consumer Protection Issues in Four States,
notes that ``there is no uniform assisted living model, and
considerable variation exists in what is labeled as assisted
living facility.'' For example, almost all programs provide
housekeeping, meals, laundry; fewer programs provide special
diets, supervision of medication and transportation; still
fewer programs provide skilled therapy, hospice, skilled
nursing, iv therapy, and tube feeding. Further, while some
facilities provide for the increasing needs of their clients,
others require that clients whose needs exceed staff capacities
be immediately discharged. Skill level requirements for staff
in assisted living facilities also vary by state. The GAO
report notes that many assisted living facilities do not
provide prospective clients with information on services and
policies adequate for informed decisions about those
facilities. The GAO survey of 622 facilities in four states
found a range of monthly charges from less than $1,000 to more
than $4,000, probably associated with differences in services
provided. Medicaid funds are used to support assisted living
programs in some states and could offset support which might be
provided for veterans.
States also differ substantially in their requirements and
regulation of assisted living programs (GAO/HEHS-97-93; GAO/
HEHS-99-27). For example, frequencies of required inspection
vary by state and by level of services offered. The GAO report
notes three topics variously specified under state regulations,
i.e., requirements for the living unit, admission and
retention, and the types and levels of services provided. It
found that 27 percent of the facilities surveyed were reported
to have five or more noteworthy problems in client care during
the survey period (including inadequate care, insufficient
staffing, medication errors, abuse, and improper discharge).
In the Committee's view, VA must explore and resolve a
series of issues before it could reasonably request Congress to
enact legislation to enable it to provide support to veterans
in need of assisted living services. Among these complex issues
are the following.
1. LServices offered. The VA must specify for purposes of
such a benefit what ``assisted living'' means and what minimal
services must be provided.
2. LEligibility criteria. The VA must determine what degree
of functional impairment would establish a need, and
eligibility, for assisted living services.
3. LVA role. The VA must consider the nature of such a
program, whether, for example, it would (a) be limited to VA's
providing partial payment to or on behalf of a veteran who
makes his or her own arrangements, (b) involve VA's planning
and approving the particular placement, or (c) VA's contracting
for a time-limited placement. In that regard, VA must consider
the extent to which it would oversee the operation of the
facility and establish requirements which might exceed those
established by some states.
If the above questions can be satisfactorily resolved, VA
must also address complex financing questions, central to
design of any legislative proposal. The Committee notes that
neither the Department or program officials have resolved or
even fully addressed these questions. The reported bill,
accordingly, directs the Secretary, by way of exploring the
feasibility of an assisted living pilot program, to address the
above and other related questions and to report to Congress.
The bill envisions receipt of a report by next April, providing
sufficient time for Congress to consider the merits of any
proposed legislation in the next session.
Construction authorization
In Public Law 105-368, the Committee authorized funding for
fiscal years 1999 and 2000 for several major construction
projects. Funds were not appropriated for several of these
projects, of which the following had been identified as high VA
priorities: an ambulatory care addition in Washington, DC;
seismic corrections in Palo Alto, CA; a spinal cord injury unit
in Tampa, Florida; and a mental health addition in Dallas.
Although the Administration has not requested appropriations
for these projects (and instead proposed two new projects in
its budget request for fiscal year 2000), each is identified in
the VA's Capital Plan for fiscal year 2000 as a pending
proposal and three of the four were recommended by VA for
funding in fiscal year 2000. The Committee believes these
projects are needed, and continues to recommend that they be
funded. With the compelling need for a large increase in
medical care funding for fiscal year 2000, and a list of
needed, but still-unfunded construction projects ``in the
queue'', the Committee is reluctant to recommend that
additional funds be appropriated for more than a single
additional major construction project this year. The Committee
would authorize funding for construction of new surgical space
at the VA Medical Center in Kansas City, Missouri, as the
highest-ranked VA project on which construction could begin if
funds were made available. This recommendation is made without
prejudice to consideration next year of VA's proposal to
renovate psychiatric-care facilities in Murfreesboro,
Tennessee.
Section-By-Section Analysis
Section 101(a) would amend chapter 17 to add a new section
1710A. That section would direct VA, subject to the
availability of appropriations, to operate and maintain a
program to provide extended care services to eligible veterans.
The measure specifies in new subsection (a) that extended care
services range from geriatric evaluations to nursing home care,
and include noninstitutional alternatives to nursing home care.
New section 1710A(b) would provide that the Secretary shall
provide those services as needed to 50 percent or more service-
connected veterans and service-connected veterans requiring
such care for a service-connected condition. Those two
categories of veterans would also have highest priority for
placement in a VA nursing home. New section 1710A(c)(1) would
require VA to prescribe regulations for additional specified
priorities for nursing home placement. New section 1710A(c)(2)
would provide that VA may not furnish extended care services
for more than 21 days in any year (other than to those two
classes of service-connected veterans described above) unless
the veteran agrees to pay a copayment. New section 1710A(d)
would describe the methodology VA is to employ in establishing
these copayments. New section 1710A(e) would establish an
extended care revolving fund in the Treasury.
Section 101(b) would require VA to develop and begin to
implement a plan to increase (above the level provided as of
September 30, 1998) the level of services and options
available, and extent of the budget, for furnishing home and
community based care to eligible veterans.
Section 101(c) would amend current law to lift the six-
month limitation on provision of adult day health care
services.
Section 101(d) would amend current law to lift the
limitation that respite care services must be provided in VA
facilities, and would authorize VA to contract for provision of
respite care.
Section 101(e) would amend current law to condition VA's
obligation under law to provide extended care services to the
availability of appropriations.
Section 101(f) would amend current law to authorize VA to
establish a program of per diem payments to State homes for
noninsitutional care services and respite care (as well as
adult day health care, authorized under current law).
Section 101(g) would state that the provisions of the
section would be effective on the day of enactment, except that
the copayment requirements under new section 1710A(c)(2) would
be effective on the effective date of the regulations
establishing those copayments; subsection (g) would also
provide that the current copayment requirement on provision of
nursing home care to so-called ``category C'' veterans would
cease to be effective as of the date of those new regulations.
Section 102 would authorize, but not require, VA to make
payments (at levels VA would establish) for emergency care on
behalf of certain veterans. VA could make such payments for a
veteran who meets the following criteria: the veteran is
described in paragraphs (1) through (6) of section 1705(a); is
enrolled in, and has received VA care within the year preceding
the emergency treatment; has no health insurance (compehensive
or limited) or any other entitlement to health care; is
personally liable to the provider for emergency treatment (as
defined) and has no other recourse against a third party which
would even partially extinguish the veteran's liability. The
measure would grant VA broad authority to limit the amount and
circumstances under which reimbursement would be paid (to
include the availability of appropriations therefor); and would
provide that VA payment to a provider, unless rejected, would
extinguish any liability on the part of the veteran. The
measure would also establish that the government has an
independent right to recover any amount which a third party
subsequently pays to the provider, and would provide means to
ensure that the government can effect such recovery. Lastly, it
would authorize the Secretary to waive recovery of a payment
made to the veteran.
Subsections (b), (c), and (d), respectively, of section 102
would make conforming amendments, establish an effective date
for the section 180 days after enactment of the act, and
provide for reports on implementation.
Section 103 would amend current law to establish specific
eligibility (and a priority for enrollment) for VA health care
for a veteran who was injured in combat (as that term is
defined).
Section 104(a) would amend current law to establish
specific eligibility (and a priority within so-called
``category A'' for enrollment) for VA health care for a veteran
who has retired from active military service, is eligible for
care under the TRICARE program, and is not otherwise eligible
for VA care under ``category A''.
``Section 104(b) would require VA and DoD to enter into an
implementing agreement not later than nine months after
enactment under which DoD would reimburse VA at rates to be
agreed upon by the Secretaries. (If the Secretaries are unable
to reach agreement, they are to report jointly on the reasons
therefor and on a plan for removing any impediments to final
agreement.) The section further provides that VA may not enter
into an agreement to provide care to military retirees under
this new authority in any network or facility unless VA would
recover its costs of providing such care and has certified and
documented that it has the capacity to provide such care.
Section 104(c) would provide for VA to deposit such DoD
payments in a new fund established under section 202.
Section 104(d) would (1) require the Secretary of Defense
to include in each TRICARE contract entered into after the date
of enactment provisions to implement the VA-DoD agreement under
section 104(b), and (2) provide for phased implementation of
the pertinent provisions of section 104.
Section 105 would amend section 1151(a)(2) of title 38,
United States Code, to establish entitlement to VA compensation
in cases in which a veteran who is disabled or dies as a result
of participation in the compensated work therapy program under
section 1718 of that title.
Section 106(a) would amend current law to authorize VA to
conduct a three-year pilot program in up to four of its
networks under which it could provide health care services (as
defined) to dependents of enrolled veterans.
Section 106(b) would provide for the General Accounting
Office (GAO) to monitor and report on the conduct of the pilot
program, and for VA to take such appropriate remedial steps as
necessary in light of GAO recommendations.
Section 107 would provide for the establishment of enhanced
service programs (described in the section) in designated
locations in order to improve access and quality of service
provided to veterans in such locations. Subsection (a) makes
findings of fact relating to the requirement to establish such
programs.
Subsection (b) would describe the circumstances under which
the VA would designate a location for such a program.
Subsection (c) would establish the requirements for
development of a plan for such an enhanced service program, and
would provide VA tools for implementing such a plan (to include
contracting (as further authorized in subsection (g)), and
long-term leasing authority. Subsection (d) and (e),
respectively, would establish protections for employees who
might be displaced under this section and a requirement that
veterans' organizations, employee unions, and others
participate in the development of a plan.
Subsection (f) would establish a reporting requirement to
provide for congressional review before implementation of the
plan.
Subsection (h) would require that 90 percent of the funds
that would have been used to maintain and operate a facility
(or a part of a facility) for a service or services which
(under an enhanced services plan) would no longer be provided
at such facility are to be made available to implement the plan
to enhance accessibility and quality of services in the
catchment area of that facility.
Subsection (i) and (j), respectively, would provide that
this section does not alter the Secretary's obligations under
title 38, United States Code, section 1706(b), and would
provide that VA is to report to Congress within 12 months of
implementing any plan under subsection (b).
Subsection (k) would provide that the section does not
diminish the Secretary's authority to consolidate or otherwise
change functions or missions at VA facilities, or create new
facilities or activities.
Section 108(a) and (b) would amend current law to extend by
one year VA's authority to provide sexual trauma counseling,
and to provide that the VA ``shall'' operate such program
during that period. Section 108(c) and (d), respectively, would
require VA to expand its efforts to conduct outreach on the
program, and to report on those expanded activities.
Section 108(e) would require VA to conduct a study relating
to the need for and resource implications of expanding
eligibility for such counseling to former members of the
reserves. Section 108(f) would require a VA-DoD report on their
joint efforts to inform separating servicemembers about these
programs. Section 108(g) would require VA to provide a one-time
report to Congress on veterans' use of services under the
program.
Section 201(a) would amend current law to authorize VA to
prescribe regulations to (1) increase prescription copayments
(and to establish a maximum annual payment applicable to an
individual with multiple outpatient prescriptions), (2) to
establish copayment requirements (subject to the limitations in
title 38, United States Code, section 1722A(a)(3) on VA's
provision (for a nonservice-connected condition) of hearing
aids, eyeglasses and other sensori-neural devices; electronic
equipment; and any other costly item or equipment (other than a
wheelchair or artificial limb). Such payments are for deposit
in a fund to be established under section 202.
Section 201(b) would amend current law to direct VA to
prescribe by regulation new copayment requirements applicable
to providing outpatient treatment to a so-called ``category C''
veteran.
Section 202 would establish a new fund in the Treasury for
deposit of specific categories of payments provided for under
this act, with amounts in the fund to be available without
fiscal year limitation (and without any requirement that such
funds be specifically appropriated) for provision of care to
veterans under chapter 17 of title 38.
Section 203 would add a new section 1729C in title 38,
United States Code, which would establish a Veterans Tobacco
Trust Fund in the Treasury to hold monies that are
appropriated, credited, or donated to this trust fund. The
measure would provide that monies (attributable to VA costs)
recovered from any lawsuit brought against the tobacco
industries by the United States in an effort to recover
Government costs of tobacco-related health care are to be
credited to the trust fund. Amounts in the trust fund are to be
available to the Secretary of Veterans Affairs after fiscal
year 2004 for use in providing medical care and services for
tobacco-related illnesses. This trust fund would also provide
monies to conduct medical research, rehabilitation research,
and health systems research with particular emphasis in
relation to tobacco addiction and diseases associated with
tobacco use.
Section 204 would amend current law to expand the scope of
activities which could be carried out by nonprofit corporations
at VA medical facilities to include activities in support of
VA's education missions.
