[Congressional Record Volume 140, Number 70 (Wednesday, June 8, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
             VA STATE HEALTH CARE REFORM PILOT PROGRAM ACT

  Mr. GLENN. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of Calendar No. 436, S. 1974, a 
bill relating to the VA State Health Care Reform Pilot Program Act.
  The PRESIDING OFFICER. The bill will be stated by title.
  The legislative clerk read as follows:

       A bill (S. 1974) to authorize the Secretary of Veterans 
     Affairs to conduct pilot programs in order to evaluate the 
     feasibility of the participation of the Department of 
     Veterans Affairs health care system in the health care 
     systems of States that have enacted health care reform.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection the Senate proceeded to consider the bill 
which had been reported from the Committee on Veterans' Affairs, with 
amendment to strike all after the enacting clause and inserting lieu 
thereof the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``VA State Health Care Reform 
     Pilot Program Act''.

     SEC. 2. PURPOSE OF PILOT PROGRAMS.

       The purpose of this Act is to authorize the participation 
     of the Department of Veterans Affairs health care system in 
     the health care systems of States that have enacted health 
     care reform in order to evaluate the most appropriate means 
     of enabling the Department health care system to participate 
     in such systems and in the National health care system 
     contemplated under any plans for National health care reform.

     SEC. 3. HEALTH CARE PILOT PROGRAMS.

