[Congressional Record (Bound Edition), Volume 150 (2004), Part 15]
[Senate]
[Pages 20762-20769]
[From the U.S. Government Publishing Office, www.gpo.gov]




DEPARTMENT OF VETERANS AFFAIRS HEALTH CARE PERSONNEL ENHANCEMENT ACT OF 
                                  2004

  Mr. FRIST. I ask unanimous consent the Senate proceed to the 
immediate consideration of Calendar No. 713, S. 2484.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 2484) to amend title 38, United States Code, to 
     simplify and improve pay provisions for physicians and 
     dentists, to authorize alternate work schedules and executive 
     pay for nurses.

  There being no objection, the Senate proceeded to consider the bill 
which had been reported from the Committee on Veterans' Affairs, with 
an amendment to strike all after the enacting clause and insert in lieu 
thereof the following:

       (Strike the part shown in black brackets and insert the 
     part shown in italic.)

                                S. 2484

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

[[Page 20763]]



     [SECTION 1. SHORT TITLE.

       [This Act may be cited as the ``Department of Veterans 
     Affairs Health Care Personnel Enhancement Act of 2003''.

     [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.

     [SEC. 3. IMPROVEMENT AND SIMPLIFICATION OF PAY PROVISIONS FOR 
                   PHYSICIANS AND DENTISTS.

       [(a) Chapter 74 is amended--
       [(1) In section 7404b--
       [(A) by striking ``(1)'' after ``(b)'';
       [(B) by striking the list of position grades under the 
     caption, ``Physician and dentist schedule'' and inserting in 
     lieu thereof the following:
     [``Physician grade.
     [Dentist grade.''; and
       [(C) by striking paragraph (2) in its entirety;
       [(2) In section 7404(c) by striking ``special''; and
       [(3) By striking Subchapter III in its entirety and 
     inserting in lieu thereof the following sections:

           [``SUBCHAPTER III--PAY FOR PHYSICIANS AND DENTISTS

     [``Sec. 7431. Pay authority

       [``(a) In order to recruit and retain highly qualified 
     physicians and dentists in the Veterans Health 
     Administration, the Secretary shall establish and 
     periodically adjust the rates of pay for physicians and 
     dentists based upon the factors specified in subsection (b). 
     Total pay shall be benchmarked to representative salaries of 
     non-Department physicians, dentists, and health care 
     clinician-executives.
       [``(b) Pay for physicians and dentists employed in the 
     Veterans Health Administration shall have three components:
       [``(1) Base pay.--This shall be a uniform pay band 
     applicable nationwide. The minimum rate shall be the maximum 
     rate for Chief grade in the Veterans Health Administration 
     Physician and Dentist Pay Schedule in effect on the day 
     before the date of enactment of this Act. The maximum rate 
     may not exceed the rate of basic pay authorized by section 
     5316 of title 5 for Level V of the Executive Schedule. The 
     Secretary shall adjust annually the minimum rate by the same 
     percentage as the adjustment under section 5303 of title 5 in 
     the rates of pay for the General Schedule, and the maximum 
     rate in accordance with section 5318 of title 5. 
     Administration facilities, under regulations prescribed by 
     the Secretary, may set individual base pay anywhere within 
     the pay band.
       [``(2) Market pay.--This shall be a variable pay band based 
     on geographic area, specialty, assignment, personal 
     qualifications, and individual experience, and shall be 
     established and adjusted locally in accordance with 
     regulations prescribed under subsection (c). Administration 
     facilities will set individual market pay in accordance with 
     regulations prescribed by the Secretary. The Under Secretary 
     for Health shall periodically review and recommend to the 
     Secretary adjustments to the market pay band based on 
     published healthcare workforce employment and compensation 
     data. The Secretary may adjust the market pay band 
     periodically based on the recommendations of the Under 
     Secretary and in response to changing health-care labor 
     trends.
       [``(3) Performance pay.--
       [``(A) There shall be a variable pay band linked to the 
     physician's or dentist's achievement of specific corporate 
     goals and individual performance objectives. Physicians and 
     dentists other than those specified in subsection (f)(1) 
     shall not be eligible for this component during the first 
     year of appointment. The amount payable to a physician or 
     dentist for this component may vary based on individual 
     achievement. The performance component paid to any physician 
     or dentist other than those specified in subsection (f)(1) 
     will be in accordance with regulations prescribed by the 
     Secretary and may not exceed $10,000 in a year.
       [``(B) In accordance with regulations prescribed by the 
     Secretary, ten percent of the benchmark total pay for 
     physicians and dentists specified in subsection (f)(1) shall 
     be linked to the physician's or dentist's achievement of 
     specific corporate goals and individual performance 
     objectives as a performance component. Administration 
     facilities may set the performance pay in accordance with 
     regulations prescribed by the Secretary.
       [``(c) Compensation paid under this subchapter shall be 
     considered pay for all purposes, included but not limited to 
     retirement benefits under chapters 83 and 84 of title 5, 
     United States Code, and other benefits. Notwithstanding the 
     preceding sentence, amounts paid for performance pay under 
     subsection (b)(3)(A) shall not be considered pay for 
     retirement benefits under chapters 83 and 84 of title 5, 
     United States Code.
       [``(d) Any decrease in pay that results from an adjustment 
     to the market or performance component of a physician's or 
     dentist's total compensation does not constitute an adverse 
     action.
       [``(e) In no case may the total amount of compensation paid 
     to a physician or dentist under this title in any one year 
     exceed the amount of annual compensation (excluding expenses) 
     specified in section 102 of title 3, United States Code.
       [``(f) Covered Positions.--
       [``(1) This subsection applies to physicians and dentists 
     in the following positions: Chiefs of Staff or equivalent 
     facility-level and Network-level clinical management 
     positions (including Network Clinical Service Managers), 
     facility and Network or Regional executive positions 
     (including Network Service Line Coordinators and Medical 
     Center/Health Care System Directors), Central Office 
     executive positions, and such other positions under this 
     title as the Secretary may determine in accordance with 
     regulations prescribed in accordance with section 7434(a).
       [``(2) Notwithstanding the special relationships of the 
     Veterans Health Administration with affiliated institutions 
     under section 7302, physicians and dentists serving in 
     covered positions and receiving compensation under this 
     subchapter may not receive any compensation on or after the 
     date specified in regulations issued by the Secretary, 
     through employment or contract with, or negotiate or accept 
     any offer of employment from, any institution or other entity 
     that is affiliated with the VA medical center to which they 
     are assigned, or affiliated with a VA medical center which 
     falls under their official responsibilities. This limitation 
     shall include receiving compensation through or from practice 
     groups or any other entities associated with the affiliated 
     institution(s), or from entities under contract with the 
     affiliated institution(s). Compensation includes anything of 
     monetary value, including but not limited to honoraria, 
     salary, and any fringe benefits such as: tuition waiver, 
     insurance protection, contributions to a retirement fund, 
     payment for books, below-market interest loans, or employee 
     discounts. Nothing in this section precludes physicians and 
     dentists in covered positions from holding uncompensated 
     appointments as other than officer, director, or trustee with 
     affiliated institutions in furtherance of section 7302.
       [``(3) Subject to any conditions the Secretary may be 
     regulation prescribe, the Secretary may, on a case-by-case 
     basis, suspend or waive the limitation in paragraph (2) to an 
     individual physician or dentist, when necessary and 
     appropriate to carry out the purposes of section 7302, to 
     assist communities or practice groups to meet medical needs 
     which otherwise would not be met, or where the Secretary 
     determines that suspension or waiver would be in the best 
     interest of the United States. The Secretary shall make any 
     suspension or wavier made pursuant to this paragraph in 
     writing.