Section 204(a) would authorize establishment of
corporations to facilitate either or both research and
education, and authorize existing corporations to so expand
their charters.
Section 204(b) would specify that such corporations may
foster education and training involving employees' continuing
medical (and medical-related) education, patient education, and
VA's core education mission described in section 7302 of title
38, United States Code.
Section 204(c) would clarify those members of the VA
facility staff who should serve on the board of directors of
such corporation.
Section 204(d) would specify the mechanisms through which
VHA would establish policies governing corporation expenditures
for education activities.
Section 205(a) would extend through December 31, 2003, VA's
authority to provide so-called readjustment counseling to
Vietnam-era veterans who have not previously sought such
assistance.
Section 205(b) would extend, through 2003, the requirement
in title 38, United States Code, section 7321, that VA support
and receive reports from a Committee on Care of Severely
Chronically Mentally Ill Veterans.
Section 205(c) would reinstate a requirement that VA
support and receive reports from a Committee on Post-traumatic
Stress Disorder.
Section 205(d) and (e), respectively, would extend through
September 30, 2002, VA's authority to make grants under the
Homeless Veterans Comprehensive Service Programs Act of 1992,
and would lift the restriction in law on the number of grants
which may be awarded which involve the procurement of vans.
Section 206(a) would amend section 8134 of title 38 to (1)
provide greater specificity regarding the general regulations
VA is to prescribe (and revise from time to time as needed)
governing the number of nursing home and domiciliary beds for
which VA grant assistance may be provided, and (2) to provide
for additional regulations to determine eligibility for grant
support.
Section 206(b) would amend section 8135 of title 38, United
States Code, to establish (1) new requirements to govern award
of a grant, (2) revised criteria for assigning the relative
priority given any particular application for grant assistance.
Section 206(c) would establish a rule to govern the
transition to the new priority system under subsection (b).
Section 206(d) would direct the VA to prescribe the initial
regulations required under section 8134(a), as amended, not
later than April 30, 2000.
Section 207(a) would amend current law to establish an
additional, independent basis on which VA may enter into a so-
called ``enhanced-use'' lease, namely on a determination that
applying the consideration under such a lease to provide
medical care and services (as proposed in a business plan)
would demonstrably improve services to eligible veterans in the
network where the leased property is located. Section 207(b)
would amend current law to extend the maximum term of an
enhanced-use lease, and to authorize VA to provide in the terms
of such lease for it to use minor construction funds for
capital contribution payments.
Section 207(c) and (d), respectively, would (1) make
conforming amendments, and (2) provide that funds received
under such a lease (after any necessary deductions under law)
would be deposited to the new fund established in section 202,
and VA is to make no less than 75 percent of the amount
attributable to that lease available to the network in which
the leased property is located.
Section 207(e) and (f), respectively, would repeal (1)
section 8169 of title 38, United States Code, which had
provided for sunsetting the VA's authority to enter into
enhanced-use leases, and (2) obsolete provisions of section
8162.
Section 208 would amend current law to provide that a
``title 38'' health care professional may not be employed by
VHA if the person has been licensed, certified, or registered
in more than one state and one of those licenses has been
terminated for cause, or the individual has voluntarily
terminated his or her professional credentials after being
notified by that state in writing of his or her potential
termination for cause.
Section 301 would amend current law to establish new
reporting requirements relating to the (1) proposed closure of
the certain beds (psychiatric, intermediate, neurology,
rehabilitative medicine, extended care (other than nursing
home), and domiciliary beds), (2) the closure of medical and
surgical beds, and (3) mission changes in nursing home units.
Section 302 would amend current law relating to the
Veterans Canteen Service. Subsection (a) would delete
restrictions in law on the sale of items or services for off-
premises use. Subsection (b) would clarify that canteens may be
established and operated at any VA medical facility, not simply
``hospitals and homes''.
Section 303 would provide for VA to report to the
Committees on Veterans Affairs no later than April 1, 2000, on
the potential for establishing a pilot program to assist
veterans in receiving assisted living services. The Secretary
is to include recommendations on the staffing and services that
should be provided under this pilot program, the design of the
program, and the issues the program should address.
Section 304 would require the Under Secretary for Health of
the Department of Veterans Affairs to establish a policy for
the Veterans Health Administration regarding the role of
chiropractic treatment in the care of veterans under chapter 17
of title 38, United States Code.
Section 401 would authorize two major medical construction
projects, (1) renovations to provide a domiciliary in Orlando,
Florida, using $2.4 million in previously appropriated funds,
and (2) a surgical addition in Kansas City, Missouri, of up to
$13 million.
Section 402 would authorize two major medical facility
leases.
Section 403 would authorize appropriations for fiscal years
2000 and 2001 of $13 million in major construction and $2.1785
million for leases.
Department Views
The Department testified at an April 22, 1999 hearing on a
draft bill which, with some modifications, was introduced as
H.R. 2116. In testifying, VA expressed strong support for the
concepts proposed in that measure.
Congressional Budget Office Cost Estimate
The following letter was received from the Congressional
Budget Office concerning the cost of the reported bill:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 28, 1999.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: At your request, the Congressional
Budget Office (CBO) has prepared the enclosed cost estimate for
H.R. 2116, the Veterans' Millennium Health Care Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sunita
D'Monte, who can be reached at 226-2840.
Sincerely,
Dan L. Crippen,
Director
Enclosure.
congressional budget office cost estimate
H.R. 2116--Veterans' Millennium Health Care Act, As introduced on June
9, 1999
SUMMARY. The bill contains several provisions that would
have a significant budgetary impact, including provisions to
increase access to long-term care for certain veterans, allow
the Department of Veterans Affairs (VA) to reimburse veterans
or providers for the cost of emergency care, extend medical
benefits to combat-injured veterans, and permit VA to spend
some of the money that the United States might receive from
litigation with tobacco companies. Assuming appropriation of
the necessary amounts, CBO estimates that the bill would entail
discretionary costs of about $138 million in 2000 and about
$1.4 billion in 2004. In addition, the provisions to spend
proceeds from tobacco litigation would raise direct spending by
about $20 million in 2003, $30 million in 2004, and $170
million in 2009. Because the bill would affect direct spending,
pay-as-you-go procedures would apply.
H.R. 2116 contains intergovernmental and private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
The costs to state, local, and tribal governments as a result
of the mandates would not exceed the threshold specified in the
act ($50 million, adjusted annually for inflation). Similarly,
costs of the private-sector mandate are unlikely to exceed the
corresponding threshold specified in UMRA ($100 million,
adjusted annually).
ESTIMATED COST TO THE FEDERAL GOVERNMENT. The estimated
budgetary impact of H.R. 2116 is shown in the following table.
The costs of this legislation fall within budget function 700
(veterans' affairs).
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
--------------------------------------------------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for Veterans' Medical
Care
Estimated Authorization Level1................ 17,862 17,862 17,862 17,862 17,862 17,862
Estimated Outlays............................. 17,609 17,958 17,975 17,782 17,751 17,751
Proposed Changes:
Extended Care Services
Estimated Authorization Level................. 0 50 250 600 800 1,000
Estimated Outlays............................. 0 40 230 560 780 980
Reimbursement for Emergency Care
Estimated Authorization Level................. 0 90 270 380 390 400
Estimated Outlays............................. 0 80 250 360 380 400
Care for Combat-Injured Veterans
Estimated Authorization Level................. 0 5 15 21 22 23
Estimated Outlays............................. 0 5 14 21 22 23
Extension and Revision of Authorities
Estimated Authorization Level................. 0 15 18 21 10 10
Estimated Outlays............................. 0 14 18 21 11 10
Other Provisions
Estimated Authorization Level................. 0 2 2 2 2 2
Estimated Outlays............................. 0 2 2 2 2 2
-----------------------------------------------------------------------------------------------------
Total--Proposed Changes
Estimated Authorization Level............... 0 160 553 1,022 1,222 1,433
Estimated Outlays........................... 0 138 512 961 1,193 1,413
Spending Under the Bill for Veterans' Medical Care
Estimated Authorization Level................. 17,862 18,022 18,415 18,884 19,084 19,295
Estimated Outlays............................. 17,609 18,096 18,487 18,743 18,944 19,164
CHANGE IN DIRECT SPENDING
Estimated Budget Authority........................ 0 3 3 3 31 51
Estimated Outlays................................. 0 3 3 3 21 31
=====================================================================================================
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 The figure shown for 1999 is the amount appropriated for that year.
2 CBO does not have enough information to estimate the costs of some provisions.
3 Less than $500,000.
Spending Subject to Appropriation
Extended Care Services.--Spending for veterans' medical
care is limited by discretionary appropriations. An enrollment
system ensures that care is provided to veterans with the
highest priority. These priorities established in law require
VA to treat veterans with service-connected disabilities before
other beneficiaries. The law states that VA shall provide
medical services such as hospital and outpatient care and may
provide nursing home care. Thus, VA has discretion whether to
provide nursing home care to high-priority beneficiaries or to
use its resources to provide additional hospital or outpatient
care to other veterans.
VA currently provides nursing home care to about 34,000
veterans each day. In total, it provides nursing home or other
long-term care to approximately 65,800 veterans a day at an
annual cost of about $2.6 billion. Of the veterans who receive
long-term care from VA on any given day, about 11,000 have
service-connected disabilities of 50 percent or greater even
though about 535,000 veterans in total are disabled to that
degree.
The need for long-term care by veterans is very large
because many veterans are disabled or elderly. According to the
Federal Advisory Commission on the Future of VA Long-Term Care
about 610,000 veterans a day needed some form of long-term care
in 1997. Among the veterans with higher priority for medical
care from VA, so-called Category A veterans, the daily need
totaled an estimated 295,000. (Category A veterans are those
with service-connected disabilities, those who fall into
special categories (such as former prisoners of war), and those
with incomes below a certain threshold. Most Category A
veterans have relatively low incomes, and low-income veterans
comprise most of the roughly 3 million veterans who enroll with
VA for health care).
Section 101 of H.R. 2116 would limit the discretion allowed
to VA under current law by requiring that extended care be
available for veterans whose service-connected disabilities are
rated 50 percent or greater or who require long-term care
because of a service-connected disability. The program of care
would include geriatric evaluations, nursing home care (in VA
and community-based facilities), domiciliary services, respite
care, and adult day health care. CBO estimates that this
section would take three to four years to implement and would
eventually cost about $1.0 billion a year in fiscal year 2000
dollars.
CBO's estimate relies on data from VA, the 1992 National
Survey of Veterans, and the National Long-Term Care Survey
(NLTCS). CBO determined the probability of a person being
institutionalized as a function of his age, marital status, and
number of limitations in activities of daily living--one
indicator of an individual's need for long-term care. Applying
those probabilities to a distribution of veterans with service-
connected disability ratings of 50 percent or higher, CBO
estimates that by 2010 about 45,000 additional veterans would
receive care in nursing homes for an annual cost of $1.2
billion. This method of estimation takes into account that
spouses often act as caregivers within the home to veterans who
might otherwise require a nursing home stay. In the near term,
demand for nursing home care through the VA would be lower
because some veterans currently rely on Medicaid, private
insurance, relatives, and certain Medicare-funded services to
provide or finance their care. Initially, those veterans might
not want to change their arrangements with providers. CBO
assumes that eventually veterans with ratings of 50 percent or
higher who enter nursing homes would turn to the VA for their
care because, unlike other private or public insurance
programs, it would be free to them. CBO expects that most
nursing home patients would be placed in community nursing
homes for an average stay of 179 days and at a cost of about
$152 a day per patient (in 2000 prices). (Nursing homes owned
and operated by VA are almost twice as expensive as privately
operated homes.)
In addition, veterans who have disability ratings of 50
percent or more may need long-term, personal care short of that
provided in a nursing home, often in their own home. CBO
estimates that 62,000 such veterans would require home-based
care at an annual cost of $0.1 billion (an average of 2\1/2\
hours of care per week at an hourly cost of $18).
The bill would require copayments from veterans receiving
long-term care if the veteran does not have a service-connected
disability rated at 50 percent or greater. VA would be allowed,
without further appropriation, to spend these amounts on
providing long-term care. VA would be required to base the
copayment on the assets and income of the veteran and spouse.
The maximum monthly copayment would allow for protecting the
spouse from financial hardship and for the veteran to retain a
monthly personal allowance.
CBO estimates that collections from copayments would amount
to $0.3 billion in 2010. The estimate assumes that veterans
with no service-connected disability or with a disability
rating less than 50 percent would be charged copayments on
about 69,000 stays at VA nursing homes, community nursing
homes, and VA domiciliaries if that stay were longer than 21
days. CBO also assumes that single veterans would keep a
minimum personal allowance of $1,000 per year, while those with
a living spouse would retain at least $13,000 per year. Based
on VA's Patient Treatment Files, the vast majority of the
69,000 stays would be low-income veterans who would be unable
to defray the full cost of their care. If VA were to require
veterans to draw down their personal assets or if it pursued
estate recoveries, copayment revenues might be higher.
