Health Security Act: Analysis of Veterans' Health Care Provisions (Fact
Sheet, 07/15/94, GAO/HEHS-94-205FS).
Reform of the nation's health care system to reduce the number of
Americans who lack coverage of basic acute health care services could
significantly reduce demand for such services in facilities administered
by the Department of Veterans Affairs (VA). GAO reported in 1992 that if
changes were not made in the VA health care system as part of health
reform, VA hospitals could lose about 50 percent of their acute hospital
workload and 44 percent of their outpatient workload. To assist the
Congressional Veterans' Affairs Committees, which will be considering
legislation to fundamentally reform the VA health care system and
veterans' health benefits, GAO prepared this fact sheet which analyzes
the veterans affairs provisions of the administration's proposed Health
Security Act.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: HEHS-94-205FS
TITLE: Health Security Act: Analysis of Veterans' Health Care
Provisions
DATE: 07/15/94
SUBJECT: Health care services
Health services administration
Community health services
Veterans benefits
Veterans hospitals
Hospital care services
Health insurance cost control
Health resources utilization
Health care planning
Proposed legislation
IDENTIFIER: Health Security Act
Clinton Health Care Plan
National Health Care Reform Initiative
Medicare Program
VA Health Care Transition Fund
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Cover
================================================================ COVER
Fact Sheet for Congressional Committees
July 1994
HEALTH SECURITY ACT - ANALYSIS OF
VETERANS' HEALTH CARE PROVISIONS
GAO/HEHS-94-205FS
VA Under the Health Security Act
Abbreviations
=============================================================== ABBREV
CHAMPUS - Civilian Health and Medical Program of the Uniformed
Services
CHAMPVA - Civilian Health and Medical Program of the Department of
Veterans Affairs
HMO - Health Maintenance Organization
VA - Department of Veterans Affairs
Letter
=============================================================== LETTER
B-257871
July 15, 1994
The Honorable John D. Rockefeller IV
Chairman
The Honorable Frank H. Murkowski
Ranking Minority Member
Committee on Veterans' Affairs
United States Senate
The Honorable G.V. (Sonny) Montgomery
Chairman
The Honorable Bob Stump
Ranking Minority Member
Committee on Veterans' Affairs
House of Representatives
Reform of the nation's health care system to reduce the number of
Americans who lack coverage of basic acute health care services could
significantly reduce demand for VA acute health care services. We
first reported in June 1992 that, if changes were not made in the VA
health care system as part of health reform, VA hospitals could lose
about 50 percent of their acute hospital workload and 40 percent of
their outpatient workload.\1
The Veterans' Affairs Committees will be considering legislation to
fundamentally reform the Department of Veterans Affairs (VA) health
care system and veterans' health benefits. We prepared this fact
sheet to help the Committees in their deliberations on this important
legislation. In summary, it contains the following:
Our section-by-section analysis of the veterans' health care
provisions of the administration's Health Security Act (title
VIII, subtitle B of H.R. 3600/S. 1757), including the
amendments approved by the Subcommittee on Hospitals and Health
Care, House Committee on Veterans' Affairs on May 11, 1994.
(See section 1.)
A list of 19 GAO reports, testimonies, and correspondence issued
during the past 2-1/2 years on different aspects of VA's role
under health reform. Summaries for selected products are
included. (See section 2.)
--------------------
\1 VA Health Care: Alternative Health Insurance Reduces Demand for
VA Care (GAO/HRD-92-79, June 30, 1992).
BACKGROUND
------------------------------------------------------------ Letter :1
Our December 1992 Transition Series report, Veterans Affairs Issues,
identified several options for preserving veterans' health care
benefits under a reformed health care system. These options include
maintaining a smaller direct delivery system strictly for veterans
but focusing on those services, such as treatment of spinal cord
injuries and service-connected disabilities, that may not be
adequately covered under a reformed national health care system;
maintaining the current direct delivery system but opening the
system to other federal beneficiaries to maintain work loads;
converting some existing facilities to other uses, such as
long-term psychiatric care, nursing home care, housing for
homeless veterans, or AIDS treatment facilities;
merging the VA system with one or more of the other federal health
care delivery systems, such as the Department of Defense health
care system; or
eliminating the separate VA health care system and meeting the
nation's commitment to veterans by supplementing the coverage
available under a national health care reform initiative.
Since then, many legislative proposals have been introduced in both
the House and Senate to reform the nation's health care system. Only
one, however, the administration's Health Security Act, contains
specific proposals for restructuring the veterans' health care
system.
HEALTH SECURITY ACT WOULD
AUTHORIZE VA TO ESTABLISH
MANAGED CARE PLANS
------------------------------------------------------------ Letter :2
The proposed Health Security Act would make fundamental changes both
in how VA operates and in the benefits to which veterans using VA are
entitled. In this regard, the act would (1) transform VA facilities
into a series of managed care plans to compete with private-sector
plans and (2) expand entitlement to free comprehensive health care
services for veterans choosing to enroll in a VA health plan. In
addition, the act would provide the following:
VA health plans could impose no cost sharing of any kind, including
premiums, copayments, deductibles, and coinsurance for "core
group" veterans (that is, veterans with service-connected
disabilities or low incomes, former prisoners of war, and
veterans of World War I or the Mexican Border Period) who enroll
in VA health plans. (See pp. 23-25.)
VA services not covered under the comprehensive benefit package
would continue to be offered to all veterans under existing
eligibility and entitlement provisions. In most cases, the
provision of such services would be subject to the availability
of resources and facilities. (See p. 14.)
VA would be given the authority to provide services to the
dependents of veterans. (See p. 12.)
VA would be authorized to establish supplemental benefits and
cost-sharing policies. (See p. 16.)
VA health care facilities would be deemed Medicare providers and VA
health plans deemed Medicare health maintenance organizations
(HMOs). (See p. 27.)
VA health plans would be allowed to contract for services without
regard to laws requiring competitive procedures. (See p. 39.)
Requirements would be eliminated that the VA notify the Congress
before administrative reorganizations. (See p. 40.)
VA would be authorized to establish its own personnel system
tailored to individual health plan needs and thus would be
exempt from most federal personnel requirements. (See p. 41.)
VA would be authorized to market its health plans but would be
restricted to use of nonappropriated funds for marketing
activities. (See p. 42.)
The Health Security Act also contains several new financing
mechanisms to help offset the costs of VA health plans:
VA would be authorized to recover from Medicare for services
provided to higher income nonservice-connected Medicare-eligible
veterans. VA would be allowed to retain funds recovered from
Medicare. (See p. 28.)
VA would be authorized to retain premiums (both the employer and
employee shares), copayments, and deductibles for veterans
enrolling in VA health plans. (See p. 28.)
Revenues received by VA health plans, including premiums,
copayments and coinsurance, deductibles, and amounts received as
reimbursements from other health plans for services provided to
its enrollees, would be deposited in a revolving fund. The
funds would be available without fiscal year limitations and
could be distributed among VA health plans. (See p. 29.)
A sum of $3.3 billion would be appropriated to a VA Health Care
Transition Fund over a 3-year period to cover construction of
additional outpatient clinics and other start-up costs for the
health plans. (See p. 42.)
SUBCOMMITTEE ON HOSPITALS AND
HEALTH CARE APPROVES AMENDMENTS
TO THE HEALTH SECURITY ACT
------------------------------------------------------------ Letter :3
On May 11, 1994, the Subcommittee on Hospitals and Health Care
approved amendments to the Health Security Act offered by Chairman
Rowland and Congressmen Smith (N.J.), Kennedy (Mass.), and Gutierrez
(Ill.). Major changes approved by the Subcommittee include the
following:
VA would be required to maintain the capacity to provide for the
specialized treatment and rehabilitative needs of disabled
veterans. VA would be required to ensure that its overall
capacity to provide such services not be reduced below capacity
when the Health Security Act is enacted. (See p. 15.)
VA health plans would not be allowed to sell a supplemental policy
to a veteran that provides coverage for services that VA is
required to provide to that veteran. (See p. 17.)
VA would not be allowed to impose or collect a cost share from a
service-connected veteran enrolled in a non-VA health plan for
specialized treatment provided by a VA facility. (See p. 21.)
VA health plans would not be allowed to provide or pay for
abortions except when the danger of death to the mother exists
or the pregnancy is the result of a forcible rape or incest.
(See p. 22.)
The prohibition on imposing cost sharing for core group veterans
enrolling in VA health plans would be limited to services
covered under the comprehensive benefit package. (See p. 23.)
VA health plans would be required to set their premiums and other
cost sharing on the basis of rules established by the health
alliances under which they operate. (See p. 26.)
Provisions would be established to provide guaranteed funding of VA
health plans. The Secretary of the Treasury would be required
to make quarterly deposits into the revolving fund from amounts
not otherwise appropriated on the basis of amounts certified by
VA. (See p. 31.)
VA's exemption from contracting requirements would be broadened.
Health plans would be exempt from virtually all federal
contracting laws and regulations in obtaining a health care
resource. (See pp. 39 and 41.)
VA health plans would be allowed to use both appropriated and
nonappropriated funds for marketing activities. (See p. 42.)
The initial appropriation authorization for the Health Care
Transition Fund would be increased from $3.3 billion to $4.05
billion, and the funds would be made available without fiscal
year limitation. (See p. 42.)
A new entitlement to nursing home care would be created for
veterans with service-connected disabilities rated at 50 percent
or more and veterans who require nursing home care for a
service-connected disability. (See p. 45.)
Core group veterans enrolling in VA health plans would be entitled
to any outpatient services offered by VA that are not in the
comprehensive benefit package without restrictions or cost
sharing. (See p. 45.)
Veterans enrolling in non-VA health plans and higher income
nonservice-connected veterans enrolled in VA health plans could
obtain outpatient services not covered under the comprehensive
benefit package or not fully covered without regard to whether
such service would obviate the need for hospital care or whether
the service is reasonably necessary in preparation for hospital
admission. (See p. 46.)
Veterans exposed to toxic substances or ionizing radiation would be
authorized free care for conditions possibly related to such
exposures, consistent with current law. (See p. 47.)
Notwithstanding any other provisions of the Health Security Act,
the provisions relating to free comprehensive care to core group
veterans would take effect on October 1, 1995. (See p. 50.)
---------------------------------------------------------- Letter :3.1
We did not obtain formal comments on this fact sheet; however, we did
discuss the information presented in this fact sheet with responsible
agency officials. We considered their comments.
We are providing copies of this fact sheet to each Member of the
House and Senate Veterans' Affairs Committees, to the Chairmen and
Ranking Minority Members of other Committees having jurisdiction over
the Health Security Act, the Secretary of Veterans Affairs, and other
interested parties. Copies will be available to others upon request.
This report was prepared under the direction of James R. Linz,
Assistant Director, Federal Health Care Delivery Issues. Please call
Mr. Linz or me at (202) 512-7101 if you or your staff have any
questions. Susan Poling, Assistant General Counsel, also contributed
to this report and can be reached at (202) 512-5881.
David P. Baine
Director, Federal Health
Care Delivery Issues
ANALYSIS OF THE VETERANS HEALTH
CARE PROVISIONS OF THE HEALTH
SECURITY ACT AS AMENDED
============================================================ Chapter 1
This table contains the original language of the Health Security Act
(H.R. 3600) as introduced and the amendments to the act as approved
by the Subcommittee on Hospitals and Health Care, House Committee on
Veterans' Affairs. Language from the original bill deleted during
markup on May 11, 1994, is enclosed in brackets. Language added
during markup is in boldface type. Additional GAO analyses are also
in boldface type.
Section Provision GAO Analysis
------------------------- ------------------------- --------------------------
Health Security Act
--------------------------------------------------------------------------------
Title VIII: Subtitle B-- Title 38, United States Establishes a new chapter
Department of Veterans Code, is amended by 18 under title 38 U.S.C.
Affairs inserting after chapter that outlines VA's role as
17 the following new a participant in health
8101. Benefits and chapter: reform.
Eligibility Through
Department of Veterans "Chapter 18--Eligibility Adds a new section 1835 to
Affairs Medical System and Benefits Under Health title 38 U.S.C.
