I 

108TH CONGRESS 

1ST SESSION H. R. 3081

To amend title XVIII of the Social Security Act to provide additional reimbursements for Medicare providers in low-reimbursement States and to 

provide financial incentives for high quality, low-cost health care. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 11, 2003

Mr. GEPHARDT (for himself and 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 provide 

additional reimbursements for Medicare providers in lowreimbursement States and to provide financial incentives 

for high quality, low-cost health care.

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 ‘‘Protecting Medicare 

5 Investments for Seniors Everywhere Act (ProMISE Act)’’. 
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1 SEC. 2. ADDITIONAL REIMBURSEMENTS FOR MEDICARE 

2 PROVIDERS IN LOW-REIMBURSEMENT 

3 STATES. 

4 Title XVIII of the Social Security Act is amended by 

5 adding at the end the following new section: 

6 ‘‘ADDITIONAL REIMBURSEMENTS FOR PROVIDERS IN

7 LOW-REIMBURSEMENT STATES

8 ‘‘SEC. 1897. (a) ADDITIONAL REIMBURSEMENT.—

9 ‘‘(1) IN GENERAL.—Subject to section 1898(c), 

10 in the case of an affected health care provider (as 

11 defined in subsection (c)) that is located in a low12 reimbursement State (as defined in subsection (b)) 

13 and that furnishes items or services for which pay14 ment may be made under part A or part B, in addi15 tion to the amount otherwise paid under such part, 

16 there also shall be paid to the provider under such 

17 part from the Federal Hospital Insurance Trust 

18 Fund (in the case of payments under part A) or 

19 from the Federal Supplementary Medical Insurance 

20 Fund (in the case of payments under part B) an 

21 amount equal to the payment adjustment percentage 

22 (specified in paragraph (2)) of the payment amount 

23 for the service under such part. 

24 ‘‘(2) PAYMENT ADJUSTMENT PERCENTAGE.—In 

25 the case of a provider located in a State for which 

26 the medicare reimbursement ratio—
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1 ‘‘(A) is at least 94 percent, the payment 

2 adjustment percentage is 1 percent; 

3 ‘‘(B) is at least 93 percent, but less than 

4 94 percent, the payment adjustment percentage 

5 is 2 percent; 

6 ‘‘(C) is at least 92 percent, but less than 

7 93 percent, the payment adjustment percentage 

8 is 3 percent; 

9 ‘‘(D) is at least 91 percent, but less than 

10 92 percent, the payment adjustment percentage 

11 is 4 percent; or 

12 ‘‘(E) is less than 91 percent, the payment 

13 adjustment percentage is 5 percent. 

14 ‘‘(b) LOW-REIMBURSEMENT STATE; MEDICARE RE15 IMBURSEMENT RATIO DEFINED.—For purposes of this 

16 section: 

17 ‘‘(1) LOW-REIMBURSEMENT STATE.—The term 

18 ‘low-reimbursement State’ means one of the 50 

19 States or the District of Columbia in which the 

20 medicare reimbursement ratio (as defined in para21 graph (2)) is less than 95 percent. 

22 ‘‘(2) MEDICARE REIMBURSEMENT RATIO.—The 

23 term ‘medicare reimbursement ratio’ means, with re24 spect to a State or the District of Columbia, the 

25 ratio (expressed as a percentage) of—
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1 ‘‘(A) the adjusted average per capita cost 

2 (as determined under section 1876(a)(4)) for 

3 benefits under parts A and B of this title (with4 out regard to any payment under this section) 

5 in the State or District; to 

6 ‘‘(B) the United States per capita cost (as 

7 so determined) for the 50 States and the Dis8 trict of Columbia. 

9 ‘‘(c) AFFECTED HEALTH CARE PROVIDERS COV10 ERED.—For purposes of this section the term ‘affected 

11 health care provider’ means a facility or professional that 

12 is within one of the following classes of health care pro13 viders or organizations: 

14 ‘‘(1) Hospitals. 

15 ‘‘(2) Physicians. 

