38 USC 1741 - Criteria for payment

(1) Except as provided in section 1745 of this title, the Secretary shall pay each State at the per diem rate of
(A) $8.70 for domiciliary care; and
(B) $20.35 for nursing home care and hospital care,

for each veteran receiving such care in a State home, if such veteran is eligible for such care in a Department facility.

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(2) The Secretary may pay each State per diem at a rate determined by the Secretary for each veteran receiving extended care services described in any of paragraphs (4) through (6) of section 1710B (a) of this title under a program administered by a State home, if such veteran is eligible for such care under laws administered by the Secretary.
(b) In no case shall the payments made with respect to any veteran under this section exceed one-half of the cost of the veterans care in such State home.
(c) Whenever the Secretary makes a determination pursuant to section 1720 (a)(2)(A) of this title that the cost of care furnished by the Department in a general hospital under the direct jurisdiction of the Secretary has increased, the Secretary may, effective no earlier than the date of such determination, increase the rates paid under subsection (a) of this section by a percentage not greater than the percentage by which the Secretary has determined that such cost of care has increased.
(d) Subject to section 1743 of this title, the payment of per diem for care furnished in a State home facility shall commence on the date of the completion of the inspection for recognition of the facility under section 1742 (a) of this title if the Secretary determines, as a result of that inspection, that the State home meets the standards described in such section.
(e) Payments to States pursuant to this section shall not be considered a liability of a third party, or otherwise be used to offset or reduce any other payment made to assist veterans.
(f) Any State home that requests payment or reimbursement for services provided to a veteran under this section shall provide to the Secretary such information as the Secretary considers necessary to identify each individual veteran eligible for payment under such section.