[Congressional Record Volume 141, Number 162 (Thursday, October 19, 1995)]
[Senate]
[Pages S15347-S15357]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SIMPSON (by request):
  S. 1345. A bill to amend title 38, United States Code, and various 
other statues, to reform eligibility for Department of Veterans Affairs 
health care benefits, improve the operation of the Department, and 
improve the processes and procedures the Department uses to administer 
various benefits programs for veterans; and for other purposes; to the 
Committee on Veterans' Affairs.


 the department of veterans affairs improvement and reinvention act of 
                                  1995

 Mr. SIMPSON. Mr. President, as chairman of the Veterans' 
Affairs Committee, I have today introduced, at the request of the 
Secretary of Veterans Affairs, S. 1345, a bill to reform eligibility 
for Department of Veterans Affairs health care benefits, improve the 
operation of the Department, and improve the processes and procedures 
the Department uses to administer various benefit programs for 
veterans; and for other purposes. The Secretary of Veterans Affairs 
submitted this legislation to the President of the Senate by letter 
dated September 12, 1995.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Veterans' Affairs Committee. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record at this point, together with the transmittal 
letter and the enclosed section-by-section analysis of the draft 
legislation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1345

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Department 
     of Veterans Affairs Improvement and Reinvention Act of 
     1995''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. References to title 38, United States Code.

                 TITLE I--VETERANS HEALTH-CARE PROGRAMS

          Part A--Reform of the Health-Care Eligibility System

Sec. 101. Definitions.
Sec. 102. Eligibility for health care.
Sec. 103. Exposure related treatment authorities.
Sec. 104. Mental health services and bereavement counseling for family 
              members.
Sec. 105. Consolidation of special authorities pertaining to prosthetic 
              devices, and aids for the blind and aids for the hearing 
              impaired.
Sec. 106. Dental care.
Sec. 107. Home improvements and structural alterations.
Sec. 108. Furnishing medications prescribed by non-VA physicians.
Sec. 109. Furnishing care in community nursing homes.
Sec. 110. Furnishing residential care.
Sec. 111. Expansion of authority to share health-care resources.
Sec. 112. Authorization of Appropriations.
Sec. 113. Conforming amendments.

             Part B--Administration of Health-Care Benefits

Sec. 120. Means test reform.
Sec. 121. VA retention of funds collected from third parties.

                       TITLE II--BENEFIT PROGRAMS

                     Part A--Loan Guaranty Program

Sec. 201. Termination of the manufactured housing loan program.
Sec. 202. Loan fees.
Sec. 203. Contracting for portfolio loan services.

                       Part B--Education Programs

Sec. 210. Electronic signatures on documents concerning education 
              benefits for veterans.
Sec. 211. Electronic funds transfer for education benefits payments.

     SEC. 2. REFERENCES TO TITLE 38, UNITED STATES CODE.

       Except as otherwise expressly provided, whenever in this 
     Act an amendment is expressed in terms of an amendment to 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--VETERANS HEALTH-CARE PROGRAMS

          Part A--Reform of the Health Care Eligibility System

     SEC. 101. DEFINITIONS.

       Section 1701 is amended by striking out paragraphs numbered 
     (5), (6), (7), (8), and (9) and inserting in lieu thereof the 
     following:
       ``(5) Then term `health care' means the most appropriate 
     care and treatment for the patient furnished in the most 
     appropriate setting, as determined by the Secretary, 
     including the provision of such pharmaceuticals, supplies, 
     equipment, devices, appliances and other materials as the 
     Secretary determines to be necessary, and including hospital 
     care, nursing home care, domiciliary care, outpatient care, 
     rehabilitative care, home care, respite care, preventive 
     care, and dental care.
       ``(6) The term `hospital care' means care and treatment for 
     a disability furnished to an individual who has been admitted 
     to a hospital as a patient.
       ``(7) The term `nursing home care' means care and treatment 
     for a disability furnished to an individual who has been 
     admitted to a nursing home as a resident.
       ``(8) The term `domiciliary care' means the furnishing of 
     shelter and food, and includes 

[[Page S 15348]]
     necessary care and treatment for a disability furnished to a veteran 
     with no adequate means of support, who has been admitted as a 
     resident to a domiciliary facility under the direct 
     jurisdiction of the Secretary.
       ``(9) The term `outpatient care' means care and treatment 
     for a disability, and preventive health services, furnished 
     to an individual other than hospital, nursing home, or 
     domiciliary care.
       ``(10) The term `rehabilitative care' means such 
     professional, counseling, and guidance services and treatment 
     programs (other than those types of vocational rehabilitation 
     services provides under chapter 31 of this title) as are 
     necessary to restore, to the maximum extent possible, the 
     physical, mental, and psychological functioning of an ill or 
     disabled person.
       ``(11) The term `home care' means outpatient care, 
     rehabilitative care, and preventive health services furnished 
     to an individual in the individual's home or other place of 
     residence but may not include care or services that any other 
     person or entity has a contractual or legal obligation to 
     provide.
       ``(12) The term `residential care' means the provision of 
     room and board and such limited personal care for and 
     supervision of residents as the Secretary determines, in 
     accordance with regulations, are necessary for the health, 
     safety, and welfare of residents, and the term `community 
     residential-care' means the provision of residential-care in 
     a non-VA facility.
       ``(13) The term `respite care' means care furnished on an 
     intermittent basis in a department facility for a limited 
     period to a veteran suffering from a chronic illness, who 
     resides primarily in a private residence when such care will 
     help the veteran to continue residing in such private 
     residence.
       ``(14) The term `preventive health services' remans care 
     and treatment furnished to prevent disease or illness 
     including periodic examinations, immunization, patient health 
     education, and such other services as the Secretary 
     determines are necessary to provide effective and economical 
     preventive health care.''.

     SEC. 102. ELIGIBILITY FOR HEALTH CARE.

       Section 1710 is amended to read as follows:

     ``Sec. 1710. Eligibility for health care

       ``(a)(1) The Secretary shall, to the extent and in the 
     amount provided in advance in appropriations acts for these 
     purposes, furnish health care which the Secretary determines 
     is needed to any veteran described in clauses (A), (C), and 
     (D) of subsection (c)(1), subject to the priorities set forth 
     in subsection (c) and to section 1715 and excluding care 
     described in subsection (b).
       ``(2) The Secretary may furnish health care which the 
     Secretary determines is needed to any veteran not described 
     in clauses (A) through (D) of subsection (c)(1).
       ``(b) Subject to the priorities set forth in subsection 
     (c), the Secretary may furnish nursing home care, respite 
     care, home care, and domiciliary care which the Secretary 
     determines is needed to any veteran.
       ``(c)(1) To the extent and in the amount provided in 
     advance in appropriations acts for these purposes, the 
     Secretary shall furnish health care under subsections (a) and 
     (b) and sections 1712, 1712A, 1712B, 1714, 1717, 1718, 1719, 
     1720B, and 1751, in accordance with the following order of 
     priority:
       ``(A) Veterans (i) who have compensable service-connected 
     disabilities, (ii) who are former prisoners of war, (iii) 
     whose discharge or release from the active military, naval or 
     air service was for a disability incurred or aggravated in 
     line of duty, and (iv) who are in receipt of, or who, but for 
     a suspension pursuant to section 1151 (or both such a 
     suspension and the receipt of retired pay), would be entitled 
     to disability compensation, but only to the extent that the 
     veterans' continuing eligibility for such care is provided 
     for in the judgment or settlement described in section 1151.
       ``(B) Veterans receiving care under sections 1712, 1712A, 
     1719, and 1720B.
       ``(C) Veterans with noncompensable service-connected 
     disabilities, veterans of the Mexican Border period or World 
     War I, and veterans receiving increased pension or additional 
     compensation or allowances based on the need of regular 
     aid and attendance or by reason of being permanently 
     housebound.
       ``(D) Veterans with attributable income less than the 
     threshold amount specified in section 1722 which is 
     applicable to those veterans, provided they sign a 
     declaration that their net worth, together with that of their 
     spouse and dependent children, if any, does not exceed 
     $50,000, and veterans receiving care under section 1751.
       ``(E) Veterans with attributable income greater than the 
     threshold amount specified in section 1722 which is 
     applicable to those veterans and veterans who do not sign the 
     declaration described in clause (D).
       ``(2) The Secretary may, by regulation, establish 
     additional priorities within each priority group established 
     in paragraph (1) of this subsection, as the Secretary 
     determines necessary.
       ``(d) Nothing in this section requires the Secretary to 
     furnish care to a veteran to whom another agency of Federal, 
     State, or local government has a duty under law to provide 
     care in an institution of such government.
       ``(e)(1) The Secretary may furnish health care under 
     subsections (a) and (b) of this section to any veteran 
     described in subsection (c)(1)(E) who has attributable income 
     greater than the amount specified in section 1722(a) which is 
     applicable to that veteran, only if the veteran agrees to pay 
     the United States the applicable amount determined under 
     paragraph (2) of this subsection.
       ``(2) A veteran 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 care shall be liable to the 
     United States for an amount equal to--
       ``(A) for hospital care--
       ``(i) the lesser of the cost of furnishing such care, as 
     determined by the Secretary, or the amount determined under 
     paragraph (3) of this subsection; and
       ``(ii) $10 for every day the veteran receives hospital 
     care.
       ``(B) for nursing home care--
       ``(i) the lesser of the cost of furnishing such care, as 
     determined by the Secretary, or the amount determined under 
     paragraph (3) of this subsection; and
       ``(ii) $5 for every day the veteran receives nursing home 
     care; and
       ``(C) for outpatient care, an amount equal to 20 percent of 
     the estimated cost of care, as determined by the Secretary.
       ``(3)(A) In the case of hospital care furnished during any 
     365-day period, the amount referred to in paragraph (2)(A)(i) 
     of this subsection is--
       ``(i) the amount of the inpatient Medicare deductible, plus
       ``(ii) one-half of such amount for each 90 days of care (or 
     fraction thereof) after the first 90 days of such care during 
     such 365-day period.
       ``(B) In the case of nursing home care furnished during any 
     365-day period, the amount referred to in paragraph (2)(B)(i) 
     of this subsection is the amount of the inpatient Medicare 
     deductible for each 90 days of such care (or fraction 
     thereof) during such 365-day period.
       ``(C)(i) Except as provided in clause (ii) of this 
     subparagraph, in the case of a veteran who is admitted for 
     nursing home care under this section after being furnished, 
     during the preceding 365-day period, hospital care for which 
     the veteran has paid the amount of the inpatient Medicare 
     deductible under this subsection and who has not been 
     furnished 90 days of hospital care in connection with such 
     payment, the veteran shall not incur any liability 
     under paragraph (2)(B)(i) of this subsection with respect 
     to such nursing home care until--
       ``(I) the veteran has been furnished, beginning with the 
     first day of such hospital care furnished in connection with 
     such payment, a total of 90 days of hospital care and nursing 
     home care; or
       ``(II) the end of the 365-day period applicable to the 
     hospital care for which payment was made,

     whichever occurs first.
       ``(ii) In the case of a veteran who is admitted for nursing 
     home care under this section after being furnished, during 
     any 365-day period, hospital care for which the veteran has 
     paid an amount under subparagraph (A)(ii) of this paragraph 
     and who has not been furnished 90 days of hospital care in 
     connection with such payment, the amount of the liability of 
     the veteran under paragraph (2)(B)(i) of this subsection with 
     respect to the number of days of such nursing home care 
     which, when added to the number of days of such hospital 
     care, is 90 or less, is the difference between the inpatient 
     Medicare deductible and the amount paid under such 
     subparagraph until--
       ``(I) the veteran has been furnished, beginning with the 
     first day of such hospital care furnished in connection with 
     such payment, a total of 90 days of hospital care and nursing 
     home care; or
       ``(II) the end of the 365-day period applicable to the 
     hospital care for which payment was made,

     whichever occurs first.
       ``(D) In the case of a veteran who is admitted for hospital 
     care under this section after having been furnished, during 
     the preceding 365-day period, nursing home care for which the 
     veteran has paid the amount of the inpatient Medicare 
     deductible under this subsection and who has not been 
     furnished 90 days of nursing home care in connection with 
     such payment, the veteran shall not incure any liability 
     under paragraph (2) of this subsection with respect to such 
     hospital care until--
       ``(i) the veteran has been furnished, beginning with the 
     first day of such nursing home care furnished in connection 
     with such payment, a total of 90 days of nursing home care 
     and hospital care; or
       ``(ii) the end of the 365-day period applicable to the 
     nursing home care for which payment was made.

