I 

112TH CONGRESS 

1ST SESSION H. R. 2201 

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 15, 2011 

Mr. SMITH of Washington (for himself, Mr. DICKS, Mr. LARSEN of Washington, and Mr. MCDERMOTT) 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 ‘‘MediFair Act of 

5 2011’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 


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1 (1) Regional inequities in Medicare reimburse2 ment have created barriers to care for seniors and 

3 the disabled. 

4 (2) The regional inequities in Medicare reim5 bursement penalize States that have cost-effective 

6 health care delivery systems and reward those States 

7 with high utilization rates and that provide ineffi8 cient care. 

9 (3) Comparatively, in 2007, the average per 

10 capita spending under traditional Medicare was 

11 $8,682 for beneficiaries in the United States, $7,320 

12 for beneficiaries in Seattle, $11,303 for those in Los 

13 Angeles, and $17,274 for those in Miami. 

14 (4) Over a lifetime, regional inequities can 

15 mean as much as a $125,000 difference in the cost 

16 of care provided per beneficiary. 

17 (5) Regional inequities have resulted in creating 

18 very different Medicare programs and amount of 

19 care received for seniors and the disabled based on 

20 where they live. 

21 (6) Because the Medicare Advantage rate is 

22 based on the fee-for-service reimbursement rate, re23 gional inequities have allowed some Medicare bene24 ficiaries access to Medicare Advantage plans with 

25 significantly more benefits and reduced cost sharing. 


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1 Beneficiaries in States with lower Medicare Advan2 tage reimbursement rates have not benefitted to the 

3 same degree as beneficiaries in other parts of the 

4 country. 

5 (7) Regional inequities in Medicare reimburse6 ment have created an unfair competitive advantage 

7 for hospitals and other health care providers in 

8 States that receive above average payments. Higher 

9 payments mean that those providers can pay higher 

10 salaries in a tight, competitive market. 

11 (8) Regional inequities in Medicare reimburse12 ment, if left unchecked, will reduce access to Medi13 care services and impact healthy outcomes for bene14 ficiaries. 

15 SEC. 3. IMPROVING FAIRNESS OF PAYMENTS TO PRO16 VIDERS UNDER THE MEDICARE FEE-FOR17 SERVICE PROGRAM. 

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

19 1395 et seq.) is amended by adding at the end the fol20 lowing new section: 

21 ‘‘IMPROVING PAYMENT EQUITY UNDER THE ORIGINAL

22 MEDICARE FEE-FOR-SERVICE PROGRAM

23 ‘‘SEC. 1899B. (a) IN GENERAL.—Notwithstanding 

24 any other provision of law, the Secretary shall establish 

25 a system for making adjustments to the amount of pay26 ment made to entities and individuals for items and servVerDate Mar 15 2010 02:03 Jun 18, 2011 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2201.IH H2201

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1 ices provided under the original Medicare fee-for-service 

2 program under parts A and B. 

3 ‘‘(b) SYSTEM REQUIREMENTS.— 

4 ‘‘(1) INCREASE FOR STATES BELOW THE NA5 TIONAL AVERAGE.—Under the system established 

6 under subsection (a), if a State average per bene7 ficiary amount for a year is less than the national 

8 average per beneficiary amount for such year, then 

9 the Secretary (beginning in 2012) shall increase the 

10 amount of applicable payments in such a manner as 

11 will result (as estimated by the Secretary) in the 

12 State average per beneficiary amount for the subse13 quent year being equal to the national average per 

14 beneficiary amount for such subsequent year. 

15 ‘‘(2) REDUCTION FOR CERTAIN STATES ABOVE

16 THE NATIONAL AVERAGE TO ENHANCE QUALITY

17 CARE AND MAINTAIN BUDGET NEUTRALITY.— 

18 ‘‘(A) IN GENERAL.—The Secretary shall 

19 ensure that the increase in payments under 

20 paragraph (1) does not cause the estimated 

21 amount of expenditures under this title for a 

22 year to increase or decrease from the estimated 

23 amount of expenditures under this title that 

24 would have been made in such year if this sec25 tion had not been enacted by reducing the 


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1 amount of applicable payments in each State 

2 that the Secretary determines has— 

3 ‘‘(i) a State average per beneficiary 

4 amount for a year that is greater than the 

5 national average per beneficiary amount 

6 for such year; and 

7 ‘‘(ii) healthy outcome measurements 

8 or quality care measurements that indicate 

9 that a reduction in applicable payments 

10 would encourage more efficient use of, and 

11 reduce overuse of, items and services for 

12 which payment is made under this title. 

13 ‘‘(B) LIMITATION.—The Secretary shall 

14 not reduce applicable payments under subpara15 graph (A) to a State that— 

16 ‘‘(i) has a State average per bene17 ficiary amount for a year that is greater 

18 than the national average per beneficiary 

19 amount for such year; and 

20 ‘‘(ii) has healthy outcome measure21 ments or quality care measurements that 

22 indicate that the applicable payments are 

23 being used to improve the access of bene24 ficiaries to quality care. 

25 ‘‘(3) DETERMINATION OF AVERAGES.— 


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1 ‘‘(A) STATE AVERAGE PER BENEFICIARY

2 AMOUNT.—Each year (beginning in 2012), the 

3 Secretary shall determine a State average per 

4 beneficiary amount for each State which shall 

5 be equal to the Secretary’s estimate of the aver6 age amount of expenditures under the original 

7 Medicare fee-for-service program under parts A 

8 and B for the year for a beneficiary enrolled 

9 under such parts that resides in the State. 

10 ‘‘(B) NATIONAL AVERAGE PER BENE11 FICIARY AMOUNT.—Each year (beginning in 

12 2012), the Secretary shall determine the na13 tional average per beneficiary amount which 

14 shall be equal to the average of the State aver15 age per beneficiary amount determined under 

16 subparagraph (A) for the year. 

17 ‘‘(4) DEFINITIONS.—In this section: 

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

19 ‘applicable payments’ means payments made to 

20 entities and individuals for items and services 

21 provided under the original Medicare fee-for22 service program under parts A and B to bene23 ficiaries enrolled under such parts that reside in 

24 the State. 


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

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

3 ‘‘(c) BENEFICIARIES HELD HARMLESS.—The provi4 sions of this section shall not affect— 

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

6 beneficiary under this title, including the scope of 

7 such items and services; or 

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

9 to such items and services. 

10 ‘‘(d) REGULATIONS.— 

11 ‘‘(1) IN GENERAL.—The Secretary, in consulta12 tion with the Medicare Payment Advisory Commis13 sion, shall promulgate regulations to carry out this 

14 section. 

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

16 promulgating the regulations pursuant to paragraph 

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

18 rural areas.’’. 

19 SEC. 4. MEDPAC RECOMMENDATIONS ON HEALTHY OUT20 COMES AND QUALITY CARE. 

21 (a) RECOMMENDATIONS.—The Medicare Payment 

22 Advisory Commission established under section 1805 of 

23 the Social Security Act (42 U.S.C. 1395b–6) shall develop 

24 recommendations on policies and practices that, if imple25 mented, would encourage— 


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1 (1) healthy outcomes and quality care under the 

2 Medicare program in States with respect to which 

3 payments are reduced under section 1899B(b)(2) of 

4 such Act (as added by section 3); and 

5 (2) the efficient use of payments made under 

6 the Medicare program in such States. 

7 (b) SUBMISSION.—Not later than the date that is 9 

8 months after the date of enactment of this Act, the Com9 mission shall submit to Congress the recommendations de10 veloped under subsection (a). 

Æ 


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