article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Veterans Medicare Reimbursement Demonstration Act of 1997''. SEC. 2. ESTABLISHMENT OF DEMONSTRATION PROJECT. (a) Authority.-- (1) In general.--The Secretary of Veterans Affairs and the Secretary of Health and Human Services shall jointly carry out a demonstration project under which the Secretary of Health and Human Services provides the Department of Veterans Affairs with reimbursement, determined in accordance with section 3, from the medicare program for health care services provided to targeted medicare-eligible veterans in or through facilities of the Department of Veterans Affairs selected under subsection (b). (2) Duration.--The Secretaries shall conduct the demonstration project during the three-year period beginning on January 1, 1998. (3) Waiver of certain medicare requirements.--To the extent necessary to carry out the demonstration project, the Secretary of Health and Human Services may waive any requirement of part B of title XI of the Social Security Act, title XVIII of that Act, or a related provision of law. (b) Selection of Participating Facilities.-- (1) Designation of service areas covered.--The Secretary of Veterans Affairs shall designate up to three geographic service areas from which facilities are selected to participate in the demonstration project. (2) Facility selection.-- (A) In general.--The Secretary, in consultation with the Secretary of Health and Human Services, shall establish a plan for the selection of facilities under the jurisdiction of the Secretary and located within a geographic service area designated under paragraph (1) to participate in the project. (B) General criteria.--The selection plan shall favor selection of those facilities that are suited to serve targeted medicare-eligible individuals because-- (i) there is a high potential demand by targeted medicare-eligible veterans for their services; (ii) they have sufficient capability in billing and accounting to participate; (iii) they have favorable indicators of quality of care, including patient satisfaction; and (iv) they meet other relevant factors identified in the plan. (C) Facility near closed base.--There shall be at least one facility selected that is in the same catchment area as a military medical facility which was closed pursuant to either of the following laws: (i) The Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note). (ii) Title II of the Defense Authorization Amendments and Base Closure and Realignment Act (Public Law 100-526; 10 U.S.C. 2687 note). (c) Voluntary Participation.--Participation of targeted medicare- eligible veterans in the demonstration project shall be voluntary, subject to the capacity of participating facilities and the funding limitations specified in section 3. (d) Cost Sharing.--The Secretary shall establish cost-sharing requirements for veterans participating in the demonstration project. Those requirements shall be the same as the requirements that apply to targeted medicare-eligible patients at nongovernmental facilities. (e) Crediting of Payments.--Payments received by the Secretary under the demonstration project shall be credited to the applicable Department of Veterans Affairs medical appropriation. SEC. 3. DETERMINATION OF REIMBURSEMENT AMOUNTS. (a) Payments Based on 95 Percent of Regular Medicare Payment Rates.-- (1) In general.--Subject to the succeeding provisions of this section, the Secretary of Health and Human Services shall reimburse the Secretary of Veterans Affairs for services provided under the demonstration project at a rate equal to 95 percent of the amounts that otherwise would be payable under the medicare program on a non-capitated basis for such services if the facility were not a Federal facility, were participating in the program, and imposed charges for such services. In cases in which a payment amount may not otherwise be readily computed, the Secretaries shall establish rules for computing equivalent or comparable payment amounts. (2) Periodic payments from medicare trust funds.--Payments under this section shall be made-- (A) on a periodic basis consistent with the periodicity of payments under the medicare program; and (B) in appropriate part, as determined by the Secretary of Health and Human Services, from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund. (3) Annual limit on medicare payments.--The amount paid to the Department of Veterans Affairs under this section for any year for the demonstration project may not exceed $50,000,000. (b) Reduction in Payment for Failure to Maintain VA Effort.-- (1) In general.--In order to avoid shifting onto the medicare program the costs of the Department of Veterans Affairs for hospital care and medical services for targeted medicare-eligible veterans, the payment amounts under this section for the project for a year shall be reduced by the amount (if any) by which-- (A) the amount of the actual VA medical expenditures for targeted veterans (as defined in paragraph (3)) for the fiscal year ending in such year, is less than (B) the amount of the maintenance of effort level for such fiscal year, as determined under paragraph (2). (2) Maintenance of effort levels.