       (a) In General.--The Secretary may carry out pilot programs 
     on the participation of the Department of Veterans Affairs 
     health care system in the health care systems of States that 
     have adopted comprehensive health benefit plans. The 
     Secretary shall carry out any pilot program under this Act in 
     accordance with the provisions of this Act.
       (b) States Eligible for Designation.--(1) The Secretary 
     shall designate each of not more than five States as a 
     location for a pilot program under this Act. The Secretary 
     shall complete the designation of States as locations for 
     pilot programs not later than 30 days after the date of the 
     enactment of this Act.
       (2) The Secretary may designate a State as a location for a 
     pilot program under this Act if the Secretary determines 
     that--
       (A) the State has enacted, or will soon enact, a statute 
     establishing or providing for a comprehensive health benefit 
     plan; and
       (B) the participation of the health care system of the 
     Department under the plan is feasible and appropriate in 
     light of the purpose of this Act.
       (c) Department Participation in State Health Benefit 
     Plans--(1) To the maximum extent practicable, the Secretary 
     shall provide eligible persons under each pilot program under 
     this Act with the comprehensive package of basic health care 
     benefits that would otherwise be available to such persons 
     under the comprehensive health benefit plan of the State in 
     which the pilot program is carried out. The Secretary shall 
     provide such benefits through the health care system of the 
     Department in such State as if such system were a provider of 
     such benefits under such plan.
       (2) Notwithstanding any other provision of law, a State may 
     not prohibit the participation of the Department under the 
     comprehensive health benefit plan of the State under a pilot 
     program unless the chief executive officer of the State 
     certifies to the Secretary that--
       (A) the benefits to be provided by the Department under the 
     pilot program do not meet requirements for quality of 
     benefits established by or provided under the plan; or
       (B) the location of Department facilities (including 
     facilities providing services by contract or agreement with 
     the Secretary) in the State is such that the proximity of 
     eligible persons to such facilities does not meet 
     requirements so established for such proximity.
       (3) Not later than 30 days after the designation of a State 
     as a location for a pilot program under this Act, and at such 
     other times as the Secretary may determine, the Secretary and 
     the health system director for that State shall jointly 
     determine the regulations under the authority of the 
     Secretary the waiver or modification of which is necessary in 
     order to facilitate the carrying out of the pilot program. 
     Upon such determination, the Secretary shall waive or modify 
     the application of such regulations to the pilot program.
       (4) The Secretary shall furnish any eligible person living 
     in a State in which a pilot program is carried out (including 
     any eligible person electing to receive benefits under the 
     pilot program and any eligible person not electing to receive 
     benefits under the pilot program) with the health care 
     benefits for which such person is eligible under chapter 17 
     of title 38, United States Code, notwithstanding that the 
     comprehensive package of basic health care benefits provided 
     under the comprehensive health benefit plan of the State does 
     not otherwise include such health care benefits. The 
     Secretary shall furnish any health care benefits under this 
     paragraph in accordance with the provisions of that chapter.
       (d) Health System Director.--(1) The Secretary shall 
     designate a health system director for each State in which a 
     pilot program is carried out under this Act. To the maximum 
     extent feasible, the Secretary shall delegate to the health 
     system directors the responsibilities of the Secretary under 
     this Act.
       (2)(A) Subject to subparagraph (B), the Secretary shall 
     designate an individual as health system director for a State 
     from among nominees for that position selected by a panel 
     composed of individuals who are senior management personnel 
     of the Department medical centers located in that State.
       (B) An individual selected for nomination to be a health 
     system director of a State under subparagraph (A) shall be--
       (i) the director or chief of staff of a Department medical 
     center located in the State in which the pilot program is 
     carried out; or
       (ii) any other individual having experience with the 
     Department medical system that is equivalent to the 
     experience with that system of an individual in a position 
     referred to in clause (i).
       (e) Administrative Reorganization.--The Secretary may carry 
     out any administrative reorganization of an office, facility, 
     activity, or function of the health care system of the 
     Department in a State in which a pilot program is carried out 
     that the Secretary and the health system director jointly 
     determine to be necessary in order to facilitate the carrying 
     out of the pilot program. Section 510(b) of title 38, United 
     States Code, shall not apply to any such administrative 
     reorganization.
       (f) Provision of Benefits.--(1)(A) Except as provided in 
     subparagraph (B), the Secretary shall provide health care 
     benefits under a pilot program--
       (i) through the direct provision of such services by the 
     health care system of the Department in the State in which 
     the pilot program is carried out; or
       (ii) by contract or other agreement in accordance with 
     paragraph (2).
       (B) The Secretary may exclude facilities of the Department 
     from participation in a pilot program. Any facilities so 
     excluded shall continue to provide health care benefits to 
     veterans and other persons eligible for such benefits in 
     accordance with the provisions of laws administered by the 
     Secretary.
       (2) The health system director of a pilot program may enter 
     into contracts and agreements for the provision of health 
     care services and contracts and agreements for other services 
     with respect to the pilot program under paragraph (1)(A)(ii). 
     Any such contract or agreement (including any lease) shall 
     not be subject to the following provisions of law:
       (A) Section 8110(c) of title 38, United States Code, 
     relating to contracting of services at Department health-care 
     facilities.
       (B) Section 8122(a)(1) of such title, relating to the lease 
     of Department property.
       (C) Section 8125 of such title, relating to local contracts 
     for the procurement of health-care items.
       (D) Section 702 of title 5, United States Code, relating to 
     the right of review of agency wrongs by courts of the United 
     States.
       (E) Sections 1346(a)(2) and 1491 of title 28, United States 
     Code, relating to the jurisdiction of the district courts of 
     the United States and the United States Court of Federal 
     Claims, respectively, for the actions enumerated in such 
     sections.
       (F) Subchapter V of chapter 35 of title 31, United States 
     Code, relating to adjudication of protests of violations of 
     procurement statutes and regulations.
       (G) Sections 3526 and 3702 of such title, relating to the 
     settlement of accounts and claims, respectively, of the 
     United States.
       (H) Subsections (b)(7), (e), (f), (g), and (h) of section 8 
     of the Small Business Act (15 U.S.C. 637(b)(7), (e), (f), 
     (g), and (h)), relating to requirements with respect to small 
     businesses for contracts for property and services.
       (I) The provisions of law assembled for purposes of 
     codification of the United States Code as section 471 through 
     544 of title 40 that relate to the authority of the 
     Administrator of General Services over the lease and disposal 
     of Federal Government property.
       (J) The Office of Federal Procurement Policy Act (41 U.S.C. 
     401 et seq.), relating to the procurement of property and 
     services by the Federal Government.
       (K) Chapter 3 of the Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 251 et seq.), relating to the 
     procurement of property and services by the Federal 
     Government.
       (L) Office of Management and Budget Circular A-76.
       (3)(A) Notwithstanding any other provision of law, 
     contracts and agreements for the provision of health care 
     services under this subsection may include contracts and 
     other agreements with insurers, health care providers, or 
     other individuals or entities that provide health care 
     services.
       (B) Contracts and agreements under this paragraph may be 
     entered into without prior review by the Central Office of 
     the Department.
       (4)(A) Contracts and agreements under this subsection for 
     services other than the services referred to in paragraph (3) 
     (including contracts and agreements for procurement of 
     equipment, maintenance and repair services, and other 
     services related to the provision of health care services) 
     shall not be subject to prior review by the Central Office if 
     the amount of such contracts or agreements is less than 
     $250,000.
       (B) Contracts and agreements for services under this 
     paragraph shall be subject to prior review by the Central 
     Office if the amount of such contracts or agreements is 
     $250,000 or greater. If the Central Office fails to approve 
     or reject a contract or agreement under this clause within 30 
     days of its submittal to the Central Office, such contract or 
     agreement shall be deemed approved by the Central Office.
       (g) Department Personnel.--(1) Notwithstanding any other 
     provision of law and to the extent necessary to carry out the 
     purpose of a pilot program, the Secretary may--
       (A) appoint personnel to positions in the health care 
     system of the Department in the State in which the pilot 
     program is carried out in accordance with such standards for 
     such positions as the Secretary may establish; and
       (B) promote and advance personnel serving in such positions 
     in accordance with such standards as the Secretary may 
     establish.
       (2) Not later than 60 days after the designation of a State 
     as a location for a pilot program under this Act, or at such 
     other time as the Secretary may determine, the Secretary 
     shall request authority from the Director of the Office of 
     Management and Budget to permit the Secretary to employ a 
     number of full time equivalent employees in the health care 
     system of the Department in that State which exceeds the 
     number of such employees that would otherwise be authorized 
     for such employment by the Director.
       (3) Notwithstanding any other provision of law, employees 
     of the Department at facilities of the Department under a 
     pilot program shall not, during the carrying out of the pilot 
     program, be subject to any reduction in the number of full 
     time employees of the Department or as a result of a 
     reduction in the number of full time employees of the Federal 
     Government.
       (h) Eligible Persons.--(1) A person eligible for health 
     care benefits under a pilot program is any person residing in 
     a State in which a pilot program is carried out as follows:
       (A) Any veteran.
       (B) Any spouse or child of a veteran.
       (C) Any individual eligible for care under paragraph (2) or 
     (3) of section 1713(a) of title 38, United States Code.
       (2) Notwithstanding any other provision of law, a State may 
     not require that any person other than a person referred to 
     in paragraph (1) be eligible for health care benefits through 
     the Department under a pilot program.
       (i) Copayments and Other Charges.--(1) Except as provided 
     in paragraph (2), the Secretary may collect from or on behalf 
     of any individual receiving health care benefits from the 
     Secretary under a pilot program under this Act a premium, 
     deductible, copayment, or other charge with respect to the 
     provision of a benefit under the pilot program. The amount of 
     the premium, deductible, copayment, or other charge collected 
     with respect to a benefit provided under a pilot program may 
     not exceed the maximum amount otherwise permitted for a 
     premium, deductible, copayment, or other charge with respect 
     to that benefit under the comprehensive health benefits plan 
     of the State in which the pilot program is carried out.
       (2)(A) Except as provided in subparagraph (B), the 
     Secretary shall not collect under the pilot programs 
     premiums, deductibles, copayments, and other charges with 
     respect to the benefits provided by the Department to the 
     following:
       (i) Veterans with compensable service-connected 
     disabilities.
       (ii) Veterans whose discharge or release from active 
     military, naval, or air service was for a compensable 
     disability that was incurred or aggravated in the line of 
     duty.
       (iii) Veterans who are in receipt of, or who, but for a 
     suspension pursuant to section 1151 of title 38, United 
     States Code (or both a suspension and the receipt of retired 
     pay), would be entitled to disability compensation, but only 
     to the extent that such veterans' continuing eligibility for 
     such care is provided for in the judgment or settlement 
     provided for in such section.
       (iv) Veterans who are former prisoners of war.
       (v) Veterans of the Mexican border period or of World War 
     I.
       (vi) Veterans who are unable to defray the expenses of 
     necessary care, as determined in accordance with section 
     1722(a) of such title.
       (B) The Secretary may collect premiums, deductibles, 
     copayments, and other charges with respect to benefits 
     provided under a pilot program to veterans referred to in 
     subparagraph (A) from any third party obligated to provide, 
     or to pay the expenses of, such benefits to or for such 
     veterans under the comprehensive health benefits plan of the 
     State in which the pilot program is carried out.
       (j) Funding.--(1) There is established in the Treasury a 
     fund to be known as the Department of Veterans Affairs Health 
     Care Reform Fund (hereafter referred to in this subsection as 
     the ``Fund'').
       (2)(A) Notwithstanding any other provision of law, amounts 
     shall be deposited in the Fund as follows:
       (i) Amounts collected under a pilot program in accordance 
     with subsection (i).
       (ii) Amounts made available to a pilot program based upon a 
     determination under paragraph (3).
       (iii) Amounts transferred to the Fund with respect to a 
     pilot program under paragraph (4).
       (iv) Such other amounts as the Secretary and the health 
     system directors of the pilot programs jointly determine to 
     be necessary in order to carry out the pilot programs.
       (v) Such other amounts as may be appropriated to the pilot 
     programs.
       (B) The Secretary shall make available amounts under 
     clauses (ii) and (iv) of subparagraph (A) from amounts 
     appropriated to the Department of Veterans Affairs for the 
     provision of health care services.
       (C) The Secretary shall establish and maintain a separate 
     account under the Fund for each pilot program carried out 
     under this Act. Any deposits and expenditures with respect to 
     a pilot program shall be made to or from the account 
     established and maintained with respect to that pilot 
     program.
       (3)(A) For each year of the operation of a pilot program 
     under this Act, the Secretary shall deposit in account of the 
     Fund for the pilot program an amount (as determined by the 
     Secretary) equal to the amount that would otherwise be made 
     available to the health care system of the Department in the 
     State in which the pilot program is carried out for the 
     payment of the cost of health care services by such system in 
     that State in that year. The Secretary shall deposit such 
     amount at the beginning of such year.
       (B) The costs referred to in subparagraph (A) shall not 
     include costs relating to the provision by the Secretary of 
     the following services:
       (i) Services relating to post-traumatic stress disorder.
       (ii) Services relating to spinal-cord dysfunction.
       (iii) Services relating to substance abuse.
       (iv) Services relating to the rehabilitation of blind 
     veterans.
       (v) Services relating to prosthetics.
       (4) Funds deposited in the Medical-Care Cost Recovery Fund 
     established under section 1729(g) of title 38, United States 
     Code, during any fiscal year in an amount in excess of the 
     Congressional Budget Office baseline (as of the date of the 
     enactment of this Act) for deposits in that fund for that 
     fiscal year shall not be subject to paragraph (4) of section 
     1710(f), 1712(f), or 1729(g) (as the case may be) of that 
     title, but shall be transferred to the fund established under 
     this subsection. Such transfer for any fiscal year shall be 
     made at any time that the total of amounts so received less 
     amounts estimated to cover the expenses, payments, and costs 
     described in paragraph (3) of section 1729(g) of that title 
     is in excess of the applicable Congressional Budget Office 
     baseline.
       (5)(A) Notwithstanding any other provision of law, the 
     health system director for a State in which a pilot program 
     is carried out shall determine the costs for which amounts in 
     the Fund may be expended in carrying out the pilot program.
       (B)(i) Except as provided in clause (ii), the costs of 
     carrying out a pilot program under this paragraph shall 
     include any costs of marketing and advertising under the 
     program, costs of legal services provided to such pilot 
     program by the General Counsel of the Department of Veterans 
     Affairs, and costs relating to acquisition (including 
     acquisition of land), construction, repair, or renovation of 
     facilities.
       (ii) Costs under this subparagraph shall not include any 
     costs relating to a major medical facility project or a major 
     medical facility lease as such terms are defined in 
     subparagraphs (A) and (B) of section 8104(a)(3) of title 38, 
     United States Code, respectively.
       (C) Amounts in the Fund for the payment of costs of a pilot 
     program under this subsection shall be available for such 
     purpose without fiscal year limitation.
       (k) Termination.--A pilot program carried out under this 
     Act shall terminate not later than 2 years after the date of 
     the commencement of provision of benefits under the pilot 
     program.