     [``Sec. 7432. Transition to new pay system

       [``(a) All current special pay agreements entered into 
     under the provisions of this subchapter in effect on the day 
     before the date of enactment of this Act shall terminate on 
     the date of enactment of this Act. Any physician or dentist 
     in receipt of special pay on that date shall continue to be 
     compensated as if such agreement were still in effect until 
     the date specified in regulations issued by the Secretary 
     implementing this new subchapter.
       [``(b) Physicians and dentists appointed or reassigned on 
     or after the date of enactment of this Act, but before 
     implementation of this subchapter shall be compensated in 
     accordance with sections 7404, 7405, 7433, 7434, 7435, and 
     7436, as applicable, in effect on the day before the date of 
     enactment of this Act. Any such physician or dentist shall 
     continue to be compensated at the applicable rates until such 
     date specified in regulations issued by the Secretary 
     implementing the new pay system. No special pay agreement 
     will be required of any physician or dentist receiving such 
     pay.
       [``(c) During the period from the date of enactment of this 
     Act through the date of implementation of this subchapter, 
     physicians and dentists paid pursuant to this section shall 
     be subject to paragraphs (1), (2), (4), (5), and (6) of 
     subsection (b) of section 7438 in effect on the day before 
     the date of enactment of this Act.
       [``(d) The amount of pay paid under this subchapter for a 
     physician or dentist appointed before the effective date of 
     regulations implementing this subchapter shall be not less 
     than the amount of base pay and special pay such physician or 
     dentist received under this title on the day before such 
     effective date.
       [``(e) Special pay subject to the provisions of section 
     7438, as in effect before the date of enactment of this 
     section, or subject to subsection (c), paid to Veterans 
     Health Administration physicians and dentists appointed 
     before the effective date of regulations implementing this 
     subchapter and who separate after such effective date, shall 
     be fully creditable for purposes of computing benefits under 
     chapters 83 and 84 of title 5.

     [``Sec. 7433. Pay for Under Secretary for Health

       [``(a) Section 5314 of title 5 establishes the base pay for 
     the Under Secretary for Health at Level III of the Executive 
     Schedule.
       [``(b) In addition to base pay under section 5314 of title 
     5, the Under Secretary for Health shall be eligible for 
     Market Pay under section 7431(b)(2).

[[Page 20764]]

       [``(c) Transition.--The current special pay agreement of 
     the Under Secretary for Health entered into under the 
     provisions of this subchapter in effect on the day before the 
     date of enactment of this Act shall terminate on the date of 
     enactment of this Act. The incumbent Under Secretary for 
     Health on the date of enactment of this Act shall continue to 
     receive special pay as if such agreement were still in effect 
     until the date specified in regulations issued by the 
     Secretary implementing this new subchapter. Any Under 
     Secretary for Health appointed on or after the date of 
     enactment of this Act, but before the date specified in 
     regulations issued by the Secretary implementing this new 
     subchapter, shall receive special pay in accordance with 
     sections 7432(d)(2), 7433, and 7437(a) in effect on the day 
     before the date of enactment of this Act.

     [``Sec. 7434. Administrative provisions

       [``(a) After receiving the recommendations of the Under 
     Secretary for Health, the Secretary, pursuant to the 
     authority in section 7421(a), shall prescribe regulations 
     implementing the physician and dentist pay system established 
     in this new subchapter. Such regulations shall include the 
     method for computing the pay for all physicians and dentists 
     in the Veterans Health Administration under this title.
       [``(b) Eighteen months after the Secretary issues 
     regulations implementing this subchapter and annually 
     thereafter for the next ten years, the Secretary shall 
     provide to the Committees on Veterans' Affairs of the Senate 
     and House of Representatives a report on the implementation 
     of the authorities under this subchapter. Each report shall 
     include:
       [``(1) a description of the rates of pay in effect during 
     the preceding fiscal year with a comparison to the rates in 
     effect during the previous fiscal year by facility and by 
     specialty;
       [``(2) the number of physicians and dentists who left 
     employment with the Veterans Health Administration during the 
     preceding year;
       [``(3) the number of unfilled physician and dentist 
     positions in each specialty in the Veterans Health 
     Administration, the average and maximum lengths of time that 
     such positions have been unfilled, and a summary of the 
     reasons that such positions remain unfilled; and
       [``(4) an assessment of the impact of implementation of 
     this subchapter on efforts to recruit and retain physicians 
     and dentists in the Veterans Health Administration.

     [In addition, the first two reports following implementation 
     of this subchapter shall also include a comparison of 
     staffing levels, contract expenditures, and average salary of 
     physicians and dentists by facility and specialty for the 
     preceding and previous fiscal years.''.
       [(b) The title and list of sections for Subchapter III in 
     the table of sections at the beginning of Chapter 74 is 
     amended to read as follows:


           [``subchapter iii--pay for physicians and dentists

[``Sec. 7431. Pay authority.
[``Sec. 7432. Transition to new pay system.
[``Sec. 7433. Pay for Under Secretary for Health.
[``Sec. 7434. Administrative provisions.''.

     [SEC. 4. ALTERNATE WORK SCHEDULES.

       [(a) Chapter 74 is amended by adding a new section 7456a:

     [``Sec. 7456a. Alternate work schedules

       [``(a) Coverage.--This section applies to registered nurses 
     appointed under this chapter.
       [``(b) 36/40 Work Schedule.--
       [``(1) Subject to paragraph (2), if the Secretary 
     determines it be necessary in order to obtain or retain the 
     services of registered nurses at any Department health-care 
     facility, the Secretary may provide, in the case of nurses 
     employed at such facility, that such nurses who work three 
     regularly scheduled 12-hour tours of duty within a workweek 
     shall be considered for all purposes (except computation of 
     full-time equivalent employees for the purposes of 
     determining compliance with personnel ceilings) to have 
     worked a full 40-hour basic workweek.
       [``(2)(A) Basic and additional pay for a registered nurse 
     who is considered under paragraph (1) to have worked a full 
     40-hour basic workweek shall be subject to subparagraphs (B) 
     and (C).
       [``(B) The hourly rate of basic pay for such a nurse for 
     service performed as part of a regularly scheduled 36-hour 
     tour of duty within the workweek shall be derived by dividing 
     the nurse's annual rate of basic pay by 1,872.
       [``(C)(i) Such a nurse who performs a period of service in 
     excess of such nurse's regularly scheduled 36-hour tour of 
     duty within a workweek is entitled to overtime pay under 
     section 7453(e) of this title, or other applicable law, for 
     officially ordered or approved service performed in excess of 
     eight hours on a day other than a day on which such nurse's 
     regularly scheduled three 12-hour tours fall, or in excess of 
     12 hours for any day included in the regularly scheduled 36-
     hour tour of duty, or in excess of 40 hours during an 
     administrative workweek.
       [``(ii) Except as provided in subparagraph (i), a 
     registered nurse to whom this subsection is applicable is not 
     entitled to additional pay under section 7453 of this title, 
     or other applicable law, for any period included in a 
     regularly scheduled 12-hour tour of duty.
       [``(3) A nurse who works a 36/40 work schedule described in 
     this subsection who is absent on approved sick leave or 
     annual leave during a regularly scheduled 12-hour tour of 
     duty shall be charged for such leave at a rate of ten hours 
     of leave for nine hours of absence.
       [``(c) 7/7 Work Schedule.--
       [``(1) Subject to paragraph (2), if the Secretary 
     determines it be necessary in order to obtain or retain the 
     services of registered nurses at any Department health-care 
     facility, the Secretary may provide, in the case of nurses 
     employed at such facility, that such nurses who work seven 
     regularly scheduled 10-hour tours of duty, with seven days 
     off duty, within a two-week pay period, shall be considered 
     for all purposes (except computation of full-time equivalent 
     employees for the purposes of determining compliance with 
     personnel ceilings) to have worked a full 80 hours for the 
     pay period.
       [``(2)(A) Basic and additional pay for a registered nurse 
     who is considered under paragraph (1) to have worked a full 
     80-hour pay period shall be subject to subparagraphs (B) and 
     (C).
       [``(B) The hourly rate of basic pay for such a nurse for 
     service performed as part of a regularly scheduled 70-hour 
     tour of duty within the pay period shall be derived by 
     dividing the nurse's annual rate of basic pay by 1,820.
       [``(C)(i) Such a nurse who performs a period of service in 
     excess of such nurse's regularly scheduled 70-hour tour of 
     duty within a pay period is entitled to overtime pay under 
     section 7453(e) of this title, or other applicable law, for 
     officially ordered or approved service performed in excess of 
     eight hours on a day other than a day on which such nurse's 
     regularly scheduled seven 10-hour tours fall, or in excess of 
     10 hours for any day included in the regularly scheduled 70-
     hour tour of duty, or in excess of 80 hours during a pay 
     period.
       [``(ii) Except as provided in subparagraph (i), a 
     registered nurse to whom this subsection is applicable is not 
     entitled to additional pay under section 7453 of this title, 
     or other applicable law, for any period included in a 
     regularly scheduled 10-hour tour of duty.
       [``(3) A nurse who works a 7/7 work schedule described in 
     this subsection who is absent on approved sick leave or 
     annual leave during a regularly scheduled 12-hour tour of 
     duty shall be charged for such leave at a rate of eight hours 
     of leave for seven hours of absence.
       [``(d) 9-Month Work Schedule.--The Secretary may authorize 
     a registered nurse appointed under section 7405, with the 
     nurse's written consent, to work full-time for nine months 
     with three months off duty, within a fiscal year, and be paid 
     at 75 percent of the full-time rate for such nurse's grade 
     for each pay period of such fiscal year. Such employee shall 
     be considered a .75 full-time equivalent employee in 
     computing full-time equivalent employees for the purposes of 
     determining compliance with personnel ceilings. Service on 
     this schedule shall be considered part-time service for 
     purposes of computing benefits under chapters 83 and 84 of 
     title 5.
       [``(e) The Secretary shall prescribe regulations for the 
     implementation of this section.''.
       [(b) The title and list of sections for Subchapter IV in 
     the table of sections at the beginning of Chapter 74 is 
     amended to read as follows:


    [``subchapter iv--pay for nurses and other health-care personnel

[``Sec. 7451. Nurses and other health-care personnel: competitive pay.
[``Sec. 7452. Nurses and other health-care personnel: administration of 
              pay.
[``Sec. 7453. Nurses: additional pay.
[``Sec. 7454. Physician assistants and other health care professionals: 
              additional pay.
[``Sec. 7455. Increases in rates of basic pay.
[``Sec. 7456. Nurses: special rules for weekend duty.
[``Sec. 7456a. Alternate work schedules.
[``Sec. 7457. On-call pay.
[``Sec. 7458. Recruitment and retention bonus pay.''.

     [SEC. 5. NURSE EXECUTIVE SPECIAL PAY.

       [(a) Section 7452 is amended by adding at the end thereof:
       [``(g)(1) In order to recruit and retain highly qualified 
     Department nurse executives, the Secretary, in accordance 
     with regulations the Secretary shall prescribe, shall pay 
     special pay to the nurse executive at each Department health-
     care facility or at Central Office.
       [``(2) Special pay paid under paragraph (1) shall be a 
     minimum of $10,000 and a maximum of $25,000. The amount paid 
     to each nurse executive shall be based on factors such as the 
     grade of the nurse executive position, the scope and 
     complexity of the nurse executive position, the nurse 
     executive's personal qualifications, the characteristics of 
     the health-care facility, e.g., tertiary, single site or 
     multi-site, nature and number of specialty care units, 
     demonstrated recruitment and retention difficulties, and such 
     other factors the Secretary deems appropriate.
       [``(3) Special pay paid under paragraph (1) shall be in 
     addition to any other pay (including basic pay) and 
     allowances to which the

[[Page 20765]]

      nurse executive is entitled, and shall be considered pay for 
     all purposes, including but not limited to retirement 
     benefits under chapters 83 and 84 of title 5, United States 
     Code, and other benefits, but shall not be considered basic 
     pay for purposes of adverse actions under subchapter V.''.

     [SEC. 6. EFFECTIVE DATE.

       [The amendments to title 38, United States Code, contained 
     herein shall take effect on the first day of the first pay 
     period on or after the later of April 1, 2004, or six months 
     after the date of enactment.

     [SEC. 7. ADMINISTRATIVE PROVISION.

       [(a) Chapter 74 is amended by adding a new section 7427:

     [``Sec. 7427. Functions

       [``The functions assigned to the Secretary and other 
     officers of the Department of Veterans Affairs under this 
     chapter are vested in their discretion.'']

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Department of Veterans 
     Affairs Health Care Personnel Enhancement Act of 2004''.

     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.

     SEC. 3. SIMPLIFICATION AND IMPROVEMENT OF GRADE AND PAY 
                   PROVISIONS FOR PHYSICIANS AND DENTISTS.