     whichever occurs first.
       ``(E) A veteran may not be required to make a payment under 
     paragraph (2)(A)(i) or paragraph (2)(B)(i) of this subsection 
     for any days of care in excess of 360 days of care during any 
     365-calendar-day period.
       ``(4) Amounts collected or received on behalf of the United 
     States under this subsection shall be deposited in the 
     Treasury as miscellaneous receipts.
       ``(5) For the purposes of this subsection, the term 
     `inpatient Medicare deductible' means the amount of the 
     inpatient hospital deductible in effect under section 1813(b) 
     of the Social Security Act (42 U.S.C. 1395(b)) on the first 
     day of the 365-day period applicable under paragraph (3) of 
     this subsection.''.

     SEC. 103. EXPOSURE-RELATED TREATMENT AUTHORITIES.

       Section 1712 is amended to read as follows:
       
[[Page S 15349]]


     ``Sec. 1712. Treatment for veterans exposed to certain toxic 
       substances or hazards

       ``(a) Subject to subsections (b) and (c), and to the extent 
     and in the amount provided in advance in appropriations acts 
     for these purposes, the Secretary shall furnish hospital care 
     and may furnish other health care to--
       ``(1) a veteran--
       ``(A) who served on active duty in the Republic of Vietnam 
     during the Vietnam era, and
       ``(B) who the Secretary finds may have been exposed during 
     such service to dioxin or was exposed during such service to 
     a toxic substance found in a herbicide or defoliant used in 
     connection with military purposes during such era,

     for any disability, notwithstanding that there is 
     insufficient medical evidence to conclude that such 
     disability may be associated with such exposure;
       ``(2) a veteran who the Secretary finds was exposed while 
     serving on active duty to ionizing radiation from the 
     detonation of a nuclear device in connection with such 
     veteran's participation in the test of such a device or with 
     the American occupation of Hiroshima and Nagasaki, Japan, 
     during the period beginning on September 11, 1945, and ending 
     on July 1, 1946, for any disability, notwithstanding that 
     there is insufficient medical evidence to conclude that such 
     disability may be associated with such exposure; and
       ``(3) a veteran who the Secretary finds may have been 
     exposed while serving on active duty in the Southwest Asia 
     theater of operations during the Persian Gulf War to a toxic 
     substance or environmental hazard for any disability, 
     notwithstanding that there is insufficient medical evidence 
     to conclude that such disability may be associated with such 
     exposure.
       ``(b) Hospital and health care may not be provided under 
     subsection (a) with respect to a disability that is found, in 
     accordance with guidelines issued by the Under Secretary for 
     Health, to have resulted from a cause other than an exposure 
     described in paragraph (1), (2), or (3) of subsection (a) in 
     the case of a veteran described in the applicable paragraph.
       ``(c) Hospital and health care may not be provided--
       ``(1) after December 31, 1996, in the case of a veteran 
     described in paragraph (1) of subsection (a); and
       ``(2) after September 30, 1997, in the case of a veteran 
     described in paragraph (3) of subsection (a).''.

     SEC. 104. MENTAL HEALTH SERVICES AND BEREAVEMENT COUNSELING 
                   FOR FAMILY MEMBERS.

       Chapter 17 is amended by adding the following new section:

     ``Sec. 1712C. Mental health services and bereavement 
       counseling for family members

       ``(a) If necessary for the effective treatment and 
     rehabilitation of a patient who is either a veteran or a 
     dependent or survivor receiving care under the last sentence 
     of section 1713(b), the Secretary may furnish the services 
     described in subsection (b) to members of the immediate 
     family of the patient, the patient's legal guardian, or the 
     individual in whose household such patient certifies an 
     intention to live.
       ``(b) The services referred to in subsection (a) are--
       ``(1) consultation, professional counseling, and training 
     as necessary in connection with the treatment of any 
     disability of a patient receiving outpatient care for a 
     physical condition;
       ``(2) mental health services, consultation, professional 
     counseling, and training as necessary in connection with the 
     treatment of a patient receiving hospital care for any 
     disability, or receiving outpatient care for a service-
     connected mental health condition;
       ``(3) mental health services, consultation, professional 
     counseling, and training as necessary in connection with the 
     treatment of a patient receiving outpatient care for a 
     nonservice-connected mental health condition, but only if the 
     patient's treatment for the mental health condition was begun 
     during a period of hospitalization and the services to the 
     family member, guardian, or other person were commenced prior 
     to the patient's discharge from such period of hospital care.
       ``(c) The Secretary may furnish counseling services for a 
     limited period to any individual who was a recipient of 
     services under subsection (a) of this section at the time 
     of--
       ``(1) the unexpected death of the veteran; or
       ``(2) the death of the veteran while the veteran was 
     participating in a hospice program (or a similar program) 
     conducted by the Secretary,

     if the Secretary determines that furnishing such services 
     would be reasonable and necessary to assist such individual 
     with the emotional and psychological stress accompanying the 
     veteran's death.''.

     SEC. 105. CONSOLIDATION OF SPECIAL AUTHORITIES PERTAINING TO 
                   PROSTHETIC DEVICES, AIDS FOR THE BLIND, AND 
                   AIDS FOR THE HEARING IMPAIRED.

       Section 1714 is amended--
       (1) by amending the heading to read as follows:

     ``Sec. 1714. Prosthetic devices and aids for the blind and 
       hearing impaired'';

       (2) by designating subsection (b) as subsection (d) and 
     inserting after subsection (a) the following new subsections 
     (b) and (c):
       ``(b) The Secretary may procure medical equipment, 
     prosthetic devices and similar appliances furnished under 
     section 1710 or subsections (d) and (e) of this section by 
     purchase or by manufacture, whichever the Secretary 
     determines may be advantageous and reasonably necessary.
       ``(c) The Secretary may repair or replace any prosthetic or 
     orthotic device or similar appliance (not including dental 
     appliances) reasonably necessary to a veteran and belonging 
     to such veteran which was damaged or destroyed by a fall or 
     other accident caused by a service-connected disability for 
     which such veteran is in receipt of, or but for the receipt 
     of retirement pay would be entitled to, disability 
     compensation.''; and
       (3) by adding at the end the following new subsection (e):
       ``(e) The Secretary may furnish devices for assisting in 
     overcoming the handicap of deafness (including telecaptioning 
     television decoders) to any veteran who is profoundly deaf 
     and is entitled to compensation on account of hearing 
     impairment.''.

     SEC. 106. DENTAL CARE.

       Section 1715 is amended to read as follows:

     ``Sec. 1715. Dental care

       ``(a) The Secretary may, within the limits of Department 
     facilities, furnish a veteran receiving hospital, nursing 
     home, or domiciliary care in a Department facility with--
       ``(1) any dental services and treatment, and related dental 
     appliances necessary for continued safe and effective 
     treatment of other disabilities for which the veteran is 
     receiving care in the VA facility; and
       ``(2) any dental services and treatment for which the 
     veteran is eligible under subsection (b) of this section.
       ``(b)(1) The Secretary may furnish outpatient dental 
     services and treatment, and related dental appliances under 
     this chapter only for a dental condition or disability--
       ``(A) which is service-connected and compensable in degree;
       ``(B) which is service-connected, but not compensable in 
     degree, but only if--
       ``(i) the dental condition or disability is shown to have 
     been in existence at the time of the veteran's discharge or 
     release from active military, naval, or air service;
       ``(ii) the veteran had served on active duty for a period 
     of not less than 180 days or, in the case of a veteran who 
     served on active duty during the Persian Gulf War, 90 days 
     immediately before such discharge or release;
       ``(iii) application for treatment is made within 90 days 
     after such discharge or release, except that (I) in the case 
     of a veteran who reentered active military, naval, or air 
     service within 90 days after the date of such veteran's prior 
     discharge or release from such service, application may be 
     made within 90 days from the date of such veteran's 
     subsequent discharge or release from such service, and (II) 
     if a disqualifying discharge or release has been corrected by 
     competent authority, application may be made within 90 days 
     after the date of correction; and
       ``(iv) the veteran's certificate of discharge or release 
     from active duty does not bear a certification that the 
     veteran was provided, within the 90-day period immediately 
     before the date of such discharge or release, a complete 
     dental examination (including dental X-rays) and all 
     appropriate dental services and treatment indicated by the 
     examination to be needed.
       ``(C) which is a service-connected dental condition or 
     disability due to combat wounds or other service trauma, or 
     of a former prisoner of war;
       ``(D) which is associated with and is aggravating a 
     disability resulting from some other disease or injury which 
     was incurred in or aggravated by active military, naval, or 
     air service;
       ``(E) which is a nonservice-connected condition or 
     disability of a veteran for which treatment was begun while 
     such veteran was receiving hospital care under this chapter 
     and such services and treatment are reasonably necessary to 
     complete such treatment;
       ``(F) from which a veteran who is a former prisoner of war 
     and who was detained or interned for a period of not less 
     than 90 days is suffering;
       ``(G) from which a veteran who has a service-connected 
     disability rated as total is suffering; or
       ``(H) the treatment of which is medically necessary (i) in 
     preparation for hospital admission, or (ii) for a veteran 
     otherwise receiving care or services under this chapter.
       ``(2) The Secretary concerned shall at the time a member of 
     the Armed Forces is discharged or released from a period of 
     active military, naval, or air service of not less than 180 
     days or, in the case of a veteran who served on active duty 
     during the Persian Gulf War, 90 days provide to such member a 
     written explanation of the provisions of clause (B) of 
     paragraph (1) of this section and enter in the service 
     records of the member a statement signed by the member 
     acknowledging receipt of such explanation (or, if the member 
     refuses to sign such statement, a certification from an 
     officer designated for such purpose by the Secretary 
     concerned that the member was provided such explanation).
       ``(3) The total amount which the Secretary may expend for 
     furnishing, during any twelve-month period, outpatient dental 
     services, treatment, or related dental appliances to a 
     veteran under this section through private facilities for 
     which the Secretary has contracted under clause (1), (2), or 
     (5) of section 1703(a) of this title may not exceed $1,000 
     unless the Secretary determines, prior 