     SEC. 4. REPORTS ON PILOT PROGRAMS.

       (a) Collection of Information.--(1) The Secretary shall 
     collect such information with respect to the provision of 
     health care benefits under each pilot program as is necessary 
     to permit the Secretary to evaluate the pilot program in 
     light of the purpose of the pilot program under this Act.
       (2) The information collected by the Secretary under 
     paragraph (1) shall include aggregated data on the following:
       (A) The number of persons participating in each pilot 
     program, including the age, sex, health status, disability 
     ratings (if any), employment status, and incomes of such 
     persons.
       (B) The nature of benefits sought by such persons under 
     each pilot program.
       (C) The nature and quantity of benefits provided to such 
     persons under each pilot program.
       (D) The cost to the Department of providing such benefits 
     under each pilot program.
       (b) Reports.--(1) Not later than 14 months after the date 
     of the completion of the designation of States as locations 
     for pilot programs under this Act, the Secretary shall submit 
     to the Committees on Veterans' Affairs of the Senate and 
     House of Representatives a report on the progress of the 
     Secretary in carrying out the pilot programs. Such report 
     shall include the information referred to in subsection 
     (a)(2) on the date of the report.
       (2) Not later than November 30 of the year of the 
     termination of the final pilot program under this Act, the 
     Secretary shall submit to the committees referred to in 
     paragraph (1) a report on the pilot programs carried out 
     under this Act. The report shall include the following:
       (A) The information referred to in subsection (a)(2), 
     together with the comments and conclusions of the Secretary 
     with respect to such information.
       (B) An assessment by the Secretary of the utility of each 
     pilot program for carrying out the purpose of this Act.
       (C) An assessment by the Secretary of appropriate means of 
     integrating the health care system of the Department into the 
     health care systems of States that have enacted health care 
     reform and into the National health care system contemplated 
     under any plans for National health care reform.
       (D) Such other information, assessments, and conclusions as 
     the Secretary considers appropriate.

