Department of Veterans Affairs Health Care Expansion Act of 1996

Department of Veterans Affairs Health Care Expansion Act of 1996 - Repeals a provision of the Veterans Health Care Act of 1992 which terminates the authority of the Secretary of Veterans Affairs (Secretary) to enter into an agreement with the Secretary of Defense for the sharing of health care.

Entitles the United States to recover or collect from a private health care plan charges for care or services furnished by a Department of Veterans Affairs medical facility to a primary beneficiary of such plan to the extent that the beneficiary would be eligible under the plan to receive payment if the care or services had not been furnished by a U.S. department or agency.

Repeals a statement of congressional purpose regarding the sharing of health care resources of the Department with certain other entities.

Authorizes the Secretary to share all health care resources (currently, only specialized medical resources) with medical schools, health-care facilities and research centers (current law), as well as with any health-care provider or plan, insurer, or other entity or individual.

Repeals a provision requiring reciprocal reimbursement of the cost of such shared resources, instead providing for payment to the Department under procedures which allow appropriate flexibility to negotiate a payment which is in the best interest of the Government.

Authorizes the Secretary to enter into an arrangement that authorizes the furnishing of services to non-veterans only if the Secretary determines that such an arrangement: (1) will not result in the denial of or delay in the provision of care to any veteran at that facility; and (2) is necessary to maintain an acceptable level and quality of service to veterans and will result in the improvement of services to eligible veterans at that facility.

Excludes from limitations on the number of full-time equivalent positions permitted in the Department those positions held by persons involved in providing health care resources under sharing arrangements.