[[Page S 15350]]
     to the furnishing of such services, treatment, or appliances and based 
     on an examination of the veteran by a dentist employed by the 
     Department (or, in an area where no such dentist is 
     available, by a dentist conducting such examination under a 
     contract or fee arrangement), that the furnishing of such 
     services, treatment, or appliances at such cost is reasonably 
     necessary.
       ``(4)(A) Except as provided in subparagraph (B) of this 
     subsection, in any year in which the President's Budget for 
     the fiscal year beginning October 1 of such year includes an 
     amount for expenditures for contract dental care under the 
     provisions of section 1710(a) of this title (other than care 
     for a veteran of the Mexican border period or of World War I, 
     and a veteran who is in receipt of increased pension or 
     additional compensation or allowances based on the need of 
     regular aid and attendance or by reason of being permanently 
     housebound (or who, but for the receipt of retired pay, would 
     be in receipt of such pension, compensation or allowance)) 
     and section 1703 of this title during such fiscal year in 
     excess of the level of expenditures made for such purpose 
     during fiscal year 1978, the Secretary shall, not later than 
     February 15 of such year, submit a report to the appropriate 
     committees of the Congress justifying the requested level of 
     expenditures for contract dental care and explaining why the 
     application of the criteria prescribed in section 1703 of 
     this title for contracting with private facilities and in 
     section 1715(a) of this title for furnishing incidental 
     dental care to hospitalized veterans will not preclude the 
     need for expenditures for contract dental care in excess of 
     the fiscal year 1978 level of expenditures for such purpose. 
     In any case in which the amount included in the President's 
     Budget for any fiscal year for expenditures for contract 
     dental care under such provisions is not in excess of the 
     level of expenditures made for such purpose during fiscal 
     year 1978 and the Secretary determines after the date of 
     submission of such budget and before the end of such fiscal 
     year that the level of expenditures for such contract dental 
     care during such fiscal year will exceed the fiscal year 1978 
     level of expenditures, the Secretary shall submit a report to 
     the appropriate committees of the Congress containing both a 
     justification (with respect to the projected level of 
     expenditures for such fiscal year) and an explanation as 
     required in the preceding sentence in the case of a report 
     submitted pursuant to such sentence. Any report submitted 
     pursuant to this paragraph shall include a comment by the 
     Secretary on the effect of the application of the criteria 
     prescribed in section 1715(a) of this title for furnishing 
     incidental dental care to hospitalized veterans.
       ``(B) A report under subparagraph (A) of this paragraph 
     with respect to a fiscal year is not required if, in the 
     documents submitted by the Secretary to the Congress in 
     justification for the amounts included for Department 
     programs in the President's Budget, the Secretary specifies 
     with respect to contract dental care described in such 
     subparagraph--
       ``(i) the actual level of expenditures for such care in the 
     fiscal year preceding the fiscal year in which such Budget is 
     submitted;
       ``(ii) a current estimate of the level of expenditures for 
     such care in the fiscal year in which such Budget is 
     submitted; and
       ``(iii) the amount included in such Budget for such care.
       ``(c) Dental services and related appliances for a dental 
     condition or disability described in paragraph (1)(B) of 
     subsection (b) of this section shall be furnished on a one-
     time completion basis, unless the services rendered on a one-
     time completion basis are found unacceptable within the 
     limitations of good professional standards, in which event 
     such additional services may be afforded as are required to 
     complete professionally acceptable treatment.
       ``(d) Dental appliances, to be furnished by the Secretary 
     under this section may be procured by the Secretary either by 
     purchase or by manufacture, whichever the Secretary 
     determines may be advantageous and reasonably necessary.''.

     SEC. 107. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS.

       Section 1717 is amended to read as follows:

     ``Sec. 1717. Home improvements and structural alterations

       ``(a) The Secretary may furnish improvements and structural 
     alterations to the home of a veteran if necessary for the 
     effective and economical treatment of a disability of the 
     veteran, but only if the improvements or alterations are 
     necessary to assure the continuation of treatment or to 
     provide the veteran access to the home or to essential 
     lavatory and sanitary facilities.
       ``(b) The cost of improvements and structural alterations 
     (or the amount of reimbursement therefor) furnished under 
     subsection (a) may not exceed--
       ``(1) $4,100 if needed--
       ``(A) for treatment of a service-connected disability 
     (including a disability that was incurred or aggravated in 
     line of duty and for which the veteran was discharged or 
     released from the active military, naval, or air service);
       ``(B) for any disability of a veteran who has a service-
     connected disability rated at 50 percent or more; and
       ``(C) to any veteran for a disability for which the veteran 
     is in receipt of compensation under section 1151 of this 
     title or for which the veteran would be entitled to 
     compensation under that section but for a suspension pursuant 
     to that section (but in the case of such a suspension, such 
     medical services may be furnished only to the extent that 
     such person's continuing eligibility for medical services is 
     provided for in the judgment or settlement described in that 
     section); and
       ``(2) $1,200 in all other cases.''.

     SEC. 108. FURNISHING MEDICATIONS PRESCRIBED BY NON-VA 
                   PHYSICIANS.

       Section 1719 is amended to read as follows:

     ``Sec. 1719. Medications prescribed by non-VA physicians; 
       immunization programs

       ``(a) The Secretary shall, to the extent and in the amount 
     provided in advance in appropriation acts for these purposes, 
     furnish to each veteran who is receiving additional 
     compensation or allowance under chapter 11 of this title, or 
     increased pension as a veteran of a period of war, by reason 
     of being permanently housebound or in need of regular aid and 
     attendance, such drugs and medicines as may be ordered on 
     prescription of a duly licensed physician as specific therapy 
     in the treatment of any illness or injury suffered by such 
     veteran: provided, that the Secretary shall continue to 
     furnish such drugs and medicines so ordered to any such 
     veteran in need of regular aid and attendance whose pension 
     payments have been discontinued solely because such veteran's 
     annual income is greater than the applicable maximum annual 
     income limitation, but only so long as such veteran's annual 
     income does not exceed such maximum annual income limitation 
     by more than $1,000.
       ``(b) In order to assist the Secretary of Health and Human 
     Services in carrying out national immunization programs under 
     other provisions of law, the Secretary may authorize the 
     administration of immunizations to eligible veterans who 
     voluntarily request such immunizations in connection with the 
     provision of care for a disability under this chapter in any 
     Department health care facility. Any such immunization shall 
     be made using vaccine furnished by the Secretary of Health 
     and Human Services at no cost to the Department. For such 
     purpose, notwithstanding any other provision of law, the 
     Secretary of Health and Human Services may provide such 
     vaccine to the Department at no cost. Section 7316 of this 
     title shall apply to claims alleging negligence or 
     malpractice on the part of Department personnel granted 
     immunity under such section.''.

     SEC. 109. FURNISHING CARE IN COMMUNITY NURSING HOMES.

       Section 1720 is amended--
       (1) in the heading by striking out the semicolon and all 
     that follows;
       (2) in subsection (a)(1)(A)(i), by striking out ``hospital 
     care, nursing home care, or domiciliary'' and inserting in 
     lieu thereof ``health'';
       (3) by striking out subsection (a) and redesignating 
     subsection (e) as subsection (d); and
       (4) by striking out subsection (f).

     SEC. 110. FURNISHING RESIDENTIAL CARE.

       Section 1730 is amended--
       (1) by redesignating subsections (a), (b), (c), (d), and 
     (e) as subsections (b), (c), (d), (e), and (f), respectively;
       (2) by inserting the following new subsection (a):
       ``(a)(1) The Secretary may furnish residential care to a 
     veteran in receipt of hospital care in a VA facility when 
     such care would be an alternative to continued hospital care.
       ``(2) The Secretary may only furnish care under paragraph 
     (1) of this subsection through contracts with community 
     residential-care facilities--
       ``(A) when the veteran has no resources to pay for the 
     care, as determined by the Secretary in regulations; and
       ``(B) for a period not to exceed 90 days during any 12-
     month period.''.
       (3) by amending subsection (b), as so redesignated, to read 
     as follows:
       ``(b) Subject to this section and regulations to be 
     prescribed by the Secretary under this section, the Secretary 
     may assist a veteran who does not meet the requirement set 
     forth in subsection (a)(2)(A) of this section by referring 
     the veteran for placement in, and aiding the veteran in 
     obtaining placement in, a community residential-care facility 
     if--
       ``(1) at the time of initiating the assistance, the 
     Secretary--
       ``(A) is furnishing the veteran hospital, domiciliary, 
     nursing home, or outpatient care; or
       ``(B) has furnished the veteran such care or services 
     within the preceding 12 months; and
       ``(2) placement of the veteran in a community residential-
     care facility is appropriate.''.
       (4) in subsection (c), as so redesignated, by striking out 
     ``subsection (a) of'' in paragraph (1), and by inserting 
     ``community residential-care'' before ``facility'' the first 
     time it appears in paragraph (2);
       (5) in subsection (d), as so redesignated, by striking out 
     ``(b)'' and inserting in lieu thereof ``(c)'';
       (6) in subsection (e), as so redesignated, by striking out 
     ``(b)'' and inserting in lieu thereof ``(c)'';
       (7) in subsection (f), as so redesignated, by striking out 
     ``(b)(2) or (c)(1)'' and ``(d)'' and inserting in lieu 
     thereof ``(c)(2) or (d)(1)'' and ``(e)'';
       (8) by striking subsection (g)

     SEC. 111. EXPANSION OF AUTHORITY TO SHARE HEALTH-CARE 
                   RESOURCES.

       (a) The text of section 8151 is amended to read as follows:
       ``It is the purpose of this subchapter to improve the 
     quality of health care provided veterans under this title, by 
     authorizing the Secretary to enter into agreements with 

[[Page S 15351]]

     health-care providers in order to share health-care resources 
     with, and receive health-care resources from those health 
     care providers, provided there is no diminution of services 
     to veterans. Among other things, it is intended by these 
     means to strengthen the medical programs at Department 
     facilities located in small cities or rural areas that are 
     remote from major medical centers.''
       (b) Section 8152 is amended--
       (1) by striking out paragraphs (1) and (2) and 
     redesignating paragraphs (3) and (4) as paragraphs (1) and 
     (2), respectively; and
       (2) by amending paragraph (1), as so redesignated, to read 
     as follows:
       ``(1) The term `health-care resource' includes health care 
     as that term is defined in paragraph (5) of section 1701, any 
     other health-care service, and any health-care support or 
     administrative resource.''.
       (3) by adding at the end the following new paragraph (3):
       ``(3) The term `health-care providers' includes health-care 
     plans, insurers, organizations, institutions, or any other 
     entity or individual who furnishes any health-care 
     resource.''.
       (c) Section 8153 is amended--
       (1) by amending the heading to read as follows:

     ``Sec. 8153. Health-care resource sharing'';

       (2) by amending paragraph (1) of subsection (a) to read as 
     follows:
       ``(a)(1) The Secretary may, when the Secretary determines 
     it to be necessary in order to secure health-care resources 
     which otherwise might not be feasibly available, or to 
     effectively utilize health-care resources, make arrangements, 
     by contract or other form of agreement, without regard to any 
     law or regulation pertaining to competitive procedures, for 
     the mutual use, or exchange of use, of health-care resources 
     between Department health-care facilities and non-Department 
     health-care providers.'';
       (3) in subsection (c), by striking out ``hospital care and 
     medical services'' and ``hospital care or medical services'' 
     and inserting in lieu thereof ``health care'' in both places; 
     and
       (4) in subsection (d), by striking out ``hospital care and 
     health services'' and inserting in lieu thereof ``health 
     care''.
       (5) by striking out subsection (e).
       (d) The table of sections at the beginning of chapter 81 is 
     amended by striking out the item relating to section 8153 and 
     inserting in lieu thereof the following:
``8153. Health care resource sharing''.

     SEC. 112. AUTHORIZATION OF APPROPRIATIONS.

