[Congressional Record Volume 157, Number 74 (Thursday, May 26, 2011)]
[Senate]
[Page S3432]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCONNELL:
  S. 1089. A bill to provide for the introduction of pay-for-
performance compensation mechanisms into contracts of the Department of 
Veterans Affairs with community-based outpatient clinics for the 
provision of health care services, and for other purposes; to the 
Committee on Veterans' Affairs.
  Mr. McCONNELL. Mr. President, I rise today to introduce the Veterans 
Health Care Improvement Act of 2011.
  As we all know, the Department of Veterans Affairs strives to provide 
the best possible health care for our nation's heroes. However, it has 
come to my attention that the quality of care provided to our nation's 
veterans remains inconsistent among community-based outpatient clinics. 
Some of these clinics are operated by private health care providers 
under VA contracts. These VA-contracted health care providers are 
compensated for their work at community-based outpatient clinics on a 
capitated basis, which means they are essentially paid based on how 
many new veterans they see during a pay period. These firms are 
therefore rewarded for the number of veterans they sign up, not for the 
quality of treatment provided to our veterans. While I am not opposed 
to capitation per se, I am concerned current VA policy provides 
contractors with the wrong incentives. Contracted health care providers 
should have incentives to provide the best possible care for veterans, 
not simply get as many veterans as possible through their doors.
  As a result of the capitated system, it has been reported that too 
many of our nation's heroes have faced difficulties at these clinics in 
scheduling appointments, have suffered from neglect or have received 
substandard health care. This occurred under the last administration 
and I am concerned it may be continuing in the current one.
  As such, I am reintroducing the Veterans Health Care Improvement Act, 
which attempts to fix the way VA-contracted health care providers are 
compensated at clinics. This bill would require the VA to begin to 
introduce a pay-for-performance compensation plan for contractors, 
thereby gradually incentivizing a higher quality of care for veterans 
seen at privately-administered community-based outpatient clinics.
  This bill gives the VA the flexibility to begin to implement such a 
system through a pilot program and leaves the VA the discretion as to 
how to adopt and best implement the pay-for-performance standards. In 
this respect, the bill defers to the VA on how best to execute these 
changes. It is my hope that my colleagues will support this measure.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1089

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Veterans Health Care 
     Improvement Act of 2011''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Veterans of the Armed Forces have made tremendous 
     sacrifices in the defense of freedom and liberty.
       (2) Congress recognizes these great sacrifices and 
     reaffirms America's strong commitment to its veterans.
       (3) As part of the on-going congressional effort to 
     recognize the sacrifices made by America's veterans, Congress 
     has dramatically increased funding for the Department of 
     Veterans Affairs for veterans health care in the years since 
     September 11, 2001.
       (4) Part of the funding for the Department of Veterans 
     Affairs for veterans health care is allocated toward 
     community-based outpatient clinics (CBOCs).
       (5) Many CBOCs are administered by private contractors.
       (6) CBOCs administered by private contractors operate on a 
     capitated basis.
       (7) Some current contracts for CBOCs may create an 
     incentive for contractors to sign up as many veterans as 
     possible, without ensuring timely access to high quality 
     health care for such veterans.
       (8) The top priorities for CBOCs should be to provide 
     quality health care and patient satisfaction for America's 
     veterans.
       (9) The Department of Veterans Affairs currently tracks the 
     quality of patient care through its Computerized Patient 
     Record System. However, fees paid to contractors are not 
     currently adjusted automatically to reflect the quality of 
     care provided to patients.
       (10) A pay-for-performance payment model offers a promising 
     approach to health care delivery by aligning the payment of 
     fees to contractors with the achievement of better health 
     outcomes for patients.
       (11) The Department of Veterans Affairs should begin to 
     emphasize pay-for-performance in its contracts with CBOCs.

     SEC. 3. PAY-FOR-PERFORMANCE UNDER DEPARTMENT OF VETERANS 
                   AFFAIRS CONTRACTS WITH COMMUNITY-BASED 
                   OUTPATIENT HEALTH CARE CLINICS.

       (a) Plan Required.--Not later than one year after the date 
     of the enactment of this Act, the Secretary of Veterans 
     Affairs shall submit to Congress a plan to introduce pay-for-
     performance measures into contracts which compensate 
     contractors of the Department of Veterans Affairs for the 
     provision of health care services through community-based 
     outpatient clinics (CBOCs).
       (b) Elements.--The plan required by subsection (a) shall 
     include the following:
       (1) Measures to ensure that contracts of the Department for 
     the provision of health care services through CBOCs begin to 
     utilize pay-for-performance compensation mechanisms for 
     compensating contractors for the provision of such services 
     through such clinics, including mechanisms as follows:
       (A) To provide incentives for clinics that provide high-
     quality health care.
       (B) To provide incentives to better assure patient 
     satisfaction.
       (C) To impose penalties (including termination of contract) 
     for clinics that provide substandard care.
       (2) Mechanisms to collect and evaluate data on the outcomes 
     of the services generally provided by CBOCs in order to 
     provide for an assessment of the quality of health care 
     provided by such clinics.
       (3) Mechanisms to eliminate abuses in the provision of 
     health care services by CBOCs under contracts that continue 
     to utilize capitated-basis compensation mechanisms for 
     compensating contractors.
       (4) Mechanisms to ensure that veterans are not denied care 
     or face undue delays in receiving care.
       (c) Implementation.--The Secretary shall commence the 
     implementation of the plan required by subsection (a) unless 
     Congress enacts an Act, not later than 60 days after the date 
     of the submittal of the plan, prohibiting or modifying 
     implementation of the plan. In implementing the plan, the 
     Secretary may initially carry out one or more pilot programs 
     to assess the feasability and advisability of mechanisms 
     under the plan.
       (d) Reports.--Not later than 180 days after the date of the 
     enactment of this Act and every 180 days thereafter, the 
     Secretary shall submit to Congress a report setting forth the 
     recommendations of the Secretary as to the feasability and 
     advisability of utilizing pay-for-performance compensation 
     mechanisms in the provision of health care services by the 
     Department by means in addition to CBOCs.
                                 ______