       (a) Simplification of Grades and Grade Requirements.--
     Section 7404(b) is amended--
       (1) by striking ``(1)'' after ``(b)'';
       (2) in the Physician and Dentist Schedule, by striking the 
     items relating to the grades and inserting the following:
       ``Physician grade.
       ``Dentist grade.''; and
       (3) by striking paragraph (2).
       (b) Simplification and Improvement of Pay Authorities.--
     Subchapter III of chapter 74 is amended to read as follows:

           ``SUBCHAPTER III--PAY FOR PHYSICIANS AND DENTISTS

     ``Sec. 7431. Pay

       ``(a) Elements of Pay.--Pay of physicians and dentists in 
     the Veterans Health Administration shall consist of three 
     elements as follows:
       ``(1) Base pay as provided for under subsection (b).
       ``(2) Market pay as provided for under subsection (c).
       ``(3) Incentive pay as provided for under subsection (d).
       ``(b) Base Pay.--One element of pay for physicians and 
     dentists shall be base pay. Base pay shall meet the following 
     requirements:
       ``(1) Each physician and dentist is entitled to base pay 
     determined under the Physician and Dentist Base and Longevity 
     Pay Schedule.
       ``(2) The Physician and Dentist Base and Longevity Pay 
     Schedule is composed of 15 rates of base pay designated, from 
     the lowest rate of pay to the highest rate of pay, as base 
     pay steps 1 through 15.
       ``(3) The rate of base pay payable to a physician or 
     dentist is based on the total number of the years of the 
     service of the physician or dentist in the Veterans Health 
     Administration as follows:

``For a physician or dentiThe rate of base pay is the rate payable for:
two years or less                                               step 1 
more than 2 years and not more than 4 years                     step 2 
more than 4 years and not more than 6 years                     step 3 
more than 6 years and not more than 8 years                     step 4 
more than 8 years and not more than 10 years                    step 5 
more than 10 years and not more than 12 years                   step 6 
more than 12 years and not more than 14 years                   step 7 
more than 14 years and not more than 16 years                   step 8 
more than 16 years and not more than 18 years                   step 9 
more than 18 years and not more than 20 years                  step 10 
more than 20 years and not more than 22 years                  step 11 
more than 22 years and not more than 24 years                  step 12 
more than 24 years and not more than 26 years                  step 13 
more than 26 years and not more than 28 years                  step 14 
more than 28 years                                             step 15.

       ``(4) At the same time as rates of basic pay are increased 
     for a year under section 5303 of title 5, the Secretary shall 
     increase each rate of base pay payable under this subsection 
     for that year by a percentage equal to the percentage by 
     which rates of basic pay are increased under such section for 
     that year.
       ``(c) Market Pay.--One element of pay for physicians and 
     dentists shall be market pay. Market pay shall meet the 
     following requirements:
       ``(1) Subject to paragraph (3), each physician and dentist 
     is eligible for market pay.
       ``(2) Market pay shall consist of pay intended to reflect 
     the value to the Veterans Health Administration of the 
     skills, experience, and availability of a particular 
     physician or dentist within a particular health care labor 
     market.
       ``(3) The annual amount of the market pay payable to a 
     physician or dentist shall be determined by the Secretary on 
     a case-by-case basis, subject to paragraph (5). The sum of 
     the total amount of the market pay determined for a physician 
     or dentist under this subsection and the annual rate of base 
     pay payable to the physician or dentist under subsection (b) 
     may not be less than the minimum amount, nor more than the 
     maximum amount, applicable to the physician or dentist under 
     paragraph (4).
       ``(4)(A) Not less often than once every two years, the 
     Secretary shall prescribe for Departmentwide applicability 
     the minimum and maximum amounts of annual pay (excluding 
     incentive pay under subsection (d)) that may be paid under 
     this section to physicians and the minimum and maximum 
     amounts of annual pay (excluding incentive pay under 
     subsection (d)) that may be paid under this section to 
     dentists.
       ``(B) The Secretary may prescribe for Departmentwide 
     applicability under this paragraph separate minimum and 
     maximum amounts of pay for a specialty or subspecialty. If 
     the Secretary prescribes separate minimum and maximum amounts 
     for a specialty or subspecialty, the Secretary may establish 
     up to four tiers of minimum and maximum amounts for such 
     specialty or subspecialty and prescribe for each tier a 
     minimum amount and a maximum amount that the Secretary 
     determines appropriate for the professional responsibilities, 
     professional achievements, and administrative duties of the 
     physicians or dentists (as the case may be) whose pay is set 
     within that tier.
       ``(5)(A) In determining the amount of the market pay for a 
     physician or dentist and determining a tier (if any) to apply 
     to a physician or dentist under paragraph (4)(B), the 
     Secretary shall consult with and consider the recommendations 
     of the Medical Professional Standards Board for the medical 
     facility of the Department at which the physician or dentist 
     is employed, except in the case of a physician or dentist 
     whose market pay is determined under subparagraph (B).
       ``(B) In the case of a physician or dentist who is a member 
     of a Medical Professional Standards Board, the Secretary 
     shall determine the amount of the market pay and the tier (if 
     any) applicable to the physician or dentist under paragraph 
     (4)(B) in accordance with such procedures and standards as 
     the Secretary shall prescribe. Such procedures and standards 
     shall, to the maximum extent practicable, be similar to the 
     procedures and standards applicable to determinations of the 
     amount of market pay and the tier applicable to physicians 
     and dentists under paragraph (4)(B) who are not members of a 
     board. Under such regulations, no member of a board may 
     participate in or have a consultative role in determining the 
     amount of market pay or tier of such member or any other 
     member of such board.
       ``(C) A Medical Professional Standards Board consulted 
     under this subparagraph shall consist of at least three and 
     not more than five persons, each of whom is either a 
     physician or a dentist. Not less than a majority of the 
     members of the board shall be practicing clinicians in their 
     professions.
       ``(6) Subject to paragraph (7), the determination of the 
     amount of market pay of a physician or dentist shall take 
     into account--
       ``(A) the level of experience of the physician or dentist 
     in the specialty or subspecialty of the physician or dentist;
       ``(B) the need for the specialty or subspecialty of the 
     physician or dentist at the Department facility concerned;
       ``(C) the health care labor market for the specialty or 
     subspecialty of the physician or dentist, which may cover any 
     geographic area the Secretary considers appropriate for the 
     specialty or subspecialty;
       ``(D) the professional reputation of the physician or 
     dentist;
       ``(E) the board certifications, if any, of the physician or 
     dentist;
       ``(F) the prior experience, if any, of the physician or 
     dentist as an employee of the Veterans Health Administration; 
     and
       ``(G) such other considerations as the Secretary considers 
     appropriate.
       ``(7) The amount that any consideration specified in 
     paragraph (6) may contribute to the amount of market pay may 
     not exceed, or be less than, such amount as the Secretary may 
     specify in regulations prescribed under section 7433 of this 
     title, or in directives issued for purposes of this 
     subsection.
       ``(8) In determining amounts of market pay, the Secretary--
       ``(A) shall consult two or more national surveys of pay for 
     physicians or dentists, as applicable, whether prepared by 
     public, private, or quasi-public entities; and
       ``(B) may utilize the recommendations or assistance of one 
     or more boards of physicians or dentists, as applicable, that 
     are appointed by the Secretary for purposes of this 
     subsection.
       ``(9) The amount of market pay of a physician or dentist 
     shall be adjusted at such times as the Secretary considers 
     appropriate in order to ensure the retention of qualified 
     physicians and dentists by the Veterans Health 
     Administration.
       ``(10) The amount of market pay of a physician or dentist 
     shall be evaluated by the Secretary not less often than once 
     every 24 months.

