[Congressional Record Volume 145, Number 28 (Tuesday, February 23, 1999)]
[Senate]
[Pages S1806-S1809]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Mr. Specter, Mr. Rockefeller, Mr. 
        McCain, Mr. Thurmond, Mr. Murkowski, Mr. Campbell, Mr. Craig, 
        Mr. Hutchinson, Ms. Snowe, Mr. Daschle, Mr. Graham, Mr. Akaka, 
        Mr. Wellstone, Mrs. Murray, Mr. Hollings, Mr. Leahy, Mr.

[[Page S1807]]

        Cleland, Ms. Landrieu, and Mr. Johnson):
  S. 445. 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 demonstration project to provide the 
Department of Veterans Affairs with Medicare reimbursement for Medicare 
healthcare services provided to certain medicare-eligible veterans; to 
the Committee on the Judiciary.
  Mr. JEFFORDS. Mr. President, I am proud to introduce the Veterans' 
Equal Access to Medicare Act. This bill will give all our nations' 
veterans the freedom to choose where they receive their medical care. I 
am joined by the Chairman and Ranking Member of the Veterans' Affairs 
Committee, Senators Specter and Rockefeller, as well as Senators 
Thurmond, Murkowski, Campbell, Craig, Hutchinson, McCain, Snowe, 
Daschle, Graham, Akaka, Wellstone, Murray, Hollings, Cleland, Landrieu, 
Johnson, and my friend and colleague from Vermont, Senator Leahy.
  Known to some as ``Medicare Subvention,'' this legislation will 
authorize the Department of Veterans Affairs (VA) to set up 10 pilot 
sites around the country where Medicare-eligible Veterans could get 
Medicare-covered services at a Veterans hospital. The VA would then be 
reimbursed at a slightly reduced rate for provision of those services. 
Many Medicare-eligible veterans want to receive their care at a VA 
facility. This bill would allow certain veterans that option.
  My legislation would implement a pilot project that is eagerly sought 
by both the Veterans Administration and the Veterans Service 
Organizations. Veterans want the right to choose where they get their 
Medicare-covered services. Many of them would like to go to a Veterans 
Administration facility where they would feel more comfortable. We want 
to make that option possible for those who have given so much of 
themselves in service to their country.
  Our legislation starts with a 10-site demonstration project, limiting 
total Medicare reimbursements to $50 million annually. The VA is 
required to maintain its current level of effort, and provisions in the 
bill prevent it from shifting any current costs to the Medicare Trust 
Fund. In the event that the demonstration project in any way increased 
Medicare's costs, the VA would reimburse Medicare for these costs and 
suspend or terminate the program.

