I 

108TH CONGRESS 

1ST SESSION H. R. 2624

To amend title XVIII of the Social Security Act to improve the provision 

of items and services provided to Medicare beneficiaries residing in rural 

areas. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 26, 2003

Mr. BOSWELL introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy 

and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL

To amend title XVIII of the Social Security Act to improve 

the provision of items and services provided to Medicare 

beneficiaries residing in rural areas.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare Fairness in 

5 Reimbursement Act’’. 
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1 SEC. 2. IMPROVING FAIRNESS OF PAYMENTS TO PRO2 VIDERS UNDER THE MEDICARE FEE-FOR3 SERVICE PROGRAM. 

4 Title XVIII of the Social Security Act (42 U.S.C. 

5 1395 et seq.) is amended by adding at the end the fol6 lowing new section: 

7 ‘‘IMPROVING FAIRNESS OF PAYMENTS UNDER THE

8 ORIGINAL MEDICARE FEE-FOR-SERVICE PROGRAM

9 ‘‘SEC. 1897. (a) ESTABLISHMENT OF SYSTEM.—Not10 withstanding any other provision of law, the Secretary 

11 shall establish a system for making adjustments to the 

12 amount of payment made to entities and individuals for 

13 items and services provided under the original medicare 

14 fee-for-service program under parts A and B. 

15 ‘‘(b) SYSTEM REQUIREMENTS.—

16 ‘‘(1) ADJUSTMENTS.—Under the system de17 scribed in subsection (a), the Secretary (beginning in 

18 2002) shall make the following adjustments: 

19 ‘‘(A) CERTAIN STATES ABOVE NATIONAL

20 AVERAGE.—If a State average per beneficiary 

21 amount for a year is greater than 105 percent 

22 (or 110 percent in the case of the determination 

23 made in 2001) of the national average per ben24 eficiary amount for such year, then the Sec25 retary shall reduce the amount of applicable 

26 payments in such a manner as will result (as 
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1 estimated by the Secretary) in the State aver2 age per beneficiary amount for the subsequent 

3 year being at 105 percent (or 110 percent in 

4 the case of payments made in 2002) of the na5 tional average per beneficiary amount for such 

6 subsequent year. 

7 ‘‘(B) CERTAIN STATES BELOW NATIONAL

8 AVERAGE.—If a State average per beneficiary 

9 amount for a year is less than 95 percent (or 

10 90 percent in the case of the determination 

11 made in 2001) of the national average per ben12 eficiary amount for such year, then the Sec13 retary shall increase the amount of applicable 

14 payments in such a manner as will result (as 

15 estimated by the Secretary) in the State aver16 age per beneficiary amount for the subsequent 

17 year being at 95 percent (or 90 percent in the 

18 case of payments made in 2002) of the national 

19 average per beneficiary amount for such subse20 quent year. 

21 ‘‘(2) DETERMINATION OF AVERAGES.—

22 ‘‘(A) STATE AVERAGE PER BENEFICIARY

23 AMOUNT.—Each year (beginning in 2001), the 

24 Secretary shall determine a State average per 

25 beneficiary amount for each State which shall 
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1 be equal to the Secretary’s estimate of the aver2 age amount of expenditures under the original 

3 medicare fee-for-service program under parts A 

4 and B for the year for a beneficiary enrolled 

5 under such parts that resides in the State. 

6 ‘‘(B) NATIONAL AVERAGE PER BENE7 FICIARY AMOUNT.—Each year (beginning in 

8 2001), the Secretary shall determine the na9 tional average per beneficiary amount which 

10 shall be equal to the average of the State aver11 age per beneficiary amounts determined under 

12 subparagraph (B) for the year. 

13 ‘‘(3) APPLICABLE PAYMENTS DEFINED.—In 

14 this section, the term ‘applicable payments’ means 

15 payments made to entities and individuals for items 

16 and services provided under the original medicare 

17 fee-for-service program under parts A and B to 

18 beneficiaries enrolled under such parts that reside in 

19 the State. 

20 ‘‘(c) BENEFICIARIES HELD HARMLESS.—The provi21 sions of this section shall not effect—

22 ‘‘(1) the entitlement to items and services of a 

23 beneficiary under this title, including the scope of 

24 such items and services; or
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1 ‘‘(2) any liability of the beneficiary with respect 

2 to such items and services. 

3 ‘‘(d) REGULATIONS.—

4 ‘‘(1) IN GENERAL.—The Secretary, in consulta5 tion with the Medicare Payment Advisory Commis6 sion, shall promulgate regulations to carry out this 

7 section. 

8 ‘‘(2) PROTECTING RURAL COMMUNITIES.—In 

9 promulgating the regulations pursuant to paragraph 

10 (1), the Secretary shall give special consideration to 

11 rural areas. 

12 ‘‘(e) BUDGET NEUTRALITY.—The Secretary shall en13 sure that the provisions contained in this section do not 

14 cause the estimated amount of expenditures under this 

15 title for a year to increase or decrease from the estimated 

16 amount of expenditures under this title that would have 

17 been made in such year if this section had not been en18 acted.’’. 

19 SEC. 3. IMPROVING FAIRNESS OF PAYMENTS FOR PHYSI20 CIANS’ SERVICES UNDER THE MEDICARE 

21 FEE-FOR-SERVICE PROGRAM. 

22 (a) ADJUSTMENT TO GEOGRAPHIC INDICES UNDER

23 THE PHYSICIAN FEE SCHEDULE.—Section 1848(e)(1) of 

24 the Social Security Act (42 U.S.C. 1395w–4(e)(1)) is 

25 amended—
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1 (1) in subparagraph (A), by striking ‘‘(B) and 

2 (C)’’ and inserting (B), (C), and (D)’’ in the matter 

3 preceding clause (i); 

4 (2) by redesignating subparagraph (D) as sub5 paragraph (E); and 

6 (3) by adding after subparagraph (C) the fol7 lowing new subparagraph: 

8 ‘‘(D) FLOOR AND CEILING ON GEO9 GRAPHIC INDICES.—If any index established 

10 under clause (i), (ii), or (iii) of subparagraph 

11 (A) or under subparagraph (B), after applica12 tion of the second sentence of subparagraph 

13 (C), is—

14 ‘‘(i) less that 0.950, the Secretary 

15 shall increase such index to 0.950; and 

16 ‘‘(ii) greater that 1.05, the Secretary 

17 shall reduce such index to 1.05.’’. 

18 (b) BUDGET NEUTRALITY ADJUSTMENT FOR APPLI19 CATION OF FLOOR AND CEILING ON GEOGRAPHIC AD20 JUSTMENT.—Section 1848(d) of the Social Security Act 

21 (42 U.S.C. 1395w–4(d)) is amended—

22 (1) in paragraph (1)(A), by striking ‘‘The con23 version’’ and inserting ‘‘Subject to paragraph (5), 

24 the conversion’’; and 
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1 (2) by adding at the end the following new 

2 paragraph: 

3 ‘‘(5) BUDGET NEUTRALITY ADJUSTMENT

4 FOR APPLICATION OF FLOOR AND CEILING ON

5 GEOGRAPHIC ADJUSTMENT.—Before applying 

6 an update for a year under this subsection, the 

7 Secretary shall (if necessary) provide for an ad8 justment to the conversion factor for that year 

9 to ensure that the aggregate payments under 

10 this part in that year shall be equal to aggre11 gate payments that would have been made 

12 under such part in that year if subsection 

13 (e)(1)(D) had not been enacted.’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to payments for items and services 

16 provided on and after January 1, 2002.

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