[[Page 20766]]

     The amount of market pay may be adjusted as the result of an 
     evaluation under this paragraph. A physician or dentist whose 
     market pay is increased by reason of an evaluation under this 
     paragraph shall receive written notice of the increase in 
     accordance with procedures prescribed under section 7433 of 
     this title.
       ``(11) No adjustment of the amount of market pay of a 
     physician or dentist under paragraph (9) or (10) may result 
     in a reduction of the amount of market pay of the physician 
     or dentist.
       ``(d) Incentive Pay.--One element of pay for physicians and 
     dentists shall be incentive pay. Incentive pay shall meet the 
     following requirements:
       ``(1) Each physician and dentist is eligible for incentive 
     pay.
       ``(2) Incentive pay shall consist of an amount intended to 
     recognize outstanding contributions by a physician or dentist 
     to--
       ``(A) the facility in which employed;
       ``(B) the furnishing of care to veterans; or
       ``(C) the practice of medicine or dentistry, as applicable.
       ``(3) The amount of incentive pay shall be determined for a 
     physician or dentist by the Secretary.
       ``(4) The amount of incentive pay shall be determined for a 
     physician or dentist on a case-by-case basis.
       ``(5) The amount of incentive pay paid to a physician or 
     dentist in a calendar year may not exceed $10,000.
       ``(e) Delegation of Responsibilities.--The Secretary may 
     delegate to an appropriate officer or employee of the 
     Department any responsibility of the Secretary under 
     subsection (c) or (d), except for the responsibilities of the 
     Secretary under subsection (c)(4).
       ``(f) Limitation on Total Compensation.--In no case may the 
     total amount of compensation paid to a physician or dentist 
     under this section in any year exceed the amount of annual 
     compensation (excluding expenses) specified in section 102 of 
     title 3.
       ``(g) Treatment of Pay.--(1) Except as provided in 
     paragraph (2), pay under this subchapter shall be considered 
     pay for all purposes, including retirement benefits under 
     chapters 83 and 84 of title 5 and other benefits.
       ``(2) Incentive pay under subsection (d) shall not be 
     considered pay for purposes of retirement benefits under 
     chapters 83 and 84 of title 5.
       ``(h) Decreases in Certain Pay Not Treatable as Adverse 
     Action.--A decrease in pay of a physician or dentist 
     resulting from an adjustment in the amount of incentive pay 
     of the physician or dentist under subsection (d) shall not be 
     treated as an adverse action.

     ``Sec. 7432. Pay of Under Secretary for Health

       ``(a) Base Pay.--The base pay of the Under Secretary for 
     Health shall be the annual rate of basic pay for positions at 
     Level III of the Executive Schedule under section 5314 of 
     title 5.
       ``(b) Market Pay.--(1) In the case of an Under Secretary 
     for Health who is also a physician or dentist, in addition to 
     the base pay specified in subsection (a) the Under Secretary 
     for Health may also be paid the market pay element of pay of 
     physicians and dentists under section 7431(c) of this title.
       ``(2) The amount of market pay of the Under Secretary for 
     Health under this subsection shall be established by the 
     Secretary.
       ``(3) In establishing the amount of market pay of the Under 
     Secretary for Health under this subsection, the Secretary 
     shall utilize an appropriate health care labor market 
     selected by the Secretary for purposes of this subsection.

     ``Sec. 7433. Administrative matters

       ``(a) Regulations.--(1) The Secretary shall prescribe 
     regulations relating to the pay of physicians and dentists in 
     the Veterans Health Administration under this subchapter.
       ``(2) In prescribing the regulations, the Secretary shall 
     take into account the recommendations of the Under Secretary 
     for Health on the administration of this subchapter.
       ``(b) Reports.--(1) Not later than 18 months after the 
     Secretary prescribes the regulations required by subsection 
     (a), and annually thereafter for the next 10 years, the 
     Secretary shall submit to the Committees on Veterans' Affairs 
     of the Senate and House of Representatives a report on the 
     pay of physicians and dentists in the Veterans Health 
     Administration under this subchapter.
       ``(2) Each report under this subsection shall include the 
     following:
       ``(A) A description of the rates of pay in effect during 
     the preceding fiscal year with a comparison to the rates in 
     effect during the fiscal year preceding fiscal year, set 
     forth by facility and by specialty.
       ``(B) The number of physicians and dentists who left the 
     Veterans Health Administration during the preceding fiscal 
     year.
       ``(C) The number of unfilled physician positions and 
     dentist positions in each specialty in the Veterans Health 
     Administration, the average and maximum lengths of time that 
     such positions have been unfilled, and an assessment of the 
     reasons that such positions remain unfilled.
       ``(D) An assessment of the impact of implementation of this 
     subchapter on efforts to recruit and retain physicians and 
     dentists in the Veterans Health Administration.
       ``(3) The first two annual reports under this subsection 
     shall also include a comparison of staffing levels, contract 
     expenditures, and average salaries of physicians and dentists 
     in the Veterans Health Administration for the fiscal year 
     preceding such report and for the fiscal year preceding such 
     fiscal year, set forth by facility and by specialty.''.
       (c) Initial Rates of Base Pay for Physicians and 
     Dentists.--The initial rates of base pay established for the 
     base pay steps under the Physician and Dentist Base and 
     Longevity Pay Schedule provided in section 7431(b) of title 
     38, United States Code (as added by subsection (b)), are as 
     follows:

Base Pay Step:                                             Rate of Pay:
1..............................................................$90,000 
2..............................................................$93,000 
3..............................................................$96,000 
4..............................................................$99,000 
5.............................................................$102,000 
6.............................................................$105,000 
7.............................................................$108,000 
8.............................................................$111,000 
9.............................................................$114,000 
10............................................................$117,000 
11............................................................$120,000 
12............................................................$123,000 
13............................................................$127,000 
14............................................................$130,000 
15............................................................$133,000.

       (d) Transition Provisions.--
       (1) Physicians and dentists.--
       (A) Pay.--(i) A physician or dentist in receipt of pay 
     under section 7404 or 7405 of title 38, United States Code, 
     as of the day before the date of the enactment of this Act 
     shall continue to receive pay under such section (as in 
     effect on the day before the date of the enactment of this 
     Act) until the effective date of this Act under section 8 of 
     this Act.
       (ii) A physician or dentist appointed or reassigned on or 
     after the date of the enactment of this Act, but before the 
     effective date of this Act, shall be compensated in 
     accordance with applicable provisions of section 7404 or 7405 
     of title 38, United States Code (as in effect on the day 
     before date of the enactment of this Act), until the 
     effective date of this Act.
       (B) Special pay.--(i) A special pay agreement entered into 
     by a physician or dentist under subchapter III of chapter 74 
     of title 38, United States Code, before the date of the 
     enactment of this Act shall terminate on the date of the 
     enactment of this Act. However, a physician or dentist in 
     receipt of special pay pursuant to such an agreement on that 
     date shall continue to receive special pay under the terms of 
     such agreement until the effective date of this Act.
       (ii) A physician or dentist described in subparagraph 
     (A)(ii) may be paid special pay under applicable provisions 
     of section 7433, 7434, 7435, or 7436 of title 38, United 
     States Code (as in effect on the day before the date of the 
     enactment of this Act), during the period beginning on the 
     date appointment or reassignment of such physician or 
     dentist, as the case may be, and ending on the effective date 
     of this Act. However, no special pay agreement shall be 
     required for the payment of special pay under this clause.
       (C) Treatment of special pay.--(i) Special pay paid under 
     subparagraph (B) shall be subject to the provisions of 
     paragraphs (1), (2), (4), (5), and (6) of section 7438(b) of 
     title 38, United States Code (as in effect on the day before 
     the date of the enactment of this Act).
       (ii) Special pay paid under subparagraph (B) shall be fully 
     creditable for purposes of computing benefits under chapters 
     83 and 84 of title 5, United States Code.
       (D) Preservation of pay.--The amount of pay paid under 
     subchapter III of chapter 74 of title 38, United States Code 
     (as amended by subsection (a)), to a physician or dentist 
     appointed or reassigned before the effective date of this Act 
     may be not less than the aggregate amount of pay and special 
     pay paid to the physician or dentist under chapter 74 of 
     title 38, United States Code (as in effect on the day before 
     the date of the enactment of this Act), as of the day before 
     the effective date of this Act.
       (2) Under secretary for health.--
       (A) Special pay.--(i) The current special pay agreement 
     entered into by the Under Secretary for Health under 
     subchapter III of chapter 74 of title 38, United States Code, 
     before the date of the enactment of this Act shall terminate 
     on the date of the enactment of this Act. However, the Under 
     Secretary shall continue to receive special pay under the 
     terms of such agreement until the effective date of this Act.
       (ii) An individual appointed as Under Secretary for Health 
     on or after the date of the enactment of this Act and before 
     the effective date of this Act shall be paid special pay in 
     accordance with the provisions of section 7432(d)(2), 7433, 
     and 7437(a) of title 38, United States Code (as in effect on 
     the day before the date of the enactment of this Act), during 
     the period beginning on the date of appointment and ending on 
     the effective date of this Act. However, no special pay 
     agreement shall be required for the payment of special pay 
     under this clause.
       (B) Treatment of special pay.--Special pay paid under 
     subparagraph (A) shall be fully creditable for purposes of 
     computing benefits under chapters 83 and 84 of title 5, 
     United States Code.
       (e) Conforming Amendment.--Section 7404(c) is amended by 
     striking ``special pay'' and inserting ``pay''.
       (f) Clerical Amendment.--The table of sections at the 
     beginning of chapter 74 is amended by striking the items 
     relating to subchapter III and inserting the following new 
     items:

``SUBCHAPTER III--PAY FOR PHYSICIANS AND DENTISTS
``Sec. 7431. Pay.
``Sec. 7432. Pay of Under Secretary for Health.
``Sec. 7433. Administrative matters.''.

[[Page 20767]]



     SEC. 4. ALTERNATE WORK SCHEDULES FOR REGISTERED NURSES.

       (a) In General.--(1) Chapter 74 is amended by inserting 
     after section 7456 the following new section:

     ``Sec. 7456A. Nurses: alternate work schedules

       ``(a) Applicability.--This section applies to registered 
     nurses appointed under this chapter.
       ``(b) 36/40 Work Schedule.--(1) Subject to paragraph (2), 
     if the Secretary determines it be necessary in order to 
     obtain or retain the services of registered nurses at any 
     Department health-care facility, the Secretary may provide, 
     in the case of nurses employed at such facility, that such 
     nurses who work three regularly scheduled 12-hour tours of 
     duty within a workweek shall be considered for all purposes 
     (except computation of full-time equivalent employees for the 
     purposes of determining compliance with personnel ceilings) 
     to have worked a full 40-hour basic workweek.
       ``(2)(A) Basic and additional pay for a nurse who is 
     considered under paragraph (1) to have worked a full 40-hour 
     basic workweek shall be subject to subparagraphs (B) and (C).
       ``(B) The hourly rate of basic pay for a nurse covered by 
     this paragraph for service performed as part of a regularly 
     scheduled 36-hour tour of duty within the workweek shall be 
     derived by dividing the nurse's annual rate of basic pay by 
     1,872.
       ``(C)(i) A nurse covered by this paragraph is entitled to 
     overtime pay for work performed in such periods as the 
     Secretary shall prescribe.
       ``(ii) Except as otherwise provided in clause (i), a nurse 
     covered by this paragraph is not entitled to additional pay 
     under section 7453 of this title, or other applicable law, 
     for any period included in a regularly scheduled 12-hour tour 
     of duty.
       ``(3) A nurse who works a work schedule described in this 
     subsection who is absent on approved sick leave or annual 
     leave during a regularly scheduled 12-hour tour of duty shall 
     be charged for such leave at a rate of ten hours of leave for 
     every nine hours of absence.
       ``(4) A nurse working a work schedule under this subsection 
     shall be eligible for holiday pay under section 7453(d) of 
     this title for any service performed by the nurse on a 
     designated holiday under such section, regardless of whether 
     such holiday occurs during or outside the nurse's regularly 
     scheduled tour of duty under such work schedule.
       ``(c) 9-Month Work Schedule for Certain Nurses.--(1) The 
     Secretary may authorize a registered nurse appointed under 
     section 7405 of this title, with the nurse's written consent, 
     to work fulltime for nine months with 3 months off duty, 
     within a fiscal year, and be paid at 75 percent of the 
     fulltime rate for such nurse's grade for each pay period of 
     such fiscal year.
       ``(2) A nurse who works under the authority in paragraph 
     (1) shall be considered a 0.75 fulltime equivalent employee 
     in computing fulltime equivalent employees for the purposes 
     of determining compliance with personnel ceilings.
       ``(3) Work under this subsection shall be considered 
     parttime service for purposes of computing benefits under 
     chapters 83 and 84 of title 5.
       ``(4) A nurse who works under the authority in paragraph 
     (1) shall be considered a fulltime employee for purposes of 
     chapter 89 of title 5.
       ``(d) Treatment as Full-Time Employee.--(1) A nurse working 
     a work schedule under subsection (b) or (c) who is a full-
     time employee in non-probationary status at the commencement 
     of work under such work schedule shall remain a full-time 
     employee in non-probationary status while working under such 
     work schedule.
       ``(2)(A) A nurse under a part-time appointment under 
     section 7405(d) of this title who, while working a work 
     schedule under subsection (b) or (c), performs hours of 
     service (as determined in accordance with such subsection) 
     equivalent to two years of service shall be treated as a 
     full-time employee and no longer in probationary status.
       ``(B) In determining the hours of service performed by a 
     nurse for purposes of subparagraph (A), any hours of service 
     not performed under a work schedule under subsection (b) or 
     (c) shall not be included.
       ``(e) Notification of Modification of Benefits.--The 
     Secretary shall provide each nurse with respect to whom an 
     alternate work schedule under this section may apply written 
     notice of the effect, if any, the alternate work schedule 
     will have on the nurse's health care premium, retirement, 
     life insurance premium, probationary status, or other benefit 
     or condition of employment. The notice shall be provided not 
     later than 14 days before the nurse consents to the alternate 
     work schedule.
       ``(f) Regulations.--The Secretary shall prescribe 
     regulations to carry out this section.''.
       (2) The table of sections at the beginning of chapter 74 is 
     amended by inserting after the item relating to section 7456 
     the following new item:

``Sec. 7456A. Nurses: alternate work schedules.''.