       Subchapter II of chapter 17 is amended by adding at the end 
     the following new section:

     ``Sec. 1720D. Authorization of appropriations

       There are authorized to be appropriated such sums as are 
     necessary to carry out this subchapter.

     SEC. 113. CONFORMING AMENDMENTS.

       (a) Section 1703 is amended--
       (1) by amending the section heading to read as follows:

     ``Sec. 1703. Contracts for hospital and outpatient care'';

       (2) by striking out the words ``medical services'' wherever 
     they appear and inserting in lieu thereof ``outpatient 
     care'';
       (3) in the first sentence of subsection (a), by striking 
     out ``or services'' and ``or 1712'';
       (4) by amending paragraph (2) of subsection (a) to read as 
     follows:
       ``(2) Outpatient care for the treatment of any disability 
     of--
       ``(A) a veteran with a service-connected disability rated 
     at 50 percent or more;
       ``(B) a veteran who has been furnished hospital care, 
     nursing home care, or domiciliary care, when reasonably 
     necessary to complete treatment incident to such care for a 
     period up to 12 months after discharge from such care unless 
     the Secretary authorizes a longer period of care after 
     finding that a longer period is required by reason of the 
     disability being treated; or
       ``(C) a veteran of the Mexican border period or World War 
     I, or a veteran who is in receipt of increased pension or 
     additional compensation or allowances based on the need of 
     regular aid and attendance or by reason of being permanently 
     housebound (or who, but for the receipt of retired pay, 
     would be in receipt of such pension, compensation, or 
     allowance) if the Secretary has determined, based on an 
     examination by a physician employed by the Department (or, 
     in areas where no such physician is available, by a 
     physician carrying out such function under a contract or 
     fee arrangement), that the medical condition of such 
     veteran precludes appropriate treatment in Department 
     facilities.''; and
       (5) by amending paragraph (5) of subsection (a) to read as 
     follows:
       ``(5) Hospital care, or outpatient care for veterans in a 
     State (other than the Commonwealth of Puerto Rico) not 
     contiguous to the contiguous States.''.
       (6) in paragraph (6) of subsection (a), by striking out 
     ``to obviate the need for hospital admission''; and
       (7) in paragraph (7) of subsection (a), by striking out 
     ``1712(b)(1)(F)'' and inserting in lieu thereof 
     ``1715(b)(1)(F)''.
       (b) Section 1704 is repealed.
       (c) Section 1711 is amended by striking ``medical 
     services'' wherever it appears and inserting in lieu thereof 
     ``outpatient care''.
       (d) Section 1712A is amended--
       (1) in subsection (b)(1), by striking ``1712(a)(5)(B)'' and 
     inserting in lieu thereof ``1710'';
       (2) in subsection (b)(2), by striking ``1701(6)(B)'' and 
     inserting in lieu thereof ``1712C''; and
       (3) in subsection (e)(1), by striking ``sections 
     1712(a)(1)(B) and'' and inserting in lieu thereof 
     ``section'';
       (e) Section 1713 is amended by striking out ``medical 
     care'' each place it appears and inserting in lieu thereof 
     ``health care''.
       (f) Section 1718 is amended in subsection (e), by striking 
     out ``1712(i) of this title'' and inserting ``1710(c)'' in 
     lieu thereof.
       (g) Section 1720A is amended--
       (1) by striking out ``hospital, nursing home, and 
     domiciliary care and medical rehabilitative services'' and 
     inserting in lieu thereof ``health care''; and
       (2) by striking out ``1995'' and inserting in lieu thereof 
     ``1997''.
       (h) Section 1720B is repealed.
       (i) Section 1720D is redesignated as section 1720B.
       (j) Section 1724 is amended--
       (1) by amending the heading to read as follows:

     ``Sec. 1724. Health care abroad'';

     and
       (2) by striking out ``medical services'' wherever it 
     appears and inserting in lieu thereof ``outpatient care''.
       (k) Section 1727 is amended by striking out ``medical 
     services'' and inserting in lieu thereof ``outpatient care''.
       (l) Section 1728 is amended by striking out ``medical 
     services'' and inserting in lieu thereof ``outpatient care''.
       (m) Section 1734 is amended--
       (1) by amending the heading to read as follows:

     ``Sec. 1734. Health care in the United States'';

     and
       (2) by striking ``hospital and nursing home care and 
     medical services'' and inserting in lieu thereof ``health 
     care''.
       (n) The table of sections for subchapters I, II, and III 
     and IV at the beginning of chapter 17 is amended to read as 
     follows:

                        ``Subchapter I--General

``Sec.
``1701. Definitions.
``1702. Presumption relating to psychosis.
``1703. Contracts for hospital and outpatient care.

   ``Subchapter II--Hospital, Nursing Home, or Domiciliary Care and 
                           Medical Treatment

       ``1710. Eligibility for health care.
       ``1711. Care during examinations and in emergencies.
       ``1712. Treatment for veterans exposed to certain toxic 
           substances or hazards.
       ``1712A. Eligibility for readjustment counseling and 
           related mental health services.
       ``1712B. Counseling for former prisoners of war.
       ``1712C. Mental health services and bereavement counseling 
           for family members.
       ``1713. Medical care for survivors and dependents of 
           certain veterans.
       ``1714. Prosthetic devices and aids for the blind and 
           hearing impaired.
       ``1715. Dental care.
       ``1716. Hospital care by other agencies of the United 
           States.
       ``1717. Home improvements and structural alterations.
       ``1718. Therapeutic and rehabilitative activities.
       ``1719. Medications prescribed by non-VA physicians; 
           immunization programs.
       ``1720. Transfers for nursing home care.
       ``1720A. Treatment and rehabilitation for alcohol or drug 
           dependence or abuse disabilities.
       ``1720B. Counseling and treatment for sexual trauma.
       ``1720C. Noninstitutional alternatives to nursing home 
           care: pilot program.
       ``1720D. Authorization of Appropriations.

  ``Subchapter III--Miscellaneous Provisions Relating to Hospital and 
          Nursing Home Care and Medical Treatment of Veterans

       ``1721. Power to make rules and regulations.
       ``1722. Income thresholds.
       ``1722A. Copayment for medications.
       ``1723. Furnishing of clothing.
       ``1724. Hospital care, medical services, and nursing home 
           care abroad.
       ``1726. Reimbursement for loss of personal effects by 
           natural disaster.
       ``1727. Persons eligible under prior law.
       ``1728. Reimbursement of certain medical expenses.
       ``1729. Recovery by the United States of the cost of 
           certain care and services.
       ``1730. Community residential care.

 ``Subchapter IV--Hospital Care and Medical Treatment for Veterans in 
                    the Republic of the Philippines

       ``1731. Assistance to the Republic of the Philippines.
       ``1732. Contracts and grants to provide for the care and 
           treatment of United States veterans by the Veterans 
           Memorial Medical Center.
       ``1733. Supervision of program by the President.
       ``1734. Health care in the United States.
       ``1735. Definitions.''.

          Part B--General Program Administration Improvements

     SEC. 120. MEANS TEST REFORM.

       (a) Section 1722 is amended to read as follows:

     Sec. 1722. Income thresholds

       ``(a)(1) For purposes of section 1710(c)(1)(D), section 
     1710(c)(1)(E) and section 1710(e), the 

[[Page S 15352]]
     income threshold for the calendar year beginning on January 1, 1995, 
     is--
       ``(A) $20,469 in case of a veteran with no dependents; and
       ``(B) $24,585 in the case of a veteran with one dependent; 
     plus $1,368 for each additional dependent.
       ``(2) Effective on January 1, of each year after 1995, the 
     amounts specified in paragraph (1) shall be increased by the 
     percentage by which the maximum rates of pension were 
     increased under section 5312(a) during the preceding calendar 
     year.
       ``(b) For purposes of this chapter, the term `attributable 
     income of a veteran' means the income of a veteran for the 
     previous year determined in the same manner as the manner in 
     which a determination is made of the total amount of income 
     by which the rate of pension for such veteran under section 
     1521 of this title would be reduced if such veteran were 
     eligible for pension under that section.
       ``(c) If a veteran has attributable income greater than the 
     applicable amount specified in subsection (a), but 
     projections of the veteran's income for the current year are 
     that it will be substantially below that amount, then to 
     avoid a hardship to the veteran, the Secretary may deem the 
     veteran to have an attributable income less than the 
     applicable amount specified in subsection (a).
       ``(d) For the purposes of section 1724(c) of this title, 
     the fact that a veteran is--
       ``(1) eligible to receive medical assistance under a State 
     plan approved under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.);
       ``(2) a veteran with a service-connected disability; or
       ``(3) in receipt of pension under any law administered by 
     the Secretary,
     ``shall be accepted as sufficient evidence of such veteran's 
     inability to defray necessary expenses.''.
       (b) Section 1722A(a)(3)(B) is amended by inserting 
     ``attributable'' before ``income''.

     SEC. 121. VA RETENTION OF FUNDS COLLECTED FROM THIRD PARTIES.

       (a) Section 1729(g) is amended--
       (1) in paragraph (3)(A) by striking ``1710(f) of this title 
     for hospital care or nursing home care, under section 1712(f) 
     of this title for medical services'' and inserting in lieu 
     thereof ``1710(e) of this title for health care''.
       (2) by amending paragraph (4) to read as follows:
       ``(4) Not later than January 1 if each year, there shall be 
     deposited into the Treasury as miscellaneous receipts an 
     amount equal to the amount of the unobligated balance 
     remaining in the Fund at the close of business on September 
     30, the preceding year--
       ``(A) minus any part of such balance that the Secretary 
     determines is necessary in order to enable the Secretary to 
     defray, during the fiscal year in which the deposit is made, 
     the expenses, payments, and costs described in paragraph (3); 
     and
       ``(B) minus twenty-five percent of that part of such 
     balance that exceeds the baseline in the President's Budget 
     for third party deposits in that fund for that fiscal 
     year, which shall be retained by VA and distributed to VA 
     health care facilities for use in improving the quality of 
     health care provided by those facilities.''.

                       TITLE II--BENEFIT PROGRAMS

                     Part A--Loan Guaranty Program

     SEC. 201. TERMINATION OF MANUFACTURED HOUSING LOAN PROGRAM.

       Section 3712 is amended--
       (1) by striking out subsection (l) in its entirety;
       (2) by redesignating subsection (m) as subsection (l); and
       (3) by inserting after subsection (l), as so redesignated, 
     the following new subsection:
       ``(m)(1) Except as provided in paragraph (2) of this 
     subsection, no loan closed after September 30, 1995, may be 
     guaranteed under this section.
       ``(2) Paragraph (1) of this subsection shall not apply to a 
     loan described in subsection (a)(1)(F) of this section.''.

     SEC. 202. LOAN FEES.

       (a) Section 3729(a)(2) is amended--
       (1) by striking out in subparagraph (A) ``or for any 
     purpose specified in section 3712 (other than section 
     3712(a)(1)(F)) of this title'';
       (2) by striking out in subparagraphs (B) and (C) ``(except 
     for a purchase referred to in section 3712(a) of this 
     title)'' each place it appears;
       (3) by inserting ``or'' at the end of clause (i) of 
     subparagraph (D);
       (4) by striking out clause (ii) of subparagraph (D);
       (5) by striking out in clause (iii) of subparagraph (D) 
     ``(other than a purchase referred to in section 3712 of this 
     title)''; and
       (6) by redesignating clause (iii) of subparagraph (D) as 
     clause (ii).
       (b) The amendments made by this section shall take effect 
     October 1, 1995.

