[Congressional Record Volume 144, Number 57 (Friday, May 8, 1998)]
[Senate]
[Pages S4558-S4559]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Mr. Rockefeller, Mr. Specter, Mr. 
        Hollings, Mr. Murkowski, Mr. Leahy, and Mr. Hagel):
  S. 2054. A bill to amend title XVIII of the Social Security Act to 
require the Secretary of Veterans Affairs and the Secretary of Health 
and Human Services to carry out a model project to provide the 
Department of Veterans Affairs with medicare reimbursement for medicare 
health-care services provided to certain medicare-eligible veterans; to 
the Committee on Finance.


     the veterans' equality for treatment and services act of 1998

  Mr. JEFFORDS. Mr. President, I am proud to rise with my colleagues, 
Senator Rockefeller, Senator Specter, Senator Hollings, Senator 
Murkowski, and my friend from Vermont, Senator Leahy, to introduce the 
Veterans' Equality for Treatment and Services Act, or VETS Act, of 
1998. This bill will give our Nation's veterans greater freedom to 
choose where they receive their medical care.
  Also known as ``Medicare Subvention,'' the VETS Act will authorize 
the Department of Veterans Affairs to set up 12 pilot sites around the 
country for Medicare-eligible veterans who are either barred from 
getting care at VA facilities, or cannot afford costly VA copayments.
  As members of the Senate Finance Committee, Senator Rockefeller and I 
worked successfully last summer to pass this exact piece of legislation 
through the Senate Finance Committee. We were disappointed that before 
final passage of the 1997 Balanced Budget Act our legislation was 
replaced with a requirement to simply study the matter and issue a 
report.
  Well, we have studied the issue and it is now time to act. The 
Veterans Health Administration under the able leadership of Ken Kizer 
has devised Medicare Subvention payment methods and I have recently 
spoken with Secretary Togo West about our mutual commitment to the 
passage of Medicare Subvention in this Congress.
  Under current law, the VA will not generally treat a non-service 
connected Medicare-eligible veteran because they have no way to recover 
the full cost of doing so. Under the VETS Act, this same veteran could 
go to their VA for care and Medicare would reimbursement the VA at the 
normal Medicare rate. Total Medicare reimbursements

[[Page S4559]]

would be limited to $50 million annually. The reimbursement level would 
be reduced if the VA treats fewer Medicare eligible veterans than in 
the prior fiscal year. The General Accounting Office would also monitor 
the operation of the sites and report on any increase in costs to 
Medicare. If the Demonstration Project increases Medicare's costs, the 
Veterans Affairs would reimburse Medicare for any increased costs and 
take action to suspend or terminate the program. Therefore, numerous 
safeguards and limitations in the bill ensure that Medicare Subvention 
does not drain the Medicare Trust Fund.
  Mr. President, we should give our veterans the ability to make the 
choice of where they will receive their medical care. Although last 
year's enactment of the Department of Defense Medicare Subvention 
program alleviated what veterans call a ``lockout'' from the military 
health care system, we need to finish the job by allowing all veterans 
access to the VA health care facility of their choice.
  In closing, the Veterans' Service Organizations strongly support the 
VETS Act. I look forward to working with them, Secretary West and the 
administration, and my colleagues here in the Senate and in the House 
to get this legislation signed into law this year.
 Mr. ROCKEFELLER. Mr. President, I am pleased to offer my 
support to the Veterans' Equality for Treatment and Services Act of 
1998. This bill will authorize a demonstration project to allow VA to 
bill Medicare for health care services provided to certain dual 
beneficiaries. The legislation is known as VA subvention, which is a 
concept that has been discussed over the years by those of us in 
Congress, by veterans service organizations, and by advisory bodies 
studying the VA health care system. I join my colleagues Senators 
Jeffords, Hollings, and Specter in this initiative.
  Due to budget constraints, many VA hospitals and clinics have been 
forced to turn away middle income, Medicare-eligible veterans who seek 
VA care. To truly understand the need for VA subvention, I ask my 
colleagues to couple these difficulties in accessing the system, with 
VA's frozen FY 99 budget. The frozen medical care budget obviously 
cannot cover even salary adjustments required by law, let alone allow 
for any growth and expansion within the VA health care system.
  For veterans, enactment of the Veterans Equality for Treatment and 
Services Act of 1998 would mean the infusion of new revenue and thus, 
improved access to care. For the Health Care Financing Administration 
(HCFA), a VA subvention demonstration project will provide the 
opportunity to assess the effects of coordination on improving 
efficiency, access, and quality of care for dual-eligible beneficiaries 
in a selected number of sites. Finally, Congress would receive the 
results of this feasibility study, which, once and for all, would give 
us the necessary data to make rational policy decisions in the future 
about Medicare and VA's involvement.
  The four VA medical centers in my own State of West Virginia spent 
$4.2 million caring for nearly a thousand Medicare-eligible veterans 
with middle incomes in 1995. Though this is telling information, I 
cannot provide my colleagues with the truly crucial piece of the story, 
that is, the number of these Medicare-eligible veterans who were turned 
away from the facilities created to serve them because of lack of 
resources. This demonstration project would encourage these eligible 
veterans who have not previously received care from the Huntington, 
Beckley, Martinsburg, and Clarksburg VAMCs to do so.
  The Veterans Equality for Treatment and Services Act is designed to 
be budget neutral. To that end, the VA would be required to maintain 
its current level of services to Medicare-eligible veterans already 
being served and would be effectively limited to reimbursement for 
additional care provided to new users. Payments from Medicare would be 
at a reduced rate and would exclude Disproportionate Share Hospital 
adjustments, Graduate Medical Education payments, and a large 
percentage of capital-related costs. In effect, the VA would be 
providing health care to Medicare-eligible veterans at a deeply 
discounted rate. HHS and VA would have the ability to adjust payment 
rates, or to shrink or terminate the program if Medicare's costs 
increase. In the event that these safeguards included in the proposal 
fail--an event which the VA has declared unlikely--this proposal caps 
all Medicare payments to the VA at $50 million.
  A HCFA representative testified before Congress and stated that this 
proposal will provide quality service to certain dual-eligible 
beneficiaries and, ``at the same time, preserve and protect the 
Medicare Trust Fund for all Americans.'' Although the VA subvention 
proposal is a small effort compared to the other recent changes made to 
the Medicare program and the changes to come, it is enormously 
important to our veterans and the health care system they depend upon.
  Last year, Senator Jeffords and I successfully offered a similar VA/
Medicare proposal at a Finance Committee markup because we saw it as a 
way to provide quality health care to veterans who are also eligible 
for Medicare, while at the same time preserving and protecting the 
Medicare Trust Fund. The Senate later passed the provision, which was 
included in the Balanced Budget Act of 1997. However, rather than 
enacting a modest VA demonstration project which would yield the 
information we need to make rational decisions in the future, budget 
conferees only approved a Department of Defense subvention plan. To put 
it bluntly, veterans got shortchanged.
  Since that time, VA and HCFA have entered into a Memorandum of 
Agreement which closely outlines the terms by which Medicare will pay 
for certain veterans receiving care at participating sites in the same 
manner as other fee-for-service providers and health maintenance 
organizations.
  I had hoped that the House of Representatives would have acted by now 
to approve a VA subvention proposal. Unfortunately, this has not 
occurred. Mr. President, veterans deserve the opportunity to come to VA 
facilities for their care and bring their Medicare coverage with them. 
I look forward to working with my colleagues on the Committees on 
Finance and Veterans' Affairs to make this long sought-after proposal a 
reality.
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