       (b) Policy Against Work Shifts in Excess of 12 Hours.--(1) 
     It is the sense of Congress to encourage the Secretary of 
     Veterans Affairs to prevent work shifts by nurses providing 
     direct patient care in excess of 12 hours in any 24 hour 
     period.
       (2) Not later than one year after the date of the enactment 
     of this Act and every year thereafter for the next two years, 
     the Secretary shall certify to Congress whether or not each 
     Veterans Health Administration facility has in place, as of 
     the date of such certification, a policy designed to prevent 
     work shifts by nurses providing direct patient care in excess 
     of 12 hours in any 24 hour period.
       (c) Report on Overtime for Certain Nurses.--(1) Not later 
     than one year after the effective date of this Act, the 
     Secretary of Veterans Affairs shall submit to Congress a 
     report on the overtime, if any, worked by nurses covered by 
     work schedules described by subsections (b) and (c) of 
     section 7456A of title 38, United States Code (as added by 
     subsection (a)), during the one-year period ending on the 
     date of such report.
       (2) The report shall set forth--
       (A) the aggregate number of hours of overtime worked by 
     nurses under each such work schedule during the one-year 
     period ending on the date of the report; and
       (B) the aggregate amount of overtime pay paid to nurses 
     working under each such work schedule during such period.

     SEC. 5. RATE OF PAY FOR DIRECTOR OF NURSING SERVICE.

       (a) Senior Executive Service ES-6 Rate.--(1) Subchapter IV 
     of chapter 74 is amended by adding at the end the following 
     new section:

     ``Sec. 7459. Director of Nursing Service: rate of pay

       ``(a) Senior Executive Service ES-6 Rate.--The rate of pay 
     for the Director of Nursing Service shall be equal to the sum 
     of the maximum rate of basic pay established for the Senior 
     Executive Service under section 5382 of title 5 and the 
     amount of the locality-based comparability payment provided 
     under section 5304 of such title for the Director's locality.
       ``(b) Inapplicability of Nurse Pay Provision.--Section 7451 
     of this title does not apply to the Director of Nursing 
     Service.''.
       (2) The table of sections at the beginning of chapter 74 is 
     amended by inserting after the item relating to section 7458 
     the following new item:

``Sec. 7459. Director of Nursing Service: rate of pay.''.

       (b) Conforming Amendment.--Section 7404(d) is amended by 
     striking ``section 7457'' and inserting ``sections 7457 and 
     7459''.

     SEC. 6. NURSE EXECUTIVE SPECIAL PAY.

       Section 7452 is amended by adding at the end the following 
     new subsection:
       ``(g)(1) In order to recruit and retain highly qualified 
     Department nurse executives, the Secretary may, in accordance 
     with regulations prescribed by the Secretary, pay special pay 
     to the nurse executive at each location as follows:
       ``(A) Each Department healthcare facility.
       ``(B) The Central Office.
       ``(2) The amount of special pay paid to a nurse executive 
     under paragraph (1) shall be not less than $10,000 or more 
     than $25,000.
       ``(3) The amount of special pay paid to a nurse executive 
     under paragraph (1) shall be based on factors such as the 
     grade of the nurse executive position, the scope and 
     complexity of the nurse executive position, the personal 
     qualifications of the nurse executive, the characteristics of 
     the healthcare facility concerned, the nature and number of 
     specialty care units at the healthcare facility concerned, 
     demonstrated difficulties in recruitment and retention of 
     nurse executives at the healthcare facility concerned, and 
     such other factors as the Secretary considers appropriate.
       ``(4) Special pay paid to a nurse executive under paragraph 
     (1) shall be in addition to any other pay (including basic 
     pay) and allowances to which the nurse executive is entitled, 
     and shall be considered pay for all purposes, including 
     retirement benefits under chapters 83 and 84 of title 5, and 
     other benefits, but shall not be considered basic pay for 
     purposes of adverse actions under subchapter V.''.

     SEC. 7. CLARIFICATION OF DISCRETIONARY NATURE OF VETERANS 
                   HEALTH ADMINISTRATION PERSONNEL ADMINISTRATION 
                   AUTHORITIES.

       (a) In General.--Chapter 74 is amended by inserting after 
     section 7426 the following new section:

     ``Sec. 7427. Discretionary nature of functions

       ``Any authority assigned to the Secretary or another 
     officer of the Department under this chapter shall be carried 
     out at the discretion of the Secretary or other officer, as 
     the case may be.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 74 is amended by inserting after the 
     item relating to section 7426 the following new item:

``7427. Discretionary nature of functions.''.

     SEC. 8. EFFECTIVE DATE.

       The amendments to title 38, United States Code, made by 
     this Act shall take effect one year after the date of the 
     enactment of this Act.

  Mr. SPECTER. Mr. President, I seek recognition today to ask for 
Senate approval of a manager's amendment to S. 2484, the proposed 
``Department of Veterans Affairs Personnel Enhancement Act of 2004,'' 
and to ask for Senate approval of the bill as so amended. This 
amendment was developed in consultation with, and it has been approved 
by, the ranking member of the Senate Veterans' Affairs Committee, 
Senator Bob Graham.
  I introduced S. 2484 on June 1, 2004 at the request of the 
administration. That bill, in the form I introduced it, and as it was 
amended prior to its approval by the Senate Committee on Veterans' 
Affairs on July 20, 2004, is already explained in Senate Report 108-
357. Accordingly, I will not detail provisions

[[Page 20768]]