     SEC. 5. DEFINITIONS.

       For the purposes of this Act--
       (1) The terms ``Secretary'', ``Department'', ``veteran'', 
     ``child'' and ``spouse'' have the meanings given such terms 
     in paragraphs (1), (2), (4), and (31) of section 101 of title 
     38, United States Code, respectively.
       (2) The term ``comprehensive health benefit plan'', in the 
     case of a State, means a plan or system established under the 
     law of the State that--
       (A) attempts to ensure the access of residents of the State 
     to a comprehensive package of basic health care benefits; and
       (B) ensures such access by providing that such benefits 
     shall be provided directly or by contract by public and 
     private entities.
       (3) The term ``comprehensive package of basic health care 
     benefits'' means the health care benefits provided for by a 
     State under the comprehensive health benefit plan of the 
     State.
       (4) The term ``health care system of the Department'', in 
     the case of a State designated as a location for a pilot 
     program, means the facilities and personnel of the Department 
     located in that State that provide health care services under 
     chapter 17 of title 38, United States Code.

  Mr. ROCKEFELLER. Mr. President, as the chairman of the Committee on 
Veterans' Affairs, I strongly urge my colleagues to support the passage 
of the pending measure, S. 1974, the proposed VA State Health Care 
Reform Pilot Program Act, as reported by the committee on May 23, 1994, 
and as it will be amended by an amendment I will offer shortly.
  In response to public support for reforming our health care system, 
several States are enacting their own reform legislation. I applaud 
these State legislators, who have moved forward to provide their 
citizens with health care security. I truly believe that Congress will 
follow their examples, and pass legislation that will give that 
security to all Americans. In the meantime, however, we have the 
opportunity to make reforms in VA health care in those States where 
health care reform is underway.
  Without this legislation, the VA medical system cannot participate 
fully in health care reform efforts in specific States, because current 
Federal law makes it virtually impossible for VA facilities to do so. 
These restrictions rob VA of the kinds of experiences and information 
it will need to thrive under national health care reform. The VA State 
Health Care Reform Pilot Program Act would address this problem by 
allowing VA to take part in State-enacted health care reform 
legislation. The VA would be able to gather essential information that 
will be useful in preparing for national health care reform, at the 
same time that it improves access to services for veterans in those 
States, thereby helping VA avoid any loss of market share while we 
continue to develop overall reform.
  The committee held a hearing on February 9, 1994, on VA's 
participation in State health care reform programs to determine the 
impediments to VA's involvement in State activities and discuss what 
could be done to facilitate VA's participation. Testimony was received 
from VA officials and representatives of the Paralyzed Veterans of 
America and the National Association of VA Chiefs of Staff. Five 
directors or chiefs of staff from VA medical centers in States that 
have initiated or soon will initiate health care reform activities also 
testified.
  In addition to the hearing, committee staff members have met with VA 
central office officials, VA medical center administrators from across 
the country, and numerous veterans service organizations. On the basis 
of the hearing and these discussions, I introduced the VA State Health 
Care Reform Pilot Program Act.
  Mr. President, I will at this time summarize the provisions of the 
bill. Detailed descriptions of all the provisions are set forth in the 
committee's report accompanying S. 1974 (S. Rept. 103-268).


                         summary of provisions

  The bill contains freestanding provisions that would:
  First, authorize VA to select up to five States with comprehensive 
health benefit plans in place, or where such plans are imminent, to 
participate in the pilot program for 2 years.
  Second, require VA to designate States as locations for pilot 
programs not later than 30 days after enactment.
  Third, prohibit States from excluding the participation of VA 
facilities in pilot program States unless the chief executive officer 
of the State certifies to the Secretary that: the benefits to be 
provided by the Department do not meet State requirements for quality, 
or the location of Department facilities or those facilities providing 
services by contract for the Department do not meet State health care 
reform requirements established regarding proximity to enrollee.
  Fourth, require the Secretary to designate a health system director 
for each State in the pilot program, who is either a director or chief 
of staff of a Department medical center located in that State, or 
another individual having similar experience with the Department 
medical system.
  Fifth, require the Secretary and the health system director for a 
State participating in the pilot program to determine, within 30 days 
after the designation of the State as a pilot site, regulations under 
the authority of the Secretary which should be waived, after which the 
Secretary shall waive such regulations.
  Sixth, authorize the Secretary to provide health care benefits under 
a pilot program: through the direct provision of care, or by contract.
  Seventh, authorize the Secretary to exclude any facilities of the 
Department in a State from participation in a pilot program.
  Eighth, waive certain laws and regulations that could interfere with 
the ability of VA facilities to enter into contracts and agreements for 
health care services or for other services.
  Ninth, authorize the VA health system director to contract out for 
medical services needed for the pilot program without prior review from 
VA central office.
  Tenth, require that contracts for nonmedical services above $250,000 
would be reviewed by central office, but would be automatically 
approved if central office did not make a decision within 30 days. 
Contracts below $250,000 would not require prior review by central 
office.
  Eleventh, authorize the Secretary to (1) appoint personnel to 
positions in the health care system of a pilot site, and (2) establish 
systems to promote and advance personnel serving in such positions.
  Twelfth, require VA facilities in the selected States to offer 
comprehensive care as defined by the comprehensive package of health 
care benefits established by the State. This care would be free to all 
compensable service-connected veterans and to all veterans with incomes 
below the current levels that apply to VA inpatient care, approximately 
$20,000 for a single veteran.
  Thirteenth, require the Secretary to (1) request authority from the 
Office of Management and Budget to hire additional employees in VA 
facilities in pilot States, and (2) ensure that employee levels in the 
pilot sites not be subject to any reduction in the number of full-time 
VA employees.
  Fourteenth, specify that any resident in a State named as a pilot 
site who is a veteran, a spouse or child of a veteran, or a person 
eligible for CHAMPVA benefits shall be eligible for health care 
benefits.
  Fifteenth, authorize VA to collect employer contributions and other 
third-party payments for enrollees' care.
  Sixteenth, establish a VA Health Care Reform Fund in the Treasury 
into which the following would be deposited: First, amounts equal to 
the amounts a VA facility in a State would receive in a fiscal year if 
it was not participating in the pilot program; second, amounts 
collected by VA facilities in the States under the pilot program; 
third, amounts collected by third-party reimbursement efforts which 
exceed a projected baseline; fourth, other amounts that the VA health 
system director and the Secretary allocate; and fifth, amounts that may 
be appropriated to the pilot programs.
  Seventeenth, ensure that funds allocated for services relating to 
spinal cord dysfunction, post traumatic stress disorder, blind 
rehabilitation, substance abuse, and prosthetics remain separate from 
the VA Health Care Reform Fund.
  Eighteenth, authorize VA to conduct marketing and advertising for the 
pilot programs.
  Nineteenth, require VA to collect the following information on the 
pilot programs: First, demographics about the enrollees; second, the 
nature of benefits requested by enrollees; third, nature and quantity 
of provided benefits; and fourth, the cost of providing such benefits.
  Twentieth, require VA to submit to Congress: First, a report on the 
progress of the Secretary in carrying out the pilot programs not later 
than 14 months after the date of designation of the sites; and second, 
a followup report including comments and conclusions of the Secretary 
not later than November 30 of the year of the termination of the final 
pilot program.
  In addition, S. 1974, as it will be amended by a technical amendment 
that I will offer, developed in cooperation with my good friend from 
Maryland [Ms. Mikulski] would clarify a number of appropriation issues 
in the bill as reported.


