I 

108TH CONGRESS 

2D SESSION H. R. 3935

To amend title XVIII of the Social Security Act to provide geographic equity 

in fee-for-service reimbursement for providers under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 10, 2004

Mr. WU 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 provide 

geographic equity in fee-for-service reimbursement for 

providers 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. 

4 This Act may be cited as the ‘‘Medicare Equity and 

5 Fairness in Fee-for-Service Reimbursement Act of 2004’’. 
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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, as amended 

5 by section 1016 of the Medicare Prescription Drug, Im6 provement, and Modernization Act of 2003 (Public Law 

7 108–173), is amended by adding at the end the following 

8 new section: 

9 ‘‘IMPROVING FAIRNESS OF PAYMENTS UNDER THE

10 ORIGINAL MEDICARE FEE-FOR-SERVICE PROGRAM

11 ‘‘SEC. 1898. (a) ESTABLISHMENT OF SYSTEM.—Not12 withstanding any other provision of law, the Secretary 

13 shall establish a system for making adjustments to the 

14 amount of payment made to providers of services and 

15 health care professionals for services provided under the 

16 original medicare fee-for-service program under parts A 

17 and B. 

18 ‘‘(b) SYSTEM REQUIREMENTS.—

19 ‘‘(1) ADJUSTMENTS.—Under the system de20 scribed in subsection (a), the Secretary (beginning in 

21 fiscal year 2005 or calendar year 2005, as the Sec22 retary determines appropriate for the type of serv23 ices involved) shall make the following adjustments: 

24 ‘‘(A) STATES ABOVE NATIONAL AVER25 AGE.—Subject to subparagraph (C), if a State 

26 average per beneficiary amount, but for the ap-
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1 plication of this section, for a year is greater 

2 than 100 percent of the national average per 

3 beneficiary amount for such year, then the Sec4 retary shall reduce the amount of applicable 

5 payments in such a manner as will result (as 

6 estimated by the Secretary) in the State aver7 age per beneficiary amount for the subsequent 

8 year being at 100 percent of the national aver9 age per beneficiary amount for such subsequent 

10 year. 

11 ‘‘(B) STATES BELOW NATIONAL AVER12 AGE.—Subject to subparagraph (C), if such a 

13 State average per beneficiary amount for a year 

14 is less than 100 percent of the national average 

15 per beneficiary amount for such year, then the 

16 Secretary shall increase the amount of applica17 ble payments in such a manner as will result 

18 (as estimated by the Secretary) in the State av19 erage per beneficiary amount for the subse20 quent year being at 100 percent of the national 

21 average per beneficiary amount for such subse22 quent year. 

23 ‘‘(C) 3-YEAR PHASE IN.—In applying this 

24 paragraph for—
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1 ‘‘(i) fiscal year 2005 or calendar year 

2 2005, the amount of any increase or de3 crease under subparagraph (A) or (B) 

4 shall be 25 percent of the amount of the 

5 increase or decrease otherwise provided; 

6 ‘‘(ii) fiscal year 2006 or calendar year 

7 2006, the amount of any increase or de8 crease under subparagraph (A) or (B) 

9 shall be 50 percent of the amount of the 

10 increase or decrease otherwise provided; 

11 and 

12 ‘‘(iii) fiscal year 2007 or calendar 

13 year 2007, the amount of any increase or 

14 decrease under subparagraph (A) or (B) 

15 shall be 75 percent of the amount of the 

16 increase or decrease otherwise provided. 

17 ‘‘(2) DETERMINATION OF AVERAGES.—

18 ‘‘(A) STATE AVERAGE PER BENEFICIARY

19 AMOUNT.—Each year (beginning in 2004), the 

20 Secretary shall determine a State average per 

21 beneficiary amount for each State which shall 

22 be equal to the Secretary’s estimate of the aver23 age amount of expenditures under the original 

24 medicare fee-for-service program under parts A 
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1 and B for the year for a beneficiary enrolled 

2 under such parts that resides in the State. 

3 ‘‘(B) NATIONAL AVERAGE PER BENE4 FICIARY AMOUNT.—Each year (beginning in 

5 2004), the Secretary shall determine the na6 tional average per beneficiary amount which 

7 shall be equal to the average of the State aver8 age per beneficiary amounts determined under 

9 subparagraph (B) for the year. 

10 ‘‘(3) APPLICABLE PAYMENTS DEFINED.—In 

11 this section, the term ‘applicable payments’ means 

12 payments made to providers of services and health 

13 care professionals for services provided under the 

14 original medicare fee-for-service program under 

15 parts A and B to beneficiaries enrolled under such 

16 parts that reside in the State. 

17 ‘‘(c) BENEFICIARIES HELD HARMLESS.—The provi18 sions of this section shall not effect—

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

20 beneficiary under this title, including the scope of 

21 such items and services; or 

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

23 to such items and services. 
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1 ‘‘(d) REGULATIONS.—The Secretary, in consultation 

2 with the Medicare Payment Advisory Commission, shall 

3 promulgate regulations to carry out this section.’’.

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