I 

111TH CONGRESS 

1ST SESSION H. R. 902 

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 

FEBRUARY 4, 2009 

Mr. SMITH of Washington (for himself, Mr. DICKS, Mr. MCDERMOTT, Mr. 

INSLEE, Mr. BAIRD, and Mr. LARSEN of Washington) 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 2009’’. 

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 2003, per capita spending 

10 under traditional Medicare was $5,661 for bene11 ficiaries in Seattle, $9,752 for those in Los Angeles, 

12 and $11,340 for those in Miami. 

13 (4) Over a lifetime, regional inequities can 

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

15 of care provided per beneficiary. 

16 (5) Regional inequities have resulted in creating 

17 very different Medicare programs and amount of 

18 care received for seniors and the disabled based on 

19 where they live. 

20 (6) Because the Medicare Advantage rate is 

21 based on the fee-for-service reimbursement rate, re22 gional inequities have allowed some Medicare bene23 ficiaries access to Medicare Advantage plans with 

24 significantly more benefits and reduced cost sharing. 

25 Beneficiaries in States with lower Medicare AdvanVerDate Nov 24 2008 00:44 Feb 08, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H902.IH H902

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1 tage reimbursement rates have not benefitted to the 

2 same degree as beneficiaries in other parts of the 

3 country. 

4 (7) Regional inequities in medicare reimburse5 ment have created an unfair competitive advantage 

6 for hospitals and other health care providers in 

7 States that receive above average payments. Higher 

8 payments mean that those providers can pay higher 

9 salaries in a tight, competitive market. 

10 (8) Regional inequities in medicare reimburse11 ment, if left unchecked, will reduce access to medi12 care services and impact healthy outcomes for bene13 ficiaries. 

14 SEC. 3. IMPROVING FAIRNESS OF PAYMENTS TO PRO15 VIDERS UNDER THE MEDICARE FEE-FOR16 SERVICE PROGRAM. 

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

18 1395 et seq.) is amended by adding at the end the fol19 lowing new section: 

20 ‘‘IMPROVING PAYMENT EQUITY UNDER THE ORIGINAL

21 MEDICARE FEE-FOR-SERVICE PROGRAM

22 ‘‘SEC. 1899. (a) IN GENERAL.—Notwithstanding any 

23 other provision of law, the Secretary shall establish a sys24 tem for making adjustments to the amount of payment 

25 made to entities and individuals for items and services 


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1 provided under the original medicare fee-for-service pro2 gram 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 2010) 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 2009), 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 2009), 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 1899(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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