Security Act
(a) DVA as a Participant Subchapter [1]I--
in Health Care Reform. General
1801. Definitions
(1) In General. Subchapter [2]II--
Enrollment
1811. Enrollment:
veterans.
1812. Enrollment: CHAMPVA
eligibles.
1813. Enrollment: family
members.
Subchapter [3]III--
Benefits
1821. Benefits for VA
enrollees.
1822. Chapter 17
benefits.
1823. Supplemental
benefits packages and
policies.
1824. Limitation
regarding veterans
enrolled with health
plans outside
Department.
Subchapter [4]IV--
Financial Matters
1831. Premiums,
copayments, etc.
1832. Medicare coverage
and reimbursement.
1833. Recovery of cost of
certain care and
services.
1834. Health Plan
Fund[s].
1835. Guaranteed funding
of Government costs
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
For purposes of this Provides definitions of
Subchapter chapter: "health plan," "VA health
1--General plan," and "VA enrollee."
(1) The term "health Because, under the
1801. Definitions plan" means an entity proposed 38 U.S.C.
that has been certified 1832(b), a VA health plan
under the Health Security would be considered a
Act as a health plan. Medicare health
maintenance organization
(2) The term "VA health (HMO), the term "VA
plan" means a health plan enrollee" refers to
that is operated by the individuals enrolled in a
Secretary under section VA health plan functioning
7341 of this title. as either a regional
alliance health plan or a
(3) The term "VA Medicare HMO.
enrollee" means an
individual enrolled under (1) Revises the definition
the Health Security Act of "VA enrollee" to make
and subchapter II of this it clear that it applies
chapter in a VA health to an individual enrolled
plan. under subchapter II of the
proposed chapter 18, title
(4) The term 38 U.S.C. The proposed
"comprehensive benefit section 1811 under
package" means the subchapter II is amended
package of benefits to specifically authorize
required to be provided Medicare-eligible veterans
by a health plan under to enroll in VA health
the Health Security Act. plans.
(2) Adds a definition of
"comprehensive benefit
package." "Comprehensive
benefit package" means the
package of benefits a
health plan is required to
provide under the Health
Security Act.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
Subchapter II-- Each veteran who is an This section states that
Enrollment eligible individual veterans who are
within the meaning of "eligible" individuals
1811. Enrollment: section 1001 of the under section 1001 of the
Veterans Health Security Act Health Security Act may
(including a veteran who enroll in a VA health
is a medicare-eligible plan. Section 1001
individual as defined in provides an entitlement to
section 1902 of that Act) the comprehensive benefit
may enroll with a VA package through enrollment
health plan. A veteran in an applicable health
who wants to receive the plan.
comprehensive benefit
package through the Section 1001(d) states
Department shall enroll that Medicare
with a VA health plan. beneficiaries will
generally not be entitled
to the comprehensive
benefit package through
enrollment in regional
alliance health plans. The
exceptions are those
states where the state has
chosen to integrate
Medicare beneficiaries
into the regional alliance
plans (section 4001) and
those Medicare
beneficiaries who are
still employed or have a
spouse still employed
(section 1012(a)). These
restrictions on enrollment
in regional alliance
health plans would, on the
surface, appear to prevent
Medicare-eligible
veterans, other than those
described above, from
enrolling in a VA health
plan.
Other Health Security Act
provisions, however, that
would deem VA health plans
Medicare HMOs (section
1832 of the proposed new
chapter 18, title 38
U.S.C.) would allow
Medicare-eligible veterans
to enroll in VA health
plans regardless of
whether states chose to
bring Medicare into the
alliances. In addition,
section 1004(b) of the
Health Security Act
designates the VA health
plan as the applicable
health plan for veterans
who choose to enroll in a
VA health plan.
Revised to clearly specify
that Medicare-eligible
veterans are eligible to
enroll in VA health plans.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1812. Enrollment: (a) Eligibility. An Civilian Health and
CHAMPVA-Eligibles individual described in Medical Program of the
subsection (b) [who is Department of Veterans
eligible for benefits Affairs (CHAMPVA)-
under section 1713 of eligible individuals can
this title and] who is enroll in a VA health plan
eligible to enroll in a in the same manner as a
health plan pursuant to veteran.
section 1001 of the
Health Security Act may Adds clarifying language
enroll under that Act to limit enrollment in VA
with a VA health plan [in health plans to those
the same manner as a CHAMPVA eligibles not
veteran]. otherwise eligible for
CHAMPUS. Specifically, it
(b) Applicability. This applies to
section applies to the
following individuals who --the surviving spouse or
are not otherwise child of a veteran who
eligible for medical care died as a result of a
under chapter 55 of title service-connected
10 (CHAMPUS): disability or was
permanently and totally
(1) The surviving spouse disabled at the time of
or child of a veteran who death, resulting from a
(A) died as a result of a service-connected
service-connected disability and
disability, or (B) at the
time of death had a total --the surviving spouse or
disability permanent in child of a person who died
nature, resulting from a in the line of duty.
service-connected
disability. "Child" has the meaning
given the term under the
(2) The surviving spouse Health Security Act.
or child of a person who
died in the active
military, naval, or air
service in the line of
duty and not due to such
person's own misconduct.
(c) Definition of Child.
For purposes of this
section, the term "child"
has the meaning given the
term in section 1011 of
the Health Security Act.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1813. Enrollment: Family (a) Eligibility. The The Secretary would be
Members Secretary shall [may] given the discretion to
authorize a VA health enroll family members of
plan to enroll members of veterans and CHAMPVA
the family of an enrollee beneficiaries in VA health
under section 1811 or plans. Family members'
1812 of this title.[, enrollment would be
subject to payment of subject to payment of
premiums, deductibles, premiums, deductibles,
copayments, and copayments, and
coinsurance as required coinsurance as required
under the Health Security under the Health Security
Act.]The enrollee shall Act. Under section 1011(b)
have the option of of the Health Security
enrolling in the VA Act, the term "family"
health plan as an includes the veteran's
individual or with family spouse if the spouse is an
members. If the enrollee eligible individual and
chooses to enroll in the the veteran's (and his/
VA health plan with her spouse's) children if
family members, all such they are eligible
family members must be so individuals.
enrolled.
Changes from discretionary
to mandatory the
Secretary's authorization
of dependent coverage by
VA health plans. Provides
that if a veteran decides
to enroll in a VA health
plan with family members,
then all family members
must enroll.
Moves reference to cost-
sharing requirements in
subsection (a) to new
subsection (b) (see
below).
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1813. (continued) Family members (other than
(b) Required Payments. a spouse or child of a
Any family member veteran who has a total
enrolled in a VA health disability, permanent in
plan shall (except as nature, resulting from a
provided in section service-connected
1831(c)(2)(B) of this disability) must pay
title) be subject to premiums, deductibles,
payment of premiums, copayments, and
deductibles, copayments, coinsurance as required
and coinsurance as under the Health Security
required under the Health Act.
Security Act.
(c) Enrollment It is not clear how
Eligibility To Survive premium payments would be
Death of Veteran. An determined for family
individual who is members of core group
enrolled with a VA health veterans opting to enroll
plan pursuant to in VA health plans with
subsection (a) as a family members. In other
member of the family of a words, one premium would
veteran enrolled under be established for the
section 1811 of this family enrollment, but the
title shall not lose "core" group veteran could
eligibility to be not be charged a premium,
enrolled with VA health while family members
plans by reason of the could.
death of that veteran.
(d) Members of Family. Provides that enrollment
[(b)] For purposes of eligibility survives the
this section, the members death of the veteran for
of the family of an those family members
enrollee are [subsection enrolled in a VA health
(a), an enrollee's family plan. It appears that
is] those individuals survivors of veterans
(other than the enrollee) enrolled in non-VA health
included within the term plans and those survivors
"family" as defined in who enroll in non-VA
section 1011(b) of the health plans after the
Health Security Act. death of the "sponsoring"
veteran would no longer be
eligible to enroll in a VA
health plan, unless
eligible under section
1812 under CHAMPVA.
Subchapter III-- The Secretary shall This section provides that
Benefits ensure that each VA a VA health plan must
health plan provides to provide to each individual
1821. Benefits for VA each individual enrolled enrolled in the plan the
Enrollees with it the items and same comprehensive benefit
services in the package that other
comprehensive benefit competing health plans
package under the Health must provide.
Security Act.
The Health Security Act
requirements for the
comprehensive benefit
package would extend to
veterans enrolling in a VA
health plan functioning as
a Medicare HMO.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1822. Chapter 17 Benefits (a) Care and Services Not Chapter 17 benefits not
Included In Comprehensive covered under the
Benefit Package. In the comprehensive benefit
case of care and services package would continue to
that may be provided be available to veterans
under chapter 17 of this enrolled in either a VA or
title that are not other health plan under
included in the the same terms and
comprehensive benefit conditions that currently
package, the Secretary apply to that veteran
shall provide to any under chapter 17 of title
veteran (whether or not 38 of the U.S.C. Among the
enrolled with the health terms and conditions that
plan) the care and apply under chapter 17 are
services authorized under requirements that (1)
this chapter in nonservice-connected
accordance with the terms veterans be admitted to a
and conditions applicable VA hospital before they
to that veteran and that can be admitted to
care under that chapter. community nursing homes
[The Secretary shall under VA sponsorship and
provide to veterans the (2) dental treatment must
care and services that have begun while they were
are authorized to be hospitalized in a VA
provided under chapter 17 hospital for most veterans
of this title in to be eligible to receive
accordance with the terms outpatient dental care.
and conditions applicable While these terms and
to that veteran and that conditions would apply
care under such chapter, both to veterans enrolling
notwithstanding that such in VA and non-VA health
care and services are not plans, they would appear
included in the to have greater effect on
comprehensive benefit veterans enrolling in non-
package.] VA plans because they
would be unable to meet
(b) Veterans Who Are Not the requirements relating
Eligible to Enroll Under to treatment in VA
Health Security Act. In hospitals unless their
the case of a veteran who health plans contracted
is not an eligible with VA health plans to
individual within the allow hospitalization in a
meaning of section 1001 VA hospital.
of the Health Security
Act, the Secretary shall Adds a new provision
provide to the veteran covering veterans living
the care and services overseas who are not
that may be provided eligible to enroll under
under chapter 17 of this the Health Security Act.
title through any They will be provided the
facility of the care and services that may
department, whether or be provided under chapter
not the facility is 17 of 38 U.S.C. through
operating as or within a any VA facility whether or
VA health plan. not the facility is
operating as or within a
VA health plan.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1822. Chapter 17 Benefits (c) Preservation of Requires that the
(continued) Specialized DVA Treatment Secretary of Veterans
Capacities. In carrying Affairs maintain the
out subsection (a), the capacity to provide for
Secretary shall ensure the specialized treatment
that the Department and rehabilitative needs
maintains the capacity to of disabled veterans
provide for the (including spinal cord
specialized treatment and injury, blind
rehabilitative needs of rehabilitation, and mental
disabled veterans illness) within distinct
(including veterans with VA programs or facilities.
spinal cord dysfunction,
blindness, and mental The Secretary of Veterans
illness) within distinct Affairs shall ensure that
programs or facilities of VA's overall capacity to
the Department that are provide such specialized
dedicated to the services is not reduced
specialized needs of below VA's capacity to
those veterans in a provide the services at
manner that affords those the time of enactment. The
veterans reasonable section also makes it
access to care and clear that it is not
services for those intended to prevent VA
specialized needs. The from expanding the number
Secretary shall ensure or types of facilities
that overall capacity of providing specialized
the Department to provide medical treatments.
such specialized services
is not reduced below the Maintaining current
capacity of the capacity to provide
Department, nationwide, specialized care could,
to provide those over time, result in a
services, as of the date degradation in the ability
of the enactment of this to meet the special care
chapter. Nothing in this needs of veterans, as
subsection precludes the those needs change,
Secretary from expanding particularly with respect
the number or type of to long-term care. In
facilities or programs addition, the eligibility
that provide treatment expansions added under
and rehabilitation section 8103 of the Health
services for the Security Act could
specialized needs of such increase demand for
veterans, including chapter 17 benefits.
provision of specialized
services on an outpatient
basis.