  An independent auditor would monitor the demonstration project 
annually and make reports to Congress on its findings. A final report 
to Congress three and a half years after commencement of the project 
from the Secretaries of Veterans Affairs and Health and Human Services 
would recommend whether to terminate, continue or expand the program.
  Almost two years ago, Senator Rockefeller and I successfully included 
similar legislation in the 1997 Balanced Budget Reconciliation Act. The 
full Senate endorsed this measure. Unfortunately, our amendment was 
later dropped in conference.
  But we feel strongly that now is the time to enact this legislation. 
Veterans want and deserve this option, and the VA should be allowed to 
become a Medicare provider. The Department of Health and Human Services 
and the Veterans Administration have already reached an agreement on 
how such a program would be implemented. It's time for us to give this 
project the green light.
  In 1997 the Department of Defense Medicare Subvention program 
alleviated what our country's military retirees call a ``lockout'' from 
the military health care system. This bill will finish the job by 
allowing all our veterans access to the best and most appropriate 
health care facility of their choosing. Our nation's veterans deserve 
no less.
  I look forward to working with the Senate Finance Committee, 
Secretary West and the Administration, the Veterans Service 
Organizations and my colleagues here and in the House to get this 
legislation signed into law this year.
  Mr. SPECTER. Mr. President, along with all the Members of the 
Committee on Veterans' Affairs, I am pleased to be an original 
cosponsor of a bill, which my colleague and friend, Senator Jim 
Jeffords, is introducing today. Mr. President, this is a most welcome 
bill. When enacted, it would direct that the Department of Veterans 
Affairs (VA) and the Department of Health and Human Services (HHS) 
enter into an agreement establishing ten geographically dispersed 
demonstration projects under which VA would provide health care 
services to certain Medicare-eligible veterans, who would not have 
otherwise received care in VA, in exchange for reimbursement from the 
Medicare trust fund. Thus, VA would be able to occupy the same basic 
position as other health care providers which furnish care to Medicare-
eligible patients: VA would be reimbursed by Medicare for providing 
this care, just as other providers may be reimbursed. The Department of 
Defense health care system is already authorized to provide such care 
for reimbursement on a demonstration project basis, and this authority 
should be extended to the VA as well.
  Under the terms of this bill, VA is authorized to establish up to ten 
subvention sites or health plans, including a site near a closed 
military base and one that provides care predominately to rural 
veterans. These sites and plans would provide health care services to 
Medicare-eligible veterans. Medicare would reimburse VA for such 
services--similar to the way the Federal Health Care Financing 
Administration pays other providers in the private sector when they 
furnish health care services to Medicare-eligible persons--but subject 
to certain cost-saving conditions. First, while fees paid to VA would 
be based on those paid to other providers, they would be reduced, 
across the board, by 5%. Second, reimbursements to VA would be further 
reduced for subsidies paid by Medicare to private facilities to cover 
their capital expense and medical education costs, and costs incurred 
by such providers, if any, in serving a disproportionate number of low-
income patients. Thus, Medicare would invariably save funds when care 
is provided to its patients by VA. In effect, VA would provide care to 
Medicare-eligible veterans at a discount to the Medicare trust fund.
  The Department of Health and Human Services (HHS) would not, however, 
be required to refer Medicare-eligible patients to VA under this bill. 
Eligible veterans would continue to be free to select their own health 
care providers. It would be up to the VA ``demonstration program'' 
sites to entice Medicare-eligible patients to VA by offering services 
and care which are more attractive than those provided by community-
care providers. One of the underlying purposes of this legislation is 
to test VA's contention that it can provide the kind of care which will 
attract veteran-patients who have other alternatives and, at the same 
time, provide care which is cost effective from the reimburser's, and 
VA's, viewpoints. Another purpose of the legislation will be to test 
the hypothesis that VA can meet the needs of its priority patients--
veterans with service-connected disabilities and veterans who are 
poor--while, simultaneously positioning itself to attract other 
veteran-patients who, due to Medicare eligibility, have the wherewithal 
to go elsewhere for care.
  Whether VA can succeed in providing cost-effective care which 
attracts patients without causing it to neglect its primary mission is 
the essence of the question that this bill is intended to answer. 
Indeed, time--and these demonstration projects--will tell whether 
providing such care to non-priority veterans for reimbursement will 
enhance VA's ability, due to an infusion of new Medicare funds, to 
provide better care to VA's mandated priority patients. Like the 
Department of Defense--which, as I have noted, already has authority 
from Congress to obtain reimbursement from Medicare--VA ought to have 
an opportunity to see if it can succeed in attracting and keeping 
patients by providing superior care. I can think of no better way to 
gauge VA quality than assessing the behavior of veterans who can ``vote 
with their feet.''
  I hope that these VA ``demonstration project'' sites will show that 
VA can, in fact, fully serve its priority patients--veterans with 
service-connected disabilities and veterans who are poor--while also 
serving veteran-patients who are able to bring Medicare funding to the 
VA system. Budgetary constraints have required that VA operate under a 
``flat-line'' medical

[[Page S1808]]