Reimbursement for Emergency Care.--Section 102 would
significantly expand VA's authority to reimburse veterans and
institutions for emergency care. It would allow VA to pay for
care stemming from life- or health-threatening emergencies
involving a veteran who is enrolled with VA for care, has no
other coverage for emergencies, and has received care from VA
within the 12 months preceding the emergency. CBO estimates
that this provision would increase spending by about $80
million in 2000 about $400 million a year by 2004, assuming
appropriation of the necessary amounts. Those costs would stem
from the costs of emergency room care and any subsequent
hospital care.
Of the 3 million veterans enrolled with VA, CBO estimates
that about 750,000 are uninsured and would be eligible for
benefits under the bill. Emergency room care represents about 3
percent of the costs of private health plans. Emergency room
costs would be two to three times greater for veterans covered
by the bill, however, based on their generally poorer health.
Thus, CBO estimates that the immediate costs of emergencies
would amount to about $155 million annually (in 2000 dollars).
CBO estimates that two-thirds of all visits to the
emergency room would be urgent and that 16 percent of those
visits would lead to admitting the veteran for an inpatient
stay. For veterans under 65 years of age, the average hospital
stay would cost about $7,000. For veterans 65 years old or
older, Medicare would cover the hospital costs, but VA would
pay physicians' costs for those veterans without Part B
coverage; CBO estimates that those costs would average about
$1,000 for the small fraction of veterans who lack Part B
coverage. The costs of the subsequent hospital stay would raise
the annual bill to VA under this provision by about $195
million (also in 2000 dollars).
Care for Combat-Injured Veterans.--VA currently accords
highest priority to veterans with service-connected
disabilities that are rated at least 50 percent disabling. The
lowest priority is given to veterans without such disabilities
and with incomes over a certain threshold. Section 103 would
raise the priority status for medical care of combat-injured
veterans. Because medical care is a discretionary program,
available appropriations limit the number of veterans who
receive care, and this bill would make it more likely that VA
would provide care to a combat-injured veteran who does not
receive a high priority under current law. CBO estimates that
this provision would raise the costs of veterans' medical care
by about $20 million a year, assuming that additional
appropriations would allow VA to treat the new beneficiaries as
well as veterans who would receive care under current law.
For this estimate, CBO assumes that the population of
combat-injured veterans is about as large as the number of
individuals who have been awarded a Purple Heart. According to
data from the Military Order of the Purple Heart, about 550,000
veterans with the award were still living in 1995. Roughly half
of those veterans already qualify for priority-level care based
on service-connected disabilities or income, according to data
from VA.
Although the remaining veterans--roughly 250,000--would be
eligible for priority care, it is likely that only a small
portion would seek VA services--only about 2 percent of all
veterans in the lowest priority category used VA's medical
services in 1996. We assume that the same percentage of such
veterans who were injured in combat currently seek care from VA
and would use VA's medical services a bit more intensively
under this bill. We also assume that another 2 percent of those
veterans would become new users of VA care under the bill. CBO
assumes the average cost of care for combat-injured veterans
would be the same as that of other veterans in the same
priority grouping.
Extension and Revision of Authorities.--Section 205(a)
would extend the eligibility of Vietnam-era veterans for
readjustment counseling from January 1, 2000, through January
1, 2003. Vietnam-era veterans currently account for 19 percent
of the patients in this program and an estimated 15 percent of
the program's total costs--about $70 million in 1999. CBO
estimates that this provision would cost about $8 million in
2000 and $34 million over the 2000-2004 period.
Section 205(d) would amend the Homeless Veterans
Comprehensive Service Programs Act and would extend the
program's ability to make grants through fiscal year 2002, from
its current deadline at the end of fiscal year 1999. Based on
recent experience in this program, CBO expects annual grants to
construct shelters for homeless veterans in the amount of $6
million over the 2000-2002 period. These grants would lead to a
stream of payments to operate the shelters in subsequent years.
The construction and operating expenses would total $37 million
through 2004.
Section 205(e) would allow the Homeless Veterans Program to
subsidize the purchase of vans for the purpose of outreach to
homeless veterans. Based on the number of vans purchased in
earlier years, CBO estimates annual expenditure of $520,000 to
assist in the purchase of 20 vans a year for four years.
Other Provisions.--CBO does not have enough information to
estimate the budgetary impacts of some provisions in the bill.
Section 104 would allow VA to provide medical care to certain
military retirees on a priority basis and be reimbursed by the
Department of Defense (DoD) at the rate that DoD would have
paid to a contractor under TRICARE. For the most part, the
payments by DoD to VA would not add to the costs of TRICARE,
but the provision could lead to somewhat greater use of medical
benefits and thus higher overall payments by DoD. DoD would
incur extra expenses to the extent that retirees increase their
use of medical care because VA's copayments are less than under
TRICARE.
Section 106 would authorize VA to conduct a three-year
pilot program to provide medical care for certain dependents of
enrolled veterans. The provision would require payment of a
reasonable charge by the dependent or the dependent's parent or
guardian. CBO estimates that this provision would probably
raise costs to VA but by a small amount. Most enrolled veterans
have low incomes, and although ability to pay would be a
criterion for care, it is likely that some of the dependents
would be unable to make the payment.
Section 107 would require VA to establish a program
designed to improve access to and utilization of medical
centers. Under current law, the Secretary already has broad
powers to allocate resources to facilities and to lease,
renovate, and close facilities. CBO estimates this provision
would have little or no budgetary impact.
Section 108 would extend by one year a counseling and
treatment program for veterans who have experienced sexual
trauma. The program would be extended from December 31,2001, to
December 31, 2002, and would probably cost a few million
dollars.
Section 207 would expand VA's program of enhanced-use
leases. Such leases provide VA with cash or other items of
value in exchange for the right to use assets of the
department. Under current law, these arrangements usually
result in barter instead of cash payments to VA because cash
proceeds must be returned to the Treasury. The bill would allow
VA to spend any proceeds from enhanced-use leases; thus, VA
would be more likely to accept cash payment. Although the
increase in receipts would equal the increase in spending,
using the proceeds from the leases could offset an equal amount
of discretionary appropriations.
Direct Spending
Veterans' Tobacco Trust Fund.--Section 203 of the bill
would give VA direct spending authority over any amounts the
federal government receives on its behalf from the tobacco
industry for recovery of costs associated with tobacco-related
illnesses. CBO estimates that the additional resources
available to VA would total $80 million over the 2000-2004
period and $0.8 billion over the 2000-2009 period. Because of
normal lags in spending this provision would increase federal
outlays by about $50 million over the 2000-2004 period and
about $640 million over the 2000-2009 period. These outlays
could supplement or supplant discretionary spending for
veterans' medical care.
There is substantial uncertainty about whether the federal
government will file a lawsuit against the tobacco industry,
whether it would win or settle, and if so, for what amounts.
Earlier this year the Justice Department announced its intent
to file a suit, and it is currently assessing the legal
theories and strategies it will use. The President's budget
request includes $20 million for preparing the lawsuit, but the
report accompanying the Senate-reported appropriation bill for
the Department of Justice states that no funds are provided for
tobacco litigation.
To develop an estimate that would fall within the range of
possible outcomes, CBO made assumptions about three factors.
First, how much would the federal government recover if it won
or settled a lawsuit? Second, what proportion would be
attributable to the costs of the VA? Finally, what is the
likelihood that the federal government will enter into a
lawsuit and either win or settle?
Amount of Potential Recoveries.--To estimate the amount
that the federal government could recover in any lawsuit
against the tobacco industry, CBO examined available research
on the cost of smoking and considered the arguments made by the
states in their recent lawsuits. Many studies have examined the
medical and other costs associated with smoking and have
arrived at different conclusions. Smoking probably increases
the net costs of some federal programs but decreases the costs
of others. Two methods typically used by researchers to
estimate the costs of smoking are the prevalence-based method,
which estimates the costs of smoking by calculating the average
difference in costs over a given period between smokers and
nonsmokers, and the life-cycle method, which makes a similar
comparison over the lifetimes of smokers and nonsmokers. In
general, the two methods reach different conclusions because
smokers, on average, have shorter life spans than nonsmokers.
By comparing the costs of only living smokers and nonsmokers,
the prevalence-based method does not include either the avoided
costs or lost tax revenue from smokers in years in which they
are no longer alive. In contrast, the life-cycle method
accounts for the shorter life spans of smokers relative to
nonsmokers.
CBO's review of the research finds that estimates of the
cost to the federal government of cigarette smoking (for
programs other than Medicaid) range from negligible under some
of the life-cycle estimates to as high as $30 billion to $40
billion a year under some of the prevalence-based estimates.
The states based their lawsuits, at least partly, on a
prevalence-based analysis that showed the costs of smoking to
Medicaid in fiscal year 1993 was $13 billion.1 This
figure could correspond to as much as $40 billion in current
dollars for other federal programs. In another study, the
Centers for Disease Control estimated the total costs of
smoking in 1993 to be $50 billion, with federal programs other
than Medicaid paying for 30 percent and state programs
(including Medicaid) paying for about 13 percent.2
This finding would suggest total federal costs of about $20
billion this year and total state costs of about $9 billion.
---------------------------------------------------------------------------
\1\ Leonard S. Miller and others, ``State Estimates of Medicaid
Expenditures Attributable to Cigarette Smoking, Fiscal Year 1993,''
Public Health Reports, vol. 113 (March/April 1998).
\2\ Centers for Disease Control and Prevention, ``Medical-Care
Expenditures Attributable to Cigarette Smoking--United States, 1993,''
Morbidity and Mortality Weekly Report, vol. 43, no 26 (1994).
---------------------------------------------------------------------------
The annual payments under the November 1998 settlement
between tobacco companies and the states ultimately rise to
about $9 billion a year before adjustments for inflation and
the volume of cigarette sales. The Justice Department contends
that the amount of money paid out by the federal government for
smoking related illnesses is even larger than that paid out by
the states through the Medicaid program.3 For the
purpose of this estimate, CBO assumes that if the federal
government wins a lawsuit or settles with tobacco companies, it
will receive slightly over twice the amounts the states are
slated to receive under their settlement. CBO further assumes
that these amounts will be adjusted for inflation and cigarette
sales in the same manner as in the state settlement, resulting
in payments of between $16 billion and $25 billion a year over
the 2000-2009 period.
---------------------------------------------------------------------------
\3\ U.S. Department of Justice, ``Developing a Plan to Take the
Tobacco Industry to Court'' (Department of Justice Fact Sheet,
Washington D.C., January 1999).
Proportion Attributable to Veterans' Programs.--In 1998 the
federal government spent about $18 billion on health care for
veterans through VA. That figure represents 7 percent of
spending on all federal non-Medicaid health care benefits
(including Medicare, the Federal Employee Health Benefits
Program, the Department of Defense health care programs, and
the Indian Health Service). For this estimate CBO assumes that
7 percent of the amounts recovered under a federal lawsuit
---------------------------------------------------------------------------
would be attributable to the VA.
Probability of Recovery of Amounts.--CBO assumes that there
is ultimately a ten percent probability that the federal
government will enter into a lawsuit and win or settle for
recoveries in these amounts. Because the timing is unclear, CBO
assumes no recoveries until 2003 and a lower but growing
probability of recoveries over the 2003-2006 period.
Other Copayments and Collections.--The bill contains
several other provisions that would allow VA to collect and
spend funds. The bill would allow VA to charge higher
copayments for prescriptions and outpatient visits of certain
veterans and to set copayments for certain costly items of
equipment other than wheelchairs and artificial limbs. The
proceeds from these charges would be either used for medical
care or deposited in the Treasury.
The budgetary effects of using these authorities would be
felt in mandatory and appropriated accounts. The provisions
would have an impact on direct spending because the receipts
and subsequent spending would not be subject to appropriation,
but the net effect would be negligible in a typical year
because the extra spending would roughly equal the
corresponding receipts. The extra spending could reduce the
need for appropriated funds if VA would otherwise request
funding for the expenses met through the use of the receipts.
CBO does not expect, however, that VA would make much use of
these authorities.
Compensated Work Therapy Program.--Section 105 would make
veterans eligible for disability compensation benefits for
injuries proximately caused by the veteran's receipt of care in
the Compensated Work Therapy Program (CWT). CWT is a
therapeutic work program for veterans that takes place in
various types of workplaces. Under current law, these veterans
are not eligible for disability compensation benefits because
of injuries suffered while participating in the program. The
budgetary impact of this provision would depend on how many
veterans are participating in this program and the rate at
which they are injured while working. Information from VA
indicates that about 15,000 veterans a year participate in this
program. Based on data from the Bureau of Labor Statistics on
the incidence of occupational illnesses and injuries, CBO
estimates that the provision would increase direct spending by
less than $500,000 a year over the 2000-2002 period and by
about $1 million a year thereafter.