1822. Chapter 17 Benefits (d) Annual Report. Not Adds a new requirement
(continued) later than March 1 of that the Secretary of
each year, the Secretary Veterans Affairs submit an
shall submit to the annual report to the House
Committees on Veterans' and Senate Veterans'
Affairs of the Senate and Affairs Committees
House of Representatives describing the actions
a report describing the taken in carrying out the
actions the Secretary has provisions relating to
taken to carry out VA's specialized treatment
subsection (c) during the and rehabilitative
preceding year. Each such programs. The report must
report shall include a include the number of
statement of the number veterans provided
of veterans to whom the specialized services, the
Department provided alternatives available in
specialized services that the private sector for
are covered by the report provision of the
and the expense of specialized services, and
providing those services, the cost of providing
and a description of the those services.
alternatives available in
the private sector for
the provision of those
services to veterans.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
A VA health plan may The section would
1823. Supplemental offer supplemental health authorize VA to market two
Benefits Packages and benefits policies and types of supplemental
Policies supplemental cost sharing insurance: (1)
policies consistent [for supplemental health
health care services not benefits policies and (2)
provided under chapter 17 cost-sharing policies.
of this title and cost Generally, section
sharing policies 1421(b)(1) of the Health
consistent] with the Security Act defines
requirements of part 2 of supplemental benefits
subtitle E of title I of policies to be health
the Health Security Act. benefit plans or health
insurance policies that
provide (1) coverage for
services and items not
included in the
comprehensive benefit
package and/or (2)
coverage for items and
services included in such
package but not covered
because of a limitation in
amount, duration, or
scope. Section 1421(b)(2)
of the Health Security Act
defines cost-sharing
policies to be health
insurance policies or
health benefits plans that
provide coverage for
deductibles, coinsurance,
and copayments imposed as
part of the comprehensive
benefit package, whether
imposed under a higher
cost-sharing plan or with
respect to nonnetwork
providers.
It is not clear what the
phrase "not provided under
chapter 17" means. If "not
provided under chapter 17"
refers to services
authorized by but not
provided to a veteran
under chapter 17 because
of restrictions on
resources or eligibility,
then the Secretary of
Veterans Affairs would, at
his or her discretion, be
able to sell supplemental
policies covering such
services as nursing home
care. The Secretary would
appear to also have wide
discretion to discontinue
sale of such policies.
Amended to delete the
reference to "not provided
under chapter 17."
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1823 (continued) However, a VA health plan It is also unclear which
may not offer a individuals could purchase
supplemental health VA supplemental health
benefits package to a benefits policies. Section
veteran that provides 1422(b)(1) generally
coverage for services provides that an entity
that the Department is offering a supplemental
required to provide to health benefits policy
that veteran under must accept for enrollment
chapter 17 of this title. every individual who seeks
such enrollment, subject
to capacity and financial
limits. Thus, it appears
the supplemental policies
would have to be made
available to veterans and
their dependents and
perhaps to others in the
health alliance. VA
officials agreed that the
language of section
1422(b)(1) is ambiguous
but pointed out that other
provisions of the Health
Security Act would prevent
most nonveterans from
enrolling in VA health
plans. VA could limit the
availability of
supplemental benefits
policies based on its
capacity to provide the
covered services, but
would be required to offer
the policies on a first-
come, first-served basis
as long as capacity holds
out.
Amended to provide that VA
health plans may not offer
a supplemental benefit
package to a veteran that
provides coverage for
services that VA is
required to provide to
that veteran under chapter
17 of 38 U.S.C. Many of
the services that might be
offered through
supplemental benefits
policies, including
nursing home care for
service-connected
veterans, would be made
entitlements, funded
entirely through
appropriations, by other
new provisions (section
8103). Core group
veterans' entitlement to
such services would be
subject to the
availability of space and
resources.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1823 (continued) If space or resources are
limited, veterans
purchasing supplemental
policies would have the
highest priority for care.
Availability of nursing
home care could be further
restricted for low-income
nonservice-connected
veterans, former prisoners
of war, and World War I
veterans through the sale
of supplemental benefits
policies. This is because
provision of nursing home
care would continue to be
optional. In effect, such
veterans could obtain
nursing home care only to
the extent that space and
resources remain after the
needs of higher income
veterans purchasing
supplemental policies are
met.
The effect of the proposed
new section 1831(a) of
title 38 U.S.C. on sale of
supplemental policies is
unclear. It might prevent
VA from charging premiums
or other cost sharing for
supplemental policies, at
least for those policies
covering items and
services covered under
chapter 17 of 38 U.S.C.,
purchased by veterans
described under 38 U.S.C.
1831(b) who enroll in the
VA health plan. VA
officials told us that, in
their opinion, the
proposed section 1831(a)
of title 38 U.S.C. would
apply only to the
comprehensive benefit
package. Service-
connected and low-income
veterans would, in their
opinion, be required to
pay the same premiums for
supplemental policies that
apply to other veterans.
Section 1831(a) was
amended to indicate that
it applies only to
services covered under the
comprehensive benefit
package. Service-
connected and low-income
veterans enrolling in VA
health plans, however,
would, under the new
section 8103(b) of the
Health Security Act, be
provided any outpatient
service, whether or not it
is included in the
comprehensive benefit
package, free of charge
based on their eligibility
for free care under
chapter 17 of 38 U.S.C.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1823 (continued) I n addition, it is unclear
whether VA must recover
the full cost of such
policies from those
required to pay a
premium.
Cost-sharing policies
would appear to be
available only to those
veterans and other VA
health plan enrollees not
entitled to free care.
Under section 1423 of the
Health Security Act, cost-
sharing policies must be
offered to all individuals
enrolled in the plan. This
means that CHAMPVA
beneficiaries and
veterans' dependents would
be eligible to purchase
cost-sharing policies. The
policies would be required
to have loss ratios not
lower than 90 percent.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1824. Limitation (a) Reimbursement A veteran enrolling in a
Regarding Veterans Required. A veteran who non-VA health plan could
Enrolled With Health is residing in a regional obtain items and services
Plans Outside Department alliance area in which covered under the
the Department operates a comprehensive benefit
health plan and who is package from a VA health
enrolled in a health plan plan only if his or her
that is not operated by health plan reimbursed VA
the Department may be the full cost of the care
provided the items and provided. This section
services in the shifts responsibility for
comprehensive benefit treatment of service-
package by a VA health connected disabilities
plan operating in that from the government to
regional alliance area individual health plans to
only if the plan is the extent that the
reimbursed in accordance treatments are covered
with the Health Security under the comprehensive
Act for [the actual and benefit package. In other
full] cost of the care words, service-connected
provided. veterans in non-VA health
plans could use VA for
treatment of their
service-connected
disabilities only if (1)
their health plan agreed
to reimburse VA for the
costs of such care or (2)
the needed services are
covered under chapter 17,
title 38 U.S.C. but not
under the comprehensive
benefit package.
Amended to substitute the
requirement that VA be
reimbursed "in accordance
with the Health Security
Act" for the prior
requirement that VA be
reimbursed "the full and
actual cost" of services
included in the
comprehensive benefit plan
provided to veterans
enrolled in non-VA health
plans. This would enable
health plans to reimburse
VA at out-of-plan rates
and require veterans to
pay higher copayments and
deductibles to obtain care
from VA than they would
pay for care provided by
their health plan.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1824 (continued) (b) Exception. The Amended to provide that a
Secretary may not impose veteran who is treated for
on or collect from a a service-connected
veteran described in disability requiring
subsection (a) a cost- specialized treatment
share charge of any kind capacity for which the VA
in the case of treatment has a particular expertise
for a service-connected be exempt from any cost-
disability requiring a sharing obligations the
specialized treatment veteran has under the
capacity for which the veteran's non-VA health
Department has particular plan.
expertise.
This provision could
unintentionally discourage
VA health plans from
providing out-of-plan
treatment to service-
connected veterans because
the health plans would
have to absorb the
veterans' cost shares;
they would be allowed to
collect and retain
veterans' cost shares for
nonservice-connected care.
VA officials believe VA
health plans would always
provide care to service-
connected veterans even if
they have to absorb the
costs.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1825. Abortions Through (a) Prohibition-- Amended to prohibit VA
VA Health Plans: Notwithstanding the health plans from
Prohibition provisions of the providing or paying for
comprehensive benefit abortions except when the
package, a VA health plan pregnancy (1) would
may not provide abortions threaten the life of the
(either by the mother if carried to full
performance of an term or (2) resulted from
abortion in a Department forcible rape or incest.
facility or by payment
for the performance of an If the comprehensive
abortion outside a benefit package includes
Department facility) broader coverage of
except in a case in abortions than is
which-- authorized for VA health
plans under this
(1) a woman suffers from amendment, women veterans
a physical disorder, with service-connected
illness, or injury that disabilities or low
would, as certified by a incomes would need to
physician, place the choose between their VA
woman in danger of death health care benefits and a
if the fetus were carried health plan offering
to term; or broader coverage of
abortions. To obtain the
(2) the pregnancy is the abortion coverage, women
result of a forcible rape veterans with service-
or incest. connected disabilities or
low incomes would have to
(b) Construction of enroll in non-VA health
Abortion Exclusion-- plans, thus forgoing the
Subsection (a) shall not free comprehensive health
be construed to remove or care benefits they would
diminish coverage of any otherwise be entitled to
reproductive health by enrolling in a VA
service, family planning health plan.
service, or service for
pregnant women otherwise VA health plans could also
provided for under this be placed at a competitive
title, except abortions. disadvantage in enrolling
veterans with spouses or
dependents of child-
bearing age if other
health plans are required
to offer broader coverage
of abortions than the VA
plans. If, on the other
hand, the comprehensive
benefit package does not
require broader abortion
coverage than that
authorized for VA health
plans, then VA health
plans would not be placed
at a competitive
disadvantage.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1825. (continued) (c) No Authority to Alter Amended to prohibit the
Abortion Exclusion-- National Health Board from
Notwithstanding any expanding the
provision of the Health comprehensive benefit
Security Act, the package to include, for
National Health Board may any health plan, any
not expand the abortion that is excluded
comprehensive benefit with respect to a VA
package to include (for health plan. This
any health plan) any provision would prevent
abortion that is excluded the National Health Board
under subsection (a) with from expanding coverage of
respect to a VA health abortions beyond what is
plan. specifically authorized
under the comprehensive
benefit package.
Subchapter IV--Financial In the case of a veteran This section would waive
Matters described in subsection all premiums and other
(b) who is a VA enrollee, cost sharing for certain
1831. Premiums, there may not be imposed veterans. The provision
Copayments, etc. or collected [the applies equally to
Secretary may not impose veterans enrolling in a VA
(a) Exception of Certain or collect] from the health plan under a
Veterans veteran a cost-share regional alliance and a
charge of any kind veteran enrolling in a VA
(whether a premium, health plan functioning as
copayment, deductible, a Medicare HMO. The
coinsurance charge, or Secretary of Veterans
other charge) for items Affairs is to make
and services in the arrangements with health
comprehensive benefit alliances to carry out
package that are provided this provision.
to the veteran by the
Secretary. The Secretary The relationship between
shall make such this section and section
arrangements as necessary 1823 is unclear. Section
with health alliances in 1831 applies to "VA
order to carry out this enrollees" and would limit
subsection. the provision of free care
to veterans enrolling in a
VA health plan but says
nothing about whether it
applies only to the
comprehensive benefit
package or to any
supplemental benefits
policies. In our opinion,
this section could be
interpreted to make any
supplemental benefits
policies offered under
section 1823 free for
those veterans enrolling
in VA health plans who
meet the criteria
established under section
1831(b).
Proposed chapter 18 of title 38 U.S.C. (cont.)
