SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Health Care Reform Act of 
1995''.

SEC. 2. HEALTH CARE REFORM PROGRAM.

    (a) In General.--Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1704 the following new section:
``Sec. 1705. Delivery of health care through reformed management of 
              care
    ``(a) The Secretary shall conduct a program to reform the way in 
which the Secretary manages delivery of health care to veterans. The 
program shall be carried out in accordance with this section.
    ``(b)(1) In carrying out the program of reformed health care under 
this section, the Secretary shall take appropriate action to (A) expand 
the capacity of the Department of Veterans Affairs to provide 
outpatient care to eligible veterans, and (B) allocate resources to 
Department facilities in such a manner as to enable such facilities in 
carrying out the provisions of this section to provide to veterans 
described in subsection (c) access to care which is reasonably similar, 
without regard to the State in which those veterans reside.
    ``(2) In carrying out paragraph (1), the Secretary shall take 
appropriate steps, within service-delivery areas established by the 
Secretary, to reduce duplication of services and to realign services 
and programs.
    ``(c)(1) During the period through September 30, 1999, the 
Secretary shall, for purposes of the program of reformed health care 
under this section, manage Department health care facilities so as to 
provide needed hospital care and outpatient medical treatment--
            ``(A) to any veteran described in subsection (e) without 
        regard to otherwise applicable limitations in this chapter 
        (other than the limitations specified in section 1712(b) of 
        this title); and
            ``(B) to all other veterans, subject to the limitations in 
        this chapter.
    ``(2) The care and treatment described in paragraph (1) includes 
the provision of preventive health services and prosthetic appliances 
and may include home care services.
    ``(3) The Secretary shall, in carrying out the program, ensure that 
any veteran with a service-connected disability is provided all 
benefits to which that veteran is entitled under this chapter.
    ``(d)(1) The Secretary, in order to manage the provision of care 
and services under this section, shall coordinate care of veterans 
through facilities under the jurisdiction of, or under contract to, the 
Secretary and through referral to other appropriate providers in a 
veteran's community.
    ``(2) The Secretary, to further the provision of care and services 
under this section, may make such rules and regulations regarding 
acquisition procedures or policies as the Secretary considers 
appropriate to obtain needed care and services under this section.
    ``(3) The Secretary, in managing the provision of care and services 
under this section, may--
            ``(A) use systems of patient prioritization, consistent 
        with the relative priorities described in section 1712(i) of 
        this title; and
            ``(B) establish a program of enrollment of eligible 
        veterans.
    ``(4) The Secretary, in managing the provision of care and services 
under this section, shall ensure that the Department maintains its 
capacity to provide for the specialized treatment and rehabilitative 
needs of disabled veterans described in section 1710(a) of this title 
(including veterans with spinal cord dysfunction, blindness, and mental 
illness) within distinct programs or facilities of the Department that 
are dedicated to the specialized needs of those veterans in a manner 
that (A) affords those veterans reasonable access to care and services 
for those specialized needs, and (B) ensures that overall capacity of 
the Department to provide such services is not reduced below the 
capacity of the Department, nationwide, to provide those services as of 
the date of the enactment of this section.
    ``(e) A veteran referred to in subsection (c)(1)(A) is any 
veteran--
            ``(1) with a compensable service-connected disability;
            ``(2) whose discharge or release from active military, 
        naval, or air service was for a compensable disability that was 
        incurred or aggravated in the line of duty;
            ``(3) who is in receipt of, or who, but for a suspension 
        pursuant to section 1151 of this title (or both a suspension 
        and the receipt of retired pay), would be entitled to 
        disability compensation, but only to the extent that such 
        veteran's continuing eligibility for such care is provided for 
        in the judgment or settlement provided for in such section;
            ``(4) who is a former prisoner of war;
            ``(5) of the Mexican border period or of World War I; or
            ``(6) who is unable to defray the expenses of necessary 
        care, as determined in accordance with section 1722(a) of this 
        title.
    ``(f) Not later than February 1, 1999, the Secretary shall submit 
to the Committees on Veterans' Affairs of the Senate and the House of 
Representatives a report on the experience of the Department in 
establishing and administering the program required by this section. 
The report shall include any recommendations of the Secretary for 
legislation to expand access of eligible veterans to health care 
services furnished by the Department.
    ``(g) This section shall expire at the close of September 30, 
1999.''.
    (b) Clerical Amendment.--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. Delivery of health care through reformed managment of care.''.
    (c) Deadline for Implementation.--The Secretary shall implement the 
program under section 1705 of title 38, United States Code, as added by 
subsection (a), not later than October 1, 1996.

SEC. 3. FUNDS RECOVERED FROM THIRD PARTIES.

