(1)
In general— Subchapter I of chapter 74 of title 38, United States Code, is amended by adding at the end the following new section:
“7414. Pay for directors of medical centers and directors of Veterans Integrated Service Networks
“(a) In general—To reflect the recruitment and retention needs of the Department for the assignment of a particular director in a medical center or Veterans Integrated Service Network of the Department, the Secretary shall prescribe a system of pay for individuals appointed under section 7401(4) of this title.
“(b) Market pay
“(1) In general—The annual amount of the market rate of pay of an individual appointed under section 7401(4) of this title—
“(A) shall be determined by the Secretary on a case-by-case basis; and
“(B) shall take into account—
“(i) the level of experience of the individual in managing facilities or programs of the Department or other similar agencies or companies, whether governmental or nongovernmental;
“(ii) the complexity of the assignment of the individual, whether assigned or to be assigned;
“(iii) the labor market for individuals in similar positions, which may cover any geographic area the Secretary considers appropriate;
“(iv) the experience of the individual in performing the assignment of the individual, whether assigned or to be assigned; and
“(v) such other considerations as the Secretary considers appropriate.
“(2) Evaluation and adjustment
“(A) In general—The market rate of pay provided under this subsection shall be evaluated by the Secretary not less frequently than once every two years.
“(B) Adjustment—The market rate of pay of an individual may be adjusted as the result of an evaluation under subparagraph (A).
“(C) Notice of results—An individual whose market rate of pay is evaluated under subparagraph (A) shall receive written notice of the results of such evaluation.
“(c) Requirements and limitations on total pay
“(1) Minimum and maximum amounts
“(A) In general—Not less frequently than once every two years, the Secretary shall prescribe for applicability throughout the Department the minimum and maximum amounts for a market rate of pay that may be paid under subsection (b).
“(B) Publication and effective date of amounts—Amounts prescribed under subparagraph (A) shall be published in the Federal Register and shall take effect not earlier than 60 days after the date of publication.
“(C) Maximum
“(i) In general—Except as provided in clause (ii), in no case may the total market rate of pay provided under subsection (b) exceed the amount of annual compensation (excluding expenses) specified in section 102 of title 3.
“(ii) Waiver—The Secretary may waive the limitation under clause (i) (to include tier limitations) if the Secretary determines it is necessary for the recruitment or retention of critical health care personnel, as determined by the Secretary.
“(2) Limitation on reduction—No adjustment of the market rate of pay under subsection (b)(2)(B) may result in a reduction of the amount of the market rate of pay of an individual while in the same position or assignment at the same location.
“(d) Treatment of pay
“(1) In general—Pay under subsection (b) shall be considered pay for all purposes, including retirement benefits under chapters 83 and 84 of title 5 and other benefits.
“(2) Cost-of-living allowance—An individual receiving pay under subsection (b) may not receive a cost-of-living allowance under section 5941 of title 5.
“(e) Annual report—Not later than one year after the date of the enactment of the VA Clinician Appreciation, Recruitment, Education, Expansion, and Retention Support (CAREERS) Act of 2023, and annually thereafter, the Secretary shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives a report on the implementation by the Secretary of the requirements under this section.”