--------------------------------------------------------------------------------
1831(a) (continued) VA officials, on the other
hand, interpret section
1831 as applying only to
the comprehensive benefit
package and not to any
supplemental benefits
policies. We believe this
is also a reasonable
interpretation that could
significantly limit the
availability of chapter 17
benefits for those low-
income and service-
connected veterans unable
or unwilling to pay the
premiums to purchase
supplemental policies. VA
would have a contractual
obligation to provide
services to those higher
income veterans purchasing
supplemental policies,
while those low-income and
service-connected veterans
without supplemental
policies would be limited
to use of whatever space
and resources were
available after VA meets
its contractual
obligations.
Under either
interpretation, veterans
enrolling in non-VA health
plans who subsequently
enroll in a VA
supplemental benefits
policy offered by a VA
health plan would not
appear to be entitled to
free supplemental benefits
unless the term "VA
enrollee" is interpreted
broadly to mean a veteran
who enrolls in a VA health
plan for either
comprehensive benefits or
supplemental benefits.
Amended to clarify that
the restriction on
imposing cost-sharing
charges applies only to
items and services
provided under the
comprehensive benefit
package. This would
clarify that supplemental
benefits policies would
not be free to core group
veterans. It would also
allow VA health plans to
impose cost sharing for
out-of-plan services
provided to VA health plan
enrollees.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1831(b) Veterans Exempt The veterans referred to This section lists the
From Charges in subsection (a) are the categories of veterans
following: entitled to free
comprehensive health
(1) Any veteran with a benefits if they enroll in
service-connected a VA health plan. It
disability. generally covers the same
groups of veterans cited
(2) Any veteran whose under 38 U.S.C. 1710,
discharge or release from which establishes
the active military, eligibility for VA
naval or air service was hospital, nursing home,
for a disability incurred and domiciliary care,
or aggravated in the line except that it excludes
of duty. those veterans seeking
care for conditions that
(3) Any veteran who is in may be related to exposure
receipt of, or who, but to toxic substances or
for a suspension pursuant ionizing radiation.
to section [1511]1151 of Currently, the cited group
this title (or both such is entitled to free VA
a suspension and the hospital care to the
receipt of retired pay), extent that space and
would be entitled to resources are available,
disability compensation, but eligibility and
but only to the extent entitlement to other
that such a veteran's services are more complex.
continuing eligibility (A new section 1831(c)(3)
for such care is provided would be added to title 38
for in the judgment or U.S.C. to exempt veterans
settlement provided for receiving care for
in such section. conditions that may be
related to exposure to
(4) Any veteran who is a toxic substances or
former prisoner of war. ionizing radiation from
copayments, deductibles,
(5) Any veteran of the and coinsurance.)
Mexican border period or
World War I. Only those veterans with
service-
(6) Any veteran who is connected disabilities
unable to defray the rated at 50 percent or
expenses of necessary higher (about 450,000
care as determined under veterans) are currently
section 1722(a) of this entitled to free
title. comprehensive health care
benefits within available
resources (not including
nursing home care, which
is optional for all
veterans). The new section
would essentially expand
the number of veterans
entitled to free
comprehensive care,
including 100 days a year
of post-hospital extended
care in rehabilitation or
skilled nursing
facilities, to about 9
million veterans.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1831(c) Other Enrollees (1) In the case of a VA Those VA enrollees not
enrollee who is not described above would be
described in subsection charged premiums,
(b), the Secretary shall copayments, deductibles,
(except as provided in and coinsurance. VA would
paragraph (2)) charge be required to establish
premiums and [shall] the premium rate and the
establish copayments, rates for deductibles and
deductibles, and copayments based on rules
coinsurance amounts. established by the health
alliance under which it is
(2) The Secretary may not operating.
charge a premium in the
case of This section would not
appear to apply to
(A) an individual who is Medicare-eligible veterans
enrolled in a VA health enrolling in the VA health
plan by reason of plan, except in those
eligibility under section states that bring Medicare
1812 of this title; or under their health
alliances.
(B) an individual who is
enrolled in a VA health Amended to exempt from
plan by reason of payment of premiums those
eligibility under section VA health plan enrollees
1813 of this title and who are CHAMPVA eligible
who is described in under section 1812 or
paragraph (1) of section eligible under paragraph
1713(a) of this title. (1) of 38 U.S.C. 1713(a)
(a spouse or child of a
(3) The Secretary may not veteran who has a total
charge a copayment, permanent disability
deductible, or other resulting from a service-
coinsurance amount in the connected disability).
case of care for any
disease covered under Amended to exempt from
section 1710(e)(1) of copayments, deductibles,
this title. and coinsurance those
veterans receiving care
for any disease covered
under section 1710(e)(1)
of title 38 U.S.C.--
veterans exposed to toxic
substances or ionizing
radiation.
(d) Establishment of The premium rate, and the This section requires the
Rates rates for deductibles and Secretary of Veterans
copayments, for each VA Affairs to set the
health plan shall be premiums and copayments
established by that and deductibles for a VA
health plan based on health plan on the basis
rules established by the of rules established by
health alliance under the health alliance under
which it is operating. which the health plan is
operating.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1831[(d)]e In the case of a veteran This section requires the
Self-Employed Service- with a service-connected Secretary of Veterans
Connected Veterans disability who is Affairs to reduce employer
enrolled in a VA health premiums owed by a self-
plan and who has net employed service-
earnings from self- connected veteran,
employment, the Secretary provided the veteran
shall, under regulations enrolls in a VA health
prescribed by the plan. In other words,
Secretary, provide for [a self-employed service-
reduction in any] the connected veterans would
waiver of any premium be required to pay all or
payment (or alliance a portion of their health
credit repayment) owed by insurance premiums if they
the veteran under section enroll in a health plan
6126 or 6111 of the other than one operated by
Health Security Act by VA. If, however, they
virtue of the veteran's enroll in a VA health
net earnings from self- plan, individual cost
employment. sharing and, to the extent
determined by the
Secretary, their employer
premiums, will be
reduced.
Amended to (1) require the
Secretary of Veterans
Affairs to waive any
premiums for self-
employed service-
connected veterans rather
than allowing the
Secretary the discretion
to waive just a portion of
the premium and (2)
specify that the waiver is
based on "net" earnings.
1832 Medicare Coverage For purposes of any This section deems VA
and Reimbursement. program administered by facilities to be Medicare
(a) Medicare Provider the Secretary of Health providers, essentially
Status and Human Services under exempting them from
title XVIII of the Social Medicare requirements. In
Security Act, a effect, this would enable
Department facility shall VA facilities to provide
be deemed to be a the full range of Medicare
Medicare provider. benefits to Medicare-
eligible veterans,
regardless of their
eligibility/entitlement
under chapter 17, title 38
U.S.C.
(b) Medicare (1) A VA health plan This section would deem VA
HMO Status shall be considered to be health plans to be
a Medicare HMO. Medicare HMOs, essentially
exempting VA from the
(2) For purposes of this requirements under section
section, the term 1876 of the Social
"Medicare HMO" means an Security Act that apply to
eligible organization other eligible
under section 1876 of the organizations. Among the
Social Security Act. provisions that VA health
plans would be exempt from
are requirements related
to (1) related-party
transactions, (2)
ownership and control
arrangements, (3)
financial solvency, (4)
quality assurance, (5)
operating experience, (6)
enrollment, and (7)
organization and
management.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1832(c) Payments from HHS In the case of care Would authorize VA to
provided to a veteran recover from Medicare the
other than a veteran costs of services provided
described in section to certain Medicare-
1831(b) of this title who eligible veterans.
is eligible for benefits Recoveries would be
under the Medicare limited to services
program under title XVIII provided to those
of the Social Security Medicare-eligible veterans
Act, the Secretary of not entitled to free care
Health and Human Services under section 1831 of the
shall reimburse a VA Health Security Act.
health plan or Department
health care facility It is not clear what would
providing services as a happen in the case of a
Medicare provider or Medicare-eligible
Medicare HMO in the same dependent. Medicare
amounts and under the eligibility and enrollment
same terms and conditions is by individual, not
as that Secretary family. Thus it is not
reimburses other Medicare clear whether the
providers or Medicare dependents of Medicare-
HMOs, respectively. The eligible veterans would be
Secretary of Health and able to enroll in a VA
Human Services shall health plan functioning as
include with each such an HMO except in states
reimbursement a Medicare that have integrated
explanation of benefits. Medicare into their
alliances.
1832(d) Deductibles and When the Secretary [of Would authorize VA to
Copayments Veterans Affairs] charge Medicare-eligible
provides care to a veterans, other than those
veteran for which the entitled to free
Secretary receives[d] comprehensive benefits,
reimbursement under this the same copayments and
section, the Secretary deductibles they would be
shall require the veteran required to pay to other
to pay to the Department Medicare providers.
any applicable deductible
or copayment that is not
covered by Medicare.
1833. Recovery of Cost of In the case of an Authorizes VA to recover
Certain Care and individual provided care from supplemental
Services or services through a VA insurance policies, such
health plan who has as Medicare supplemental
(a) Recovery From Third coverage under a (Medigap) policies and
Parties supplemental health CHAMPUS supplemental
insurance policy pursuant benefits policies. VA
to part 2 of subtitle E would not be authorized to
of title I of the Health recover for care or
Security Act or under any services for a service-
other provision of law, connected disability.
or who has coverage under
a Medicare supplemental
health insurance plan (as
defined in the Health
Security Act) or under
any other provision of
law, the Secretary has
the right to recover or
collect charges for care
or services (as
determined by the
Secretary, but not
including care or
services for a service-
connected disability)
from the party providing
that coverage to the
extent that the
individual or the
provider of the care or
services) would be
eligible to receive
payment for such care or
services from such party
if the care or services
had not been furnished by
a department or agency of
the United States.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1833(b) Procedures The provisions of Provides that the third-
subsections (b) through party recovery provisions
(f) of section 1729 of of current law remain in
this title shall apply effect.
with respect to claims by
the United States under
subsection (a) in the
same manner as they apply
to claims under
subsection (a) of that
section.
1834. Health Plan Fund There is hereby Would establish in the
established in the Treasury a revolving fund
(a) Establishment of Fund Treasury a revolving fund for VA health plans.
to be known as the
"Department of Veterans
Affairs Health Plan
Fund".
(b) Crediting of Amounts There shall be credited Revenues received by VA
to Fund to the revolving fund health plans, whether
[A]any amount received by related to the furnishing
the Department by reason of care to non-VA health
of the furnishing of plan enrollees or the
health care by a VA enrollment of individuals
health plan and any in the VA health plan,
amount received by the must be credited to the
Department by reason of revolving fund. Amounts to
[or] the enrollment of an be credited to the
individual with a VA revolving fund include
health plan (including those received as
amounts received as premiums, premium discount
premiums, premium payments, copayments or
discount payments, coinsurance, and
copayments or deductibles, and those
coinsurance, and received as reimbursements
deductibles, amounts from another health plan
received as third-party for care furnished to one
reimbursements, and of its enrollees.
amounts received as Recoveries from Medicare
reimbursements from would also be credited to
another health plan for the revolving fund. Funds
care furnished to one of appropriated to pay the VA
its enrollees) [shall be portion of health plan
credited to the revolving enrollees' premiums would
fund]. not be credited to the
revolving fund.
Amended language appears
to make no substantive
change.
1834(c) Crediting to [Notwithstanding Requires VA to return to
Treasury subsection (b), the the General Fund of the
Department may not retain Treasury any funds
amounts received for care recovered for care
furnished to a VA provided to veterans if
enrollee in a case in the costs of such care
which the costs of such were covered by
care have been covered by appropriations.
appropriations. Such
amounts shall be
deposited in the General
Fund of the Treasury.]
Any amounts deposited to
the revolving fund that
are attributable to
amounts received by the
Department as a premium
by reason of the
enrollment with a VA
health plan of a veteran
described in section
1831(b) of this title
shall be covered into the
General Fund of the
Treasury.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1834(d) Availability of Amounts in the revolving Would make the amounts in
Funds fund are hereby made the revolving fund
available for [the] all available to VA health
expenses, both direct and plans, without regard to
indirect, related to [of] the sources of the funds,
the delivery by a VA for payments for items and
health plan of the items services covered under the
and services in the comprehensive benefit
comprehensive benefit package and any
package and any supplemental benefits
supplemental benefits package or policy offered
package or policy offered by the VA health plan.
by that health plan.