PAY-AS-YOU-GO CONSIDERATIONS. Section 252 of the Balanced
Budget and Emergency Deficit Control Act sets up pay-as-you-go
procedures for legislation affecting direct spending or
receipts. The net changes in outlays and governmental receipts
that are subject to pay-as-you-go procedures are shown in the
following table. For the purposes of enforcing pay-as-you-go
procedures, only the effects in the current year, the budget
year, and the succeeding four years are counted.
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays.............................................. 0 0 0 0 21 31 61 91 121 151 171
Changes in receipts............................................. Not Applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT. Section 102 of
the bill would authorize the Department of Veterans Affairs to
reimburse providers for the reasonable cost of emergency
treatment furnished to certain veterans. The provision would
impose a private-sector and intergovernmental mandate on
providers (including public hospitals) because, in the event of
a dispute over reasonable cost, it would extinguish any
liability on the part of the veteran for that treatment unless
the provider rejects and refunds the department's payment
within 30 days. It is not clear whether the provision would
lead to a net financial loss or gain for providers. All
providers would face costs if the department's payment were
lower than the amount billed. But some providers might
experience a net gain under this provision if reimbursements
from the department more than offset liabilities that otherwise
would not be collected and any associated collection costs. In
any event, costs of the provision are unlikely to exceed the
thresholds specified in UMRA for intergovernmental costs ($50
million, adjusted annually for inflation) or private-sector
costs ($100 million, adjusted annually).
COMPARISON WITH OTHER ESTIMATES. The Administration's
budget request for fiscal year 2000 contains a proposal for
veterans' out-of-network emergency care that is similar to
section 102 of H.R. 2116. The Administration's proposal,
however, would cover fewer than half as many veterans. The
budget request includes about $244 million in 2000 to cover the
out-of-network emergency care for uninsured, enrolled veterans
with compensable disabilities related to military service. H.R.
2116 would cover that kind of care for all uninsured. enrolled
veterans, including veterans whose eligibility is based on
income.
ESTIMATE PREPARED BY:
Federal Costs:
Extended Care Services: Sunita D'Monte (226-2840), Stuart
Hagen (225-2644), and Rachel Schmidt (226-2900).
Reimbursement for Emergency Care: Michael A. Miller (226-
2840).
Care for Combat-Injured Veterans: Michael A. Miller (226-
2840).
Extension and Revision of Authorities: Sarah T. Jennings
(226-2840).
Veterans' Tobacco Trust Fund: Dorothy A. Rosenbaum (226-
9010).
Compensated Work Therapy Program: Charles R. Riemann (226-
2840).
Other Provisions: Sunita D'Monte (226-2840).
Impact on State, Local, and Tribal Governments: Susan Sieg
(225-3220).
Impact on the Private Sector: Rachel Schmidt (226-2900).
ESTIMATE APPROVED BY:
Paul N. Van de Water, Assistant Director for Budget
Analysis.
VA Committee Rebuttal of CBO's Cost Estimate on H.R. 2116
The Committee has ordered reported a bill which authorizes
an expansion of certain medical benefits while providing for
both new revenues (which can help offset program expansions)
and significant reforms in the VA health care system. With the
failure of the Congressional Budget Office (CBO) to meet the
Committee's May 12 request for a cost estimate, the
Subcommittee marked up this bill without the benefit of CBO's
views on its cost implications. Still lacking a CBO estimate at
the scheduled full committee markup of the bill, the Committee
deferred final action on the measure in order to permit the
Subcommittee to take testimony on the cost implications of the
bill.
The Subcommittee's June 30 hearing on the bill's cost
impact apparently served as a catalyst leading to CBO's
submitting an estimate, published herein. But it also served to
underscore the frail foundation underlying CBO's projections.
Significantly, CBO has acknowledged that its estimate is
based on the tenuous assumption that there would be
``appropriation of the necessary amounts'' to fund the
provisions authorized by the bill. As CBO testified at the June
30 hearing, however, ``legislative changes such as those in
H.R. 2116 authorizing long-term and emergency care for veterans
do not raise federal outlays, because funding for them is
subject to appropriation''. CBO noted that VA's ``appropriation
limits how much the VA may actually spend regardless of how
much spending is authorized.'' Given historic (constrained)
levels of funding for VA medical care (as described in CBO's
testimony of June 30), it is a misnomer to characterize CBO's
projections as a ``cost estimate''.
CBO's projections of the potential for increased spending
under the bill--an additional $1.4 billion in the fiscal year
2004--are clearly not insignificant. But closer scrutiny as
reflected in the Subcommittee's June 30 hearing, calls into
question the underpinnings of CBO's projections. It is apparent
to this Committee, in the light of the points below, that those
projections are not a reliable mirror of even potential costs.
1. CBO attributes unreasonable costs to a population which
has the highest priority for VA care and a high percentage of
which VA is already serving: CBO projects large new costs based
on a provision directing VA to provide needed long-term care to
service-connected veterans who are rated 50 percent or more
disabled. These veterans already have the highest priority for
VA long-term care. A VA long-term care expert testified at the
June 30 hearing that the Department is already providing long-
term care to approximately two-thirds of those service-
connected veterans who need such care. Rather than exposing the
Department to up to $1 billion in new long-term care costs,
that official testified that new costs would be under $185
million per year, and might be entirely offset by VA's
implementation of required long-term care copayments under the
bill.
Rather than witnessing a battle of experts, what the
Subcommittee learned was that VA based its estimate on a
sophisticated planning model while CBO began wrestling only
recently with a question of first impression. VA's model had
only recently undergone a rigorous analysis (and approval) by a
Federal advisory committee composed of top experts on long-term
care from around the country. That committee had been
established to study the future demand for VA care and the
adequacy of VA programs to meet that demand. The VA, in
developing its estimate of the impact of section 101, focused
on the disabled service-connected population which actually
uses VA services. The Congressional Budget Office, professing
ignorance of VA's model and insufficient time to refine its
work, relied heavily on data which suggested that large numbers
of 50 percent service-connected veterans would likely qualify
for nursing home care based on degree of functional impairment.
As CBO acknowledged, it based its estimate that by 2010 45,000
additional veterans would receive care in nursing homes on
``the probability of a person being institutionalized as a
function of his age, marital status, and number of limitations
in activities of daily living.'' What CBO did not factor, and
in fact largely disregarded, is the ``real world'' data on such
veterans' actual utilization of VA services. In short, the CBO
assumption that vast numbers of 50 percent service-connected
veterans who do not now rely on VA care would be induced to
seek it under this bill simply has little evidence to support
it. That assumption ignores the fact that those veterans
already have the highest priority for VA long-term care and
could readily receive VA care.
It is the Committee's view that CBO has vastly overinflated
the impact of this provision. First it fails to acknowledge
that some veterans do not and would not use VA health care
services, for any number of reasons. Secondly, CBO failed to
address the fact that veterans, like other Americans, typically
do not want to be institutionalized in a nursing home unless
they have no other option. The fact that a large number of 50
percent service-connected veterans may qualify for such care
(based on degree of functional impairment) is not a meaningful
predictor of extensive utilization of VA nursing home care.
2. While projecting new long-term care costs to VA, CBO has
failed to project the substantial savings to the Medicare and
Medicaid programs which would necessarily result under its
scenario.
Many veterans in need of long-term care are eligible for
other Federal health care programs which fund such care. To
illustrate, in a cost estimate developed last year on
legislation to provide for Medicare to reimburse VA for care of
certain dual-eligible veterans, (H.R. 3828, the Veterans
Medicare Access Improvement Act of 1998), CBO noted the extent
to which veterans have dual eligibility for VA medical care and
for Medicare. CBO projected that the proportion of veterans who
are at least 65 will increase from 36 percent in 1997 to 41
percent in 2008. VA is already heavily subsidizing the Medicare
program. In its estimate on H.R. 3828, CBO estimated that about
one-half of the $17 billion in VA health outlays in 1997 were
for Medicare-covered services furnished to Medicare-eligible
veterans.
The Congressional Research Service (CRS) recently estimated
that about 60 per cent of the nation's long-term care
expenditures are paid by the Federal and state governments. CRS
reported that Medicare pays for over half of the home and
community-based care, and Medicaid pays more than 40 percent of
the costs of nursing home care. In projecting substantial
increases in VA expenditures for both nursing home care and
home and community-based long-term care, CBO's estimate is
strikingly silent regarding the impact of these changes on
Medicare or Medicaid. One would expect that if veterans qualify
for long-term care benefits under Medicare and Medicaid at the
same rate as other Americans, there should be a 60 percent
savings in these programs for each additional dollar spent by
VA.
At the Subcommittee's hearing on June 30, CBO conceded that
there could be savings to the Medicaid program of some $150
million annually, but inexplicably its prepared testimony and
written cost estimate failed to reflect that. CBO failed to
offer any persuasive explanation for assuming no savings to
Medicare.
3. CBO projects new costs, but fails to project any
offsetting revenues provided for in other provisions of the
bill.
H.R. 2116 was intended to provide some balance between
program expansion and programmatic reforms which would provide
offsetting revenues. CBO's estimate of the costs of the bill is
altogether misleading in failing to identify and credit
offsetting revenues.
Cost-savings or new revenues should have been projected for
the following provisions:
a. LSection 201 of the bill would substantially revise
current VA rules on cost-sharing. It envisions VA's
increasing a $2 copayment on pharmaceuticals and
establishing copayment requirements on provision of
hearing aids and other costly items. It would also
require VA to revise copayment requirements on
outpatient visits by so-called category C veterans.
CBO's estimate fails to identify any revenue associated
with those provisions. Nor did CBO offer any revenue
projection at the June 30 hearing, despite testimony
from VA that the Department intended to implement these
authorities. CBO's failure to provide any such
projection is particularly troubling given its
projections to the Congress as recently as April 1999
to the effect that additional revenues of some $200
million per year could be realized through legislation
to increase VA drug copayment requirements.
b. LSection 207, which would extend and expand VA's
authority to enter into long-term leases of underused
VA property, should result in VA's gaining additional
revenues.
CBO's projections are strikingly inconsistent. CBO appeared
to discount the significance of the bill's revenue-generating
provisions either because they are authorizations (rather than
explicit requirements) or because the pertinent provisions of
the bill were not more explicit. Ironically, CBO was not
unwilling to provide very specific estimates of the cost of a
provision, such as emergency care payments under section 102.
Like the drug copayment provision section 102 simply authorizes
VA to establish a new program and leaves broad discretion on
payment levels to the Department.
4. CBO has ignored provisions which would limit the costs
of the bill:
Section 102 of the bill would authorize--but not
require--VA to pay for emergency care for certain
veterans who lack health insurance or any other health
coverage. This section directs VA to set emergency care
payment levels and to establish appropriate limitations
on payment. As VA acknowledged at the June 30 hearing
it has an obvious incentive to set low rates so as to
limit its liability. CBO fails to take account of VA's
authority to limit its liability under the bill, and
clearly assumed that VA would make payments at the same
reimbursement rate as private health plans. VA
indicated in its testimony that it would not be
reasonable to base a cost estimate of this measure on
the experience of private health plans. The Committee
believes the CBO projection that this measure would
entail additional costs of up to $400 million in fiscal
year 2004 is not only unreasonably speculative but
based on entirely faulty assumptions. In contrast, VA
staff projected the cost of implementing this measure
to be approximately $150 million/year.
5. CBO has a poor track record on estimating demand for VA
care.
The Committee has two additional reasons for questioning
CBO's cost estimate and concluding that that estimate is not a
reliable basis for gauging the fiscal impact of enacting H.R.
2116. First, the Committee notes the inherent difficulty of
making long-term projections in a dynamic sector like health
care, particularly as it involves the VA health care system,
which is itself still undergoing dramatic changes. Second, the
Committee notes the lack of success CBO has had in the recent
past in estimating with any degree of reliability the impact of
changing provisions of law governing eligibility for particular
health care benefits.
The enactment of H.R. 2116 would have a substantial, and
the Committee believes, beneficial impact on the VA health care
system. The bill represents the most significant legislative
change since the enactment of the Veterans Health Care
Eligibility Act of 1996, which expanded veterans' eligibility
for outpatient care. CBO, in its 1996 estimate of the costs
attributable to enacting that legislation, projected that ``the
new benefit for outpatient care would entail net costs of about
$3 billion each year.'' In fact, the ``costs'' of that
expansion of eligibility have largely been offset by savings,
as VA had projected. The Committee would expect much the same
under this legislation.