     SEC. 203. CONTRACTING FOR PORTFOLIO LOAN SERVICES.

       (a) Subchapter III of chapter 37 is amended by inserting 
     after section 3735 the following new section:

     ``Sec. 3736. Portfolio loan servicing

       ``(a) Notwithstanding the provisions of any other law, the 
     Secretary is authorized to contract with a private entity for 
     the servicing of loans made or acquired by the Secretary 
     under this chapter. The contract may provide for the 
     contractor to retain, as compensation for the work performed 
     under such contract, a portion of the interest collected on 
     such loans. A contract under this subsection may be for a 
     term not in excess of 15 years.
       ``(b) For purposes of the Federal Credit Reform Act of 
     1990, the deduction from interest retained by a contractor as 
     authorized by subsection (a) of this section shall be deemed 
     to be a cost of a direct loan or the cost of a loan 
     guarantee, and not an administrative expense.''.
       (b) The table of sections at the beginning of such chapter 
     is amended by inserting below the item relating to section 
     3735 the following new item:

     ``3736. Portfolio loan servicing.''.

                       PART B--EDUCATION PROGRAMS

     SEC. 210. ELECTRONIC SIGNATURES ON DOCUMENTS CONCERNING 
                   EDUCATION BENEFITS FOR VETERANS.

       (a) Section 3674(a)(3) is amended by inserting ``(A)'' 
     before ``Each'' and by adding at the end the following new 
     subparagraph (B):
       ``(B) The Secretary may require that any report or 
     certification required by this subsection be submitted to the 
     Department electronically by such means and in such format as 
     the Secretary may prescribe, including a requirement for the 
     use of a digital signature or other individually identified 
     electronic designation of the reporting or certifying party 
     on the electronic reports and certifications submitted. Such 
     a digital signature or other electronic designation will be 
     deemed to be the original signature of the reporting or 
     certifying party.''.
       (b) Section 3680(g) amended--
       (1) by inserting ``(1)'' after the ``(g)'' at the 
     beginning; and
       (2) by adding at the end the following new paragraph:
       ``(2) The Secretary may require that any report or 
     certification required under this section be submitted to the 
     Department electronically by such means and in such format as 
     the Secretary may prescribe, including a requirement for the 
     use of a digital signature or other individually identified 
     electronic designation of the reporting or certifying party 
     on the electronic reports and certifications submitted. Such 
     a digital signature or other electronic designation will be 
     deemed to be the original signature of the reporting or 
     certifying party.''.
       (c) Section 3684 is amended by adding at the end the 
     following new subsection:
       ``(d) For purposes of this section, the Secretary may 
     require that any report or certification required by this 
     section is to be submitted to the Department electronically 
     by such means and in such format as the Secretary may 
     prescribe, including a requirement for the use of a digital 
     signature or other individually identified electronic 
     designation of the reporting or certifying party on the 
     electronic reports and certifications submitted. Such a 
     digital signature or other electronic designation will be 
     deemed to be the original signature of the reporting or 
     certifying party.''.
       (d) Section 5101 (a) is amended--
       (1) by inserting ``(1)'' after the ``(a)'' at the 
     beginning; and
       (2) by adding at the end the following new paragraph:
       ``(2) The secretary is authorized to provide that a claim 
     for education benefits under laws administered by the 
     Department may be submitted to the Department electronically 
     through an electronic terminal, telephone, computer or other 
     electronic means in such manner as the Secretary may 
     prescribe, including a requirement for the use of a digital 
     signature or other individually identified electronic 
     designation of the claimant on the electronic claim submitted 
     by the claimant. Such a digital signature or other electronic 
     designation will be deemed to be the individual claimant's 
     original signature.''.
       (e) Chapter 53 is amended--
       (1) by adding at the end the following new section:

     ``Sec. 5320. Verification of education benefits information

       ``(a) The Department may utilize data electronically 
     provided to the Department by any individual in initially 
     establishing or verifying eligibility or continued 
     eligibility of an individual for education benefits under 
     laws administered by the Department. The data will be in the 
     form prescribed by the Secretary.
       ``(b) Notwithstanding section 552a(o) and (p) of title 5, 
     the Secretary may suspend, terminate, or reduce payments 
     based on the data described in subsection (a) once the 
     Secretary (1) informs the individual of the data provided 
     electronically, (2) gives the individual an explanation of 
     the procedures to contest such data, and (3) gives notice of 
     the individual's right to appeal the decision in the same 
     manner as applies to other information and findings relating 
     to eligibility for or entitlement to the payment of such 
     benefits.''; and
       ``(2) by amending the table of sections for such chapter by 
     adding at the end the following new item:

     ``Sec. 5320. Verification of education benefits 
       information''.

     SEC. 211. ELECTRONIC FUNDS TRANSFER FOR EDUCATION BENEFITS 
                   PAYMENTS.

       Section 5120(d) is amended--
       (a) by striking out ``Notwithstanding'' and inserting in 
     lieu thereof ``(1) Except as provided in paragraph (2) of 
     this subsection, and notwithstanding''; and
       (b) by adding a the end thereof the following new 
     paragraph:
       ``(2)(A) Notwithstanding the provisions of section 
     3680(d)(4) of this title and subsection 

[[Page S 15353]]
     (a) of this section, the Secretary is authorized to require, pursuant 
     to an agreement with the Secretary of the Treasury under 
     which the Secretary certifies such benefits for payment, that 
     education benefits provided under laws administered by the 
     Department be paid through electronic funds transfer, to 
     include a program combining use of vouchers and federally 
     established electronic benefit transfer accounts or any other 
     electronic funds transfer program designated by the 
     Secretary.
       ``(B) For purpose of this paragraph, the term ``electronic 
     funds transfer'' means any transfer of funds, other than a 
     transaction originated by cash, check or similar paper 
     instrument, that is initiated through an electronic terminal, 
     telephone, computer, or magnetic tape, for the purpose of 
     ordering, instructing, or authorizing a financial institution 
     to debit or credit an account.''.

                      Section by Section Analysis


                        Section 101--Definitions

       Section 101 of the draft bill would amend 38 U.S.C. 
     Sec. 1701, which defines a number of terms that are important 
     for administering VA health care eligibility laws. The 
     definitions of several terms are revised to make them 
     simpler. In addition to revising definitions, the bill would 
     add definitions of the terms ``health care'' and 
     ``residential care'' to section 1701, and transfer 
     definitions of terms into section 1701. For example, the 
     definition of the term respite care is moved from section 
     1720B.

                       Definition of health care

       The term ``health care'' is at the heart of the reformed 
     eligibility system established by other provisions of the 
     draft bill. The definition of the term first states that it 
     means the most appropriate care and treatment of the patient, 
     furnished in the most appropriate setting. The definition 
     further states that the term ``health care'' includes all of 
     the generally accepted modes of health care that VA furnishes 
     to veterans. Thus, the term is defined as including hospital 
     care, nursing home care, domiciliary care, outpatient care, 
     rehabilitative care, home care, respite care, preventive 
     care, and dental care. The definition also states that health 
     care includes pharmaceuticals, supplies, equipment, devices, 
     appliances and other necessary materials. The intent of that 
     language is to include all of the different types of medical 
     equipment, prosthetic and orthotic devices, and other 
     supplies the Department now furnishes to veterans, many of 
     which are included in the current definition of the term 
     ``medical services.''

   Definition of hospital care, nursing home care and outpatient care

       Section 1701 would also include specific definitions of the 
     various terms used in the definition of health care. Included 
     are definitions of hospital care, nursing home care, and 
     outpatient care. Each of those three terms are defined simply 
     and it is intended that they carry the same meanings that are 
     commonly understood in the medical community.

                     Definition of domiciliary care

       A new definition of the term ``domiciliary care'' is added 
     to section 1701. It provides that such care is applicable 
     only to veterans with no adequate means of support. That 
     language is intended to continue in effect one of the 
     eligibility requirements for domiciliary care that is now 
     included in 38 U.S.C. Sec. 1710(b).

                   Definition of rehabilitative care

       The definition of the term ``rehabilitative care'' remains 
     unchanged from existing law.

                        Definition of home care

       The bill would add a definition of the term ``home care'' 
     to section 1701. The definition intentionally limits home 
     care to health services and does not include health-related 
     services such as homemaker or social support services. The 
     definition also includes language stating that the term does 
     not include care or services that any other person or entity 
     has a contractual or legal obligation to furnish. The purpose 
     of that language is to ensure that VA not be required to 
     furnish home care to a veteran who resides in a board and 
     care facility, a residential care facility, a nursing home, 
     or other institution where the institution has a legal or 
     contractual responsibility to provide the type of care 
     included in home care.

                     Definition of residential care

       The bill would add a definition of the term residential 
     care to section 1701 referring to the new type of residential 
     care which would be authorized in section 1730. The 
     definition is patterned on the definition of the term 
     ``community residential-care'' that is now included in 38 
     U.S.C.Sec. 1730(f). The term would be defined as the 
     provision of room and board and such limited personal care 
     and supervision of residents as the Secretary determines, in 
     regulations, is needed for the health, safety and welfare of 
     residents. The definition of ``community residential-care'' 
     now in 1730 would be deleted. In lieu of that, the new 
     definition would provide that community residential care is 
     simply residential care furnished in a non-VA facility.

       Definition of respite care and preventive health services

       Section 101 would add a definition of the term ``respite 
     care'' to section 1701 that is essentially the same as the 
     definition of that term now included in 38 U.S.C. Sec. 1720B. 
     Section 101 would also revise the definition of preventive 
     health services to make it somewhat shorter and more concise 
     then the existing definition.


               Section 102--Basic Health Care Eligibility

       Section 102 of the draft bill would completely revise 38 
     U.S.C. Sec. 1710. The revised section 1710 would become the 
     basic eligibility provision for most of the conventional 
     health care benefits VA furnishes, including hospital, 
     nursing home, domiciliary, and outpatient care.

                    Authority to furnish health care

       Subsection (a) of the revised section 1710 would provide 
     that the Secretary ``shall'' furnish certain veterans with 
     needed health care, subject to specified conditions and 
     limitations, and ``may'' furnish such care to other veterans. 
     Those veterans to whom the Secretary ``shall'' furnish care, 
     those with so-called mandatory eligibility, would generally 
     be the same as those who currently have mandatory eligibility 
     for VA hospital care under the current 38 U.S.C. 
     Sec. 1710(a)(1). Those veterans are commonly referred to as 
     category A veterans, and include veterans having service-
     connected disabilities, former prisoners of war, World War I 
     veterans, and nonservice-connected veterans with incomes 
     below the statutorily established income threshold commonly 
     referred to as the means test threshold. Subsection (a)(1) of 
     the revised section 1710 specifically provides that the 
     requirement that the Secretary ``shall'' furnish health care 
     would not apply to dental care, nursing home care, home care, 
     respite care and domiciliary care. Those veterans to whom the 
     Secretary ``may'' furnish health care under the bill would 
     be the so-called category C veterans, generally those 
     having no service-connected disabilities who have incomes 
     above the means test income threshold.
       Because ``health care'' is defined in section 1701 as 
     including outpatient care, the revised section 1710 would 
     have the effect of completely eliminating the currently 
     existing requirements that VA furnish outpatient care to many 
     veterans only if it is needed as pre-hospital care, post-
     hospital care, or to obviate the need for hospital care. 
     Additionally, the changes would permit the Department to 
     furnish needed prosthetic and orthotic devices to any veteran 
     eligible for health care regardless of whether care is 
     furnished on an inpatient or outpatient basis.
       Subsection (a) of the revised section 1710 would also make 
     the provision of all health care subject to the 
     prioritization scheme described in subsection (d) of the 
     revised section 1710. Finally, subsection (a) would include 
     language explicitly providing that the Department shall 
     furnish care only to the extent that Congress appropriates 
     funds for that purpose in advance of delivering the care.