VA would be free to
allocate funds to any VA
health plan or to pay for
comprehensive benefits and
supplemental benefits,
regardless of funding
source.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1835. Guaranteed Funding The Secretary of the Would require the
of Government Costs Treasury shall deposit Secretary of the Treasury
into the Department of to make quarterly deposits
(a) Required Deposits Veterans Affairs Health into the Health Plan Fund
From Treasury Plan Fund on the first from amounts not otherwise
day of each fiscal year appropriated those amounts
quarter, from amounts not certified by the Secretary
otherwise appropriated, of Veterans Affairs as
the amount certified to described below.
the Secretary under
subsection (b) with This section would
respect to the fiscal transfer responsibility
year quarter beginning on for determining funding
that date. The first such levels for VA health plans
deposit shall be made from the Congress to the
with respect to the first Secretary of Veterans
fiscal year quarter Affairs. It would give the
during which the Secretary--and the
Secretary operates a VA Director of the Office of
health plan under the Management and Budget--
Health Security Act. wide discretion in
determining the capacity
of VA health plans. The
Secretary, or OMB, could
increase or decrease the
capacity of VA health
plans and therefore VA
appropriations by changing
the projected number of
enrollees.
This section does not
provide funding for the
additional chapter 17
outpatient services VA
health plans would be
required to provide to
core group enrollees under
the amended section
8103(b) of the Health
Security Act. Such
services would be paid for
entirely through
appropriations. VA
officials agreed that
funds deposited in the
revolving fund could not
be used to pay for such
services. Proposed section
1834(d) of 38 U.S.C.
limits the use of amounts
in the revolving fund to
payment of expenses for
items in the comprehensive
benefit package and any
supplemental benefits
policies.
(b) Certification of Not later than 30 days The Secretary of Veterans
Amount. before the beginning of Affairs would be required
each fiscal year quarter, to provide the above
the Secretary of Veterans certifications not later
Affairs shall certify to than 30 days before the
the Secretary of the beginning of each fiscal
Treasury the amount year quarter.
determined for that
quarter under subsection It is not clear how this
(c). funding mechanism would
correspond to the funding
and enrollment cycles for
regional alliance health
plans.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1835(c) Determination of (1) The amount to be The amount to be certified
Amount certified to the to the Secretary of the
Secretary of the Treasury Treasury is the product of
under subsection (b) for (1) the projected number
any fiscal year quarter of core group veteran
is the product of enrollees and (2) the
"capitated enrollment
(A) the projected number amount" for that fiscal
of VA enrollees described year.
in section 1831(b) of
this title as of the
beginning of that fiscal
year quarter, and
(B) the capitated
enrollment amount for
that fiscal year
determined under
subsection (d). The Secretary of Veterans
Affairs would be required
to adjust future
(2) The Secretary shall certifications to account
adjust future for (1) differences
certifications under this between actual and
subsection to take anticipated enrollments
account of and (2) any information
the Secretary finds that
(A) differences between would produce a more
the actual number of accurate capitated
veterans described in enrollment amount.
section 1831(b) of this
title enrolled for a
fiscal year quarter and
the projected number used
in the certification for
that quarter pursuant to
paragraph (1); and
(B) any information that
the Secretary finds would
produce a more accurate
capitated enrollment
amount by enabling the
Secretary to estimate
more accurately the costs
that the Department will
incur during the period
covered by any such
certification in
providing those services
that are specified to be
included in the
comprehensive benefit
package.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1835(d) Capitated (1) The Secretary shall The initial capitated
Enrollment Amount determine the capitated enrollment amount is to be
enrollment amount for determined by dividing (1)
purposes of subsection the annual full cost
(c). The initial incurred by VA in
capitated enrollment providing those services
amount shall be specified to be included
determined as the amount in the comprehensive
equal to benefit package (based on
the most recent cost data
(A) the annual full cost available) and adjusted
(as defined in OMB for inflation based on the
Circular A-25, issued on Bureau of Labor
July 8, 1993) that has Statistics' medical care
been incurred by the consumer price index by
Department in providing (2) the total number of
those services that are core veterans who received
specified to be included those services.
in the comprehensive
benefit package, based The capitated enrollment
upon the most recent cost amount would have little
data available as of the relationship to potential
time of the VA costs of providing the
determination, adjusted comprehensive benefit
for inflation to the date package and could
of the determination overstate or understate
based upon the medical actual VA costs. First, VA
care consumer price index cost data do not allow it
calculated by the Bureau to accurately determine
of Labor Statistics, the cost of providing
divided by, individual services.
Second, dividing the total
(B) the total number of cost of providing
veterans described in comprehensive benefits to
section 1831(b) of this both core group and other
title who received those veterans by only the
services. number of core group
veterans using the
services could overstate
the cost of providing
comprehensive benefits to
core group veterans.
Third, relying on data
only for those who
actually used VA services
during the year may
underestimate potential
utilization since most
veterans do not now rely
exclusively on the VA.
To the extent that the
method results in Treasury
payments to the revolving
fund that exceed VA's
actual costs of providing
services to core group
veterans, the funds would
remain in the revolving
fund indefinitely. In
effect, they could be used
to subsidize the costs of
providing services to
other veterans and
dependents.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1835(d) (2) The Secretary shall In tabulating VA's total
(continued) include in the total annual cost, the Secretary
annual cost for purposes of Veterans Affairs will
of paragraph (1)(A) the include the amount
amount appropriated for appropriated for fiscal
fiscal year 1994 for the year 1994 for VA medical
medical and prosthetic and prosthetic research.
research functions of the
Veterans Health It is not clear why the
Administration. total appropriation for
medical and prosthetic
research is being added to
the cost of providing
services included in the
comprehensive benefit
package. Such costs,
particularly prosthetic
research and geriatric
research, apply more to
those chapter 17 benefits
not included in the
comprehensive benefit
package than to those
included in the package.
(3) The Secretary shall Requires the Secretary of
develop the methodology Veterans Affairs to
for determining the develop the methodology
initial capitated for determining the
enrollment amount under initial capitated
paragraph (1) in enrollment amount in
consultation with the consultation with GAO. If
Comptroller General of GAO disagrees with the
the United States. If the methods proposed by VA,
Comptroller General GAO is required to
disagrees with the promptly notify the
methodology proposed to Veterans' Affairs
be used by the Secretary, committees.
the Comptroller General
shall promptly notify the VA currently lacks
Committees on Veterans' adequate data on the cost
Affairs of the Senate and of services it provides.
House of Representatives. Accordingly, without
The determination of that significant improvements
amount shall be made not in VA cost data, GAO would
later than June 1, 1995. find it difficult to
accept any method VA might
develop for determining
the initial capitated
enrollment amount.
(4) The initial capitated The initial capitated
enrollment amount, as enrollment amount, as
adjusted annually for adjusted for the rate of
inflation based upon the medical inflation, will
medical care consumer apply for the first 5
price index calculated by fiscal years during which
the Bureau of Labor VA operates VA health
Statistics, shall apply plans.
for the first five fiscal
years during which the
Secretary operates a VA
health plan.
Proposed chapter 18 of title 38 U.S.C.
--------------------------------------------------------------------------------
1835(d) (5)(A) Not later than the VA would be required to
(continued) end of the third fiscal report to the Congress no
year during which the later than the end of the
Secretary operates a VA third year of operation of
health plan, the VA health plans on actions
Secretary shall submit to needed to change the
the Committees on annual capitated
Veterans' Affairs of the enrollment amount by the
Senate and House of end of the fifth year to
Representatives a report the method described below
on what actions, if any, or to some other
would be necessary in methodology.
order for the Department
to change the annual The proposed method for
capitated enrollment determining the annual
amount by the end of the capitated enrollment
fifth such year from the amount after the initial
initial amount determined 5-year period is to use
under paragraph (1) to an the average premium that
amount determined using would be payable under the
the method described in Health Security Act for
subparagraph (B), or to individuals enrolled in
amounts determined by health plans other than VA
some other methodology, health plans that have
without a reduction in enrollment populations
quality of care. with disproportionate
numbers of people in
similar demographic and
(5)(B) The method for patient-risk
determining the annual characteristics to the
capitated enrollment population of VA
amount for purposes of enrollees.
the study under this
paragraph is to determine
the average premium that
would be payable under
the Health Security Act
for individuals enrolled
in health plans other
than VA health plan which
have enrollment
populations with
disproportionate numbers
of persons with similar
demographic and patient-
risk characteristics to
the population of VA
enrollees.
Health Security Act
--------------------------------------------------------------------------------
8101(a)(2). The table of chapters at Adds chapter 18 to the
Clerical Amendment the beginning of part II table of chapters at the
of title 38, United beginning of part II,
States Code, is amended title 38 U.S.C.
by inserting after the
item relating to chapter
17 the following new
item:
"18. Benefits and
Eligibility Under Health
Security Act.....1801".
(b) Preservation of (1) Chapter 17 of title Would add a new section
Existing Benefits for 38, United States Code, 1705 to title 38 U.S.C.
Facilities not Operating is amended by inserting and add section 1705 to
as Health Plans after section 1704 the the table of sections at
following new section: the beginning of chapter
17, title 38 U.S.C.
[Text omitted]
(2) The table of sections
at the beginning of such
chapter is amended by
inserting after the item
relating to section 1704
the following new item:
"1705. Facilities not
operating within health
plans; veterans not
eligible to enroll in
health plans."
Proposed new section of title 38 U.S.C.
--------------------------------------------------------------------------------
1705. Facilities Not The provisions of this Provides that the
Operating Within Health chapter shall apply with provisions of chapter 17,
Plans: Veterans Not respect to the furnishing title 38 U.S.C., apply
Eligible to Enroll in of care and services-- with respect to the
Health Plans furnishing of care and
(1) by any facility of services (1) by a VA
the Department that is facility not operating as
not operating as or or within a VA health plan
within a health plan or (2) to a veteran who is
certified as a health not an eligible individual
plan under the Health under the meaning of
Security Act; and section 1001 of the Health
Security Act.
(2) by any facility of
the Department (whether
or not operating as or
within a health plan
certified as a health
plan under the Health
Security Act) in the case
of a veteran who is not
an eligible individual
within the meaning of
section 1001 of the
Health Security Act.
Health Security Act
--------------------------------------------------------------------------------
8102. Organization of (a) In General. Adds a new subchapter IV
Department of Veterans to chapter 73, title 38
Affairs Facilities as Chapter 73 of title 38, U.S.C., and redesignates
Health Plans United States Code, is the existing subchapter IV
amended-- as subchapter V.
(1) by redesignating
subchapter IV as
subchapter V; and
(2) by inserting after
subchapter III the
following new
subchapter:
SUBCHAPTER IV--
PARTICIPATION AS PART OF
NATIONAL HEALTH CARE
REFORM
Proposed new section of chapter 73, title 38 U.S.C.
--------------------------------------------------------------------------------
7341(a) Organization of The Secretary shall Directs the Secretary of
Health Care Facilities as organize health plans and Veterans Affairs to
Health Plans operate Department organize health plans
facilities as or within under the Health Security
health plans under the Act and to prescribe
Health Security Act. The regulations establishing
Secretary shall prescribe standards for the
regulations establishing operation of those health
standards for the plans. The regulations are
operation of Department to conform, to the extent
health care facilities as practicable, to the same
or within health plans requirements established
under that Act. In for other health plans
prescribing those under the Health Security
standards, the Secretary Act.
shall assure that they
conform, to the maximum
extent practicable, to
the requirements for
health plans generally
set forth in part 1 of
subtitle E of title I of
the Health Security Act.
7341(b) Within a geographic area Gives the Secretary the
or region, health care discretion to organize VA
facilities of the facilities into a single
Department located within health plan within a
that area or region may geographic area or region
be organized to operate or to operate as several
as a single health plan health plans. A VA
encompassing all facility could be a part
Department facilities of more than one VA health
within that area or plan.
region or may be
organized to operate as
several health plans.