care appropriation for the past three years even as personnel and other 
inflationary costs continue to rise from year to year. VA has attempted 
to increase its collections from private sector, third-party insurers 
in order to supplement its funding base, but these collections have not 
been sufficient. I and my colleagues on the Committee on Veterans' 
Affairs believe that VA ought to have parallel authority to collect 
reimbursement from Medicare when it provides non-service-connected care 
to these patients. I ask that my colleagues give the Department this 
authority by approving this legislation.
  Mr. President, I compliment my colleague and friend from Vermont for 
his leadership on establishing this innovative and crucial legislation 
that I believe will be an essential tool in the future for VA's care of 
veterans, and I urge my colleagues to give this bill high priority 
attention for early passage this year.
  Mr. ROCKEFELLER. Mr. President, I am pleased to offer my support to 
the Veterans' Equal Access to Medicare Act. This bill will authorize a 
pilot project to allow VA to bill Medicare for health care services 
provided to certain dual beneficiaries. The legislation is known as VA 
Medicare subvention, which is a concept that has been discussed over 
the years by those of us in Congress, by veterans service 
organizations, and by virtually every advisory body that has studied 
the VA health care system. I join my colleague Senator Jeffords in this 
initiative.
  In the past, many VA hospitals and clinics have been forced to turn 
away middle income, Medicare-eligible veterans who sought VA care. 
These hospitals simply did not have the resources to care for them. 
Now, with eligibility reform, all enrolled veterans will have access to 
a uniform, comprehensive benefit package. Yet, resources for veterans' 
health care have not increased, and, in fact, have remained flatlined.
  During the first session of the 105th Congress, Senator Jeffords and 
I successfully pushed a similar proposal through the Senate Finance 
Committee and the full Senate. The basic tenets of the current bill 
remain the same. For veterans, enactment of the Veterans' Equal Access 
to Medicare Act 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 
nearly $5 million caring for Medicare-eligible veterans with middle 
incomes last year. Although 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 had been turned 
away over the years from the very 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 VA Medical 
Centers to do so, while providing Medicare with cost-savings 
opportunities.
  As in years past, the Veterans' Equal Access to Medicare 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. The Department of Health and Human Services 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 the last 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.'' I believe this.
  Although the VA subvention proposal is a small effort compared to the 
other recent changes made to the Medicare program and the changes yet 
to come, it is enormously important to our veterans and the health care 
system they depend upon. And regardless of any policy changes resulting 
from the Bipartisan Commission on the Future of Medicare, an excellent 
opportunity will remain to test the idea of Medicare subvention to VA.
  Over the last couple of years, we have tried to enact this proposal. 
Unfortunately, we have continually met resistance. Others who favor the 
subvention concept have even tried to turn this Medicare-cost saving 
proposal into a way to make sweeping policy changes about the delivery 
of VA health care. My goal this session is to overcome this resistance 
and enact this proposal without any extraneous measures.
  Truly, this VA/Medicare proposal is 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. With a signed 
Memorandum of Agreement between VA and HCFA, VA is ready to move ahead 
with this demonstration project. Finally, the Department of Defense 
Medicare Subvention test program--TRICARE Senior Prime--is progressing. 
Let us not delay VA any longer.
  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.
  Mr. McCAIN. Mr. President, I am proud to be an original co-sponsor of 
the Veterans' Equal Access to Medicare Act, which would authorize a 
demonstration of Medicare subvention within the Department of Veterans 
Affairs (VA) health care system. Many of us supported similar 
legislation sponsored by Senator Jeffords and incorporated into the 
Senate version of the 1997 Budget Resolution. Unfortunately, this 
measure was removed by the conferees to the bill and did not become 
law. In the 105th Congress, separate legislation authorizing a test of 
Medicare subvention for veterans passed the House of Representatives 
but stalled in the Senate. The intervening period has only made more 
apparent the benefits of allowing Medicare-eligible veterans to use 
their Medicare entitlement for care at local VA medical facilities.
  The Veterans' Equal Access to Medicare Act would establish a three-
year demonstration project at up to 10 sites around the country, 
including a site near a military medical facility closed under the Base 
Realignment and Closure process and a site in an area where the target 
population is predominantly rural. The VA would bill Medicare for 
Medicare-covered services provided to eligible veterans at these sites. 
Veterans' participation would be voluntary, and participants would make 
the same Medicare co-payments to the VA as at non-VA facilities.
  The legislation also contains important safeguards. The VA's 
Inspector General must certify the accounting and managerial 
capabilities of participating facilities; the VA must maintain its 
current level of effort to prevent cost shifting from the VA to the 
Medicare Trust Fund; the Comptroller General must audit the 
demonstration project annually to ensure that the Medicare Trust Fund 
does not incur any additional costs; and Medicare payments to the VA 
must be capped at $50 million annually. After three years, the 
Secretaries of Health and Human Services and Veterans Affairs would be 
required to submit recommendations to Congress on whether to extend or 
expand the project.
  By permitting the VA to collect and retain Medicare payments for 
health care provided to eligible veterans, our legislation would 
demonstrate subvention's ability to enhance access to the VA medical 
system for veterans

[[Page S1809]]

and channel critical non-appropriated funding into the VA network 
without raising costs to the Medicare Trust Fund. But don't take my 
word for it. The Fiscal Year 2000 Independent Budget jointly proposed 
by AMVETS, Disabled American Veterans, Paralyzed Veterans of America, 
and Veterans of Foreign Wars summarizes the virtues of VA Medicare 
subvention as follows:

       Medicare subvention will benefit veterans, taxpayers, and 
     ultimately VA. It would give veterans who currently do not 
     have access to VA health care the option of choosing the VA 
     system. VA believes it can deliver care to Medicare 
     beneficiaries at a discounted rate, which would save money 
     for the Medicare Trust Fund and stretch taxpayer dollars.