                               conclusion

  Mr. President, in closing, I thank our Committee's ranking Republican 
member, Senator Murkowski, for his invaluable cooperation and help with 
this bill. I also am grateful to other members of the committee for 
their support and cooperation on this measure.
  Mr. President, the VA State Health Care Reform Pilot Program would 
provide VA with essential information and experiences regarding how it 
needs to change in order to survive and thrive under health care 
reform. In doing so, it will also help us repay the debt we owe to our 
Nation's veterans, by strengthening and improving the VA medical system 
that serves them.


                           Amendment No. 1765

 (Purpose: To revise certain provisions relating to the funding of the 
                            pilot programs.)

  Mr. GLENN. Mr. President, on behalf of Senator Rockefeller, I send an 
amendment to the desk and ask unanimous consent that the Senate proceed 
to its immediate consideration, and that the amendment be agreed to.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Ohio [Mr. Glenn] for Mr. Rockefeller 
     proposes an amendment numbered 1765.

  Mr. GLENN. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       On page 32, strike out lines 17 through 20 and insert in 
     lieu thereof the following:
       (B) Amounts deposited in the Fund pursuant to clauses (ii) 
     and (iv) shall be derived from amounts appropriated to the 
     Department of Veterans Affairs for the Veterans Health 
     Administration for medical care.
       On page 33, line 4, insert ``the'' after ``shall deposit 
     in''.
       On page 34, strike out lines 11 through 15 and insert in 
     lieu thereof the following:
       (5)(A) Notwithstanding any other provision of law, amounts 
     in the Fund shall be available for all expenses incurred by 
     the Veterans Health Administration in carrying out the pilot 
     programs. Subject to subparagraph (B), the health system 
     director for a State in which a pilot program is carried out 
     shall determine the expenses of the pilot program for that 
     State for purposes of this paragraph.
       On page 35, strike out lines 4 through 6 and insert in lieu 
     thereof the following:
       (C) The period of availability of amounts in an account 
     established in the Fund for a pilot program shall end on the 
     last day of the fiscal year in which the pilot program is 
     carried out.
       On page 37, between lines 6 and 7, insert the following:
       (3) Not later than 30 days after the end of any fiscal year 
     in which a pilot program is carried out under section 3, the 
     Secretary shall submit to the appropriate committees of 
     Congress a report describing the amounts expended from the 
     Department of Veterans Affairs Health Care Reform Fund 
     established under section 3(j)(1) during that fiscal year for 
     each pilot program so carried out.
  The PRESIDING OFFICER. Without objection, the amendment is agreed to.
  So the amendment (No. 1765) was agreed to.
  The PRESIDING OFFICER. Without objection, the substitute, as amended, 
is agreed to and the bill will be deemed read for the third time.
  The bill was deemed read for a third time.
  Mr. GLENN. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of Calendar No. 420, H.R. 4013, 
the House companion, that all after the enacting clause be stricken and 
the text of S. 1974, as amended, be inserted in lieu thereof; that the 
bill be deemed read a third time, passed; that the motion to reconsider 
be laid upon the table, and that any statements appear at the 
appropriate place in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the bill (H.R. 4013) was deemed read a third time and passed, as 
follows:

                               H.R. 4013

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``VA State Health Care Reform 
     Pilot Program Act''.

     SEC. 2. PURPOSE OF PILOT PROGRAMS.

       The purpose of this Act is to authorize the participation 
     of the Department of Veterans Affairs health care system in 
     the health care systems of States that have enacted health 
     care reform in order to evaluate the most appropriate means 
     of enabling the Department health care system to participate 
     in such systems and in the National health care system 
     contemplated under any plans for National health care reform.

     SEC. 3. HEALTH CARE PILOT PROGRAMS.