    (a) Authorized Uses.--Section 1729 of title 38, United States Code, 
is amended by adding at the end of paragraph (3) of subsection (g) the 
following new subparagraph:
            ``(C) Expenses of (i) establishing new outpatient clinics, 
        (ii) altering or remodeling medical facilities to provide 
        additional space for provision of outpatient care, and (iii) 
        other measures as determined necessary by the Secretary to 
        increase the number of outpatient visits provided eligible 
        veterans through facilities of the Department or under contract 
        arrangements.''.
    (b) Availability of Funds.--Subsection (g) of such section is 
further amended by striking out paragraph (4) and inserting the 
following:
    ``(4)(A) There shall be within the Fund a reserve to be available 
for the purposes specified in paragraph (3)(C). Not later than December 
1 of each year, there shall be set aside for the reserve amounts as 
provided in this paragraph. If the amount to be set aside for the 
reserve for any year is less than zero, the amount added to the reserve 
for that year shall be zero. Funds may be obligated under paragraph 
(3)(C) only to the extent of the availability of unobligated amounts in 
the reserve. Amounts in the reserve shall remain available for 
obligation until expended.
    ``(B) On December 1, 1995, the amount set aside for the reserve 
under subparagraph (A) shall be the amount by which--
            ``(i) the unobligated balance remaining in the Fund at the 
        close of business on September 30, 1995, minus any part of such 
        balance that the Secretary determines is necessary to defray 
        the expenses, payments, and costs described in paragraph (3), 
        exceeds
            ``(ii) $579,282,000.
    ``(C) On December 1, 1996, the amount set aside for the reserve 
under subparagraph (A) shall be the amount by which--
            ``(i) the unobligated balance remaining in the Fund at the 
        close of business on September 30, 1996, minus any part of such 
        balance that the Secretary determines is necessary to defray 
        the expenses, payments, and costs described in paragraph (3), 
        exceeds
            ``(ii) $640,918,000.
    ``(D) On December 1, 1997, the amount set aside for the reserve 
under subparagraph (A) shall be the amount by which--
            ``(i) the unobligated balance remaining in the Fund at the 
        close of business on September 30, 1997, minus any part of such 
        balance that the Secretary determines is necessary to defray 
        the expenses, payments, and costs described in paragraph (3), 
        exceeds
            ``(ii) $731,334,000.
    ``(E) On December 1, 1998, the amount set aside for the reserve 
under subparagraph (A) shall be the amount by which--
            ``(i) the unobligated balance remaining in the Fund at the 
        close of business on September 30, 1998, minus any part of such 
        balance that the Secretary determines is necessary to defray 
        the expenses, payments, and costs described in paragraph (3), 
        exceeds
            ``(ii) $758,321,000.
    ``(F) On December 1, 1999, the amount set aside for the reserve 
under subparagraph (A) shall be the amount by which--
            ``(i) the unobligated balance remaining in the Fund at the 
        close of business on September 30, 1999, minus any part of such 
        balance that the Secretary determines is necessary to defray 
        the expenses, payments, and costs described in paragraph (3), 
        exceeds
            ``(ii) $372,435,000.
    ``(5) Not later than January 1 of each year, there shall be 
deposited into the Treasury as miscellaneous receipts an amount equal 
to the amount of the unobligated balance remaining in the Fund at the 
close of business on September 30 of the preceding year minus (A) any 
part of such balance that the Secretary determines is necessary in 
order to enable the Secretary to defray, during the fiscal year in 
which the deposit is made, the expenses, payments, and costs described 
in paragraph (3), and (B) the amount in the reserve described in 
paragraph (4).
    ``(6) The Secretary shall prescribe regulations for the allocation 
of amounts in the reserve under paragraph (4) for the purposes stated 
in paragraph (3)(C). Those regulations shall be designed to provide 
incentives to increase the recoveries and collections under this 
section. Such regulations may provide that up to 25 percent of those 
amounts be made available each year directly to the medical centers, or 
networks of medical centers, at which such recoveries have been at 
above average levels. The remainder of those funds shall be allocated 
by the Secretary, based on the plan developed pursuant to paragraph 
(7), in a manner such that funds are targeted to areas determined to 
have the greatest unmet need for outpatient care.
    ``(7) In order to promote effective planning for orderly 
development of needed capacity for providing outpatient care to 
eligible veterans, the Under Secretary for Health shall conduct an 
annual study to evaluate the relative need within service-delivery 
areas of the Department for expanding that capacity (directly or 
through contract arrangements).''.
    (c) Annual Report on Medical Care Cost Recovery.--Such section is 
further amended by adding at the end the following new subsection:
    ``(j) Not later than February 1 each year, the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and House 
of Representatives a report on medical care cost recovery under this 
section. The report shall include (1) the plan described in subsection 
(g)(7), (2) the regulations promulgated under subsection (g)(6), (3) 
the specific allocations made pursuant to such regulations, and (4) the 
actions taken by the Secretary to carry out section 2(d)(4) of the 
Veterans Health Care Reform Act of 1995 during the preceding fiscal 
year.''.
Veterans Health Care Reform Act of 1995 - Directs the Secretary of Veterans Affairs to conduct within the Department of Veterans Affairs a program of reformed health care to:  (1) expand the Department's capacity to provide outpatient care to eligible veterans; and (2) allocate resources to enable Department facilities to provide access to health care which is reasonably similar, regardless of the State of residence, to:  (a)  veterans with a compensable service-connected disability; (b) veterans discharged or released from active duty due to a disability incurred in the line of duty; (c) certain veterans in receipt of veterans' disability compensation; (d) former prisoners of war; (e) veterans of the Mexican border period or World War I; or (f) veterans unable to defray the expenses of necessary care.  Directs the Secretary, through September 30, 1999, to manage Department health care facilities so as to provide to such veterans and all other veterans (subject to certain limitations) necessary hospital care and outpatient medical treatment, including preventive health care and prosthetic appliances.  Allows home care services to be included. Directs the Secretary to ensure that the Department maintains its capacity to provide for the specialized treatment and rehabilitative needs of disabled veterans. 
Directs the Secretary to report to specified congressional committees on the Department's experience in establishing and administering the program.  Terminates the program at the end of FY 1999. 
Adds to the authorized uses of health care reimbursement funds recovered by the Department from third party payers the expenses of establishing new outpatient care clinics or altering or remodeling current facilities to provide additional space for such care. Establishes within the Department of Veterans Affairs Medical-Care Cost Recovery Fund a reserve for such purposes.  Directs the Secretary to report to specified congressional committees on medical care cost recovery.
Veterans Health Care Reform Act of 1995