Appicability to Legislative Branch
The reported bill would not be applicable to the
legislative branch under the Congressional Accountability Act,
Public Law 104-1, because it would apply only to certain
Department of Veterans Affairs programs and activities.
Statement of Federal Mandates
The reported bill would not establish any significant
federal mandate under the Unfunded Mandates Reform Act, Public
Law 104-4.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the U.S. Constitution,
the reported bill would be authorized by Congress' power to
``provide for the common Defence and general Welfare of the
United States.''
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
TITLE 38 UNITED STATES CODE
* * * * * * *
PART II--GENERAL BENEFITS
* * * * * * *
CHAPTER 11--COMPENSATION FOR SERVICE-CONNECTED DISABILITY OR DEATH
* * * * * * *
Sec. 1151. Benefits for persons disabled by treatment or vocational
rehabilitation
(a) * * *
* * * * * * *
(2) the disability or death was proximately caused
(A) by the provision of training and rehabilitation
services by the Secretary (including by a service-
provider used by the Secretary for such purpose under
section 3115 of this title) as part of an approved
rehabilitation program under chapter 31 of this title,
or (B) by participation in a program (known as a
``compensated work therapy program'') under section
1718 of this title.
* * * * * * *
CHAPTER 17--HOSPITAL, NURSING HOME, DOMICILIARY, AND MEDICAL CARE
* * * * * * *
subchapter i--general
Sec.
1701. Definitions.
* * * * * * *
subchapter ii--hospital, nursing home or domiciliary care and medical
treatment
1710. Eligibility for hospital, nursing home, and domiciliary care.
1710A. Requirement to provide extended care.
* * * * * * *
1713A. Medical care for certain dependents and enrolled veterans:
pilot program.
* * * * * * *
subchapter iii--miscellaneous provisions relating to hospital and
nursing home care and medical treatment of veterans
1721. Power to make rules and regulations.
* * * * * * *
[1722A. Copayment for medications.]
1722A. Copayments for medications and certain costly items and
equipment.
* * * * * * *
1725. Reimbursement for emergency treatment.
* * * * * * *
1729B. Health Services Improvement Fund.
1729C. Veterans Tobacco Trust Fund.
* * * * * * *
SUBCHAPTER I--GENERAL
Sec. 1701. Definitions
For the purposes of this chapter--
(1) * * *
* * * * * * *
(10) The term ``injured in combat'' means wounded in action
as the result of an act of an enemy of the United States or
otherwise wounded in action by weapon fire while directly
engaged in armed conflict (other than as the result of willful
misconduct by the wounded individual).
* * * * * * *
Sec. 1705. Management of health care: patient enrollment
system
(a) * * *
* * * * * * *
(3) Veterans who are former prisoners of war or who
were injured in combat, veterans with service-connected
disabilities rated 10 percent or 20 percent, and
veterans described in subparagraphs (B) and (C) of
section 1710(a)(2) of this title.
* * * * * * *
(6) All other veterans eligible for hospital care,
medical services, and nursing home care under section
1710(a)(2) of this title (other than subparagraph (H)
of such section).
(7) Veterans who are eligible for hospital care,
medical services, and nursing home care under section
1710(a)(2)(H) of this title.
[(7)] (8) Veterans described in section 1710(a)(3) of
this title.
* * * * * * *
SUBCHAPTER II--HOSPITAL, NURSING HOME OR DOMICILIARY CARE AND MEDICAL
TREATMENT
* * * * * * *
Sec. 1710. Eligibility for hospital, nursing home, and domiciliary care
(a)(1) The Secretary (subject to paragraph (4)) shall furnish
hospital care and medical services, and [may furnish nursing
home care,] which the Secretary determines to be needed--
* * * * * * *
(2) The Secretary (subject to paragraph (4)) shall furnish
hospital care and medical services, and may furnish nursing
home care, which the Secretary determines to be needed to any
veteran--
(A) * * *
* * * * * * *
(D) who is a former prisoner of war or who was
injured in combat;
* * * * * * *
(F) who was exposed to a toxic substance, radiation,
or other conditions, as provided in subsection (e);
[or]
(G) who is unable to defray the expenses of necessary
care as determined under section 1722(a) of this
title[.]; or
(H) who has retired from active military, naval, or
air service in the Army, Navy, Air Force, or Marine
Corps, is eligible for care under the TRICARE program
established by the Secretary of Defense, and is not
otherwise described in paragraph (1) or in this
paragraph.
* * * * * * *
(4) The requirement in paragraphs (1) and (2) that the
Secretary furnish hospital care and medical services, and the
requirement in section 1710A of this title that the Secretary
provide a program of extended care services, shall be effective
in any fiscal year only to the extent and in the amount
provided in advance in appropriations Acts for such purposes.
* * * * * * *
(g)(1) The Secretary may not furnish medical services under
subsection (a) of this section (including home health services
under section 1717 of this title) to a veteran who is eligible
for hospital care under this chapter by reason of subsection
(a)(3) of this section unless the veteran agrees to pay to the
United States [the amount determined under paragraph (2) of
this subsection] in the case of each outpatient visit the
applicable amount or amounts established by the Secretary by
regulation.
(2) A veteran who is furnished medical services under
subsection (a) of this section and who is required under
paragraph (1) of this subsection to agree to pay an amount to
the United States in order to be furnished such services shall
be liable to the United States, in the case of each visit in
which such services are furnished to the veteran, for an amount
[equal to 20 percent of the estimated average cost (during the
calendar year in which the services are furnished) of an
outpatient visit in a Department facility. Such estimated
average cost shall be determined by the Secretary.] which the
Secretary shall establish by regulation.
* * * * * * *
Sec. 1710A. Extended care services
(a) The Secretary (subject to section 1710(a)(4) of this
title and subsection (c) of this section) shall operate and
maintain a program to provide extended care services to
eligible veterans in accordance with this section. Such
services shall include the following:
(1) Geriatric evaluation.
(2) Nursing home care (A) in facilities operated by
the Secretary, and (B) in community-based facilities
through contracts under section 1720 of this title.
(3) Domiciliary services under section 1710(b) of
this title.
(4) Adult day health care under section 1720(f) of
this title.
(5) Such other noninstitutional alternatives to
nursing home care, including those described in section
1720C of this title, as the Secretary considers
reasonable and appropriate.
(6) Respite care under section 1720B of this title.
(b)(1) In carrying out subsection (a), the Secretary shall
provide extended care services which the Secretary determines
are needed (A) to any veteran in need of such care for a
service-connected disability, and (B) to any veteran who is in
need of such care and who has a service-connected disability
rated at 50 percent or more.
(2) The Secretary, in making placements for nursing home care
in Department facilities, shall give highest priority to
veterans (A) who are in need of such care for a service-
connected disability, or (B) who have a service-connected
disability rated at 50 percent or more. The Secretary shall
ensure that a veteran described in this subsection who
continues to need nursing home care shall not after placement
in a Department nursing home be transferred from the facility
without the consent of the veteran, or, in the event the
veteran cannot provide informed consent, the representative of
the veteran.
(c)(1) The Secretary, in carrying out subsection (a), shall
prescribe regulations governing the priorities for the
provision of nursing home care in Department facilities so as
to ensure that priority for such care is given (A) for patient
rehabilitation, (B) for clinically complex patient populations,
and (C) for patients for whom there are not other suitable
placement options.
(2) The Secretary may not furnish extended care services for
a non-service-connected disability other than in the case of a
veteran who has a service-connected disability rated at 50
percent or more unless the veteran agrees to pay to the United
States a copayment for extended care services of more than 21
days in any year.
(d)(1) A veteran who is furnished extended care services
under this chapter and who is required under subsection (c)(2)
to pay an amount to the United States in order to be furnished
such services shall be liable to the United States for that
amount.
(2) In implementing subsection (c)(2), the Secretary shall
develop a methodology for establishing the amount of the
copayment for which a veteran described in subsection (c) is
liable. That methodology shall provide for--
(A) establishing a maximum monthly copayment (based
on all income and assets of the veteran and the spouse
of such veteran);
(B) protecting the spouse of a veteran from financial
hardship by not counting all of the income and assets
of the veteran and spouse (in the case of a spouse who
resides in the community) as available for determining
the copayment obligation; and
(C) allowing the veteran to retain a monthly personal
allowance.
(e)(1) There is established in the Treasury of the United
States a revolving fund known as the Department of Veterans
Affairs Extended Care Fund (hereinafter in this section
referred to as the ``fund''). Amounts in the fund shall be
available, without fiscal year limitation and without further
appropriation, exclusively for the purpose of providing
extended care services under subsection (a).
(2) All amounts received by the Department under this section
shall be deposited in or credited to the fund.
* * * * * * *
Sec. 1712A. Eligibility for readjustment counseling and related mental
health services
(a)(1)(A) * * *
(B) Subparagraph (A) applies to the following veterans:
(i) * * *
* * * * * * *
(ii) Any veteran (other than a veteran covered by
clause (i)) who served on active duty during the
Vietnam era who seeks or is furnished such counseling
before January 1, [2000] 2003.
* * * * * * *
Sec. 1713A. Medical care for certain dependents of enrolled veterans:
pilot program
(a) The Secretary may, during the program period, carry out a
pilot program to provide primary health care services for
eligible dependents of veterans in accordance with this
section.
(b) For purposes of this section:
(1) The term ``program period'' means the period
beginning on the first day of the first month beginning
more than 180 days after the date of the enactment of
this section and ending three years after that day.
(2) The term ``eligible dependent'' means an
individual who--
(A) is the spouse or child of a veteran who
is enrolled in the system of patient enrollment
established by the Secretary under section 1705
of this title; and
(B) is determined by the Secretary to have
the ability to pay for such care or services
either directly or through reimbursement or
indemnification from a third party.
(c) The Secretary may furnish health care services to an
eligible dependent under this section only if the dependent
(or, in the case of a minor, the parent or guardian of the
dependent) agrees--
(1) to pay to the United States an amount
representing the reasonable charges for the care or
services furnished (as determined by the Secretary);
and
(2) to cooperate with and provide the Secretary an
appropriate assignment of benefits, authorization to
release medical records, and any other executed
documents, information, or evidence reasonably needed
by the Secretary to recover the Department's charges
for the care or services furnished by the Secretary.
(d)(1) The health care services provided under the pilot
program under this section may consist of such primary hospital
care services and such primary medical services as may be
authorized by the Secretary. The Secretary may furnish those
services directly through a Department medical facility or,
subject to paragraphs (2) and (3), pursuant to a contract or
other agreement with a non-Department facility (including a
health-care provider, as defined in section 8152(2) of this
title).
(2) The Secretary may enter into a contract or agreement to
furnish primary health care services under this section in a
non-Department facility on the same basis as provided under
subsections (a) and (b) of section 1703 of this title or may
include such care in an existing or new agreement under section
8153 of this title when the Secretary determines it to be in
the best interest of the prevailing standards of the Department
medical care program.
(3) Primary health care services may not be authorized to be
furnished under this section at any medical facility if the
furnishing of those services would result in the denial of, or
a delay in providing, access to care for any enrolled veteran
at that facility.
(e)(1) In the case of an eligible dependent who is furnished
primary health care services under this section and who has
coverage under a health-plan contract, as defined in section
1729(i)(1) of this title, the United States shall have the
right to recover or collect the reasonable charges for such
care or services from such health-plan contract to the extent
that the individual or the provider of the care or services
would be eligible to receive payment for such care or services
from such health-plan contract if the care or services had not
been furnished by a department or agency of the United States.
(2) The right of the United States to recover under paragraph
(1) shall be enforceable with respect to an eligible dependent
in the same manner as applies under subsections (a)(3), (b),
(c)(1), (c)(2), (d), (f), (h), and (i) of section 1729 of this
title with respect to a veteran.
(f)(1) Subject to paragraphs (2) and (3), the pilot program
under this section shall be carried out during the program
period in not more than four veterans integrated service
networks, as designated by the Secretary. In designating
networks under the preceding sentence, the Secretary shall
favor designation of networks that are suited to serve
dependents of veterans because of--
(A) the capability of one or more medical facilities
within the network to furnish primary health care
services to eligible dependents while assuring that
veterans continue to receive priority for care and
services;
(B) the demonstrated success of such medical
facilities in billings and collections;
(C) support for initiating such a pilot program among
veterans in the network; and
(D) such other criteria as the Secretary considers
appropriate.
(2) In implementing the pilot program, the Secretary may not
provide health care services for dependents who are children--
(A) in more than one of the participating networks
during the first year of the program period; and
(B) in more than two of the participating networks
during the second year of the program period.
(3) In implementing the pilot program, the Secretary shall
give priority to facilities which operate women veterans'
clinics.