       (a) In General.--The Secretary may carry out pilot programs 
     on the participation of the Department of Veterans Affairs 
     health care system in the health care systems of States that 
     have adopted comprehensive health benefit plans. The 
     Secretary shall carry out any pilot program under this Act in 
     accordance with the provisions of this Act.
       (b) States Eligible for Designation.--(1) The Secretary 
     shall designate each of not more than five States as a 
     location for a pilot program under this Act. The Secretary 
     shall complete the designation of States as locations for 
     pilot programs not later than 30 days after the date of the 
     enactment of this Act.
       (2) The Secretary may designate a State as a location for a 
     pilot program under this Act if the Secretary determines 
     that--
       (A) the State has enacted, or will soon enact, a statute 
     establishing or providing for a comprehensive health benefit 
     plan; and
       (B) the participation of the health care system of the 
     Department under the plan is feasible and appropriate in 
     light of the purpose of this Act.
       (c) Department Participation in State Health Benefit 
     Plans--(1) To the maximum extent practicable, the Secretary 
     shall provide eligible persons under each pilot program under 
     this Act with the comprehensive package of basic health care 
     benefits that would otherwise be available to such persons 
     under the comprehensive health benefit plan of the State in 
     which the pilot program is carried out. The Secretary shall 
     provide such benefits through the health care system of the 
     Department in such State as if such system were a provider of 
     such benefits under such plan.
       (2) Notwithstanding any other provision of law, a State may 
     not prohibit the participation of the Department under the 
     comprehensive health benefit plan of the State under a pilot 
     program unless the chief executive officer of the State 
     certifies to the Secretary that--
       (A) the benefits to be provided by the Department under the 
     pilot program do not meet requirements for quality of 
     benefits established by or provided under the plan; or
       (B) the location of Department facilities (including 
     facilities providing services by contract or agreement with 
     the Secretary) in the State is such that the proximity of 
     eligible persons to such facilities does not meet 
     requirements so established for such proximity.
       (3) Not later than 30 days after the designation of a State 
     as a location for a pilot program under this Act, and at such 
     other times as the Secretary may determine, the Secretary and 
     the health system director for that State shall jointly 
     determine the regulations under the authority of the 
     Secretary the waiver or modification of which is necessary in 
     order to facilitate the carrying out of the pilot program. 
     Upon such determination, the Secretary shall waive or modify 
     the application of such regulations to the pilot program.
       (4) The Secretary shall furnish any eligible person living 
     in a State in which a pilot program is carried out (including 
     any eligible person electing to receive benefits under the 
     pilot program and any eligible person not electing to receive 
     benefits under the pilot program) with the health care 
     benefits for which such person is eligible under chapter 17 
     of title 38, United States Code, notwithstanding that the 
     comprehensive package of basic health care benefits provided 
     under the comprehensive health benefit plan of the State does 
     not otherwise include such health care benefits. The 
     Secretary shall furnish any health care benefits under this 
     paragraph in accordance with the provisions of that chapter.
       (d) Health System Director.--(1) The Secretary shall 
     designate a health system director for each State in which a 
     pilot program is carried out under this Act. To the maximum 
     extent feasible, the Secretary shall delegate to the health 
     system directors the responsibilities of the Secretary under 
     this Act.
       (2)(A) Subject to subparagraph (B), the Secretary shall 
     designate an individual as health system director for a State 
     from among nominees for that position selected by a panel 
     composed of individuals who are senior management personnel 
     of the Department medical centers located in that State.
       (B) An individual selected for nomination to be a health 
     system director of a State under subparagraph (A) shall be--
       (i) the director or chief of staff of a Department medical 
     center located in the State in which the pilot program is 
     carried out; or
       (ii) any other individual having experience with the 
     Department medical system that is equivalent to the 
     experience with that system of an individual in a position 
     referred to in clause (i).
       (e) Administrative Reorganization.--The Secretary may carry 
     out any administrative reorganization of an office, facility, 
     activity, or function of the health care system of the 
     Department in a State in which a pilot program is carried out 
     that the Secretary and the health system director jointly 
     determine to be necessary in order to facilitate the carrying 
     out of the pilot program. Section 510(b) of title 38, United 
     States Code, shall not apply to any such administrative 
     reorganization.
       (f) Provision of Benefits.--(1)(A) Except as provided in 
     subparagraph (B), the Secretary shall provide health care 
     benefits under a pilot program--
       (i) through the direct provision of such services by the 
     health care system of the Department in the State in which 
     the pilot program is carried out; or
       (ii) by contract or other agreement in accordance with 
     paragraph (2).
       (B) The Secretary may exclude facilities of the Department 
     from participation in a pilot program. Any facilities so 
     excluded shall continue to provide health care benefits to 
     veterans and other persons eligible for such benefits in 
     accordance with the provisions of laws administered by the 
     Secretary.
       (2) The health system director of a pilot program may enter 
     into contracts and agreements for the provision of health 
     care services and contracts and agreements for other services 
     with respect to the pilot program under paragraph (1)(A)(ii). 
     Any such contract or agreement (including any lease) shall 
     not be subject to the following provisions of law:
       (A) Section 8110(c) of title 38, United States Code, 
     relating to contracting of services at Department health-care 
     facilities.
       (B) Section 8122(a)(1) of such title, relating to the lease 
     of Department property.
       (C) Section 8125 of such title, relating to local contracts 
     for the procurement of health-care items.
       (D) Section 702 of title 5, United States Code, relating to 
     the right of review of agency wrongs by courts of the United 
     States.
       (E) Sections 1346(a)(2) and 1491 of title 28, United States 
     Code, relating to the jurisdiction of the district courts of 
     the United States and the United States Court of Federal 
     Claims, respectively, for the actions enumerated in such 
     sections.
       (F) Subchapter V of chapter 35 of title 31, United States 
     Code, relating to adjudication of protests of violations of 
     procurement statutes and regulations.
       (G) Sections 3526 and 3702 of such title, relating to the 
     settlement of accounts and claims, respectively, of the 
     United States.
       (H) Subsections (b)(7), (e), (f), (g), and (h) of section 8 
     of the Small Business Act (15 U.S.C. 637(b)(7), (e), (f), 
     (g), and (h)), relating to requirements with respect to small 
     businesses for contracts for property and services.
       (I) The provisions of law assembled for purposes of 
     codification of the United States Code as section 471 through 
     544 of title 40 that relate to the authority of the 
     Administrator of General Services over the lease and disposal 
     of Federal Government property.
       (J) The Office of Federal Procurement Policy Act (41 U.S.C. 
     401 et seq.), relating to the procurement of property and 
     services by the Federal Government.
       (K) Chapter 3 of the Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 251 et seq.), relating to the 
     procurement of property and services by the Federal 
     Government.
       (L) Office of Management and Budget Circular A-76.
       (3)(A) Notwithstanding any other provision of law, 
     contracts and agreements for the provision of health care 
     services under this subsection may include contracts and 
     other agreements with insurers, health care providers, or 
     other individuals or entities that provide health care 
     services.
       (B) Contracts and agreements under this paragraph may be 
     entered into without prior review by the Central Office of 
     the Department.
       (4)(A) Contracts and agreements under this subsection for 
     services other than the services referred to in paragraph (3) 
     (including contracts and agreements for procurement of 
     equipment, maintenance and repair services, and other 
     services related to the provision of health care services) 
     shall not be subject to prior review by the Central Office if 
     the amount of such contracts or agreements is less than 
     $250,000.
       (B) Contracts and agreements for services under this 
     paragraph shall be subject to prior review by the Central 