of the bill that are already explained in the Committee Report. Rather, 
I will confine this explanation to highlighting how the bill as now 
further amended--the ``Manager's bill''--would modify the reported 
bill.
  Section 3 of the reported bill makes changes in the system used by 
the Department of Veterans Affairs--VA--to compensate its physicians 
and dentists. The managers' bill contains many changes to this section. 
Some are primarily technical in nature and are designed to assure that 
the language of the bill actually accomplishes its intended purpose. 
These changes would, among other things, clarify how VA physicians' and 
dentists' retirement credits will be computed during the transition 
from the current to the new pay system; assure that statutory language 
requiring comparability pay increases is consistent with language in 
other Federal pay system statutes; and specify that physicians and 
dentists who work in VA headquarters will also be eligible for pay 
under the new pay system.
  Other changes made to section 3 of the reported bill are more 
substantive. Almost entirely, they respond to comments that were made 
on the reported bill by VA officials, by VA employee representatives, 
by physician and dentist professional organizations, and by the staffs 
of interested Senators, and by the staff of the House of 
Representatives' Committee on Veterans' Affairs. First, there are two 
changes that would foster more public awareness of, and input on, 
decisions made by VA that would affect the pay of physicians and 
dentists. One change would require that the VA Secretary publish in the 
Federal Register any updates in the national ``pay bands'' he or she 
might establish under authority of this legislation; another would 
require VA's Under Secretary for Health to solicit the views of 
exclusive employee representatives and physicians' and dentists' 
professional organizations before making recommendations to the 
Secretary on ``pay band'' modifications or other regulatory changes.
  Second, the Managers' bill would modify the reported bill's 
requirement that VA consult local Medical Professional Standards 
Boards--PSBs--prior to making decisions concerning the pay of 
physicians or dentists. It would only be required that an appropriate 
panel of physicians or dentists, as applicable, be consulted since not 
all VA facilities have an appropriate PSB in place. The managers' bill 
would also excise references to the required size of the board.
  Third, the Managers' bill would require VA to provide a physician or 
dentist written notice of decisions made by VA concerning his or her 
``market-based'' pay. Under the reported bill, such notification was 
only required in the event a physician's or dentist's pay were to 
increase.
  Fourth, the Managers' bill would create an exception to the general 
rule contained in the reported bill that a physician's or dentist's pay 
may not be reduced during his or her tenure with VA. The managers' 
amendment would permit VA to change pay--and reduce pay--if a physician 
or dentist changes his or her assignment within a medical facility or 
moves from one VA facility to another. For example, if VA were to hire 
a cardiologist at the prevailing market salary for a practicing 
cardiologist, but that physician later becomes a VA primary care 
physician, VA would be allowed to adjust his or her pay to the primary 
care physician level. Similarly, if a physician is hired in Manhattan 
at a Manhattan salary and later transfers to the DesMoines VA Medical 
Center, VA would be allowed to adjust his or her pay to DesMoines 
market rates. In cases where the move or change in assignment is 
involuntary due, for example, to disciplinary action, VA would be 
required to afford the employee an opportunity to appeal.
  Fifth, the reported bill included a provision which would have 
allowed VA to award ``incentive pay'' of up to $10,000 to physicians or 
dentists in recognition of outstanding contributions to the facility, 
to the care of veterans, or to the practice of medicine or dentistry. 
It was suggested that these standards were too general. In response, 
the managers' bill specifies that such pay--renamed ``performance 
pay''--would be awarded on the basis of the physician's or dentist's 
achievement of specific goals or objectives as revealed by the 
Secretary in advance. Additionally, the managers' bill would raise the 
amount payable as ``performance pay'' to $15,000 annually or 7.5 
percent of the sum of a physician's or dentist's base and market pay, 
whichever is lower. Inasmuch as the achievement of ``performance pay'' 
objectives are intended to be encouraged only by the ``positive 
reinforcement'' of a prospective bonus, the managers' bill would 
prohibit VA from taking disciplinary actions against physicians or 
dentists for failing to meet goals outlined under this program.
  Finally, the managers' bill, at VA's request, would make all of the 
changes to the VA physician and dentist compensation system effective 
the first pay period following January 1, 2006.
  Section 4 of the reported bill authorizes alternate work schedules 
for VA nurses. The managers' bill makes a number of technical changes, 
and two substantive changes. On the technical side, the managers' bill, 
for example, clarifies the full-time vs. part-time status of nurses 
working alternate schedules and specifies a requirement that VA provide 
notice to employees whose benefits might change under a new work 
schedule. Substantively, one modification would require that VA pay 
overtime to nurses on a 36/40 schedule in three instances: when work 
over 12 hours in one day is performed; when more than 40 hours are 
worked in an administrative work week; and when more than 8 hours are 
worked on a day not originally scheduled for a 12-hour shift. Each of 
these over-time scenarios is consistent with current practice; the 
change is made purely to ensure maintenance of the status quo. A second 
substantive change would express the Sense of the Congress that VA 
should prevent work hours by nurses in excess of 12 consecutive hours 
or over 60 hours in any seven-day period, and require VA to certify to 
Congress that each VA facility has policies in place designed to 
prevent nurses from working more than these tours of duty. The patient 
safety-related reasons for these requirements are explained in Senate 
Report 108-357.
  Section 5 of the reported bill would have provided a pay increase for 
the Director of Nursing Services in VA's Central Office. Due to 
disagreements concerning the implementation of this section of the 
bill, action on this proposed pay increase is deferred.
  The substance of Section 6 of the reported bill is unchanged. It is 
merely renumbered in light of the removal of section 5.
  Section 7 of the reported bill would have clarified VA authority with 
respect to certain personnel decisions. This provision, requested by VA 
as a purely technical ``clarification'' of existing law, was subject to 
much discussion and debate among VA officials, Committee staff, and 
employee representatives. It was taken by employee representatives to 
be a ``stealth attempt'' by VA to circumvent current collective 
bargaining agreements. The Committee does not ascribe such motives to 
VA, but it has withdrawn this provision from the managers' bill.
  Section 8 of the reported bill specified that all provisions of the 
bill would have been effective one year following the date of 
enactment. Section 3 of the managers' bill changes the effective date 
applicable to that provision to the first pay period following January 
1, 2006. The other provisions of the managers' bill would now take 
effect upon enactment of the managers' bill.
  This legislation is the product of almost unprecedented open 
negotiation with very senior VA officials, unions representing 
Government employees, professional representatives of VA physicians and 
dentists, and other interested persons. This unprecedented ``sunshine'' 
has resulted, I think, in an exceptional bill. But for the 
extraordinary efforts of VA, union, and professional organization 
officials to resolve their differences in good faith, this improved 
managers' bill could not have emerged. They and the Congressional staff 
are to be complimented. But the

[[Page 20769]]

efforts of one person--Mr. William T. Cahill, the Veterans Affairs 
Committee's Health Policy Counsel--deserve to be singled out for 
recognition. But for his steadfast and determined efforts to push this 
project through numerous impasses that had impeded its development, we 
would not have gotten to this day.
  Mr. GRAHAM. Mr. President, I rise today to urge swift passage of S. 
2484, which reflects a compromise agreement on a new system for 
compensating physicians and dentists in the Department of Veterans 
Affairs' VA health care system, as well as alternative work schedules 
for VA nurses. VA doctors and dentists have not gotten a pay adjustment 
in over a decade. All of these measures are aimed at improving VA's 
ability to recruit and retain quality health care professionals. I 
would like to highlight some of the key aspects of this legislation.
  The compromise agreement sets forth a three-tiered system for paying 
VA physicians and dentists. The three tiers consist of base, market, 
and performance pay. The base pay element is similar to that employed 
by other Federal agencies, also known as the General Schedule GS--
system. As such, increases are guaranteed for every 2 years a physician 
or dentist remains employed by VA.
  The second component of the new pay system is market pay. This 
element will be implemented by the Secretary in the form of pay bands 
that will be determined by surveys of regional salaries in the academic 
and private sectors. Also relevant to the market pay determinations are 
factors such as the scarcity--or abundance--of certain specialty 
physicians, type and years of experience, and board certifications. 
Finally, the Secretary will consult with professional review panels 
composed of other physicians or dentists.
  The final component is performance pay. Performance pay will be 
awarded to doctors and dentists if they meet certain goals and measures 
set forth by the Secretary. Currently, VA has extensive performance 
measures that it utilizes to motivate its health care providers and 
ensure quality of care. This element has a maximum of $15,000 or 7.5 
percent of the sum of the base and market pay.
  One other major section of this agreement establishes alternative 
work schedules for VA nurses. It is widely known that the entire 
country is suffering from a nursing shortage. VA anticipates that it 
will be hit especially hard by the retirement of a significant portion 
of its nursing workforce over the next 10 years. S. 2484 allows VA to 
employ different types of working schedules in order to attract more 
nurses to the system.
  I am proud to have worked on this valuable piece of legislation for 
our Nation's veterans.
  Mr. FRIST. I ask unanimous consent the substitute amendment at the 
desk be agreed to, the bill, as amended, be read a third time and 
passed, the amendment to the title be agreed to, the motions to 
reconsider be laid on the table en bloc, and any statements be printed 
in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (3973) was agreed to.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  The bill (S. 2484), as amended, was passed.
  The title was amended so as to read:

       ``An Act to amend title 38, United States Code, to simplify 
     and improve pay provisions for physicians and dentists and to 
     authorize alternate work schedules and executive pay for 
     nurses, and for other purposes.''.

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