I 

108TH CONGRESS 

2D SESSION H. R. 4822

To amend title XVIII of the Social Security Act to clarify the right of 

Medicare beneficiaries to enter into private contracts with physicians 

and other health care professionals for the provision of health services 

for which no payment is sought under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 13, 2004

Mr. SAM JOHNSON of Texas (for himself, Mr. NORWOOD, and Mr. CRANE) 

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 clarify 

the right of Medicare beneficiaries to enter into private 

contracts with physicians and other health care professionals for the provision of health services for which 

no payment is sought 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 Beneficiary 

5 Freedom To Contract Act of 2004’’.
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1 SEC. 2. USE OF PRIVATE CONTRACTS BY MEDICARE BENE2 FICIARIES FOR PROFESSIONAL SERVICES. 

3 (a) IN GENERAL.—Section 1802(b) of the Social Se4 curity Act (42 U.S.C. 1395a) is amended to read as fol5 lows: 

6 ‘‘(b) CLARIFICATION OF USE OF PRIVATE CON7 TRACTS BY MEDICARE BENEFICIARIES FOR PROFES8 SIONAL SERVICES.—

9 ‘‘(1) IN GENERAL.—Nothing in this title shall 

10 prohibit a medicare beneficiary from entering into a 

11 private contract with a physician or health care 

12 practitioner for the provision of medicare covered 

13 professional services (as defined in paragraph 

14 (5)(C)) if—

15 ‘‘(A) the services are covered under a pri16 vate contract that is between the beneficiary 

17 and the physician or practitioner and meets the 

18 requirements of paragraph (2); 

19 ‘‘(B) under the private contract no claim 

20 for payment for services covered under the con21 tract is to be submitted (and no payment made) 

22 under part A or B, under a contract under sec23 tion 1876, or under a MA plan (other than an 

24 MSA plan); and 

25 ‘‘(C)(i) the Secretary has been provided 

26 with the minimum information necessary to 
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1 avoid any payment under part A or B for serv2 ices covered under the contract, or 

3 ‘‘(ii) in the case of an individual enrolled 

4 under a contract under section 1876 or a MA 

5 plan (other than an MSA plan) under part C, 

6 the eligible organization under the contract or 

7 the MA organization offering the plan has been 

8 provided the minimum information necessary to 

9 avoid any payment under such contract or plan 

10 for services covered under the contract. 

11 ‘‘(2) REQUIREMENTS FOR PRIVATE CON12 TRACTS.—The requirements in this paragraph for a 

13 private contract between a medicare beneficiary and 

14 a physician or health care practitioner are as fol15 lows: 

16 ‘‘(A) GENERAL FORM OF CONTRACT.—The 

17 contract is in writing and is signed by the medi18 care beneficiary. 

19 ‘‘(B) NO CLAIMS TO BE SUBMITTED FOR

20 COVERED SERVICES.—The contract provides 

21 that no party to the contract (and no entity on 

22 behalf of any party to the contract) shall sub23 mit any claim for (or request) payment for 

24 services covered under the contract under part 
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1 A or B, under a contract under section 1876, 

2 or under a MA plan (other than an MSA plan). 

3 ‘‘(C) SCOPE OF SERVICES.—The contract 

4 identifies the medicare covered professional 

5 services and the period (if any) to be covered 

6 under the contract, but does not cover any serv7 ices furnished—

8 ‘‘(i) before the contract is entered 

9 into; or 

10 ‘‘(ii) for the treatment of an emer11 gency medical condition (as defined in sec12 tion 1867(e)(1)(A)), unless the contract 

13 was entered into before the onset of the 

14 emergency medical condition. 

15 ‘‘(D) CLEAR DISCLOSURE OF TERMS.—The 

16 contract clearly indicates that by signing the 

17 contract the medicare beneficiary—

18 ‘‘(i) agrees not to submit a claim (or 

19 to request that anyone submit a claim) 

20 under part A or B (or under section 1876 

21 or under a MA plan, other than an MSA 

22 plan) for services covered under the con23 tract; 

24 ‘‘(ii) agrees to be responsible, whether 

25 through insurance or otherwise, for pay-
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1 ment for such services and understands 

2 that no reimbursement will be provided 

3 under such part, contract, or plan for such 

4 services; 

5 ‘‘(iii) acknowledges that no limits 

6 under this title (including limits under 

7 paragraph (1) and (3) of section 1848(g)) 

8 will apply to amounts that may be charged 

9 for such services; 

10 ‘‘(iv) acknowledges that medicare sup11 plemental policies under section 1882 do 

12 not, and other supplemental health plans 

13 and policies may elect not to, make pay14 ments for such services because payment is 

15 not made under this title; and 

16 ‘‘(v) acknowledges that the beneficiary 

17 has the right to have such services pro18 vided by (or under the supervision of) 

19 other physicians or health care practi20 tioners for whom payment would be made 

21 under such part, contract, or plan. 

22 Such contract shall also clearly indicate whether 

23 the physician or practitioner involved is ex24 cluded from participation under this title. 
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1 ‘‘(3) MODIFICATIONS.—The parties to a private 

2 contract may mutually agree at any time to modify 

3 or terminate the contract on a prospective basis, 

4 consistent with the provisions of paragraphs (1) and 

5 (2). 