16 ‘‘(3) Skilled nursing facilities. 

17 ‘‘(4) Home health agencies. 

18 ‘‘(5) Medicare+Choice organizations offering 

19 Medicare+Choice plans. 

20 ‘‘(d) EFFECTIVE PERIOD.—This section shall apply 

21 to payments—

22 ‘‘(1) for hospitals, skilled nursing facilities, and 

23 home health agencies, for fiscal years beginning with 

24 fiscal year 2004; or 
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1 ‘‘(2) for physicians and Medicare+Choice orga2 nizations, for calendar years beginning with 2004. 

3 ‘‘(e) RELATION TO MANAGED CARE: AVOIDING DU4 PLICATION OF INCREASES.—Payments under this section 

5 to affected health care providers other than 

6 Medicare+Choice organizations in an area shall not be 

7 taken into account for purposes of applying part C in that 

8 area.’’. 

9 SEC. 3. MEDICARE FINANCIAL INCENTIVE PROGRAM FOR 

10 HIGH QUALITY, LOW-COST HEALTH CARE. 

11 Title XVIII of the Social Security Act is further 

12 amended by adding at the end the following new section: 

13 ‘‘FINANCIAL INCENTIVE PROGRAM FOR HIGH QUALITY, 

14 LOW-COST HEALTH CARE

15 ‘‘SEC. 1898. (a) RANKING OF STATES BY QUALITY

16 AND COST.—

17 ‘‘(1) IN GENERAL.—The Secretary shall provide 

18 for the ranking of States on measures of both qual19 ity and cost of health care services under this title. 

20 ‘‘(2) PROCESS.—

21 ‘‘(A) IN GENERAL.—Within 1 year after 

22 the date of the enactment of this section, the 

23 Secretary shall submit to Congress a proposal 

24 for establishing such measures of quality. The 

25 Secretary shall consult with stakeholders in de26 veloping such proposal. 
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1 ‘‘(B) ACTION.—If the Congress does not 

2 enact a law within 90 legislative days after re3 ceiving such proposal, the proposal shall become 

4 effective. 

5 ‘‘(3) COST.—In developing the measure based 

6 on cost, the Secretary shall rely on the Secretary’s 

7 measure of average medicare spending per recipient 

8 in each State. 

9 ‘‘(4) ANNUAL EVALUATIONS.—The Secretary 

10 shall conduct annually evaluations of States quality 

11 and cost of health care services under this title. 

12 ‘‘(b) ADDITIONAL BONUS PAYMENT.—

13 ‘‘(1) IN GENERAL.—Subject to subsection (c), 

14 in the case of a hospital or physician that is located 

15 in a State that is ranked under subsection (a) 

16 among the top quartile of States in quality and cost 

17 and that furnishes items or services for which pay18 ment may be made under part A or part B, in addi19 tion to the amount otherwise paid under such part, 

20 there also shall be paid to the provider under such 

21 part from the Federal Hospital Insurance Trust 

22 Fund (in the case of payments under part A) or 

23 from the Federal Supplementary Medical Insurance 

24 Fund (in the case of payments under part B) an 
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1 amount equal to 5 percent of the payment amount 

2 for the service under such part. 

3 ‘‘(2) AUTHORITY TO COVER OTHER PRO4 VIDERS.—The Secretary may expand paragraph (1) 

5 to apply to other health care providers and practi6 tioners under this title, but shall not effect such an 

7 expansion without reporting to Congress. 

8 ‘‘(c) AGGREGATE PERCENTAGE ADJUSTMENT LIMI9 TATION.—In no case shall the sum of the percentage in10 crease under subsection (b) and the payment adjustment 

11 percentage under section 1897(a)(2) with respect to a 

12 State exceed 100 percent minus the medicare reimburse13 ment ratio (as defined in section 1897(b)(2)) for that 

14 State. Any such percentage increase or adjustment shall 

15 be reduced on a pro-rata basis to the extent required to 

16 comply with the previous sentence.’’.

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