 Authority to furnish nursing home, domiciliary, respite and home care

       Subsection (b) of the revised section 1710 would provide 
     that the Secretary ``may'' furnish needed nursing home care, 
     home care, respite care, and domiciliary care to any veteran, 
     subject to the limits of available resources, and subject to 
     the same priority scheme described in subsection (d). Under 
     current law, all veterans have so-called discretionary 
     eligibility for nursing home care, and that is unchanged. 
     However, the language making the provision of nursing home, 
     domiciliary, respite and home care subject to available 
     resources, and subject to a priority scheme is new.

          Priorities for the purpose of furnishing health care

       Subsection (c) of the revised section 1710 would require 
     the Secretary to furnish health care benefits in accordance 
     with specified priorities. The provision would apply to 
     nearly all health-care benefits VA furnishes. Subsection (c) 
     would set up five priority groups. It further provides that 
     the Secretary could, by regulation, establish additional 
     priorities within each statutory priority group.

                           Priority group one

       The first priority group includes veterans with compensable 
     service-connected disabilities and former prisoners of war. 
     In addition, this group includes two smaller categories of 
     veterans, those discharged from the military for a service-
     related disability, but who for various reasons have not 
     sought service-connection, and those injured as a result of 
     care rendered by VA who are receiving benefits under 38 
     U.S.C. Sec. 1151.

                           Priority group two

       The second priority group includes veterans who receive 
     certain specialty care under one of the following four 
     special treatment authorities.
       1. Veterans receiving care for disabilities which may 
     possibly be associated with exposure to herbicides (such as 
     Agent Orange) in Vietnam, to radiation during nuclear weapons 
     testing, or as a result of the bombing of Hiroshima and 
     Nagasaki, Japan, or to environmental hazards or other toxins 
     in the Persian Gulf. A revised section 1712 would be the 
     basic authority for this care.
       2. Veterans receiving readjustment counseling. Section 
     1712A is the basic authority for this care.
       3. Veterans receiving increased pension or compensation 
     benefits because they are housebound or in need of aid and 
     attendance, who obtain medication from VA based on 
     prescriptions written by their private physicians. A revised 
     section 1719 would be the authority for the Department to 
     furnish the medication.
       4. Veterans receiving sexual trauma counseling. A revised 
     section 1720 would provide authority for this counseling.
     
[[Page S 15354]]


                          Priority group three

       The third priority group includes veterans with service-
     connected disabilities rated 0%, veterans of the Mexican 
     Border period, veterans of World War I, and veterans 
     receiving increased pension based on the need of regular aid 
     and attendance or by reason of being permanently housebound.

                          Priority group four

       The fourth priority group includes nonservice-connected 
     veterans with incomes below the current means test income 
     thresholds who also sign a declaration that their family net 
     worth does not exceed $50,000. The income thresholds are the 
     same as those now in effect, which are set forth in 38 U.S.C. 
     Sec. 1722. For calendar year 1995, they are $20,469 for a 
     single veteran, $24,585 for a veteran with one dependent, and 
     $1,368 for each additional dependent. If the veteran's net 
     worth exceeds $50,000, or the veteran refuses to sign a 
     declaration that it is less than that amount, the veteran is 
     included in priority group five described below. This fourth 
     priority group also includes veterans receiving screening, 
     counseling, and treatment for sickle cell anemia under 38 
     U.S.C. Sec. 1751.

                          Priority group five

       The fifth priority group includes nonservice-connected 
     veterans with incomes above the current means test income 
     thresholds. It also includes nonservice-connected veterans 
     with incomes below that level, but who have family net worth 
     in excess of $50,000, or who refuse to sign a declaration 
     that net worth is less than that amount.

              Care furnished by other Government entities

       Subsection (d) of the revised section 1710 is identical to 
     subsection (g) in the current section 1710, which provides 
     that VA is not obligated to provide care to veterans, such as 
     those who are incarcerated, to whom another governmental 
     entity is legally obligated to furnish care.

                               Copayments

       Subsection (e) of the revised section 1710 retains the 
     currently existing copayment structure with one substantive 
     change. Generally, veterans with incomes above the means test 
     income thresholds must agree to pay copayments amounting to 
     the Medicare deductible for each 90 days of care, and must 
     pay per diem amounts of $10 for each day of hospital care and 
     $5 for each day of nursing home care. The first substantive 
     change has to do with the outpatient care copayment. 
     Currently, veterans required to pay a copayment must pay 20% 
     of the average cost of an outpatient visit. Subsection (e) 
     would change that to provide that veterans pay 20% of the 
     estimated cost of the care. The change would be made to bring 
     copayments more in line with the actual cost of furnishing 
     care.

         Furnishing inpatients with dental and outpatient care

       Two provisions now included in section 1710(c) would be 
     deleted from the revised section 1710. The first provision 
     permits the Department to furnish dental care to inpatients 
     when needed to continue safe and effective treatment of other 
     disabilities for which the veteran is receiving care. That 
     provision has been simplified and included as subsection (a) 
     of the revised section 1715, which is the section concerned 
     with dental care. The second provision pertains to furnishing 
     outpatient care to inpatients. It has been deleted because it 
     would be unnecessary with the other changes in law the bill 
     would make it simplify eligibility for outpatient care.


   SECTION 103--AGENT ORANGE, RADIATION, AND PERSIAN GULF TREATMENT 
                              AUTHORITIES

       Section 103 would completely revise the current 38 U.S.C. 
     Sec. 1712, which now provides the Department with authority 
     to furnish outpatient care. Much of the language in the 
     current section 1712 is unnecessary given the changes in 
     basic eligibility for outpatient care and would be deleted. 
     Language in the current section that must be retained is 
     transferred to other sections in chapter 17. Finally, the so-
     called Agent Orange, Radiation, and Persian Gulf treatment 
     authorities would be moved from the current section 1710(e) 
     to the revised section 1712.

            Deletion of current outpatient eligibility rules

       Subsection (a) of the current section 1712 now includes all 
     of the eligibility requirements that pertain to outpatient 
     medical services. Under the proposed eligibility scheme, 
     encompassed in the revised section 1710, which would 
     authorize the Secretary to furnish all needed health care, 
     including outpatient care, there is no need for any of those 
     existing requirements. Accordingly, section 103 of the bill 
     would delete them. The rules in question are those which 
     provide that the Secretary shall furnish outpatient medical 
     services to certain veterans, and may furnish such services 
     to other veterans. They are also the requirements which limit 
     outpatient care in certain cases to that needed as pre-
     hospital care, post-hospital care, or to obviate the need for 
     hospital care. A priority scheme now set forth in subsection 
     (i) of section 1712 would also be deleted as unnecessary 
     because the proposed new section 1710 includes priority 
     provisions. Finally, the copayment provisions applicable to 
     VA's furnishing outpatient care, now set forth in subsection 
     (f) of section 1712, have been moved to the proposed new 
     subsection (e) of section 1710.

                  Outpatient dental care requirements

       The current section 1712 also includes eligibility 
     requirements which pertain to VA provision of outpatient 
     dental services. The draft bill would make no changes in 
     those requirements. However, the bill would move all of the 
     dental provisions now included in section 1712(b), (c), (d), 
     and (e) to a new section 1715, which would be entitled 
     ``Dental care.''

           Privately prescribed medications and immunizations

       Two other provisions included in the current section 1712 
     would also be retained, but moved to another section. First, 
     subsection (h) of the existing 1712 authorizes the Secretary 
     to fill prescriptions written by non-VA physicians for 
     veterans who are receiving increased pension or compensation 
     benefits because they are housebound or in need of aid and 
     attendance. Second, subsection (j) of the current section 
     1712 authorizes the Secretary to provide immunizations to 
     veterans as part of national immunization programs 
     administered by the Department of Health and Human Services. 
     The provisions of subsections (h) and (j) would be moved to a 
     new section 1719, which would be entitled ``Medications 
     prescribed by non-VA physicians; immunization programs.''

               Agent Orange, radiation, and Persian Gulf

       In place of other provisions deleted or transferred from 
     section 1712, the draft bill would insert in section 1712 
     provisions now set forth in subsection (e) of section 1710. 
     The provisions provide authority for VA to treat disabilities 
     which may possibly be associated with exposure to herbicides, 
     such as Agent Orange, during service in Vietnam, exposure to 
     ionizing radiation from nuclear testing or in post-War Japan, 
     and exposure to environmental hazards and contaminants in the 
     Persian Gulf area. The provisions would be transferred from 
     the current section 1710, generally without substantive legal 
     change.
       The revised section 1712 would, however, extend the time 
     period during which VA would have authority to provide the 
     treatment under that section. Under current law, the 
     Department's authority to provide care for those exposed to 
     herbicides in Vietnam or to ionizing radiation expires on 
     June 30, 1995. The draft bill would extend the herbicide 
     treatment authority through December 31, 1996, and would make 
     the ionizing radiation authority permanent. The Department 
     currently may provide care for those exposed to toxic 
     substances or environmental hazards in the Persian Gulf 
     through December 31, 1995. The draft bill would extend that 
     authority through September 30, 1997.


  SECTION 104--MENTAL HEALTH SERVICES AND BEREAVEMENT COUNSELING FOR 
                                FAMILIES

       Section 104 would add a new section 1712C entitled ``Mental 
     health services and bereavement counseling for 
     family members.'' Under current law, those services are 
     authorized via the definition of medical services. All of 
     the details and limits on the Department's furnishing the 
     services are presently contained in the definitions of 
     ``hospital care'' and ``medical services'' in the current 
     section 1701. Those definitions would be revised under 
     this bill, as discussed above, and written much more 
     simply. The content of the old definitions related to 
     mental health services and bereavement counseling for 
     family members is being transferred to the new section. 
     The counseling and other services would be furnished under 
     the new section 1712B, not as a form of health care under 
     the proposed new section 1710. However, there would be no 
     substantive change in existing authority to furnish the 
     services.


   Section 105--Special Authorities Related to Furnishing Prosthetic 
          Devices, and Aids for the Blind and Hearing Impaired

       Section 105 would amend 38 U.S.C. Sec. 1714, which 
     currently authorizes VA to furnish veterans who receive a 
     prosthetic appliance from VA with proper fitting of the 
     device, and training in it use. It further authorizes guide 
     dogs and devices and appliances for the blind. Section 105 
     would retain those existing provisions in section 1714, and 
     add other provisions, now located in other parts of chapter 
     17, to the section. The proposed new section 1714 would not 
     include any authority that does not already exist in chapter 
     17 of title 38.

                    Devices for the hearing impaired

       Section 1717(c) currently contains authority for VA to 
     furnish devices to assist veterans in overcoming the handicap 
     of deafness. Section 105 would transfer that language to 
     section 1714, where it more logically belongs.

                      Repair of prosthetic devices

       Section 1719 currently authorizes VA to repair or replace 
     prosthetic appliances and other medical equipment and devices 
     damaged by a fall or accident caused by a service-connected 
     disability. Section 105 would transfer that language to 
     section 1714.

                   Acquisition of prosthetic devices

       Language now included in 38 U.S.C. Sec. 1712(d), which 
     authorizes the Secretary to purchase or manufacture medical 
     equipment, prosthetic devices, and similar appliances, would 
     be transferred to section 1714.