6 ‘‘(4) NO REQUIREMENTS FOR SERVICES FUR7 NISHED TO MSA PLAN ENROLLEES.—The require8 ments of paragraphs (1) and (2) do not apply to any 

9 contract or arrangement for the provision of services 

10 to a medicare beneficiary enrolled in an MA plan 

11 under part C. 

12 ‘‘(5) DEFINITIONS.—In this subsection:

13 ‘‘(A) HEALTH CARE PRACTITIONER.—The 

14 term ‘health care practitioner’ means a practi15 tioner described in section 1842(b)(18)(C). 

16 ‘‘(B) MEDICARE BENEFICIARY.—The term 

17 ‘medicare beneficiary’ means an individual who 

18 is enrolled under part B. 

19 ‘‘(C) MEDICARE COVERED PROFESSIONAL

20 SERVICES.—The term ‘medicare covered profes21 sional services’ means—

22 ‘‘(i) physicians’ services (as defined in 

23 section 1861(q), and including services de24 scribed in section 1861(s)(2)(A)), and 
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1 ‘‘(ii) professional services of health 

2 care practitioners, including services de3 scribed in section 1842(b)(18)(D), 

4 for which payment may be made under part A 

5 or B, under a contract under section 1876, or 

6 under a Medicare+Choice plan but for the pro7 visions of a private contract that meets the re8 quirements of paragraph (2). 

9 ‘‘(D) MA PLAN; MSA PLAN.—The terms 

10 ‘MA plan’ and ‘MSA plan’ have the meanings 

11 given such terms in section 1859. 

12 ‘‘(E) PHYSICIAN.—The term ‘physician’ 

13 has the meaning given such term in section 

14 1861(r).’’. 

15 (b) CONFORMING AMENDMENTS CLARIFYING EX16 EMPTION FROM LIMITING CHARGE AND FROM REQUIRE17 MENT FOR SUBMISSION OF CLAIMS.—Section 1848(g) of 

18 the Social Security Act (42 U.S.C. 1395w–4(g)) is amend19 ed—

20 (1) in paragraph (1)(A), by striking ‘‘In’’ and 

21 inserting ‘‘Subject to paragraph (8), in’’; 

22 (2) in paragraph (3)(A), by striking ‘‘Payment’’ 

23 and inserting ‘‘Subject to paragraph (8), payment’’; 

24 (3) in paragraph (4)(A), by striking ‘‘For’’ and 

25 inserting ‘‘Subject to paragraph (8), for’’; and 
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1 (4) by adding at the end the following new 

2 paragraph: 

3 ‘‘(8) EXEMPTION FROM REQUIREMENTS FOR

4 SERVICES FURNISHED UNDER PRIVATE CON5 TRACTS.—

6 ‘‘(A) IN GENERAL.—Pursuant to section 

7 1802(b)(1), paragraphs (1), (3), and (4) do not 

8 apply with respect to physicians’ services (and 

9 services described in section 1861(s)(2)(A)) fur10 nished to an individual by (or under the super11 vision of) a physician if the conditions described 

12 in section 1802(b)(1) are met with respect to 

13 the services. 

14 ‘‘(B) NO RESTRICTIONS FOR ENROLLEES

15 IN MSA PLANS.—Such paragraphs do not apply 

16 with respect to services furnished to individuals 

17 enrolled with MSA plans under part C, without 

18 regard to whether the conditions described in 

19 subparagraphs (A) through (C) of section 

20 1802(b)(1) are met. 

21 ‘‘(C) APPLICATION TO ENROLLEES IN

22 OTHER PLANS.—Subject to subparagraph (B) 

23 and section 1852(k)(2), the provisions of sub24 paragraph (A) shall apply in the case of an in25 dividual enrolled under a contract under section 
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1 1876 or under a MA plan (other than an MSA 

2 plan) under part C, in the same manner as they 

3 apply to individuals not enrolled under such a 

4 contract or plan.’’. 

5 (c) CONFORMING AMENDMENTS.—(1) Section 

6 1842(b)(18) of the Social Security Act (42 U.S.C. 

7 1395u(b)(18)) is amended by adding at the end the fol8 lowing: 

9 ‘‘(E) The provisions of section 1848(g)(8) shall apply 

10 with respect to exemption from limitations on charges and 

11 from billing requirements for services of health care prac12 titioners described in this paragraph in the same manner 

13 as such provisions apply to exemption from the require14 ments referred to in section 1848(g)(8)(A) for physicians’ 

15 services.’’. 

16 (2) Section 1866(a)(1)(O) of such Act (42 U.S.C. 

17 1395cc(a)(1)(O)) is amended by striking ‘‘enrolled with a 

18 Medicare+Choice organization under part C’’ and insert19 ing ‘‘enrolled with a MA organization under part C (other 

20 than under an MSA plan)’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall take effect on the date that is 6 months 

23 after the date of the enactment of this Act and apply to 

24 contracts entered into on or after that date.

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