(c) In carrying out States would not be
responsibilities under allowed to (1) impose any
the Health Security Act, requirement on a VA health
a State (or a State- plan that is inconsistent
established entity)-- with this section or other
federal laws and (2) deny
(1) may not impose any certification of a VA
standard or requirement health plan on the basis
on a VA plan that is of a conflict between a
inconsistent with this rule of a state or health
section or any regulation alliance and this section
prescribed under this or regulations prescribed
section or other Federal under this section. This
laws regarding the would appear to give wide
operation of this discretion to the
section; and Secretary to determine the
extent to which it is
(2) may not deny practicable for VA to
certification of a VA conform to state or
health plan under the regional alliance
Health Security Act on requirements.
the basis of a conflict
between a rule of a state
or health alliance and
this section or
regulations prescribed
under this section or
other Federal laws
regarding the operation
of this section.
Proposed new section of chapter 73, title 38 U.S.C.
--------------------------------------------------------------------------------
7342. [Contract Authority [The Secretary may enter Would authorize the
for Facilities Operating into a contract (without Secretary to enter into
as or Within Health regard to provisions of contracts for the
Plans]Health Care law requiring the use of provision of services by
Resource Agreements competitive procedures) VA health plans without
for the provision of regard to provisions of
services by a VA health law requiring the use of
plan in any area in which competitive bidding. This
the Secretary determines waiver of competitive
that such contracting is procurement requirements
more cost-effective than would apply whenever the
providing such services Secretary determines that
directly through such contracting would be
Department facilities or more cost-effective than
when such contracting is providing such services
necessary because of directly through VA
geographic facilities or when such
inaccessibility.] contracting is necessary
because of geographic
(a) A VA health plan or inaccessibility.
the director of a
Department of Veterans Amended to broaden the
Affairs health care exemption of VA health
facility that is plans from contracting
operating as or within a procedures. In addition to
VA health plan may, being exempted from laws
without regard to section requiring the use of
1703 of this title or any competitive procedures, VA
other law or regulation health plans and directors
pertaining to competitive of VA facilities operating
procedures, acquisition within VA health plans
procedures or policies would be allowed to
(other than contract contract without regard to
dispute settlement contracting requirements
procedures), or bid in current VA law or any
protests, enter into other law or regulation
agreements with health pertaining to competitive
care plans, insurers, and procedures, acquisition
health care providers, procedures or policies, or
and with any entity or bid protests.
individual, to furnish or
obtain any health-care These amendments would
resource, as that term is essentially eliminate
defined in section 8152 current provisions of law
of this title. governing the contracting
process, including
internal controls intended
to prevent fraud and
abuse. In addition, they
would establish incentives
for VA health plans and
facilities to place higher
priority on providing
services to nonveterans
under contracts or
resource sharing
agreements than to
veterans because the
facility would be allowed
to retain the full
proceeds from the
transaction; the VA health
plan would not necessarily
receive the same payment
for care provided to
veterans.
Proposed new section of chapter 73, title 38 U.S.C.
--------------------------------------------------------------------------------
7342 (continued) (b) Any proceeds to the Amended to provide that
Government received from any proceeds to the
an agreement under government from such
subsection (a) shall be contracts or resource
credited to the agreements will be
Department of Veterans credited to VA's Health
Affairs Health Plan Fund Care Fund and to funds
established under section allocated to the facility
1834 of this title and to that furnished the
funds that have been resource.
allotted to the facility
that furnished the
resource involved.
[7343. Resource Sharing [The Secretary may enter Would expand the
Authority: Facilities into agreements under Secretary's authority
Operating as or Within section 8153 of this under 38 U.S.C. 8153 to
Health Plans] title with other health enter into sharing
care plans, with other agreements for specialized
health care providers, medical resources with
and with other health other health plans, health
industry organizations, care providers, health
and with individuals, for industry organizations,
the sharing of resources and individuals.
of the Department through Currently, section 8153
facilities of the only permits agreements
Department operating as with other health care
or within health plans.] facilities, research
centers, medical schools,
and state veterans' home
facilities.
734[4]3(a) Administrative In order to carry out Would allow the Secretary
and Personnel Flexibility this subchapter, the to carry out
Secretary may-- administrative
reorganizations without
(1) subject to section regard to 38 U.S.C. 510,
1822(c) of this title, which requires
carry out administrative notification of
reorganizations of the appropriate congressional
Department without regard committees if the
to those provisions under reorganization reduces the
section 510 of this title full-time staff at a
following subsection (a) facility by 15 percent or
of [the] that section; more over 1 year or 25
and percent or more over 2
fiscal years.
Amended to limit the
Secretary of Veterans
Affairs' authorization to
conduct administrative
reorganizations that would
affect VA's capacity to
provide specialized
services by making the
authorization subject to
the new section 1822(c)
provision relating to
preservation of
specialized treatment
capabilities.
Proposed new section of chapter 73, title 38 U.S.C.
--------------------------------------------------------------------------------
734[4]3(a) (continued) (2) when the Secretary Would allow the Secretary
finds it is cost- to contract for services
effective or necessary in currently performed by VA
order to provide health employees without regard
care services in a timely to 38 U.S.C. 8110(c),
manner-- which, in general, limits
the Secretary's ability to
(A) enter into contracts convert an activity
for procurement of any performed by federal
commercially available employees at a health care
item at a cost of under facility to an activity
$100,000 without regard performed by a
to any provision of law contractor.
or regulation (i)
requiring competitive Amended to authorize the
procedures; (ii) Secretary to enter into
mandating or giving contracts for any
priority to any source of commercially available
supply; or (iii) item at a cost of under
pertaining to protests; $100,000 without regard to
and current laws and
regulations requiring
(B) enter into contracts competitive bidding,
without regard to section mandating or giving
8110(c) of this title for priority to any source of
the performance of supply, or pertaining to
services previously bid protests.
performed by employees of
the Department.[without This provision essentially
regard to section 8110(c) eliminates the existing
of this title.] internal controls over
contracts to purchase
items under $100,000 as
well as such provisions as
priorities given to
minority contractors and
small businesses.
Revisions are pending to
procurement laws that
would encourage and
simplify purchase of
"commercial items" and
simplify acquisition
procedures for purchases
under $100,000.
(b) The Secretary may Would give the Secretary
establish alternative wide discretion to
personnel systems or establish new personnel
procedures for personnel systems or procedures at
at facilities operated as facilities operated as or
or with[in] health plans within health plans under
under the Health Security the Health Security Act.
Act whenever the The sole exception to this
Secretary considers such discretion is that
action necessary in order veterans' preference will
to carry out the terms of continue in a manner
that Act, except that the comparable to current law.
Secretary shall provide
for preference eligibles
(as defined in section
2108 of title 5[, United
States Code]) in a manner
comparable to the
preference for such
eligibles under
subchapter I of chapter
33, and subchapter I of
chapter 35, of such
title.
Proposed new section of chapter 73, title 38 U.S.C.
--------------------------------------------------------------------------------
734[4]3(c) Subject to the provisions Would allow VA to carry
of section 1404 of the out promotional,
Health Security Act, the advertising, and marketing
Secretary may carry out activities to inform
appropriate promotional, individuals of the
advertising, and availability of facilities
marketing activities to of the Department
inform individuals of the operating as or within
availability of health plans.
facilities of the
Department operating as VA would be limited to
or within health plans. using nonappropriated
[Such activities may only funds for its marketing
be carried out using activities. The proposed
nonappropriated funds.] new section 8102(c) of the
Health Security Act would
allow the use of
appropriated funds for
marketing activities
during fiscal year 1994.
Amended to eliminate the
requirement that only
nonappropriated funds be
used for marketing
activities.
734[5]4. Veterans Health [(a) There is hereby Would authorize the
Care [Investment] authorized to be appropriation of $3.3
Transition Fund appropriated to the billion over 3 fiscal
Department, in addition years to a Veterans Health
to amounts otherwise Care Investment Fund.
authorized to be
appropriated to the Amended to increase the
Department for VA health amount to be appropriated
plans, such amounts as from $3.3 billion to $4.05
are necessary for the billion and change the
Secretary of the Treasury name of such fund to the
to fulfill the Veterans Health Care
requirement of subsection Transition Fund.
(b).]
[(b)] (a) For each of
fiscal years 1995, 1996,
and 1997, the Secretary
of the Treasury shall [,
subject to subsection
(a),] credit to a special
fund (in this section
referred to as the
"Fund") of the Treasury
an amount equal to--
(1)[$1,000,000,000]
$1,250,000,000 for fiscal
year 1995;
(2)
[$600,000,000]$850,000,00
0 for fiscal year 1996;
and
(3) [$1,700,000,000]
$1,950,000,000 for fiscal
year 1997.
[(c)(1) Subject to Provides that amounts in
paragraph (2), the Veterans Health Care
a](b)Amounts in the Fund Investment Fund are
shall be available to the available only for VA
Secretary only for VA health plans.
health plans authorized
under this chapter. Such Amended to make the funds
amounts are available in the Health Care
without fiscal year Transition Fund available
limitation for costs of without fiscal year
commencing operation of limitation and to specify
VA health plans, that the funds could be
including consulting used for start-up costs,
services, equipment, including consulting
marketing, and other services, equipment,
costs, minor marketing, and certain
construction, and construction.
(subject to section 8104
of this title) major
construction.
Proposed new section of chapter 73, title 38 U.S.C.
--------------------------------------------------------------------------------
734[5]4 (continued) [(c)(2) For fiscal year The funds credited to the
1995, 1996, or 1997, the Veterans Health Care
amount credited to the Investment Fund would be
Fund for the fiscal year available for use by VA
shall be available for only if appropriations
use by the Secretary acts for the appropriate
under paragraph (1) only fiscal year provide new
if appropriations Acts budget authority for the
for that fiscal year, medical care account equal
without addition of to or greater than the
amounts provided under amount proposed by the
subsection (a) for the President in his budget
Fund, provide new budget submission.
authority for the
Department of Veterans Provision deleted.
Affairs Medical Care
account, for that fiscal
year, of no less than the
amount for that account
proposed in the budget of
the president for that
fiscal year under section
1105 of title 31.]
[(d)] (c)The Secretary VA would be required to
shall submit to Congress, report to the Congress by
no later than March 1, March 1, 1997, on its
1997, a report concerning preparations for and
the operation of the operations under the
Department of Veterans Health Security Act during
Affairs health care fiscal years 1995 and
system in preparing for, 1996. VA would be required
and operating under, to discuss (1) the
national health care adequacy of the amounts in
reform under the Health the Veterans Health Care
Security Act during Investment Fund, (2)
fiscal years 1995 and quality of care, (3) the
1996. The report shall plans' ability to attract
include a discussion of- patients, and (4) the need
- for additional amounts for
the Veterans Health Care
(1) the adequacy of Investment Fund for fiscal
amounts in the Fund for years after 1997.
the operation of VA
health plans;
(2) the quality of care
provided by such plans;
(3) the ability of such
plans to attract
patients; and
(4) the need (if any) for
additional funds for the
Fund in fiscal years
after fiscal year 1997.
Proposed new section of chapter 73, title 38 U.S.C.
--------------------------------------------------------------------------------
734[6]5. Funding The Secretary may apply VA would be authorized to
Provisions: Grants and for and accept, if apply for and accept
Other Sources of awarded, any grant or grants or other sources of
Assistance other source of funding funding intended to meet
that is intended to meet the needs of special
the needs of special populations. For example,
populations and that but VA could apply for grants
for this section is from the National
unavailable to facilities Institutes of Health, the
of the Department or to Robert Wood Johnson
health plans operated by Foundation, or other
the Government if funds organizations. The grants
obtained through the or other sources of
grant or other source of funding could be for
funding will be used research, the delivery of
through a facility of the health care services, or
Department operating as both.
or within a health plan.
Health Security Act
--------------------------------------------------------------------------------
8102(b) Clerical Amendment.--The Clerical amendment
table of sections at the creating a new table of
beginning of chapter 73 sections at the beginning
is amended by striking of chapter 73, title 38
out the item relating to U.S.C.
the heading for
subchapter IV and Revised to reflect
inserting in lieu thereof amendments to chapter 73,
the following: title 38 U.S.C.
