A bill to amend title 38, United States Code, to increase flexibility in payments for State veterans homes, and for other purposes.

Directs the Secretary of Veterans Affairs (VA) to pay to a state veterans home the cost of nursing home care provided to a covered veteran that is in excess of the amount paid for such care under part A of title XVIII (Medicare) and title XIX (Medicaid) of the Social Security Act.

Defines a covered veteran as one: (1) in need of nursing home care for a service-connected disability; or (2) with a service-connected disability rated at 70% or more and in need of such care.

Replaces provisions providing for payment of nursing home care at the lesser of the prevailing rate or the cost of daily care with provisions providing for payment at the applicable or prevailing rate in the area in which the state home is located.

Directs the Secretary to reimburse a state home for any Medicare copayment required of a covered veteran.

Permits a state home, in lieu of receiving payment under the above provisions, to elect to receive payment to furnish nursing home care to a veteran through a specified agreement entered into by the Secretary and the state home.