     Office if the amount of such contracts or agreements is 
     $250,000 or greater. If the Central Office fails to approve 
     or reject a contract or agreement under this clause within 30 
     days of its submittal to the Central Office, such contract or 
     agreement shall be deemed approved by the Central Office.
       (g) Department Personnel.--(1) Notwithstanding any other 
     provision of law and to the extent necessary to carry out the 
     purpose of a pilot program, the Secretary may--
       (A) appoint personnel to positions in the health care 
     system of the Department in the State in which the pilot 
     program is carried out in accordance with such standards for 
     such positions as the Secretary may establish; and
       (B) promote and advance personnel serving in such positions 
     in accordance with such standards as the Secretary may 
     establish.
       (2) Not later than 60 days after the designation of a State 
     as a location for a pilot program under this Act, or at such 
     other time as the Secretary may determine, the Secretary 
     shall request authority from the Director of the Office of 
     Management and Budget to permit the Secretary to employ a 
     number of full time equivalent employees in the health care 
     system of the Department in that State which exceeds the 
     number of such employees that would otherwise be authorized 
     for such employment by the Director.
       (3) Notwithstanding any other provision of law, employees 
     of the Department at facilities of the Department under a 
     pilot program shall not, during the carrying out of the pilot 
     program, be subject to any reduction in the number of full 
     time employees of the Department or as a result of a 
     reduction in the number of full time employees of the Federal 
     Government.
       (h) Eligible Persons.--(1) A person eligible for health 
     care benefits under a pilot program is any person residing in 
     a State in which a pilot program is carried out as follows:
       (A) Any veteran.
       (B) Any spouse or child of a veteran.
       (C) Any individual eligible for care under paragraph (2) or 
     (3) of section 1713(a) of title 38, United States Code.
       (2) Notwithstanding any other provision of law, a State may 
     not require that any person other than a person referred to 
     in paragraph (1) be eligible for health care benefits through 
     the Department under a pilot program.
       (i) Copayments and Other Charges.--(1) Except as provided 
     in paragraph (2), the Secretary may collect from or on behalf 
     of any individual receiving health care benefits from the 
     Secretary under a pilot program under this Act a premium, 
     deductible, copayment, or other charge with respect to the 
     provision of a benefit under the pilot program. The amount of 
     the premium, deductible, copayment, or other charge collected 
     with respect to a benefit provided under a pilot program may 
     not exceed the maximum amount otherwise permitted for a 
     premium, deductible, copayment, or other charge with respect 
     to that benefit under the comprehensive health benefits plan 
     of the State in which the pilot program is carried out.
       (2)(A) Except as provided in subparagraph (B), the 
     Secretary shall not collect under the pilot programs 
     premiums, deductibles, copayments, and other charges with 
     respect to the benefits provided by the Department to the 
     following:
       (i) Veterans with compensable service-connected 
     disabilities.
       (ii) Veterans whose discharge or release from active 
     military, naval, or air service was for a compensable 
     disability that was incurred or aggravated in the line of 
     duty.
       (iii) Veterans who are in receipt of, or who, but for a 
     suspension pursuant to section 1151 of title 38, United 
     States Code (or both a suspension and the receipt of retired 
     pay), would be entitled to disability compensation, but only 
     to the extent that such veterans' continuing eligibility for 
     such care is provided for in the judgment or settlement 
     provided for in such section.
       (iv) Veterans who are former prisoners of war.
       (v) Veterans of the Mexican border period or of World War 
     I.
       (vi) Veterans who are unable to defray the expenses of 
     necessary care, as determined in accordance with section 
     1722(a) of such title.
       (B) The Secretary may collect premiums, deductibles, 
     copayments, and other charges with respect to benefits 
     provided under a pilot program to veterans referred to in 
     subparagraph (A) from any third party obligated to provide, 
     or to pay the expenses of, such benefits to or for such 
     veterans under the comprehensive health benefits plan of the 
     State in which the pilot program is carried out.
       (j) Funding.--(1) There is established in the Treasury a 
     fund to be known as the Department of Veterans Affairs Health 
     Care Reform Fund (hereafter referred to in this subsection as 
     the ``Fund'').
       (2)(A) Notwithstanding any other provision of law, amounts 
     shall be deposited in the Fund as follows:
       (i) Amounts collected under a pilot program in accordance 
     with subsection (i).
       (ii) Amounts made available to a pilot program based upon a 
     determination under paragraph (3).
       (iii) Amounts transferred to the Fund with respect to a 
     pilot program under paragraph (4).
       (iv) Such other amounts as the Secretary and the health 
     system directors of the pilot programs jointly determine to 
     be necessary in order to carry out the pilot programs.
       (v) Such other amounts as may be appropriated to the pilot 
     programs.
       (B) Amounts deposited in the Fund pursuant to clauses (ii) 
     and (iv) shall be derived from amounts appropriated to the 
     Department of Veterans Affairs for the Veterans Health 
     Administration for medical care.
       (C) The Secretary shall establish and maintain a separate 
     account under the Fund for each pilot program carried out 
     under this Act. Any deposits and expenditures with respect to 
     a pilot program shall be made to or from the account 
     established and maintained with respect to that pilot 
     program.
       (3)(A) For each year of the operation of a pilot program 
     under this Act, the Secretary shall deposit in the account of 
     the Fund for the pilot program an amount (as determined by 
     the Secretary) equal to the amount that would otherwise be 
     made available to the health care system of the Department in 
     the State in which the pilot program is carried out for the 
     payment of the cost of health care services by such system in 
     that State in that year. The Secretary shall deposit such 
     amount at the beginning of such year.
       (B) The costs referred to in subparagraph (A) shall not 
     include costs relating to the provision by the Secretary of 
     the following services:
       (i) Services relating to post-traumatic stress disorder.
       (ii) Services relating to spinal-cord dysfunction.
       (iii) Services relating to substance abuse.
       (iv) Services relating to the rehabilitation of blind 
     veterans.
       (v) Services relating to prosthetics.
       (4) Funds deposited in the Medical-Care Cost Recovery Fund 
     established under section 1729(g) of title 38, United States 
     Code, during any fiscal year in an amount in excess of the 
     Congressional Budget Office baseline (as of the date of the 
     enactment of this Act) for deposits in that fund for that 
     fiscal year shall not be subject to paragraph (4) of section 
     1710(f), 1712(f), or 1729(g) (as the case may be) of that 
     title, but shall be transferred to the fund established under 
     this subsection. Such transfer for any fiscal year shall be 
     made at any time that the total of amounts so received less 
     amounts estimated to cover the expenses, payments, and costs 
     described in paragraph (3) of section 1729(g) of that title 
     is in excess of the applicable Congressional Budget Office 
     baseline.
       (5)(A) Notwithstanding any other provision of law, amounts 
     in the Fund shall be available for all expenses incurred by 
     the Veterans Health Administration in carrying out the pilot 
     programs. Subject to subparagraph (B), the health system 
     director for a State in which a pilot program is carried out 
     shall determine the expenses of the pilot program for that 
     State for purposes of this paragraph.
       (B)(i) Except as provided in clause (ii), the costs of 
     carrying out a pilot program under this paragraph shall 
     include any costs of marketing and advertising under the 
     program, costs of legal services provided to such pilot 
     program by the General Counsel of the Department of Veterans 
     Affairs, and costs relating to acquisition (including 
     acquisition of land), construction, repair, or renovation of 
     facilities.
       (ii) Costs under this subparagraph shall not include any 
     costs relating to a major medical facility project or a major 
     medical facility lease as such terms are defined in 
     subparagraphs (A) and (B) of section 8104(a)(3) of title 38, 
     United States Code, respectively.
       (C) The period of availability of amounts in an account 
     established in the Fund for a pilot program shall end on the 
     last day of the fiscal year in which the pilot program is 
     carried out.
       (k) Termination.--A pilot program carried out under this 
     Act shall terminate not later than 2 years after the date of 
     the commencement of provision of benefits under the pilot 
     program.

