Meanwhile, heat oil in large skillet on medium heat.
Add onions, peppers and garlic; cook 5 min. or until crisp-tender, stirring frequently.
Add meat; cook until browned, stirring occasionally.
Add diced tomatoes, pasta sauce, 2 Tbsp. Parmesan and seasonings; mix well. Simmer on medium-low heat 10 min., stirring occasionally.
Heat oven to 350F.
Drain pasta.
Add to meat mixture in skillet; stir to evenly coat. Spoon half the pasta mixture into 3-qt. casserole sprayed with cooking spray; cover with half the VELVEETA. Repeat layers; cover.
Bake 20 to 25 min. or until heated through, uncovering for the last 10 min.