* * * * * * *
Sec. 1720. Transfers for nursing home care; adult day health care
(a) * * *
* * * * * * *
[(f)(1)(A) The Secretary is authorized to furnish adult day
health care as provided for in this subsection. For the purpose
only of authorizing the furnishing of such care and specifying
the terms and conditions under which it may be furnished to
veterans needing such care--]
(f)(1)(A) The Secretary may furnish adult day health care
services to a veteran enrolled under section 1705(a) of this
title who would otherwise require nursing home care.
* * * * * * *
Sec. 1720B. Respite care
(a) The Secretary may furnish respite care services to a
veteran who is [eligible] enrolled to receive care under
section 1710 of this title.
(b) For the purpose of this section, [the term ``respite
care'' means hospital or nursing home care] the term ``respite
care services'' means care and services which--
(1) [is] are of limited duration;
(2) [is] are furnished [in a Department facility] on
an intermittent basis to a veteran who is suffering
from a chronic illness and who resides primarily at
home; and
(3) [is] are furnished for the purpose of helping the
veteran to continue residing primarily at home.
(c) In furnishing respite care services, the Secretary may
enter into contract arrangements.
* * * * * * *
Sec. 1720D. Counseling and treatment for sexual trauma
(a)(1) During the period through [December 31, 2001] December
31, 2002, the Secretary [may provide counseling to a veteran
who the Secretary determines requires such counseling] shall
operate a program under which the Secretary provides counseling
and appropriate care and services to veterans who the Secretary
determines require such counseling and care and services to
overcome psychological trauma, which in the judgment of a
mental health professional employed by the Department, resulted
from a physical assault of a sexual nature, battery of a sexual
nature, or sexual harassment which occurred while the veteran
was serving on active duty.
[(2) During the period referred to in paragraph (1), the
Secretary may provide appropriate care and services to a
veteran for an injury, illness, or other psychological
condition that the Secretary determines to be the result of a
physical assault, battery, or harassment referred to in that
paragraph.]
[(3)] (2) In furnishing counseling to a veteran under this
subsection, the Secretary may, during the period through
[December 31, 2001] December 31, 2002, provide such counseling
pursuant to a contract with a qualified mental health
professional if (A) in the judgment of a mental health
professional employed by the Department, the receipt of
counseling by that veteran in facilities of the Department
would be clinically inadvisable, or (B) Department facilities
are not capable of furnishing such counseling to that veteran
economically because of geographical inaccessibility.
* * * * * * *
(c) The Secretary shall provide information on the counseling
and treatment available to veterans under this section. Efforts
by the Secretary to provide such information--
(1) shall include availability of a toll-free
telephone number (commonly referred to as an 800
number); [and]
(2) shall ensure that information about the
counseling and treatment available to veterans under
this section--
(A) is revised and updated as appropriate;
(B) is made available and visibly posted at
appropriate facilities of the Department; and
(C) is made available through appropriate
public information services; and
[(2)] (3) shall include coordination with the
Secretary of Defense seeking to ensure that individuals
who are being separated from active military, naval, or
air service are provided appropriate information about
programs, requirements, and procedures for applying for
counseling and treatment under this section.
* * * * * * *
SUBCHAPTER III--MISCELLANEOUS PROVISIONS RELATING TO HOSPITAL AND
NURSING HOME CARE AND MEDICAL TREATMENT OF VETERANS
* * * * * * *
[Sec. 1722A. Copayment for medications]
Sec. 1722A. Copayments for medications and certain costly items and
equipment
(a) * * *
* * * * * * *
(b) The Secretary, pursuant to regulations which the
Secretary shall prescribe, may--
(1) increase the copayment amount in effect under
subsection (a);
(2) establish a maximum annual pharmaceutical
copayment amount under subsection (a) for veterans who
have multiple outpatient prescriptions; and
(3) require a veteran, other than a veteran described
in subsection (a)(3), to pay to the United States a
reasonable copayment for sensori-neural aids,
electronic equipment, and any other costly item or
equipment furnished the veteran for a nonservice-
connected condition, other than a wheelchair or
artificial limb.
[(b)] (c) Amounts collected under [this section] subsection
(a) shall be deposited in the Department of Veterans Affairs
Medical Care Collections Fund. Amounts collected through use of
the authority under subsection (b) shall be deposited in
Department of Veterans Affairs Health Services Improvement
Fund.
[(c)] (d) The provisions of subsection (a) expire on
September 30, 2002.
* * * * * * *
Sec. 1725. Reimbursement for emergency treatment
(a) General Authority.--(1) Subject to subsections (c) and
(d), the Secretary may reimburse a veteran described in
subsection (b) for the reasonable value of emergency treatment
furnished the veteran in a non-Department facility.
(2) In any case in which reimbursement is authorized under
subsection (a)(1), the Secretary, in the Secretary's
discretion, may, in lieu of reimbursing the veteran, make
payment of the reasonable value of the furnished emergency
treatment directly--
(A) to a hospital or other health care provider that
furnished the treatment; or
(B) to the person or organization that paid for such
treatment on behalf of such veteran.
(b) Eligibility.--(1) A veteran referred to in subsection
(a)(1) is an individual who is an active Department health-care
participant who is personally liable for emergency treatment
furnished the veteran in a non-Department facility.
(2) A veteran is an active Department health-care participant
if the veteran--
(A) is described in any of paragraphs (1) through (6)
of section 1705(a) of this title;
(B) is enrolled in the health care system established under
such section; and
(C) received care under this chapter within the 12-month
period preceding the furnishing of such emergency treatment.
(3) A veteran is personally liable for emergency treatment
furnished the veteran in a non-Department facility if the
veteran--
(A) is financially liable to the provider of
emergency treatment for that treatment;
(B) has no entitlement to care or services under a
health-plan contract;
(C) has no other contractual or legal recourse
against a third party that would, in whole or in part,
extinguish such liability to the provider; and
(D) is not eligible for reimbursement for medical
care or services under section 1728 of this title.
(c) Limitations on Reimbursement.--(1) The Secretary, in
accordance with regulations prescribed by the Secretary,
shall--
(A) establish the maximum amount payable under
subsection (a);
(B) delineate the circumstances under which such
payments may be made, to include such requirements on
requesting reimbursement as the Secretary shall
establish; and
(C) provide that in no event may a payment under that
subsection include any amount for which the veteran is
not personally liable.
(2) Subject to paragraph (1), the Secretary may provide
reimbursement under this section only after the veteran or the
provider of emergency treatment has exhausted without success
all claims and remedies reasonably available to the veteran or
provider against a third party for payment of such treatment.
(3) Payment by the Secretary under this section, on behalf of
a veteran described in subsection (b), to a provider of
emergency treatment, shall, unless rejected and refunded by the
provider within 30 days of receipt, extinguish any liability on
the part of the veteran for that treatment. Neither the absence
of a contract or agreement between the Secretary and the
provider nor any provision of a contract, agreement, or
assignment to the contrary shall operate to modify, limit, or
negate the requirement in the preceding sentence.
(d) Independent Right of Recovery.--(1) In accordance with
regulations prescribed by the Secretary, the United States
shall have the independent right to recover any amount paid
under this section when, and to the extent that, a third party
subsequently makes a payment for the same emergency treatment.
(2) Any amount paid by the United States to the veteran (or
the veteran's personal representative, successor, dependents,
or survivors) or to any other person or organization paying for
such treatment shall constitute a lien in favor of the United
States against any recovery the payee subsequently receives
from a third party for the same treatment.
(3) Any amount paid by the United States to the provider that
furnished the veteran's emergency treatment shall constitute a
lien against any subsequent amount the provider receives from a
third party for the same emergency treatment for which the
United States made payment.
(4) The veteran (or the veteran's personal representative,
successor, dependents, or survivors) shall ensure that the
Secretary is promptly notified of any payment received from any
third party for emergency treatment furnished to the veteran.
The veteran (or the veteran's personal representative,
successor, dependents, or survivors) shall immediately forward
all documents relating to such payment, cooperate with the
Secretary in the investigation of such payment, and assist the
Secretary in enforcing the United States right to recover any
payment made under subsection (c)(3).
(e) Waiver.--The Secretary, in the Secretary's discretion,
may waive recovery of a payment made to a veteran under this
section that is otherwise required by subsection (d)(1) when
the Secretary determines that such waiver would be in the best
interest of the United States, as defined by regulations
prescribed by the Secretary.
(f) Definitions.--For purposes of this section:
(1) The term ``emergency treatment'' means medical
care or services furnished, in the judgment of the
Secretary--
(A) when Department or other Federal
facilities are not feasibly available and an
attempt to use them beforehand would not be
reasonable;
(B) when such care or services are rendered
in a medical emergency of such nature that
delay would be hazardous to life or health; and
(C) until such time as the veteran can be
transferred safely to a Department facility or
other Federal facility.
(2) The term ``health-plan contract'' includes any of
the following:
(A) An insurance policy or contract, medical
or hospital service agreement, membership or
subscription contract, or similar arrangement
under which health services for individuals are
provided or the expenses of such services are
paid.
(B) An insurance program described in section
1811 of the Social Security Act (42 U.S.C.
1395c) or established by section 1831 of such
Act (42 U.S.C. 1395j).
(C) A State plan for medical assistance
approved under title XIX of such Act (42 U.S.C.
1396 et seq.).
(D) A workers' compensation law or plan
described in section 1729(a)(2)(A) of this
title.
(E) A law of a State or political subdivision
described in section 1729(a)(2)(B) of this
title.
(3) The term ``third party'' means any of the
following:
(A) A Federal entity.
(B) A State or political subdivision of a
State.
(C) An employer or an employer's insurance
carrier.
(D) An automobile accident reparations
insurance carrier.
(E) A person or entity obligated to provide,
or to pay the expenses of, health services
under a health-plan contract.
* * * * * * *
Sec. 1729A. Department of Veterans Affairs Medical Care Collections
Fund
(a) * * *
(b) Amounts recovered or collected after June 30, 1997, under
any of the following provisions of law shall be deposited in
the fund:
(1) * * *
* * * * * * *
(6) Section 1725 of this title.
[(6)] (7) Public Law 87-693, popularly known as the
``Federal Medical Care Recovery Act'' (42 U.S.C. 2651
et seq.), to the extent that a recovery or collection
under that law is based on medical care or services
furnished under this chapter.
* * * * * * *
Sec. 1729B. Health Services Improvement Fund
(a) There is established in the Treasury of the United States
a fund to be known as the ``Department of Veterans Affairs
Health Services Improvement Fund''.
(b) Amounts received or collected after the date of the
enactment of this section under any of the following provisions
of law shall be deposited in the fund:
(1) Section 1713A of this title.
(2) Section 1722A(b) of this title.
(3) Section 8165(a) of this title.
(4) Section 104(c) of the Veterans' Millennium Health
Care Act.
(c) Amounts in the fund are hereby available, without fiscal
year limitation, to the Secretary for the purposes stated in
subparagraphs (A) and (B) of section 1729A(c)(1) of this title.
Sec. 1729C. Veterans Tobacco Trust Fund
(a) There is established in the Treasury of the United States
a trust fund to be known as the ``Veterans Tobacco Trust
Fund'', consisting of such amounts as may be appropriated,
credited, or donated to the trust fund.
(b) If a lawsuit is brought by the United States against the
tobacco manufacturers seeking recovery of costs incurred or to
be incurred by the United States that are attributable to
tobacco-related illnesses, there shall be credited to the trust
fund from any amount recovered by the United States pursuant to
that lawsuit, without further appropriation, the amount that
bears the same ratio to the amount recovered as the amount of
the Department's costs for health care attributable to tobacco-
related illnesses for which recovery is sought in the suit
bears to the total amount sought by the United States in the
suit.
(c) After September 30, 2004, amounts in the trust fund shall
be available, without fiscal year limitation, to the Secretary
of Veterans Affairs for the following purposes:
(1) Furnishing medical care and services under this
chapter, to be available during any fiscal year for the
same purposes and subject to the same limitations
(other than with respect to the period of availability
for obligation) as apply to amounts appropriated from
the general fund of the Treasury for that fiscal year
for medical care.
(2) Conducting medical research, rehabilitation
research, and health systems research, with particular
emphasis on research relating to prevention and
treatment of, and rehabilitation from, tobacco
addiction and diseases associated with tobacco use.
* * * * * * *
SUBCHAPTER V--PAYMENTS TO STATE HOMES
* * * * * * *
Sec. 1741. Criteria for payment
(a)(1) * * *
* * * * * * *
(2) The Secretary may pay each State per diem at a rate
determined by the Secretary for each veteran receiving [adult
day health care in a State home] extended care services
described in any of paragraphs (4) through (6) of section
1710A(a) of this title under a program administered by a State
home, if such veteran is eligible for such care under laws
administered by the Secretary.
(b) In no case shall the payments made with respect to any
veteran under this section exceed one-half of the cost of the
veterans' care in such State home.
