COOK and stir sausage and peppers in large nonstick skillet on medium heat 5 to 7 min. or until sausage is done and peppers are tender. Add water, Seasoning Mix and Pasta; stir. Bring to boil. Reduce heat to medium-low; cover.
SIMMER 11 to 13 min. or until pasta is tender and most of the water is absorbed, stirring frequently. Remove from heat.
STIR in VELVEETA Cheese Sauce.