  In other words, this is win-win legislation for all concerned 
parties. Veterans receive better access to quality health care; the VA 
benefits from an inflow of non-appropriated funding; and VA provides 
more efficient care than other Medicare providers, saving scarce 
resources in this era of balanced budgets.
  Military retirees, but not veterans, currently qualify for an ongoing 
Medicare subvention demonstration project authorized by Congress in 
1997. In 1996, I had introduced legislation to authorize Medicare 
reimbursement to the Department of Defense for care provided to 
Medicare-eligible retirees and their families. Although the Senate 
included this provision in its version of the Fiscal Year 1997 Defense 
Appropriations bill, it was dropped in conference with the House.
  A year later, I supported the current Medicare subvention 
demonstration project for military retirees, which was included in the 
Balanced Budget Act of 1997. It is my hope that this project will 
demonstrate the potential for Medicare subvention to defray the 
escalating costs of the Military Health Service System, slow the 
depletion of the Medicare Trust Fund, and provide a more generous 
benefit to retired service members seeking the quality health care our 
government promised them.
  I do not need to remind my colleagues that we also promised medical 
benefits to veterans who served for fewer than 20 years and are not 
entitled to retirement benefits. That the Department of Veterans 
Affairs manages the largest health care network in the United States is 
testament to our continuing effort to make good on that promise. But 
the quantity of health care providers for veterans is not at issue 
today; rather, the quality of care is among the most pressing items on 
the agenda of America's veterans and their advocates.
  The veterans from whom I am honored to hear on my travels across the 
United States and in my Senate office frequently remind me that the VA 
health care system does not always offer them the quality of care they 
have clearly earned. Authorizing a test of Medicare subvention for 
veterans would hopefully demonstrate its ability to improve veterans' 
access to VA facilities and enhance the quality of service there.
  For this reason, the Department of Veterans Affairs supports a 
Medicare subvention demonstration. So do the major veterans' service 
organizations whose membership comprises the very individuals who would 
be affected by this legislation. I would also note that a majority of 
both houses of the 105th Congress voted in favor of legislation to 
authorize a Medicare subvention demonstration for veterans, even though 
the specific terms of that legislation differed somewhat.
  Mr. President, I wish to conclude my remarks by once again drawing 
from the wisdom of the veterans' service organizations' Independent 
Budget, which warns that Medicare subvention funding must be a 
supplement to, not a substitute for, an adequate VA appropriation. 
Veterans' care and benefits have been underfunded for years. 
Implementing a test of Medicare subvention for veterans is but one step 
in what must be a concerted campaign to honor the promises made to all 
who have answered their country's call through their military service. 
Let no one forget the sacrifices made by every veteran to secure our 
liberty in what has been, and remains, a very dangerous world.
  Mr. HUTCHINSON. Mr. President. I would like to express my strong 
support for Senator Jefford's bill, the Veterans' Equal Access to 
Medicare Act. I am proud to be an original cosponsor of this important 
legislation which would allow the VA to establish a Medicare subvention 
demonstration project. At ten sites across the country, Medicare would 
reimburse the VA for Medicare-covered services provided to eligible 
veterans.
  As a former member of the House Veterans' Affairs Committee, and a 
current member of the Senate Veterans' Affairs Committee, I have been 
and remain a strong advocate of the Medicare subvention concept. As a 
member of the House, I was cosponsor of Representative Joel Hefley's 
bill to create a demonstration project of Medicare subvention. During 
the 105th Congress, I was a cosponsor of Senator Jefford's bill, S. 
2054.
  The last four years of flat-lined Administration budgets have 
demonstrated the critical need for this legislation. To treat new 
veteran patients, the VA must be creative in finding new revenue 
sources. The perpetual volatility of the health care marketplace has 
made it more and more difficult for VA to collect under the standard 
fee for service arrangements. Currently, 85% of all insured Americans 
are under some form of managed care, and many of these plans do not 
recognize the VA as a network provider eligible for reimbursement. In 
order for the VA to be able to collect the millions that it needs to 
adequately serve veterans and to survive under the budget proposed by 
the Administration for FY 2000, there must be a new revenue source. 
Medicare subvention legislation would be a step in the right direction.
  Historically, higher income veterans have been locked out of the VA 
health care system because of a severe lack of resources. Under 
subvention legislation, the VA would potentially be able to open its 
doors to millions of veterans 65 years and older who want to choose VA 
as their primary care giver. Our legislation will be the first in truly 
saving the Private Ryan's of WWII and the Korean conflict. Now more 
than ever, the VA needs to be able to collect and compete in the health 
care marketplace as an equal partner with other health plans. Medicare 
subvention will allow it that opportunity. I am proud to again be a 
cosponsor of this important legislation.
                                 ______