"SUBCHAPTER IV--
PARTICIPATION AS PART OF
NATIONAL HEALTH CARE
REFORM"
7341. Organization of
health care facilities as
health plans.
7342. [Contract authority
for facilities operating
as or within health
plans.]Health Care
Resource Agreements.
7343.[Resource sharing
authority: facilities
operating as or within
health plans.
7344.]Administrative and
personnel flexibility.
734[5]4. Veterans Health
Care [Investment]
Transition Fund.
734[6]5. Funding
provisions; grants and
other sources of
assistance.
Subchapter 5--Research
Corporations
[(c)] [Transition Provision-- VA would be permitted to
The limitation in the use appropriated funds for
second sentence of marketing, promotional,
section 7344(c) of title and advertising purposes
38, United States Code, during fiscal year 1994.
as added by subsection
(a), shall not apply Amended to delete this
during fiscal year 1994.] provision.
Health Security Act
--------------------------------------------------------------------------------
8103. Eligibility for Section 1710(a)(1) of Would create a new
Chapter 17 Care title 38, United States entitlement to nursing
Code, is amended by home care for veterans
(a) Nursing Home Care inserting "(or, in the with service-connected
case of a veteran disabilities rated at 50
described in subparagraph percent or more and
(A) or (D) below, shall veterans who require
furnish nursing home nursing home care for a
care)" after "may furnish service-connected
nursing home care". disability. Currently,
nursing home care is a
discretionary benefit for
all veterans.
(b) Outpatient Care For Paragraph (1) of section Provides that VA will
Enrolled Veterans 1712(a) of such title is provide any veteran in the
amended-- core group who enrolls in
a VA health plan with any
(1) by striking out "and" needed outpatient services
at the end of (other than dental care)
subparagraph (B); that are not covered or
not fully covered under
(2) by striking out the the comprehensive benefit
period at the end of package.
subparagraph (C) and
inserting in lieu thereof This provision would
"; and"; and essentially require VA to
provide to service-
(3) by adding at the end connected, low-income, and
the following: other core group veterans
enrolling in VA health
"(D) to any veteran plans any outpatient
described in section services, including
1831(b) of this title who prescription drugs and
is enrolled under section vision care, not covered
1811 of this title and or not fully covered under
the Health Security Act the comprehensive benefit
with a VA health plan (as package. It is not clear
defined in section 1801 whether this becomes a
of this title), for any contractual right to the
disability to the extent services or whether the
that care and treatment services would still be
of that disability is not subject to space and
included within the resource limits. The
comprehensive benefit provisions would, however,
package (as defined in eliminate conditions for
section 1801 of this eligibility such as
title)." limiting services to those
that obviate the need for
hospitalization and prior
hospitalization
requirements that
otherwise might have
limited access to
benefits.
VA officials interpret the
provision of care under
this section as being
subject to the
availability of space and
resources. They also
believe, however, that
they have always had
adequate resources to meet
the needs of all veterans
in the mandatory care
category.
Health Security Act
--------------------------------------------------------------------------------
8103(c) Obviate-the-Need (1) Paragraph (2) of such For veterans who do not
Outpatient Care section is amended by enroll with VA health
striking out "The plans, VA may provide
Secretary" and all that outpatient services (other
follows through "this than dental care) that are
subsection..." and not covered or not fully
inserting in lieu thereof covered under the
"Except as provided in comprehensive benefit
subsection(b) of this package without regard to
section, the Secretary whether such service would
shall furnish on an obviate the need for
ambulatory or outpatient hospital care or whether
basis such medical the service is reasonably
services as the Secretary necessary in preparation
determines are for hospital admission.
needed..."
(2) Paragraph (4) of such
section is amended by
striking out "medical
services for a purpose
described in paragraph
(5) of this subsection"
and inserting in lieu
thereof ", to the extent
that facilities are
available, such medical
services as the Secretary
determines are needed".
(3) Such section is
further amended by
striking out paragraph
(5) and redesignating
paragraph (6) as
paragraph (5).
8103(d) Conforming (1) Section 1701(6) of Conforming amendments.
Amendments such title is amended by
striking out "(except
under the circumstances
described in section
1712(a)(5)(A)".
(2) Section
1701(6)(B)(i)(II) of such
title is amended by
striking "section
1712(a)(5)(B)" and
inserting in lieu thereof
"section 1712".
(3) Section 1703(a)(2)(B)
of such title is amended
by striking out "for a
purpose described in
section 1712(a)(5)(B) of
this title" and inserting
in lieu thereof "to
complete treatment
incident to hospital,
nursing home, or
domiciliary care that has
been provided by the
Department".
(4) Section 1712(A)(b)(1)
of such title is amended
by striking out "section
1712(a)(5)(B)" and
inserting in lieu thereof
"section 1703(a)(2)(B)".
Health Security Act
--------------------------------------------------------------------------------
8104. Authority to Section 1710(e) of title Veterans who served in
Provide Health Care for 38, United States Code, Vietnam during the Vietnam
Herbicide and Radiation is amended to read as era whom VA finds may have
Exposure follows: been exposed to an
herbicide agent are
(a) Authorized Inpatient "(e)(1)(A) Subject to eligible for hospital care
Care paragraph (2), a and nursing home care for
herbicide-exposed veteran the diseases specified
is eligible for hospital below.
care and nursing home
care under subsection
(a)(1)(G) for any disease
specified in subparagraph
(B).
8104(a) (continued) "Section 1703(e)(1)(B) Covered diseases are those
The diseases referred to that the National Academy
in subparagraph (A) are of Sciences has found or
those for which the subsequently finds either
National Academy of some evidence of, or
Sciences, in a report insufficient evidence to
issued in accordance with permit a conclusion on the
section 2 of the Agent presence or absence of, an
Orange Act of 1991, has association between
determined-- diseases in humans and
exposure to an herbicide.
"(i) that there is
sufficient evidence to
conclude that there is a
positive association
between occurrence of the
disease in humans and
exposure to a herbicide
agent;
"(ii) that there is
evidence which is
suggestive of an
association between
occurrence of the disease
in humans and exposure to
a herbicide agent, but
such evidence is limited
in nature; or
"(iii) that available
studies are insufficient
to permit a conclusion
about the presence or
absence of an association
between occurrence of the
disease in humans and
exposure to a herbicide
agent.
Health Security Act
--------------------------------------------------------------------------------
================================================================================
8104(a) (continued) (C) A radiation-exposed Veterans who have been
veteran is eligible for exposed to radiation are
hospital care and nursing eligible for hospital and
home care under nursing home care for any
subsection (a)(1)(G) for- disease for which the
- Secretary of Veterans
Affairs determines there
"(i) any disease listed is credible evidence of an
in section 1112(c)(2) of association between
this title; and diseases in humans and
exposure to ionizing
"(ii) any other disease radiation.
for which the Secretary,
based on the advice of
the Advisory Committee on
Environmental Hazards,
determines that there is
credible evidence of a
positive association
between occurrence of the
disease in humans and
exposure to ionizing
radiation.
Proposed change to title 38 U.S.C.
--------------------------------------------------------------------------------
1710(e)(2) Hospital and nursing home Provides that hospital and
care may not be provided nursing home care cannot
under or by virtue of be provided to veterans
paragraph (1)(A) after exposed to toxic
September 30, 1996. herbicides under the above
provisions after September
30, 1996.
1710(e)(3) For purposes of this Provides definitions of
subsection and section "herbicide-
1712 of this title-- exposed veteran,"
"herbicide agent," and
(A) the term "herbicide- "radiation-exposed
exposed veteran" means a veteran."
veteran (i) who served on
active duty in the
Republic of Vietnam
during the Vietnam era,
and (ii) who the
Secretary finds may have
been exposed during such
service to a herbicide
agent;
(B) the term "herbicide
agent" has the meaning
given the term in section
1116(a)(4) of this title;
and
(C) the term "radiation-
exposed veteran" has the
meaning given that term
in section 1112(c)(4) of
this title.
Health Security Act
--------------------------------------------------------------------------------
8104(b) Authorized Section 1712 of such Herbicide-exposed veterans
Outpatient Care title is amended-- and radiation-exposed
(1) in subsection (a)(1)- veterans would also be
- eligible for outpatient
treatment for any disease
(A) by striking out "and" that may be related to
at the end of their exposures as
subparagraph (B); discussed above. This
provision would remain in
(B) by striking out the effect until October 1,
period at the end of 1996, for herbicide-
subparagraph (C) and exposed veterans but would
inserting in lieu thereof continue after that time
a semicolon; and for radiation-exposed
veterans.
(C) by adding at the end
the following:
"(D) during the period
before October 1, 1996,
to any herbicide-exposed
veteran for any disease
listed in section
1710(e)(1)(B) of this
title; and
"(E) to any radiation-
exposed veteran for any
disease covered under
section 1710(e)(1)(C) of
this title."; and
(2) in subsection (i)(3)-
-
(A) by striking out
"(A)"; and
(B) by striking out ", or
(B)" and all that follows
through "title".
8104(c) Savings Provision The provisions of Current provisions with
sections 1710(e) and respect to the provision
1712(a) of title 38, of hospital, nursing home
United States Code, as in care, and medical services
effect on the day before would continue in effect
the date of the enactment for any veteran furnished
of this Act, shall apply care on the basis of
with respect to hospital presumed exposure to toxic
care, nursing home care, herbicides or radiation
and medical services in before the enactment of
the case of any veteran the Health Security Act.
furnished care or
services before such date
of enactment on the basis
of presumed exposure to a
substance or radiation
under the authority of
those provisions.
Health Security Act
--------------------------------------------------------------------------------
8105. Extension of Section 1710(e) of title Authority to provide
Authority to Provide 38, United States Code, priority health care to
Priority Health Care for is amended-- veterans who may have been
Exposure to Environmental exposed to toxic
Hazards (1) in paragraph (1)(C), substances or
by inserting "which environmental hazards
(a) Authorized Inpatient becomes manifest before while serving on active
Care October 1, 1996" after duty in the Persian Gulf
"for any disability"; War would be extended for
and hospital and nursing home
care and medical services
(2) in paragraph (3), by through September 30,
striking out "December 1996, notwithstanding that
31, 1994." and inserting insufficient medical
in lieu thereof evidence exists to
"September 30, 1998." conclude that such
disability may be
associated with such
exposure. The provisions
relating to care of
veterans of the Persian
Gulf War expire September
30, 1998.
(b) Authorized Outpatient Section 1712(a)(1) of Authority to provide
Care such title is amended by outpatient care to
striking out "December veterans who served on
31, 1994, for any active duty in the Persian
disability" and inserting Gulf War who may have been
in lieu thereof "October exposed to toxic
1, 1998, for any substances or
disability which becomes environmental hazards
manifest before October would be extended to
1, 1996." September 30, 1998, for
any disability that
becomes manifest before
October 1, 1996.
8106. Effective Date of Notwithstanding any other Provides that
Coverage for High- provision of this Act, notwithstanding any other
Priority Veterans the provisions of the provisions of the Health
amendments made by this Security Act, the
subtitle shall take provisions relating to
effect with respect to high-priority veterans
veterans described in will take effect on
section 1831(b) of title October 1, 1995.
38, United States Code,
as added by section 8101,
on October 1, 1995. The
Secretary of Veterans
Affairs shall take such
steps as necessary to
implement those
provisions with respect
to those veterans by that
date.
Health Security Act
--------------------------------------------------------------------------------
8107. Report on Waiving (a) Report.--The The Secretary of Veterans
Cost-Sharing for Certain Secretary of Veterans Affairs would be required
Medical Care for Affairs shall submit to to submit a report to the
Dependents of Persian Congress a report on the Congress within 60 days
Gulf Veterans Who May desirability and the after enactment of the
Have Been Exposed to feasibility of waiving Health Security Act on the
Environmental Hazards any requirement for cost- desirability and
sharing in the case of feasibility of waiving
medical care described in cost sharing for certain
subsection (b) that is medical care provided to
provided by a VA health dependents of Persian Gulf
plan under chapter 18 of war veterans who may have
title 38, United States been exposed to
Code (as added by section environmental hazards.