* * * * * * *
PART V--BOARDS, ADMINISTRATIONS, AND SERVICES
* * * * * * *
CHAPTER 73--VETERANS HEALTH ADMINISTRATION--ORGANIZATION AND FUNCTIONS
* * * * * * *
SUBCHAPTER II--GENERAL AUTHORITY AND ADMINISTRATION
* * * * * * *
Sec. 7321. Committee on Care of Severely Chronically Mentally Ill
Veterans
(a) * * *
* * * * * * *
(d)(1) * * *
(2) Not later than February 1, 1998, and February 1 of each
of the [three] five following years, the Secretary shall submit
to the Committees on Veterans' Affairs of the Senate and House
of Representatives a report containing information updating the
reports submitted under this subsection before the submission
of such report.
* * * * * * *
SUBCHAPTER IV--RESEARCH CORPORATIONS
* * * * * * *
Sec. 7361. Authority to establish; status
(a) The Secretary may authorize the establishment at any
Department medical center of a nonprofit corporation to provide
a flexible funding mechanism for the conduct of approved
research and education at the medical center. Except as
otherwise required in this subchapter or under regulations
prescribed by the Secretary, any such corporation, and its
directors and employees, shall be required to comply only with
those Federal laws, regulations, and executive orders and
directives which apply generally to private nonprofit
corporations. Such a corporation may be established to
facilitate either research or education or both research and
education.
* * * * * * *
Sec. 7362. Purpose of corporations
Any corporation established under this subchapter shall be
established solely to facilitate research as described in
section 7303(a) of this title and education and training as
described in sections 7302, 7471, 8154, and 1701(6)(B) of this
title in conjunction with the applicable Department medical
center. Any funds received by the Secretary for the conduct of
research or research at the medical center other than funds
appropriated to the Department may be transferred to and
administered by the corporation for [that purpose] these
purposes.
* * * * * * *
Sec. 7363. Board of directors; executive director
(a) The Secretary shall provide for the appointment of a
board of directors for any corporation established under this
subchapter. The board shall include--
(1) the director of the medical center, the chief of
staff of the medical center, and [the assistant chief
of staff for research of the medical center; and] as
appropriate, the assistant chief of staff for research
for the medical center and the associate chief of staff
for education for the medical center, or, in the case
of a facility at which such positions do not exist,
those officials who are responsible for carrying out
the responsibilities of the medical center director,
chief of staff, and, as appropriate, the assistant
chief of staff for research and the assistant chief for
education; and
(2) subject to subsection (c), members who are not
officers or employees of the Federal Government and who
are familiar with issues involving medical and
scientific research or education, as appropriate.
* * * * * * *
(c) An individual appointed under subsection (a)(2) to the
board of directors of a corporation established under this
subchapter may not be affiliated with, employed by, or have any
other financial relationship with any entity that is a source
of funding for research or education by the Department unless
that source of funding is a governmental entity or an entity
the income of which is exempt from taxation under the Internal
Revenue Code of 1986.
* * * * * * *
Sec. 7364. General powers
(a) * * *
* * * * * * *
(c)(1) A corporation established under this subchapter may
not spend funds for an education activity unless the activity
is approved in accordance with procedures prescribed by the
Under Secretary for Health.
(2) The Under Secretary for Health shall prescribe policies
and procedures to guide the expenditure of funds by
corporations under paragraph (1) consistent with the purpose of
such corporations as flexible funding mechanisms.
* * * * * * *
CHAPTER 74--VETERANS HEALTH ADMINISTRATION--
PERSONNEL
* * * * * * *
SUBCHAPTER I--APPOINTMENTS
* * * * * * *
Sec. 7402. Qualifications of appointees
(a) * * *
* * * * * * *
(f) A person may not be employed in a position under
subsection (b) (other than under paragraph (4) of that
subsection) if--
(1) the person is or has been licensed, registered,
or certified (as applicable to such position) in more
than one State; and
(2) either--
(A) any of those States has terminated such
license, registration, or certification for
cause; or
(B) the person has voluntarily relinquished
such license, registration, or certification in
any of those States after being notified in
writing by that State of potential termination
for cause.
* * * * * * *
CHAPTER 78--VETERANS' CANTEEN SERVICE
* * * * * * *
Sec. 7802. Duties of Secretary with respect to Service
The Secretary shall--
(1) establish, maintain, and operate canteens where
deemed necessary and practicable at [hospitals and
homes] medical facilities of the Department and at
other Department establishments where similar essential
facilities are not reasonably available from outside
commercial sources;
* * * * * * *
(11) authorize the use of funds of the Service when
available, subject to such regulations as the Secretary
may deem appropriate, for the purpose of cashing
checks, money orders, and similar instruments in
nominal amounts for the payment of money presented by
veterans hospitalized or domiciled at [hospitals and
homes] medical facilities of the Department, and by
other persons authorized by section 7803 of this title
to make purchases at canteens. Such checks, money
orders, and other similar instruments may be cashed
outright or may be accepted, subject to strict
administrative controls, in payment for merchandise or
services, and the difference between the amount of the
purchase and the amount of the tendered instrument
refunded in cash.
* * * * * * *
Sec. 7803. Operation of Service
[(a)] The canteens at [hospitals and homes] medical
facilities of the Department shall be primarily for the use and
benefit of veterans hospitalized or domiciled at such
[hospitals and homes] medical facilities. Service at such
canteens may also be furnished to personnel of the Department
and recognized veterans' organizations employed at such
[hospitals and homes] medical facilities and to other persons
so employed, to the families of all the foregoing persons who
reside at the [hospital or home] medical facility concerned,
and to relatives and other persons while visiting any of the
persons named [in this subsection; however, service to any
person not hospitalized, domiciled, or residing at the hospital
or home shall be limited to the sale of merchandise or services
for consumption or use on the premises] in this section.
[(b) Service at canteens other than those established at
hospitals and homes shall be limited to sales of merchandise
and services for consumption or use on the premises, to
personnel employed at such establishments, their visitors, and
other persons at such establishments on official business.]
* * * * * * *
PART VI--ACQUISITION AND DISPOSITION OF PROPERTY
* * * * * * *
CHAPTER 81--ACQUISITION AND OPERATION OF HOSPITAL AND DOMICILIARY
FACILITIES; PROCUREMENT AND SUPPLY; ENHANCED-USE LEASES OF REAL
PROPERTY
* * * * * * *
subchapter v--enhanced-use leases of real property
Sec.
8161. Definitions.
* * * * * * *
[8169. Expiration.]
* * * * * * *
SUBCHAPTER I--ACQUISITION AND OPERATION OF MEDICAL FACILITIES
* * * * * * *
Sec. 8110. Operation of medical facilities
(a)(1) * * *
* * * * * * *
(d) The Secretary may not in any fiscal year close more than
50 percent of the beds within a bed section (of 20 or more
beds) of a Department medical center unless the Secretary first
submits to the Committees on Veterans' Affairs of the Senate
and the House of Representatives a report providing a
justification for the closure. No action to carry out such
closure may be taken after the submission of such report until
the end of the 21-day period beginning on the date of the
submission of the report.
(e) The Secretary shall submit to the Committees on Veterans'
Affairs of the Senate and the House of Representatives, not
later than January 20 of each year, a report documenting by
network for the preceding fiscal year the following:
(1) The number of medical service and surgical
service beds, respectively, that were closed during
that fiscal year and, for each such closure, a
description of the changes in delivery of services that
allowed such closure to occur.
(2) The number of nursing home beds that were the
subject of a mission change during that fiscal year and
the nature of each such mission change.
(f) For purposes of this section:
(1) The term ``closure'', with respect to beds in a
medical center, means ceasing to provide staffing for,
and to operate, those beds. Such term includes
converting the provision of such bed care from care in
a Department facility to care under contract
arrangements.
(2) The term ``bed section'', with respect to a
medical center, means psychiatric beds (including beds
for treatment of substance abuse and post-traumatic
stress disorder), intermediate, neurology, and
rehabilitation medicine beds, extended care (other than
nursing home) beds, and domiciliary beds.
(3) The term ``justification'', with respect to
closure of beds, means a written report that includes
the following:
(A) An explanation of the reasons for the
determination that the closure is appropriate
and advisable.
(B) A description of the changes in the
functions to be carried out and the means by
which such care and services would continue to
be provided to eligible veterans.
(C) A description of the anticipated effects
of the closure on veterans and on their access
to care.
* * * * * * *
SUBCHAPTER III--STATE HOME FACILITIES FOR FURNISHING DOMICILIARY,
NURSING HOME, AND HOSPITAL CARE
* * * * * * *
Sec. 8134. General regulations
[(a) Within six months after the date of enactment of any
amendment to this section with respect to such amendment, the
Secretary shall prescribe the following by regulation:
[(1) The number of beds required to provide adequate
nursing home care to veterans residing in each State.]
(a)(1) The Secretary shall prescribe regulations for the
purposes of this subchapter.
(2) In those regulations, the Secretary shall prescribe for
each State the number of nursing home and domiciliary beds for
which assistance under this subchapter may be furnished. Such
regulations shall be based on projected demand for such care 10
years after the date of the enactment of the Veterans
Millennium Health Care Act by veterans who at such time are 65
years of age or older and who reside in that State. In
determining such projected demand, the Secretary shall take
into account travel distances for veterans and their families.
(3)(A) In those regulations, the Secretary shall establish
criteria under which the Secretary shall determine, with
respect to an application for assistance under this subchapter
for a project described in subparagraph (B) which is from a
State that has a need for additional beds as determined under
subsections (a)(2) and (d)(1), whether the need for such beds
is most aptly characterized as great, significant, or limited.
Such criteria shall take into account the availability of beds
already operated by the Secretary and other providers which
appropriately serve the needs which the State proposes to meet
with its application.
(B) This paragraph applies to a project for the construction
or acquisition of a new State home facility, to a project to
increase the number of beds available at a State home facility,
and a project to replace beds at a State home facility
(4) The Secretary shall review and, as necessary, revise
regulations prescribed under paragraphs (2) and (3) not less
often than every four years.
(b) The Secretary shall prescribe the following by
regulation:
[(2)] (1) General standards of construction, repair,
and equipment for facilities constructed or acquired
with assistance received under this subchapter.
[(3)] (2) General standards for the furnishing of
care in facilities which are constructed or acquired
with assistance received under this subchapter, which
standards shall be no less stringent than those
standards prescribed by the Secretary pursuant to
section 1720(b) of this title.
[(b)] (c) The Secretary may inspect any State facility
constructed or acquired with assistance received under this
subchapter at such times as the Secretary deems necessary to
insure that such facility meets the standards prescribed in
subsection [(a)(3)] (b)(2).
(d)(1) In prescribing regulations to carry out this
subchapter, the Secretary shall provide that in the case of a
State that seeks assistance under this subchapter for a project
described in subsection (a)(3)(B), the determination of the
unmet need for beds for State homes in that State shall be
reduced by the number of beds in all previous applications
submitted by that State under this subchapter, including beds
which have not been recognized by the Secretary under section
1741 of this title.
(2)(A) Financial assistance under this subchapter for a
renovation project may only be provided for a project for which
the total cost of construction is in excess of $400,000 (as
adjusted from time to time in such regulations to reflect
changes in costs of construction).
(B) For purposes of this paragraph, a renovation project is a
project to remodel or alter existing buildings for which
financial assistance under this subchapter may be provided and
does not include maintenance and repair work which is the
responsibility of the State.
Sec. 8135. Applications with respect to projects; payments
(a) Any State desiring to receive assistance for a project
for construction of State home facilities (or acquisition of a
facility to be used as a State home facility) must submit to
the Secretary an application. Such application shall [set
forth--] set forth the following:
(1) [the] The amount of the grant requested with
respect to such project which may not exceed 65 percent
of the estimated cost of construction (or of the
estimated cost of facility acquisition and
construction) of such project[,].
(2) [a] A description of the site for such
project[,].
(3) [plans] Plans and specifications for such project
in accordance with regulations prescribed by the
Secretary pursuant to section 8134(a)(2) of this
title[,].
(4) [reasonable] Reasonable assurance that upon
completion of such project the facilities will be used
principally to furnish to veterans the level of care
for which such application is made and that not more
than 25 percent of the bed occupancy at any one time
will consist of patients who are not receiving such
level of care as veterans[,].
(5) [reasonable] Reasonable assurance that title to
such site is or will be vested solely in the applicant,
a State home, or another agency or instrumentality of
the State[,].
(6) [reasonable] Reasonable assurance that adequate
financial support will be available for the
construction of the project (or for facility
acquisition and construction of the project) by July 1
of the fiscal year for which the application is
approved and for its maintenance and operation when
complete[,].
(7) [reasonable] Reasonable assurance that the State
will make such reports in such form and containing such
information as the Secretary may from time to time
reasonably require, and give the Secretary, upon
demand, access to the records upon which such
information is based[,].