                        Section 106--Dental Care

               Abolition of authority to furnish tobacco

       Section 106 would completely revise 38 U.S.C. Sec. 1715. 
     Currently, that section authorizes the Secretary to furnish 
     tobacco to veterans receiving hospital or domiciliary care. 
     Because it is Departmental policy that tobacco ordinarily not 
     be used in health-care facilities, section 106 would repeal 
     the authority to furnish tobacco. In its place, section 106 
     would place in section 1715 all of the 

[[Page S 15355]]
     eligibility requirements governing VA's provision of dental care, which 
     are now contained in subsection (c) of section 1710, and 
     subsections (b), (c), and (d) of section 1712.

                         Inpatient dental care

       Language currently in subsection (c) of section 1710 
     permits the Department to furnish dental care to inpatients 
     when needed to continue safe and effective treatment of other 
     disabilities for which the veteran is receiving care. That 
     provision has been simplified and included as subsection (a) 
     of the revised section 1715. Additionally, subsection (a) 
     would authorize the Secretary to furnish inpatients with any 
     other dental care for which they would be eligible to receive 
     on an outpatient basis.

                         Outpatient dental care

       Currently, VA has very detailed eligibility requirements 
     governing the provision of dental care on an outpatient 
     basis. Those requirements are set forth in subsections (b), 
     (c), and (d) of section 1712. Section 106 of this bill would 
     transfer the language now in section 1712 into section 1715, 
     virtually unchanged. No substantive legal changes in the 
     eligibility requirements for outpatient dental care are 
     intended.


       Section 107--Home Improvements and Structural Alterations

                    Deletion of home care provisions

       Section 107 would revise 38 U.S.C. Sec. 1717. Section 1717 
     currently authorizes the Department to furnish home health 
     services as a form of outpatient medical services. The 
     section further provides that the department may furnish 
     certain veterans home improvements and structural alterations 
     as a form of home health services. Section 107 would delete 
     the references to home health services. The language is 
     unnecessary because home health care is included in the new 
     definition of ``health care'' in the revised section 1701, 
     and such care would be furnished pursuant to section 1710. 
     However, the language regarding the furnishing of home 
     improvements and structural alterations would be retained in 
     section 1717.

              Home improvements and structural alterations

       The current language in section 1717 pertaining to home 
     improvements and structural alterations would be revised 
     somewhat so that it provides stand alone authority for the 
     improvements and alterations. The improvements and 
     alterations would not be a form of outpatient care, as is now 
     the case. Rather, section 1717 would be the authority for the 
     benefit. All of the existing limits on furnishing home 
     improvements and structural alteration would be retained 
     without change.

        Invalid lifts and therapeutic and rehabilitative devices

       Section 1717 currently contains authority for furnishing 
     certain veterans with invalid lifts and therapeutic and 
     rehabilitative devices. That authority is now 
     largely duplicative of other authority to furnish the 
     items as a form of medical services. Section 107 would 
     delete the authority as it is unnecessary. The definition 
     of ``health care'' in the revised section 1701 would 
     include the lifts and devices, and the Secretary's 
     authority to furnish health care would provide authority 
     to furnish such items.

                     Aids for the hearing impaired

       Section 1717(c) currently contains authority to furnish 
     devices to assist veterans in overcoming the handicap of 
     deafness. Section 105 of the draft bill would transfer that 
     authority without change to the proposed new section 1714.


    Section 108--Privately Prescribed Medications and Immunizations

       Section 108 would completely revise 38 U.S.C. Sec. 1719. 
     That section currently authorizes VA to repair or replace 
     prosthetic appliances and other medical equipment and devices 
     damaged by a fall or accident caused by a service-connected 
     disability. Section 105 of the draft bill would transfer that 
     authority to section 1714. In its place, section 108 would 
     insert two authorities now included in section 1712. The 
     first is authority for the Secretary to fill prescriptions 
     written by non-VA physicians for veterans who are receiving 
     increased pension or compensation benefits because they are 
     housebound or in need of aid and attendance. The second is 
     authority for the Secretary to provide immunizations to 
     veterans as part of national immunization programs 
     administered by the Department of Health and Human Services. 
     Those two authorities are currently included in subsections 
     (h) and (j) of section 1712.


                Section 109--Community Nursing Home Care

       Section 109 would amend 38 U.S.C. Sec. 1720, VA's authority 
     to contract for nursing home care. The changes would permit 
     VA to directly admit a nonservice-connected veteran to a 
     contract community nursing home. Under current law, only 
     service-connected veterans may be admitted directly. 
     Additionally, section 109 would delete obsolete language in 
     section 1720 which authorizes VA to furnish veterans with 
     adult day health care. That special authority to furnish 
     adult day health care expired in 1991. More importantly, the 
     definition of the term ``health care'' which would be added 
     to section 1701 would include adult day health care.


                     Section 110--Residential Care

       Section 110 would revise 38 U.S.C. Sec. 1730, which now 
     authorizes a community residential care program under which 
     VA refers veterans to board and care homes that the veterans 
     pay for with their own resources, often VA monetary benefits 
     such as compensation or pension. The draft bill would add a 
     new subsection (a) to section 1730 to authorize VA to furnish 
     such care to certain veterans. The authority to provide the 
     care would be completely discretionary, and quite limited. 
     The Secretary could authorize transfer of a veteran into such 
     care only if the veteran is actually receiving VA hospital 
     care in a VA facility, and the residential care is an 
     alternative to continued hospital care. Moreover, such a 
     transfer could be authorized only when the veteran has no 
     resources to pay for the services. During the period of time 
     that a veteran is receiving residential care, VA officials 
     would be undertaking efforts to assist the veteran in 
     securing alternative funding, such as public assistance, for 
     the care of the veteran. Care would be furnished on a 
     contract basis, and could continue for no more than 90 days 
     in any year.
       The amendments made by section 110 would not alter the 
     existing community residential care referral program. 
     Veterans who qualify for that program could not qualify for 
     the proposed new program under which VA pays for the care 
     because they would have alternative arrangements for payment 
     for the care. Thus, they could not meet the eligibility 
     requirements of the new program.


               Section 111--Sharing Health Care Resources

       Section 111 would amend three sections in chapter 81 of 
     title 38 that authorize VA's program to share health-care 
     resources. The provisions would expand VA's ability to obtain 
     health-care resources to serve the needs of veterans in the 
     changing health care environment. Changes to these sections 
     would facilitate the successful implementation of the 
     reformed eligibility system that other sections of the draft 
     bill would establish. The amendments would allow VA to more 
     easily acquire services for veterans, and would permit VA to 
     provide health care services to other providers in the 
     community when it would be beneficial to both parties, and 
     when there would be no diminution of services to veterans.

                        Basic sharing authority

       Subsection (b) of section 111 would amend 38 U.S.C. 
     Sec. 8153, VA's basic sharing authority, to allow VA to share 
     a wider array of resources with a wider array of other care 
     providers than is now the case. It would delete language in 
     that section which lists the different types of providers 
     with whom the Department may share, and in lieu thereof, 
     would authorize sharing with ``health care providers.'' It 
     would also allow VA to share any ``health care resource.''

                              Definitions

       Section 111(c) would add to 38 U.S.C. Sec. 8152, a 
     definition of the term ``health-care providers'' which would 
     include insurers, health care plans, and any organization, 
     entity, or individual that furnishes health care resources. 
     VA currently lacks authority to share with insurers and with 
     individuals such as physicians or other solo providers. It 
     would also add a definition of ``health-care resources.'' The 
     term would be defined to include health care as defined in 
     section 1701, as well as any other health-care service, and 
     any other health-care support or administrative resource. 
     Under existing law VA is limited to sharing ``specialized 
     medical resources.''
       Finally, section 111(a) would amend 38 U.S.C. Sec. 8151, 
     which states the purpose of VA's sharing program, so that 
     it conforms with the changes which would be made by 
     subsections (b) and (c).


              Section 112--Authorization of Appropriations

       Section 112 would add a new section 1720D to subchapter II 
     of chapter 17 of title 38, United States Code, authorizing 
     appropriations of such sums as are necessary to carry out the 
     subchapter.


                   Section 113--Conforming Amendments

       Section 113 would amend fourteen different sections in 
     chapter 17 to make conforming changes needed as a result of 
     other amendments made by the bill. The section would repeal 
     two currently existing sections. Section 1720B, which 
     authorizes respite care, would be repealed. Respite care 
     would be provided as a form of health care. The bill would 
     also repeal section 1704, which requires VA to submit an 
     annual report on the provision of preventive health services. 
     Finally, the current section 1720D, which authorizes a sexual 
     trauma counseling program, would be redesignated as section 
     1720B.


                     Section 120--Means Test Reform

       Section 120 would amend 38 U.S.C. Sec. 1722 to simplify 
     administration of VA's health care benefits ``means test.'' 
     VA uses the means test to determine both a veteran's priority 
     for receiving VA health care and whether a veteran must agree 
     to pay certain copayments in exchange for care.

                           Income thresholds

       The draft bill would first amend subsection (a) of section 
     1722. It would abolish use of the term ``unable to defray the 
     expenses of necessary care.'' The subsection would simply 
     state that for purposes of the eligibility provisions and 
     priority provisions of section 1710, certain income 
     thresholds shall apply. The thresholds would be unchanged 
     from those currently in effect for distinguishing between 
     category A (higher priority veterans) and category C (lower 
     priority veterans) veterans. As under existing law, the 
     thresholds would be increased each year by the 

[[Page S 15356]]
     same percentage that rates of pension are increased.

                               Net worth

       Section 120 of the bill would strike language in the 
     currently existing section 1722(d) which provides for 
     consideration of net worth in making the determination of 
     whether a veteran is unable to defray the cost of care. That 
     language is unnecessary due to language included in the 
     proposed new section 1710(c)(1)(D), and its elimination will 
     make administration of the means test much easier and less 
     costly. The language in section 1710(c)(1)(D) would provide 
     that a nonservice-connected veteran eligible for health care 
     on the basis of low income must sign a declaration that 
     family net worth does not exceed $50,000. If the veteran does 
     not sign such a declaration, that veteran would have lower 
     priority, and would be required to make copayments. The 
     $50,000 figure is used because that is the figure VA now uses 
     under the existing net worth test to trigger a review of a 
     veterans net worth to determine whether a part of net worth 
     should be used to help defray the costs of care.


          Section 121--VA Retention of Third Party Collections

                        Third party collections

       Section 121 would amend 38 U.S.C. Sec. 1729, the section 
     which allows VA to recover the cost of care it provides to 
     veterans from third parties, particularly insurance 
     companies. Under current law, VA returns to the Treasury all 
     amounts that it collects from third parties, less the costs 
     of collection. Each year, the President's Budget anticipates 
     that VA will collect a certain amount, referred to as the 
     baseline. As an incentive to collect even more, section 121 
     would amend subsection (g) of section 1729 to permit VA to 
     retain 25 percent of the amounts it collects over and above 
     the baseline amount. The provision further provides that VA 
     must use the additional amounts it would retain for improving 
     the quality of health care furnished by VA facilities.


             section 201--manufactured housing loan program

       Section 201 would terminate VA's authority to guarantee a 
     loan for the purchase of a manufactured home. Any such loan 
     closed after September 30, 1995, would not be eligible for 
     guaranty. An exception would be made for a loan to refinance 
     an existing VA guaranteed manufactured loan with a new loan 
     at a lower interest rate. Under existing law, which remains 
     unchanged a veteran may not receive cash under an interest 
     rate reduction refinancing loan.
       Section 201 would also repeal the requirement that the 
     Secretary's annual report to the Congress contain information 
     about VA manufactured home loans, and make other technical 
     and conforming amendments.


