I 

109TH CONGRESS 

1ST SESSION H. R. 2356 

To amend title XVIII of the Social Security Act to reform the Medicare 

physician payment update system through repeal of the sustainable 

growth rate (SGR) payment update system. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 12, 2005 

Mr. SHAW (for himself and Mr. CARDIN) 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 reform 

the Medicare physician payment update system through 

repeal of the sustainable growth rate (SGR) payment 

update system. 

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 ‘‘Preserving Patient Ac5 cess to Physicians Act of 2005’’. 
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1 SEC. 2. REFORM OF THE MEDICARE PHYSICIAN PAYMENT 

2 UPDATE SYSTEM THROUGH ELIMINATION OF 

3 THE SUSTAINABLE GROWTH RATE (SGR) PAY4 MENT UPDATE SYSTEM. 

5 (a) IN GENERAL.—Section 1848(d) of the Social Se6 curity Act (42 U.S.C. 1395w–4(d)) is amended by adding 

7 at the end the following new paragraphs: 

8 ‘‘(6) UPDATE FOR 2006.—The update to the 

9 single conversion factor established in paragraph 

10 (1)(C) for 2006 shall not be less than 2.7 percent. 

11 ‘‘(7) UPDATE FOR YEARS BEGINNING WITH

12 2007.— 

13 ‘‘(A) IN GENERAL.—Unless otherwise pro14 vided by law, subject to the budget-neutrality 

15 factor determined by the Secretary under sub16 section (c)(2)(B)(ii), the update to the single 

17 conversion factor established in paragraph 

18 (1)(C) for a year beginning with 2007 is equal 

19 to the product of— 

20 ‘‘(i) 1 plus the Secretary’s estimate of 

21 the percentage change in the value of the 

22 input price index (as provided under sub23 paragraph (B)(ii)) for the year (divided by 

24 100); and 
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1 ‘‘(ii) 1 minus the Secretary’s estimate 

2 of the productivity adjustment factor under 

3 subparagraph (C) for the year. 

4 ‘‘(B) INPUT PRICE INDEX.— 

5 ‘‘(i) ESTABLISHMENT.—Taking into 

6 account the mix of goods and services in7 cluded in computing the medicare economic 

8 index (referred to in the fourth sentence of 

9 section 1842(b)(3)), the Secretary shall es10 tablish an index that reflects the weighted11 average input prices for physicians’ serv12 ices for a year. Such index shall only ac13 count for input prices and not changes in 

14 costs that may result from other factors 

15 (such as productivity). 

16 ‘‘(ii) ANNUAL ESTIMATE OF CHANGE

17 IN INDEX.—The Secretary shall estimate, 

18 before the beginning of each year (begin19 ning with 2007) the change in the value of 

20 the input price index under clause (i) from 

21 the previous year to the year involved. 

22 ‘‘(C) PRODUCTIVITY ADJUSTMENT FAC23 TOR.—The Secretary shall estimate, and cause 

24 to be published in the Federal Register not 

25 later than November 1 before the beginning of 
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1 each year (beginning with 2007), a productivity 

2 adjustment factor that reflects the Secretary’s 

3 estimate of growth in multifactor productivity 

4 in the national economy, taking into account 

5 growth in productivity attributable to both labor 

6 and nonlabor factors. Such adjustment may be 

7 based on a multi-year moving average of pro8 ductivity (based on data published by the Bu9 reau of Labor Statistics).’’. 

10 (b) CONFORMING AMENDMENTS.—Section 1848 of 

11 the Act (42 U.S.C. 1395w–4) is amended— 

12 (1) in subsection (d)(1)(A), by striking ‘‘sub13 paragraph (B))’’ and all that follows and inserting 

14 the following: ‘‘subparagraph (B))— 

15 ‘‘(i) for years before 2001, adjusted 

16 by the update (established under para17 graph (3)) for the year involved; 

18 ‘‘(ii) for 2001, 2002, and 2003, multi19 plied by the update (established under 

20 paragraph (4)) for the year involved; 

21 ‘‘(iii) for 2004 and 2005, multiplied 

22 by the update (established under para23 graph (5)) for that year; 
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1 ‘‘(iv) for 2006, multiplied by the up2 date (established under paragraph (6)) for 

3 that year; and 

4 ‘‘(v) for 2007 and each subsequent 

5 year, multiplied by the update (established 

6 under paragraph (7)) for the year in7 volved.’’; 

8 (2) by striking clause (i) of subsection 

9 (d)(1)(E) and inserting the following: 

10 ‘‘(i) cause to have published in the 

11 Federal Register not later than November 

12 1— 

13 ‘‘(I) of 2000 and each subsequent 

14 year, the conversion factor which will 

15 apply to physicians’ services for the 

16 succeeding year; 

17 ‘‘(II) of 2000, 2001, and 2002, 

18 the update determined under para19 graph (4) for such succeeding year 

20 and the allowed expenditures under 

21 such paragraph for the succeeding 

22 year; 

23 ‘‘(III) of 2003 and 2004, the up24 date determined under paragraph (5) 

25 for 2004 and 2005; 
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1 ‘‘(IV) of 2005, the update deter2 mined under paragraph (6) for 2006; 

3 and 

4 ‘‘(V) of 2006 and each subse5 quent year, the update determined 

6 under paragraph (7) for the suc7 ceeding year; and’’; 

8 (3) in subsection (d)(1)(E)(ii), by inserting 

9 ‘‘(for years before 2006)’’ after ‘‘the sustainable 

10 growth rate’’; 

11 (4) in subsection (d)(4)— 

12 (A) in the heading, by striking ‘‘YEARS

13 BEGINNING WITH 2001’’ and inserting ‘‘2001, 

14 2002, AND 2003’’ ; 

15 (B) in subparagraph (A), in the matter 

16 preceding clause (i), by striking ‘‘for a year be17 ginning with 2001’’ and inserting ‘‘for 2001, 

18 2002, and 2003’’; 

19 (C) in subparagraph (C)(iii), by striking 

20 ‘‘YEARS BEGINNING WITH 2000.—The al21 lowed expenditures for a year (beginning with 

22 2000)’’ and inserting ‘‘2000, 2001, AND 2002.— 

23 The allowed expenditures for each of years 

24 2000, 2001, and 2002’’; and 
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1 (D) in subparagraph (E), by striking ‘‘BE2 GINNING WITH 2001’’ and ‘‘for a year begin3 ning with 2001’’ and inserting ‘‘2001, 2002, AND

4 2003’’ and ‘‘for 2001, 2002, and 2003’’, respec5 tively; and 

6 (5) in subsection (f)— 

7 (A) in paragraph (1)(B), by striking ‘‘No8 vember 1 of each succeeding year’’ and insert9 ing ‘‘November 1 of each year before 2005’’; 

10 (B) in paragraph (2), by inserting ‘‘and 

11 ending with 2003’’ after ‘‘beginning with 

12 2000’’; 

13 (C) in paragraph (3), by striking ‘‘for a 

14 year beginning with 2001’’ and inserting ‘‘for 

15 2001, 2002, and 2003’’; and 

16 (D) in paragraph (3)(C), by striking ‘‘FOR

17 2003 AND SUCCEEDING YEARS’’ and inserting 

18 ‘‘FOR 2003’’ and by striking ‘‘a year after 2002’’ 

19 and inserting ‘‘2003’’. 

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