I 

108TH CONGRESS 

1ST SESSION H. R. 33

To amend title XVIII of the Social Security Act to establish a minimum 

geographic cost-of-practice index value for physicians’ services furnished 

under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 2003

Mr. BEREUTER (for himself, Mr. BERRY, Mr. FOLEY, Mr. MURTHA, Mr. KILDEE, Mr. COSTELLO, Mr. GREEN of Wisconsin, Mr. NETHERCUTT, Mr. 

MCINTYRE, Mr. TOWNS, Mr. LUCAS of Oklahoma, Mrs. WILSON of New 

Mexico, Mr. BOUCHER, Mr. TERRY, Mr. BAIRD, Mrs. CUBIN, Mr. BASS, 

Mr. FROST, and Mr. OSBORNE) introduced the following bill; which was 

referred to the Committee on Energy and Commerce, and in addition to 

the Committee on Ways and Means, 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 establish 

a minimum geographic cost-of-practice index value for 

physicians’ services furnished under the Medicare Program.

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; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Rural Equity Payment Index Reform Act of 2003’’. 
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1 (b) FINDINGS.—Congress makes the following find2 ings: 

3 (1) Variations in the physician work adjustment 

4 factors under section 1848(e) of the Social Security 

5 Act (42 U.S.C. 1395w–4w(e)) result in a physician 

6 work payment inequity between urban and rural lo7 calities under the medicare physician fee schedule. 

8 (2) The amount the medicare program spends 

9 on its beneficiaries varies substantially across the 

10 country, far more than can be accounted for by dif11 ferences in the cost of living or differences in health 

12 status. 

13 (3) Since beneficiaries and others pay into the 

14 program on the basis of income and wages and bene15 ficiaries pay the same premium for Part B services, 

16 these payments result in substantial crosssubsidies 

17 from people living in low payment States with con18 servative practice styles or beneficiary preferences to 

19 people living in higher payment States with aggres20 sive practice styles or beneficiary preferences. 

21 (4) Congress has been mindful of these vari22 ations when it comes to capitation payments made 

23 to managed care plans under the Medicare+Choice 

24 program and has put in place floors that increase 

25 monthly payments by more than one-third in some 
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1 of the lowest payment counties over what would oth2 erwise occur. But this change addresses only a very 

3 small fraction of medicare beneficiaries who are 

4 presently enrolled in Medicare+Choice plans oper5 ating in low payment counties. 

6 (5) Unfortunately, Congress has only begun to 

7 address the underlying problem of substantial geo8 graphic variations in fee-for-service spending under 

9 traditional medicare. 

10 (6) Improvements in rural hospital payment 

11 systems under the medicare program help to reduce 

12 aggregate per capita payment variation as rural hos13 pitals are in large part located in low payment coun14 ties. 

15 (7) Many rural communities have great dif16 ficulty attracting and retaining physicians and other 

17 skilled health professionals. 

18 (8) Targeted efforts to provide relief to rural 

19 doctors in low payment localities would further re20 duce variation by improving access to primary and 

21 tertiary services along with more equitable payment. 

22 (9) Geographic adjustment factors in the medi23 care program’s resource-based relative value scale 

24 unfairly suppress fee-for-service payments to rural 

25 providers. 
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1 (10) Actual costs are not presently being meas2 ured accurately and payments do not reflect the 

3 costs of providing care. 

4 (11) Unless something is done about medicare 

5 payment in rural areas, as the baby boom cohort 

6 ages into medicare, the financial demands on rural 

7 communities to subsidize care for their aged and dis8 abled medicare beneficiaries will progress from dif9 ficult to impossible in another 10 years. 

10 (12) The impact on rural health care infra11 structure will be first felt in economically depressed 

12 rural areas where the ability to shift costs is already 

13 limited. 

14 SEC. 2. PHYSICIAN FEE SCHEDULE WAGE INDEX REVISION. 

15 Section 1848(e)(1) of the Social Security Act (42 

16 U.S.C. 1395w–4(e)(1)) is amended—

17 (1) in subparagraph (A), by striking ‘‘subpara18 graphs (B) and (C)’’ and inserting ‘‘subparagraphs 

19 (B), (C), and (E)’’; and 

20 (2) by adding at the end the following new sub21 paragraph: 

22 ‘‘(E) FLOOR FOR WORK GEOGRAPHIC INDI23 CES.—

24 ‘‘(i) IN GENERAL.—Notwithstanding 

25 the work geographic index otherwise cal-
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1 culated under subparagraph (A)(iii), in no 

2 case may the work geographic index ap3 plied for payment under this section be 

4 less than—

5 ‘‘(I) 0.976 for services furnished 

6 during 2004; 

7 ‘‘(II) 0.987 for services furnished 

8 during 2005; 

9 ‘‘(III) 0.995 for services fur10 nished during 2006; and 

11 ‘‘(IV) 1.000 for services fur12 nished during 2007 and subsequent 

13 years. 

14 ‘‘(ii) EXEMPTION FROM LIMITATION

15 ON ANNUAL ADJUSTMENTS.—The increase 

16 in expenditures attributable to clause (i) 

17 shall not be taken into account in applying 

18 subsection (c)(2)(B)(ii)(II).’’.

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