                         section 202--loan fees

       Section 202 would make technical and conforming amendments, 
     consistent with the termination of the manufactured housing 
     loan program as proposed by section 201 of this bill, to 
     Section 3729 of title 38, United States Code, relating to the 
     fee veterans and other borrowers and assumers pay to VA for 
     housing loans. No change would be made in the amount of 
     existing fees.
       These amendments would take effect October 1, 1995.


          section 203--contracting for portfolio loan services

       Section 203(a) would add a new section 3736 to title 38, 
     United States Code, which would authorize VA to contract with 
     a private firm to service VA portfolio loans. The term 
     ``portfolio loans'' includes loans made by VA e.g., in 
     connection with the sale of VA acquired properties, known as 
     ``vendee loans,'' and direct loans to Native American 
     veterans. It also includes guaranteed loans of which VA took 
     an assignment, a procedure commonly referred to as 
     ``refunding.'' VA would permit the contractor to retain a 
     portion of the interest collected on the loans as payment for 
     services rendered. This would permit VA to have the contract 
     bid for ``basis points'' in a manner similar to servicing 
     contracts used in the private sector.
       VA would be permitted to let a servicing contract for up to 
     15 years. Current Federal contract law generally limits 
     contracts to a 5-year term.
       This section would also provide that, for budgeting 
     purposes under the Federal Credit Reform Act of 1990, the 
     cost of a servicing contract authorized by this section would 
     be treated as a cost of the loan or loan guaranty, and not as 
     an administrative expense.
       Section 203(b) would make a conforming amendment to the 
     table of sections for chapter 37 of title 38.


       section 210--electronic signatures for education benefits

       Section 210 would amend several provisions of title 38, 
     United States Code, to clarify that claimants for VA 
     education benefits, State approving agencies, and schools may 
     transmit documents with their signature electronically to 
     permit VA to award benefits. These electronic documents, 
     submitted in the regular course of business, would be 
     accepted as the legal equivalent of a signed, written, paper 
     document. As such, they could be used to make benefits 
     determinations in an expedited manner with reduced errors.


 section 211--electronic funds transfer for education benefits payments

       Section 211 would amend section 5120(d) of title 38, United 
     States Code, to authorize VA to implement, under an agreement 
     with the Treasury, a system requiring that payment of 
     educational assistance allowances under all education 
     benefits programs administered by VA would be made by 
     electronic funds transfer. The amendment defines ``electronic 
     funds transfer'' (EFT) to include the various electronic 
     systems and devices prevalent today for such purposes, as 
     distinguished from transactions originated by cash, check, or 
     other paper instrument.
       VA would be required to develop a plan for phasing in the 
     conversion from a paper instrument to an EFT system for 
     education benefits payments, and would be given discretionary 
     authority to prescribe regulations needed to implement the 
     EFT system. Such regulations may include authority to modify 
     any provision of the EFT system designated by the Secretary, 
     as well as to waive or modify the system's application in 
     circumstances where it would be impractical.
                                                                    ____



                                Secretary of Veterans Affairs,

                               Washington, DC, September 12, 1995.
     Hon. Al Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: We are transmitting a draft bill, ``To 
     amend title 38, United States Code, and various other 
     statutes, to reform eligibility for Department of Veterans 
     Affairs health-care benefits, improve the operation of the 
     Department, and improve the processes and procedures the 
     Department uses to administer various benefit programs for 
     veterans; and for other purposes.''
       In 1993, the Administration, led by Vice President Gore, 
     launched its effort to improve Federal Government operations 
     through the ``reinventing government'' program. This year, in 
     phase II of that effort, VA examined its basic missions, 
     reviewed its major programs, and developed several exciting 
     initiatives to enable the Department to better serve 
     veterans, and serve them in a cost-effective manner. Several 
     of those initiatives can be implemented only through 
     enactment of legislation. This draft bill would provide the 
     needed changes in law.


                     health-care eligibility reform

       Perhaps the single most important need in the VA health-
     care system at this time is the need for reform of the 
     eligibility system. Currently, the process required for a 
     veteran to receive care from VA can be confusing and 
     frustrating. Complicated and irrational statutory eligibility 
     rules sometimes cause absurd outcomes. Existing law 
     discourages VA from effectively managing care, and often 
     promotes the use of expensive and unnecessary inpatient care.
       VA designed the eligibility reform proposal in the draft 
     bill to achieve several important objectives.
       First, the eligibility system should be one that both the 
     persons seeking care and those providing the care are able to 
     understand.
       Second, the eligibility system should ensure that VA is 
     able to furnish patients the most appropriate care and 
     treatment that is medically needed, cost effectively and in 
     the most appropriate setting.
       Third, veterans should retain eligibility for those 
     benefits they are now eligible to receive.
       Fourth, VA management should gain the flexibility needed to 
     manage the system effectively.
       Fifth, the proposal should be budget neutral.
       Sixth, the proposal should not create any new and 
     unnecessary bureaucracy.
       The draft bill would provide that the Department ``shall'' 
     furnish a specified core group of veterans with needed 
     ``health care.'' This would include hospital care, outpatient 
     care, disease prevention services, pharmaceuticals, medical 
     equipment, and prosthetic equipment and devices. Persons in 
     the core group would generally be those veterans now commonly 
     referred to as category A veterans: those with service-
     connected disabilities, former prisoners of war, World War I 
     veterans, and nonservice-connected veterans with incomes 
     below the current means test income threshold. The Department 
     would retain authority to furnish the core group veterans 
     with other types of health care, including nursing home care. 
     VA would also retain authority to furnish all health care to 
     veterans not included in the core group. The Department would 
     furnish all care in accordance with five priority groups set 
     forth in the bill. Finally, the bill would continue in place 
     the current copayment structure, and would retain, 
     essentially unchanged, the so-called Agent Orange, Radiation, 
     and Persian Gulf treatment authorities.
       The most significant change in the proposal would be the 
     complete elimination of the complicated and archaic 
     eligibility rules governing the provision of outpatient care. 
     The bill would also permit wider use of cost-effective 
     preventive health measures, and use of residential care when 
     that would alleviate the need for hospital care. These key 
     features will allow VA to provide the right care at the right 
     place and the right time for the right price.


                          Health-Care Sharing

       Today's competitive health-care environment demands that 
     all types of service providers cooperate and work together 
     for each to survive. The VA health-care system is an integral 
     part of the larger health-care industry and must be able to 
     work with partners in both the private and public sectors. 
     However, current law imposes undue limitations on VA's 
     ability to obtain needed health-care 

[[Page S 15357]]
     resources to serve veterans. Similarly, VA is unable to fully share, 
     even when it is mutually advantageous to do so, its resources 
     with others in the community who could benefit from the 
     Department's expertise. To remedy that situation, the draft 
     bill includes provisions to expand VA's ability to share 
     resources with other community health-care providers.
       The draft bill would amend existing law to permit the 
     Department to share all types of health-care resources with 
     all types of health-care providers in the community. It would 
     define ``health care resource'' to include conventional 
     health-care services such as hospital care, nursing home 
     care, outpatient care, rehabilitative care, and preventive 
     care. Additionally, it would include other health-care 
     support or administrative services essential to the operation 
     of a health-care system. The draft bill would also more 
     broadly define the term ``health care provider'' to include 
     insurers, health-care plans, and health-care management 
     organizations, as well as individuals such as physicians or 
     other solo providers. The expanded sharing authority is 
     essential for the reform of the entire VA health-care system.


             VA Retention of Increased Medical Collections

       Current law permits the VA to recover the cost of care it 
     provides to veterans from third parties, particularly 
     insurance companies. Funds collected are turned over to the 
     Treasury. The Department currently does an excellent job of 
     collecting these funds. However, as an additional incentive 
     to VA medical centers to increase collections, the draft bill 
     would authorize the Department to retain a portion of amounts 
     it collects over the amounts anticipated in the budget each 
     year. Providing an incentive such as this is a classic 
     example of how to ``reinvent'' Government.


             Termination of Manufactured Home Loan Program

       The draft bill would repeal the authority for VA to 
     guarantee loans to purchase manufactured homes. The number of 
     veterans obtaining manufactured home loans has declined 
     significantly over the years, from a high of 13,502 in fiscal 
     Year 1983 to only 24 in Fiscal Year 1994. Manufactured home 
     loan foreclosure rates are significantly higher than those 
     for site-built homes. The cumulative foreclosure rate for 
     manufactured home loans is 38.7 percent compared to 5.58 
     percent for site-built homes. The high foreclosure rates in 
     the manufactured home loan program have adversely affected 
     the financial solvency of the loan guaranty program, and 
     resulted in substantial debts being established against 
     veterans whose loans were liquidated and homes repossessed. 
     Due to this low volume, there is virtually no lender interest 
     in using the VA manufactured home loan program. However, VA 
     is required to maintain expertise in consumer installment 
     finance, which differs in many respect from real estate 
     finance.
       This provision will not affect the ability of veterans to 
     obtain VA guaranteed loans to purchase, construct, or improve 
     conventionally-built homes, or refinance existing liens on 
     such homes.


                Contracting for Portfolio Loan Servicing

       The draft bill would permit VA to contract for servicing of 
     its loan portfolio in a manner which is consistent with 
     private sector loan servicing. VA believes it is in the best 
     interests of the Government to contract out this function. 
     Several provisions of existing law, however, preclude VA 
     from privatizing this function in the most effective 
     manner.
       Current law limits Federal contracts to a term of 5 years. 
     This is too short a term for the servicing of loans that bear 
     a 30-year maturity. The draft bill would permit the servicing 
     contract to have a 15-year term. Second, current law requires 
     a contract servicer to remit immediately to the Government 
     all money collected. The bill would allow the contractor to 
     retain a portion of the loan payments collected as its fee as 
     is customary in the private sector. Finally, the draft bill 
     would clarify the budget treatment of the cost of this 
     contract under the Federal Credit Reform Act of 1990 as a 
     cost of the loan rather than as administrative overhead, 
     which more accurately reflects private sector accounting 
     practices.


    electronic signatures and electronic funds transfers--education 
                                benefits

       In the modern world, information is commonly transmitted 
     electronically. Yet statutes are often slow to catch up with 
     technology. This draft bill would amend various laws to 
     modernize administration of VA's education benefit programs. 
     The bill would clarify that claimants for VA education 
     benefits, State approving agencies, and schools may transmit 
     documents with their signature electronically to permit VA to 
     award benefits. The bill would also authorize VA to 
     implement, under an agreement with the Treasury, a system 
     requiring that payment of educational assistance allowances 
     under all education benefits programs administered by VA 
     would be made by electronic funds transfer.
       The Omnibus Budget Reconciliation Act (OBRA) requires that 
     all revenue and direct spending legislation meet a pay-as-
     you-go requirement. That is, no such bill should result in an 
     increase in the deficit; and if it does, it will trigger a 
     sequester if it is not fully offset. Outlay savings in this 
     bill would equal its increase in direct spending, resulting 
     in a net zero PAYGO effect. Thus, considered alone, this bill 
     meets the pay-as-you-go requirement of OBRA.
       We are advised by the Office of Management and Budget that 
     there is no objection to the transmittal of this draft bill 
     to the Congress and its enactment would be in accord with the 
     program of the President.
           Sincerely,
     Jesse Brown.

                          ____________________