     SEC. 4. REPORTS ON PILOT PROGRAMS.

       (a) Collection of Information.--(1) The Secretary shall 
     collect such information with respect to the provision of 
     health care benefits under each pilot program as is necessary 
     to permit the Secretary to evaluate the pilot program in 
     light of the purpose of the pilot program under this Act.
       (2) The information collected by the Secretary under 
     paragraph (1) shall include aggregated data on the following:
       (A) The number of persons participating in each pilot 
     program, including the age, sex, health status, disability 
     ratings (if any), employment status, and incomes of such 
     persons.
       (B) The nature of benefits sought by such persons under 
     each pilot program.
       (C) The nature and quantity of benefits provided to such 
     persons under each pilot program.
       (D) The cost to the Department of providing such benefits 
     under each pilot program.
       (b) Reports.--(1) Not later than 14 months after the date 
     of the completion of the designation of States as locations 
     for pilot programs under this Act, the Secretary shall submit 
     to the Committees on Veterans' Affairs of the Senate and 
     House of Representatives a report on the progress of the 
     Secretary in carrying out the pilot programs. Such report 
     shall include the information referred to in subsection 
     (a)(2) on the date of the report.
       (2) Not later than November 30 of the year of the 
     termination of the final pilot program under this Act, the 
     Secretary shall submit to the committees referred to in 
     paragraph (1) a report on the pilot programs carried out 
     under this Act. The report shall include the following:
       (A) The information referred to in subsection (a)(2), 
     together with the comments and conclusions of the Secretary 
     with respect to such information.
       (B) An assessment by the Secretary of the utility of each 
     pilot program for carrying out the purpose of this Act.
       (C) An assessment by the Secretary of appropriate means of 
     integrating the health care system of the Department into the 
     health care systems of States that have enacted health care 
     reform and into the National health care system contemplated 
     under any plans for National health care reform.
       (D) Such other information, assessments, and conclusions as 
     the Secretary considers appropriate.
       (3) Not later than 30 days after the end of any fiscal year 
     in which a pilot program is carried out under section 3, the 
     Secretary shall submit to the appropriate committees of 
     Congress a report describing the amounts expended from the 
     Department of Veterans Affairs Health Care Reform Fund 
     established under section 3(j)(1) during that fiscal year for 
     each pilot program so carried out.

     SEC. 5. DEFINITIONS.

       For the purposes of this Act--
       (1) The terms ``Secretary'', ``Department'', ``veteran'', 
     ``child'' and ``spouse'' have the meanings given such terms 
     in paragraphs (1), (2), (4), and (31) of section 101 of title 
     38, United States Code, respectively.
       (2) The term ``comprehensive health benefit plan'', in the 
     case of a State, means a plan or system established under the 
     law of the State that--
       (A) attempts to ensure the access of residents of the State 
     to a comprehensive package of basic health care benefits; and
       (B) ensures such access by providing that such benefits 
     shall be provided directly or by contract by public and 
     private entities.
       (3) The term ``comprehensive package of basic health care 
     benefits'' means the health care benefits provided for by a 
     State under the comprehensive health benefit plan of the 
     State.
       (4) The term ``health care system of the Department'', in 
     the case of a State designated as a location for a pilot 
     program, means the facilities and personnel of the Department 
     located in that State that provide health care services under 
     chapter 17 of title 38, United States Code.

  Mr. GLENN. Mr. President, I ask unanimous consent that Calendar No. 
436, S. 1974 be indefinitely postponed.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________