Authorizes the Secretary of Veterans Affairs, in carrying out responsibilities with respect to the delivery of health care for veterans and their beneficiaries, to establish and operate managed health care plans through a Department of Veterans Affairs health care facility or group of such facilities or through arrangements with public or private entities. Directs the Secretary to prescribe the minimum health care benefits to be provided to veterans enrolled in the plan, which shall include at least those benefits covered under parts A and B of the Medicare Program (title XVIII of the Social Security Act). Authorizes the Secretary to establish cost-sharing requirements for veterans enrolled in such a plan, including premiums, copayments, and deductibles. Requires the director of a Department health care facility to certify, before the operation of a plan at such facility, that sufficient medical care funds have been allotted to such facility to provide the needed services.

Directs the Secretary of Health and Human Services (HHS Secretary) to make payments during a year to a Department managed health care plan on behalf of veterans who are Medicare-eligible individuals and are enrolled in the managed health care plan, under similar terms as the HHS Secretary makes payments under Medicare to other eligible managed health care plans. Directs the Secretary to certify to the HHS Secretary each year a list of all Department managed health care plans which conform to the standards required for such payments.