8101), to an individual
who is a VA enrollee
enrolled under family-
member eligibility under
section 1813 of that
chapter.
(b) Persian Gulf War
Illness.--Medical care
referred to in subsection
(a) is medical care
provided to a family
member of a veteran
described in subparagraph
(C) of section 1710(e)(1)
of title 38, United
States Code, for any
disease or disability
occurring in that family
member which the
Secretary finds may be
related to the service of
the veteran in the
Southwest Asia theater of
operations during the
Persian Gulf War.
(c) Matters to be
Considered.--In preparing
the report under
subsection (a), the
Secretary shall consider
relevant studies,
including those that have
been (or that are being)
conducted by the
Department of Veterans
Affairs, the Department
of Defense, the National
Institutes of Health, the
National Academy of
Sciences, and private
health care providers.
(d) Submission of
Report.--The report under
subsection (a) shall be
submitted not later than
60 days after the date of
enactment of this Act.
--------------------------------------------------------------------------------
GAO PRODUCTS RELATED TO VA'S ROLE
UNDER HEALTH CARE REFORM
============================================================ Chapter 2
SUMMARIES OF PRINCIPAL PRODUCTS
---------------------------------------------------------- Chapter 2:1
VETERANS' HEALTH CARE:
EFFORTS TO MAKE VA
COMPETITIVE MAY CREATE
SIGNIFICANT RISKS
(TESTIMONY, JUNE 29, 1994,
GAO/T-HEHS-94-197)
-------------------------------------------------------- Chapter 2:1.1
VA faces many challenges as it tries to restructure its health care
system to compete in a managed care environment. Most legal barriers
that might limit VA's ability to compete with private-sector managed
care plans would be addressed through the Health Security Act. The
act would overcome many barriers by expanding entitlement to VA
health care or by exempting VA from federal and state requirements
developed to prevent fraud and abuse and ensure quality of and access
to health care services. In addition, many of the structural
barriers, such as VA's lack of adequate cost and utilization data,
will likely inhibit its efforts to establish competitive health
plans. As a result, significant risks are associated with efforts to
transform the VA direct delivery system into a series of managed care
plans. The expanded entitlement to free comprehensive care, for
example, could add billions of dollars to VA appropriations if all
veterans entitled to free care seek to enroll in VA health plans.
VA HEALTH CARE: VA AND THE
HEALTH SECURITY ACT (LETTER,
MAY 9, 1994,
GAO/HEHS-94-159R)
-------------------------------------------------------- Chapter 2:1.2
GAO provides a detailed analysis of the Health Security Act as
submitted by the Administration. It consists of
a discussion of the veterans' health care provisions contained
under title VIII of H.R. 3600 that pertain directly to VA;
a discussion of other provisions of the Health Security Act that
mention VA; and
a comparison of the health care services that would be covered
under the comprehensive benefits package under the Health
Security Act with the health care services currently covered
under chapter 17 of title 38 of the United States Code.
VA HEALTH CARE REFORM:
FINANCIAL IMPLICATIONS OF
THE PROPOSED HEALTH SECURITY
ACT (TESTIMONY, MAY 5, 1994,
GAO/T-HEHS-94-148)
-------------------------------------------------------- Chapter 2:1.3
The veterans' health care provisions of the Health Security Act
address many of the issues discussed in our reports. GAO believes
that eligibility reforms that enable VA to shift the focus of its
health care system from inpatient to ambulatory and primary care and
its collateral plans to become an increasingly managed care system
are long overdue steps. Several financial and policy implications,
however, need to be considered by the Congress. For example, the
expanded entitlement to free comprehensive health care benefits could
add billions of dollars to Department of Veterans Affairs (VA)
appropriations if all veterans entitled to free care seek to enroll
in VA health plans. Authorizing the Secretary of Veterans Affairs to
offer supplemental benefit policies covering such services as
long-term nursing care could add tens of billions of dollars to VA
appropriations.
VETERANS' HEALTH CARE: MOST
CARE PROVIDED THROUGH NON-VA
PROGRAMS (REPORT, APRIL 25,
1994, GAO/HEHS-94-104BR)
-------------------------------------------------------- Chapter 2:1.4
Nine out of 10 veterans have non-VA health care coverage. Veterans
with Medicare coverage are unlikely to use VA services. Seven out of
10 federal dollars spent on veterans' health care come from non-VA
programs. Expenditures on veterans' health care through private
health insurance likely exceed those under VA health care. Veterans
using VA services tend to have lower incomes and less private health
insurance coverage than nonusers. Health reform could reduce VA's
role as a safety net for acute-care services. President Clinton's
proposed Health Security Act is the only major health reform proposal
that would change the role of the VA health care system. The report
points out several other options that exist for restructuring the VA
health care system.
VETERANS' HEALTH CARE:
VETERANS' PERCEPTIONS OF VA
SERVICES AND ITS ROLE IN
HEALTH CARE REFORM
(TESTIMONY, APRIL 20, 1994,
GAO/T-HEHS-94-150)
-------------------------------------------------------- Chapter 2:1.5
GAO presented the views obtained from discussions with small groups
of veterans on the current veterans health care system and the future
role of VA. Several themes emerged: (1) veterans, other than those
without health insurance, seemed to use VA only for certain services,
such as treatment of service-connected disabilities; (2) veterans'
satisfaction with VA health care varied by location, but focused
mainly on poor customer service; (3) veterans perceive that the care
offered by VA can be erratic and some questioned the quality of care
offered by facilities at other locations; (4) veterans expressed
concern that changes could diminish or eliminate veterans' health
benefits; (5) some veterans did not see a need to maintain separate
veterans' health care facilities, as long as veterans were given a
viable alternative; and (6) veterans frequently indicated the needs
of veterans with service-connected disabilities should receive the
highest priority.
VA HEALTH CARE: A PROFILE
OF VETERANS USING VA MEDICAL
CENTERS IN 1991 (REPORT,
MAR. 29, 1994,
GAO/HEHS-94-113FS)
-------------------------------------------------------- Chapter 2:1.6
Of the 2.2 million veterans who used VA medical centers in 1991,
two-thirds had family incomes under $20,000; in contrast, about 10
percent had family incomes over $40,000. Lower incomes tended to
prevail among nonservice-connected, unmarried, and younger veterans.
About 45 percent of the veterans were employed and 45 percent were
retired. About 46 percent of the veterans were married and 16
percent had dependents other than a spouse. About 25 percent of the
veterans used VA for inpatient services; almost all used VA for
outpatient services.
VA HEALTH CARE: COMPARISON
OF VA BENEFITS WITH OTHER
PUBLIC AND PRIVATE PROGRAMS
(REPORT, JULY 29, 1993,
GAO/HRD-93-94)
-------------------------------------------------------- Chapter 2:1.7
The complex eligibility and entitlement provisions of the Department
of Veterans Affairs (VA) place more restrictions on the availability
of services than do other programs. About two-thirds of veterans
eligible for VA care can obtain medical services only to the extent
that space and resources are available after other veterans with
higher priorities for care are served. Other public and private
health care programs essentially guarantee payment for covered
services to all eligible participants. Once in the VA system,
veterans are generally offered a more extensive array of services,
fewer limitations in terms of the duration and number of visits or
services covered, and less cost sharing than are available under most
public and private health benefit programs.
VA HEALTH CARE: POTENTIAL
FOR OFFSETTING LONG-TERM
CARE COSTS THROUGH ESTATE
RECOVERY (REPORT, JULY 27,
1993, GAO/HRD-93-68)
-------------------------------------------------------- Chapter 2:1.8
VA could potentially offset a significant portion of its nursing home
and domiciliary care costs if it had the same authority states have
to operate estate recovery programs under Medicaid. The potential
for recovering nursing home and domiciliary costs may be greater for
veterans than for Medicaid recipients because (1) home ownership is
significantly higher among elderly VA hospital users than among
Medicaid nursing home recipients, and (2) veterans living in VA
facilities generally contribute much less of their incomes toward the
cost of their care than do Medicaid recipients. Oregon's successful
Medicaid estate recovery program could serve as a model for a VA
program.
VA HEALTH CARE:
VARIABILITIES IN OUTPATIENT
CARE ELIGIBILITY AND
RATIONING DECISIONS (REPORT,
JULY 16, 1993,
GAO/HRD-93-106)
-------------------------------------------------------- Chapter 2:1.9
Veterans' access to outpatient care at VA medical centers varies
widely for two reasons: (1) medical centers interpret VA outpatient
eligibility criteria differently, and (2) medical centers' rationing
decisions vary, including whether to ration and what rationing method
to use. This variation results in veterans with similar medical
conditions or income status receiving outpatient care at some medical
centers but not at others.
VA HEALTH CARE: VETERANS'
EFFORTS TO OBTAIN OUTPATIENT
CARE FROM ALTERNATIVE
SOURCES (REPORT, JULY 14,
1993, GAO/HRD-93-123)
------------------------------------------------------- Chapter 2:1.10
Of 198 veterans surveyed, 168 (85 percent) obtained needed care after
VA medical centers turned them away. These veterans received
diagnostic evaluations or needed treatment, including medication, for
the same conditions for which they had initially sought treatment at
the VA centers. The remaining 30 veterans did not obtain further
medical care, primarily because they could not afford it.
VA HEALTH CARE: OFFSETTING
LONG-TERM CARE COSTS BY
ADOPTING STATE COPAYMENT
PRACTICES (REPORT, AUG. 12,
1992, GAO/HRD-92-96)
------------------------------------------------------- Chapter 2:1.11
VA could offset a larger portion of its nursing home and domiciliary
costs if the Congress authorized it to adopt charging policies
similar to those that most states GAO visited use to offset the costs
of operating their state veterans' homes. In fiscal year 1990, VA
offset less than 1 percent of its costs to provide nursing home and
domiciliary care in VA and community facilities through copayments.
In comparison, the eight states GAO visited that charged for care
offset from 4 to 43 percent of state home operating costs through
copayments. If VA had offset similar percentages, its yearly
recoveries would have been between $43 million and $464 million.
VA HEALTH CARE: ALTERNATIVE
HEALTH INSURANCE REDUCES
DEMAND FOR VA CARE (REPORT,
JUNE 30, 1992,
GAO/HRD-92-79)
------------------------------------------------------- Chapter 2:1.12
Demand for VA inpatient services, as measured by days-of-care
provided to veterans, could drop by about 47 percent if the United
States establishes a universal health care program that does not
include changes in the VA health care system. Similarly, demand for
outpatient services could drop by about 41 percent. The actual
decreases, including the impact on nursing home usage, could vary
significantly depending on the type of universal coverage program
adopted. Although many veterans would continue to seek VA treatment,
the magnitude of the likely decrease in demand for VA-sponsored
health care suggests that the VA health care system should be
included in any debate about reform of the American health care
system.
OTHER RELATED PRODUCTS
---------------------------------------------------------- Chapter 2:2
Veterans' Health Care: Potential Effects of Health Care Reforms on
VA's Major Construction Program (Testimony, May 6, 1993,
GAO/T-HRD-93-19).
Veterans' Health Care: Potential Effects of Health Financing Reforms
on Demand for VA Services (Testimony, Mar. 31, 1993,
GAO/T-HRD-93-12).
Veterans' Health Care: Potential Effects of Health Reforms on VA
Construction (Testimony, Mar. 3, 1993, GAO/T-HRD-93-7).
VA Health Care: Actions Needed to Control Major Construction Costs
(Report, Feb. 26, 1993, GAO/HRD-93-75).
Veterans' Affairs Issues (Report, Dec. 1992, GAO/OCG-93-21TR).
VA Health Care: Demonstration Project Concerning Future Structure of
Veterans' Health Program (Testimony, Aug. 11, 1992,
GAO/T-HRD-92-53).
Veterans Affairs: Accessibility of Outpatient Care at VA Medical
Centers (Testimony, July 21, 1993, GAO/T-HRD-93-29).