(8) [reasonable] Reasonable assurance that the rates
of pay for laborers and mechanics engaged in
construction of the project will be not less than the
prevailing local wage rates for similar work as
determined in accordance with the Act of March 3, 1931
(40 U.S.C. 276a-276a-5) (known as the Davis-Bacon
Act)[, and].
(9) [in] In the case of a project for acquisition of
a facility, reasonable assurance that the estimated
total cost of acquisition of the facility and of any
expansion, remodeling, and alteration of the acquired
facility will not be greater than the estimated cost of
construction of an equivalent new facility.
(b)(1) Any State seeking to receive assistance under this
subchapter for a project that would involve construction or
acquisition of either nursing home or domiciliary facilities
shall include with its application under subsection (a) the
following:
(A) Documentation (i) that the site for the project
is in reasonably proximity to a sufficient
concentration and population of veterans who are 65
years of age and older, and (ii) that there is a
reasonable basis to conclude that the facilities when
complete will be fully occupied.
(B) A financial plan for the first three years of
operation of such facilities.
(C) A five-year capital plan for the State home
program for that State.
(2) Failure to provide adequate documentation under paragraph
(1)(A) or to provide an adequate financial plan under paragraph
(1)(B) shall be a basis for disapproving the application.
[(b)] (c)(1) Upon receipt of an application [for a grant
under subsection (a) of this section] under subsection (a) for
financial assistance under this subchapter, the Secretary--
(A) * * *
* * * * * * *
(2) Subject to paragraphs (3) and (5)(C) of this subsection,
the Secretary shall accord priority to applications in the
following order:
(A) An application from a State that has made
sufficient funds available for [the construction or
acquisition of] the project for which the grant is
requested so that such project may proceed upon
approval of the grant without further action required
by the State to make such funds available for such
purpose.
[(B) An application from a State that does not have a
State home facility constructed or acquired with
assistance under this subchapter (or for which such a
grant has been made).
[(C) An application from a State which the Secretary
determines, in accordance with criteria and procedures
specified in regulations which the Secretary shall
prescribe, has a greater need for nursing home or
domiciliary beds or adult day health care facilities
than other States from which applications are received.
[(D) An application that meets such other criteria as
the Secretary determines are appropriate and has
established in regulations.]
(B) An application from a State for a project at an
existing facility to remedy a condition or conditions
that have been cited by an accrediting institution, by
the Secretary, or by a local licensing or approving
body of the State as being threatening to the lives or
safety of the patients in the facility.
(C) An application from a State that has not
previously applied for award of a grant under this
subchapter for construction or acquisition of a State
nursing home.
(D) An application for construction or acquisition of
a nursing home or domiciliary from a State that the
Secretary determines, in accordance with regulations
under this subchapter, has a great need for the beds to
be established at such home or facility.
(E) An application from a State for renovations to a
State home facility other than renovations described in
subparagraph (B).
(F) An application for construction or acquisition of
a nursing home or domiciliary from a State that the
Secretary determines, in accordance with regulations
under this subchapter, has a significant need for the
beds to be established at such home or facility.
(G) An application that meets other criteria as the
Secretary determines appropriate and has established in
regulations.
(H) An application for construction or acquisition of
a nursing home or domiciliary from a State that the
Secretary determines, in accordance with regulations
under this subchapter, has a limited need for the beds
to be established at such home or facility.
(3) In according priorities to projects under paragraph (2)
of this subsection, the Secretary--
[(A) shall accord priority only to projects which
would involve construction or acquisition of either
nursing home or domiciliary buildings or construction
(other than new construction) of adult day health care
buildings; and]
(A) may not accord any priority to a project for the
construction or acquisition of a hospital; and
* * * * * * *
[(c)] (d) No application submitted to the Secretary under
this section shall be disapproved until the Secretary has
afforded the applicant notice and an opportunity for a hearing.
[(d)] (e) The amount of a grant under this subchapter shall
be paid to the applicant or, if designated by the applicant,
the State home for which such project is being carried out or
any other agency or instrumentality of the applicant. Such
amount shall be paid, in advance or by way of reimbursement,
and in such installments consistent with the progress of the
project as the Secretary may determine and certify for payment
to the Secretary of the Treasury. Funds paid under this section
for an approved project shall be used solely for carrying out
such project as so approved.
[(e)] (f) Any amendment of any application, whether or not
approved, shall be subject to approval in the same manner as an
original application.
* * * * * * *
SUBCHAPTER V--ENHANCED-USE LEASES OF REAL PROPERTY
* * * * * * *
Sec. 8162. Enhanced-use leases
(a)(1) The Secretary may in accordance with this subchapter
enter into leases with respect to real property that is under
the jurisdiction or control of the Secretary. Any such lease
under this subchapter may be referred to as an ``enhanced-use
lease''. The Secretary may dispose of any such property that is
leased to another party under this subchapter in accordance
with section 8164 of this title. The Secretary may exercise the
authority provided by this subchapter notwithstanding section
8122 of this title, section 321 of the Act of June 30, 1932 (40
U.S.C. 303b), sections 202 and 203 of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 483, 484), or
any other provision of law (other than Federal laws relating to
environmental and historic preservation) inconsistent with this
section. [The applicability of this subchapter to section
421(b) of the Veterans' Benefits and Services Act of 1988
(Public Law 100-322; 102 Stat. 553) is covered by subsection
(c).]
(2) The Secretary may enter into an enhanced-use lease [only
if the Secretary] only if--
(A) the Secretary determines that--
[(A)] (i) at least part of the use of the
property under the lease will be to provide
appropriate space for an activity contributing
to the mission of the Department;
[(B)] (ii) the lease will not be inconsistent
with and will not adversely affect the mission
of the Department; and
[(C)] (iii) the lease will enhance the use of
the property[.]; or
(B) the Secretary determines that the implementation
of a business plan proposed by the Under Secretary for
Health for applying the consideration under such a
lease to the provision of medical care and services
would result in a demonstrable improvement of services
to eligible veterans in the geographic service-delivery
area within which the property is located.
* * * * * * *
(b)(1) If the Secretary has determined that a property should
be leased to another party through an enhanced-use lease, the
Secretary shall select the party with whom the lease will be
entered into using selection procedures determined by the
Secretary that ensure the integrity of the selection process.
(2) The term of an enhanced-use lease [may not exceed--
[(A) 35 years, in the case of a lease involving the
construction of a new building or the substantial
rehabilitation of an existing building, as determined
by the Secretary; or
[(B) 20 years, in the case of a lease not described
in subparagraph (A).] may not exceed 75 years.
* * * * * * *
[(4) Any payment by the Secretary for the use of space or
services by the Department on property that has been leased
under this subchapter may only be made from funds appropriated
to the Department for the activity that uses the space or
services. No other such payment may be made by the Secretary to
a lessee under an enhanced-use lease unless the authority to
make the payment is provided in advance in an appropriation
Act.]
(4) The terms of an enhanced-use lease may provide for the
Secretary to--
(A) obtain facilities, space, or services on the
leased property; and
(B) use minor construction funds for capital
contribution payments.
[(c)(1) Subject to paragraph (2), the entering into an
enhanced-use lease covering any land or improvement described
in section 421(b)(2) of the Veterans' Benefits and Services Act
of 1988 (Public Law 100-322; 102 Stat. 553) shall be considered
to be prohibited by that section unless specifically authored
by law.
[(2) The entering into an enhanced-use lease by the Secretary
covering any land or improvement described in such section
421(b)(2) shall not be considered to be prohibited under that
section if under the lease--
[(A) the designated property is to be used only for
child-care services;
[(B) those services are to be provided only for the
benefit of--
[(i) employees of the Department;
[(ii) individuals employed on the premises of
such property; and
[(iii) employees of a health-personnel
educational institution that is affiliated with
a Department facility;
[(C) over one-half of the employees benefited by the
child-care services provided are required to be
employees of the Department; and
[(D) over one-half of the children to whom child-care
services are provided are required to be children of
employees of the Department.]
* * * * * * *
Sec. 8163. Designation of property to be leased
(a) * * *
(b) Before conducting such a hearing, the Secretary shall
provide reasonable notice of the proposed designation and of
the hearing. The notice shall [include--] include the
following:
(1) [the] The time and place of the hearing[;].
(2) [identification] Identification of the property
proposed to be leased[;].
(3) [a] A description of the proposed uses of the
property under the lease[;].
(4) [a] A description of how the uses to be made of
the property under a lease of the general character
then contemplated--
[(A) would contribute in a cost-effective
manner to the mission of the Department;
[(B) would not be inconsistent with the
mission of the Department; and
[(C) would not adversely affect the mission
of the Department; and]
(A) would--
(i) contribute in a cost-effective
manner to the mission of the
Department;
(ii) not be inconsistent with the
mission of the Department;
(iii) not adversely affect the
mission of the Department; and
(iv) affect services to veterans; or
(B) would result in a demonstrable
improvement of services to eligible veterans in
the geographic service-delivery area within
which the property is located.
(5) [a] A description of how those uses would affect
services to veterans.
(c)(1) * * *
* * * * * * *
(E) A description of how the proposed lease--
[(i) would contribute in a cost-effective
manner to the mission of the Department;
[(ii) would not be inconsistent with the
mission of the Department; and
[(iii) would not adversely affect the mission
of the Department.]
(i) would--
(I) contribute in a cost-effective
manner to the mission of the
Department;
(II) not be inconsistent with the
mission of the Department;
(III) not adversely affect the
mission of the Department; and
(IV) affect services to veterans; or
(ii) would result in a demonstrable
improvement of services to eligible veterans in
the geographic service-delivery area within
which the property is located.
* * * * * * *
Sec. 8165. Use of proceeds
[(a)(1) Of the funds received by the Department under an
enhanced-use lease and remaining after any deduction from such
funds under subsection (b), 75 percent shall be deposited in
the nursing home revolving fund established under section 8116
of this title and 25 percent shall be credited to the Medical
Care Account of the Department for the use of the Department
facility at which the property is located.]
(a)(1) Funds received by the Department under an enhanced-use
lease and remaining after any deduction from those funds under
subsection (b) shall be deposited in the Department of Veterans
Affairs Health Services Improvement Fund established under
section 1729B of this title. The Secretary shall make available
to the designated health care region of the Veterans Health
Administration within which the leased property is located not
less than 75 percent of the amount deposited in the fund
attributable to that lease.
* * * * * * *
(3) For the purposes of paragraph (1), the term ``designated
health care region of the Veterans Health Administration''
means a geographic area designated by the Secretary for the
purposes of the management of, and allocation of resources for,
health care services provided by the Veterans Health
Administration.
* * * * * * *
[Sec. 8169. Expiration
[The authority of the Secretary to enter into enhanced-use
leases under this subchapter expires on December 31, 2001.]
----------
VETERANS' HEALTH CARE ACT OF 1984
* * * * * * *
TITLE I--HEALTH PROGRAMS
* * * * * * *
POST-TRAUMATIC-STRESS DISORDER
Sec. 110. (a) * * *
* * * * * * *
(e)(1) Not later than [March 1, 1985] March 1, 2000, the
Administrator shall submit to the Committees on Veterans'
Affairs of the Senate and House of Representatives a report on
the implementation of this section. The report shall include
the following:
(A) * * *
* * * * * * *
(2) Not later than [February 1, 1986] February 1, 2001, and
February 1 of each of the three following years, the
Administrator shall submit to the Committees on Veterans'
Affairs of the Senate and House of Representatives a report
containing information updating the reports submitted under
this subsection before the submission of such reports.
* * * * * * *
----------
HOMELESS VETERANS COMPREHENSIVE SERVICE PROGRAMS ACT OF 1992
* * * * * * *
SEC. 3. GRANTS.
(a) Authority to Make Grants.--(1) * * *
(2) The authority of the Secretary to make grants under this
section expires on [September 30, 1999] September 30, 2002.
(b) Criteria for Award of Grants.--The Secretary shall
establish criteria and requirements for the award of a grant
under this section, including criteria for entities eligible to
receive such grants. The Secretary shall publish such criteria
and requirements in the Federal Register not later than 90 days
after the date of the enactment of this Act [Nov. 10, 1992]. In
developing such criteria and requirements, the Secretary shall
consult with organizations with experience in the area of
providing service to homeless veterans and to the maximum
extent possible shall take into account the findings of the
assessment of the Secretary under section 107 of the Veterans'
Medical Programs Amendments of 1992 [Public Law 102-405, 38
U.S.C. 527 note]. The criteria established under this section
shall include the following:
(1) * * *
(2) Specification as to the number of projects for
which grant support is available, which shall include
provision for no more than 25 service centers [and no
more than 20 programs which incorporate the procurement
of vans as described in paragraph (1)].
* * * * * * *