--The maintenance of effort level for any fiscal year is the amount equal to the maintenance of effort level for the preceding fiscal year or, in the case of fiscal year 1998, the amount of VA medical expenditures for targeted veterans (as defined in paragraph (3)) for fiscal year 1997-- (A) increased or decreased by the same percentage as the percentage by which the amount of the medical care appropriation for the Department of Veterans Affairs for that fiscal year exceeds (or is less than, respectively) the amount of such appropriation for the preceding fiscal year; and (B) decreased by the amount of the decrease (if any) in VA medical expenditures for targeted veterans for that fiscal year (relative to the preceding fiscal year) that, as estimated by the Secretaries, results from-- (i) a rate of increase in the level of medical care appropriations for the Department of Veterans Affairs described in subparagraph (A) that is less than the general rate of increase in health care costs; and (ii) the reduction in priority in delivery of services to targeted medicare-eligible veterans attributable to the amendments made by title I of the Veterans' Health Care Eligibility Reform Act of 1996 (Public Law 104- 262; 110 Stat. 3177) and to implementation of the plan developed pursuant to section 429 of Public Law 104-204 (110 Stat. 2929). (3) VA medical expenditures for targeted veterans defined.--For purposes of this subsection, the term ``VA medical expenditures for targeted veterans'' means, with respect to a fiscal year, the amount expended by the Department of Veterans Affairs during the fiscal year for providing hospital care and medical services under chapter 17 of title 38, United States Code to targeted medicare-eligible veterans. Such amount does not include-- (A) expenditures for the conduct of medical examinations to adjudicate claims under such title, or (B) expenditures attributable to services for which reimbursement is made under the demonstration project. (c) Assuring No Increase in Cost to Medicare Program.-- (1) Monitoring impact on costs to medicare program.-- (A) In general.--The Secretaries, in consultation with the Comptroller General, shall closely monitor the expenditures made under the medicare program for targeted medicare-eligible veterans during the period of the demonstration project compared to the expenditures that would have been made for such veterans during that period if the demonstration project had not been conducted. (B) Auditing by the comptroller general.--Not later than December 31 of each year during which the demonstration project is conducted, the Comptroller General shall determine and submit to the Secretaries and the appropriate committees of Congress a report on the extent, if any, to which the costs of the Secretary of Health and Human Services under the medicare program increased during the preceding fiscal year as a result of the demonstration project. (2) Required response in case of increase in costs.-- (A) In general.--If the Secretaries find, based on paragraph (1), that the expenditures under the medicare program increased (or are expected to increase) during a fiscal year because of the demonstration project, the Secretaries shall take such steps as may be needed-- (i) to recoup for the medicare program the amount of such increase in expenditures; and (ii) to prevent any such increase in the future. (B) Steps.--Such steps-- (i) under subparagraph (A)(i) shall include payment of the amount of such increased expenditures by the Secretary from the current medical care appropriation of the Department of Veterans Affairs to the trust funds under the medicare trust program; and (ii) under subparagraph (A)(ii) shall include suspending or terminating the demonstration project (in whole or in part) or substitution of a lower percentage for 95 percent under subsection (a)(1). SEC. 4. EVALUATION AND REPORTS. (a) Annual Report by Independent Entity.-- (1) In general.--The Secretaries shall arrange for an independent entity with expertise in the evaluation of health services to conduct an ongoing evaluation of the demonstration project. (2) Annual reports.--The entity shall submit a report on the project jointly to the Secretaries and to the appropriate committees of the Congress not later than March 1 following each year during which the project is conducted. (3) Assessment.--Each such report shall include the results of the evaluation under subsection (a), including an assessment of each of the following: (A) The cost to the Department of Veterans Affairs of providing care to veterans under the project. (B) Compliance of participating facilities with applicable measures of quality of care, compared to such compliance for other medicare-participating facilities. (C) A comparison of the costs of facilities' participation in the program with the reimbursements provided for services of such facilities. (D) Any savings or costs to the medicare programs from the project. (E) Any change in access to care or quality of care for targeted medicare-eligible veterans participating in the project. (F) Any effect of the project on the access to care of veterans who did not participate in the project and of targeted medicare-eligible veterans. (b) Report on Extension and Expansion of Demonstration Project.-- Not later than six months after the date of the submission of the final report under subsection (a), the Secretaries shall submit to the Congress a report containing their recommendation as to-- (1) whether to extend the demonstration project or make it permanent; (2) whether to expand the project to cover additional sites and areas and to increase the maximum amount of reimbursement under the project in any year; and (3) whether the terms and conditions of the project should be continued (or modified) if the project is extended or expanded. (c) Recommendation Concerning New Demonstration Project for Payment to Managed Health-Care Plans.