II

107TH CONGRESS

1ST SESSION S. 1020

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 SENATE OF THE UNITED STATES

JUNE 12, 2001

Mr. HARKIN (for himself, Mr. CRAIG, Mr. BINGAMAN, Mrs. MURRAY, Mr.

FEINGOLD, Mr. KOHL, and Mr. LEAHY) introduced the following bill;

which was read twice and referred to the Committee on Finance

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 of 2001’’.
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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) DEFINITIONS.—In this section:

14 ‘‘(A) APPLICABLE PAYMENTS.—The term

15 ‘applicable payments’ means payments made to

16 entities and individuals for items and services

17 provided under the original medicare fee-for18 service program under parts A and B to bene19 ficiaries enrolled under such parts that reside in

20 the State.

21 ‘‘(B) STATE.—The term ‘State’ has the

22 meaning given such term in section 210(h).

23 ‘‘(c) BENEFICIARIES HELD HARMLESS.—The provi24 sions of this section shall not effect—
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1 ‘‘(1) the entitlement to items and services of a

2 beneficiary under this title, including the scope of

3 such items and services; or

4 ‘‘(2) any liability of the beneficiary with respect

5 to such items and services.

6 ‘‘(d) REGULATIONS.—

7 ‘‘(1) IN GENERAL.—The Secretary, in consulta8 tion with the Medicare Payment Advisory Commis9 sion, shall promulgate regulations to carry out this

10 section.

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

12 promulgating the regulations pursuant to paragraph

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

14 rural areas.

15 ‘‘(e) BUDGET NEUTRALITY.—The Secretary shall en16 sure that the provisions contained in this section do not

17 cause the estimated amount of expenditures under this

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

19 amount of expenditures under this title that would have

20 been made in such year if this section had not been en21 acted.’’.
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1 SEC. 3. IMPROVING FAIRNESS OF PAYMENTS FOR PHYSI2 CIANS’ SERVICES UNDER THE MEDICARE

3 FEE-FOR-SERVICE PROGRAM.

4 (a) ADJUSTMENT TO GEOGRAPHIC INDICES UNDER

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

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

7 amended—

8 (1) in subparagraph (A), by striking ‘‘(B) and

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

10 preceding clause (i);

11 (2) by redesignating subparagraph (D) as sub12 paragraph (E); and

13 (3) by adding after subparagraph (C) the fol14 lowing new subparagraph:

15 ‘‘(D) FLOOR AND CEILING ON GEO16 GRAPHIC INDICES.—If any index established

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

18 (A) or under subparagraph (B), after applica19 tion of the second sentence of subparagraph

20 (C), is—

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

22 shall increase such index to 0.950; and

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

24 shall reduce such index to 1.05.’’.

25 (b) BUDGET NEUTRALITY ADJUSTMENT FOR APPLI26 CATION OF FLOOR AND CEILING ON GEOGRAPHIC AD-
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1 JUSTMENT.—Section 1848(d) of the Social Security Act

2 (42 U.S.C. 1395w–4(d)) is amended—

3 (1) in paragraph (1)(A), by striking ‘‘The con4 version’’ and inserting ‘‘Subject to paragraph (5),

5 the conversion’’; and

6 (2) by adding at the end the following new

7 paragraph:

8 ‘‘(5) BUDGET NEUTRALITY ADJUSTMENT

9 FOR APPLICATION OF FLOOR AND CEILING ON

10 GEOGRAPHIC ADJUSTMENT.—Before applying

11 an update for a year under this subsection, the

12 Secretary shall (if necessary) provide for an ad13 justment to the conversion factor for that year

14 to ensure that the aggregate payments under

15 this part in that year shall be equal to aggre16 gate payments that would have been made

17 under such part in that year if subsection

18 (e)(1)(D) had not been enacted.’’.

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

20 this section shall apply to payments for items and services

21 provided on and after January 1, 2002.

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