--Not later than March 1, 1999, the Secretaries shall submit to the appropriate committees of the Congress a report on the feasibility and advisability of establishing a new demonstration project to reimburse the Secretary of Veterans Affairs under section 1876(a) of the Social Security Act for health care services furnished to targeted medicare-eligible veterans enrolled in managed health-care plans established by the Secretary. SEC. 5. DEFINITIONS. For the purpose of this Act: (1) Demonstration project; project.--The terms ``demonstration project'' and ``project'' mean the demonstration project carried out under section 2(a). (2) Geographic service area.--The term ``geographic service area'' means a field component of the Veterans Health Administration that-- (A) is based on a geographic area which encompasses a population of veteran beneficiaries and is defined on the basis of natural patient referral patterns; and (B) provides health care through strategic alliances among Department of Veterans Affairs medical centers, clinics, and other sites. (3) Medicare program.--The term ``medicare program'' means the programs of health benefits provided under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). (4) Secretary; secretaries.--Unless otherwise provided, the term ``Secretary'' means the Secretary of Veterans Affairs and the term ``Secretaries'' means the Secretary of Veterans Affairs and the Secretary of Health and Human Services acting jointly. (5) Targeted medicare-eligible veteran.--The term ``targeted medicare-eligible veteran'' means an individual-- (A) who is a veteran (as defined in section 101(2) of title 38, United States Code) described in section 1710(a)(3) of title 38, United States Code; (B) who is entitled to hospital insurance benefits under part A of the medicare program and enrolled in the supplementary medical insurance program under part B of the medicare program; and (C) whose annual income is an amount between the applicable income threshold under section 1722(b) of title 38, United States Code, and the amount equal to three times the amount of such applicable income threshold.
summary: Veterans Medicare Reimbursement Demonstration Act of 1997 - Directs the Secretaries of Veterans Affairs (VA) and Health and Human Services (HHS) to jointly carry out a demonstration project, during the three-year period beginning on January 1, 1998, under which the HHS Secretary provides the VA with reimbursement from the Medicare program (title XVIII of the Social Security Act) for health-care services provided to targeted Medicare-eligible veterans in or through selected VA medical centers. Provides for the waiver of certain Medicare requirements in order to carry out the project. Requires the VA Secretary to establish a plan for the selection of up to 12 medical centers located in geographically dispersed locations for project participation. Requires at least one medical center selected to be in the same catchment area as a military medical facility which was closed pursuant to a defense base closure law. Requires project participation to be voluntary. Directs the VA Secretary to establish requirements for participating veterans. Authorizes the VA Secretary, in carrying out the demonstration project, to operate managed health care plans, either through the VA or public or private entities. Directs the Secretary to prescribe minimum health care benefits to be provided under such plans. Allows the Secretary to establish a managed health care plan only after: (1) reporting to the Congress a plan for the use of such centers and facilities; and (2) receiving from the VA Inspector General certain certifications relating to costs and conformity with health plan requirements. Requires project reimbursement at a rate equal to 95 percent of amounts that would otherwise be payable under the Medicare program if the facility was not a Federal facility, was participating in the project, and imposed charges for such services. Excludes certain amounts from such computation. Requires reimbursement payments periodically from Medicare trust funds, with an annual Medicare payment limit of $50 million, of which no more than $10 million may be used for the conduct of the project through managed health care plans. Requires reductions in such payments when the amount of the actual VA effort level for targeted veterans for that fiscal year is less than the amount of the VA effort level for FY 1997. Directs the Secretaries to compare the expenditures made under the project to the expenditures that would have been made for such veterans if the project had not been conducted, and to take appropriate steps if the expenditures under the Medicare program increased as a result of the project. Requires annual reports by the Comptroller General. Prohibits the VA Secretary from carrying out a demonstration project at a medical center until 30 days after reporting to the Congress on plans for the selection of appropriate centers. Requires: (1) an independent entity to conduct an ongoing project evaluation and report results to the Secretaries and appropriate congressional committees; and (2) a report from the Secretaries to the Congress on possible project extension and expansion.