II 

111TH CONGRESS 

2D SESSION S. 3216 

To amend title XVIII of the Social Security Act to ensure Medicare beneficiary access to physicians, to ensure equitable reimbursement under 

the Medicare program for all rural States, and to eliminate sweetheart 

deals for frontier States. 

IN THE SENATE OF THE UNITED STATES 

APRIL 15, 2010 

Mr. GRASSLEY introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to ensure 

Medicare beneficiary access to physicians, to ensure equitable reimbursement under the Medicare program for 

all rural States, and to eliminate sweetheart deals for 

frontier States. 

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 Rural Health 

5 Care Equity Act of 2010’’. 


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1 SEC. 2. REVISIONS TO THE PRACTICE EXPENSE GEO2 GRAPHIC ADJUSTMENT UNDER THE MEDI3 CARE PHYSICIAN FEE SCHEDULE. 

4 Effective as if included in the enactment of the Pa5 tient Protection and Affordable Care Act (Public Law 

6 111–148), subparagraph (H) of section 1848(e)(1) of the 

7 Social Security Act (42 U.S.C. 1395w–4(e)(1)), as added 

8 by section 3102(b) of the Patient Protection and Afford9 able Care Act, is amended to read as follows: 

10 ‘‘(H) PRACTICE EXPENSE GEOGRAPHIC

11 ADJUSTMENT FOR 2010 AND SUBSEQUENT

12 YEARS.— 

13 ‘‘(i) FOR 2010.—Subject to clause (iii), 

14 for services furnished during 2010, the em15 ployee wage and rent portions of the prac16 tice expense geographic index described in 

subparagraph (A)(i) shall reflect 1 17 ⁄2 of the 

18 difference between the relative costs of em19 ployee wages and rents in each of the dif20 ferent fee schedule areas and the national 

21 average of such employee wages and rents. 

22 ‘‘(ii) FOR 2011.—Subject to clause 

23 (iii), for services furnished during 2011, 

24 the employee wage and rent portions of the 

25 practice expense geographic index de26 scribed in subparagraph (A)(i) shall reflect 


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1 1 ⁄4 of the difference between the relative 

2 costs of employee wages and rents in each 

3 of the different fee schedule areas and the 

4 national average of such employee wages 

5 and rents. 

6 ‘‘(iii) HOLD HARMLESS.—The practice 

7 expense portion of the geographic adjust8 ment factor applied in a fee schedule area 

9 for services furnished in 2010 or 2011 

10 shall not, as a result of the application of 

11 clause (i) or (ii), be reduced below the 

12 practice expense portion of the geographic 

13 adjustment factor under subparagraph 

14 (A)(i) (as calculated prior to the applica15 tion of such clause (i) or (ii), respectively) 

16 for such area for such year. 

17 ‘‘(iv) ANALYSIS.—The Secretary shall 

18 analyze current methods of establishing 

19 practice expense geographic adjustments 

20 under subparagraph (A)(i) and evaluate 

21 data that fairly and reliably establishes 

22 distinctions in the costs of operating a 

23 medical practice in the different fee sched24 ule areas. Such analysis shall include an 

25 evaluation of the following: 


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1 ‘‘(I) The feasibility of using ac2 tual data or reliable survey data devel3 oped by medical organizations on the 

4 costs of operating a medical practice, 

5 including office rents and non-physi6 cian staff wages, in different fee 

7 schedule areas. 

8 ‘‘(II) The office expense portion 

9 of the practice expense geographic ad10 justment described in subparagraph 

11 (A)(i), including the extent to which 

12 types of office expenses are deter13 mined in local markets instead of na14 tional markets. 

15 ‘‘(III) The weights assigned to 

16 each of the categories within the prac17 tice expense geographic adjustment 

18 described in subparagraph (A)(i). 

19 In conducting such analysis, the Secretary 

20 shall not take into account any data that 

21 is not actual or survey data. 

22 ‘‘(v) REVISION FOR 2012 AND SUBSE23 QUENT YEARS.—As a result of the analysis 

24 described in clause (iv), the Secretary 

25 shall, not later than January 1, 2012, 


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1 make appropriate adjustments to the prac2 tice expense geographic adjustment de3 scribed in subparagraph (A)(i) to ensure 

4 accurate geographic adjustments across fee 

5 schedule areas, including— 

6 ‘‘(I) basing the office rents com7 ponent and its weight on occupancy 

8 costs only and making weighting 

9 changes in other categories as appro10 priate; 

11 ‘‘(II) ensuring that office ex12 penses that do not vary from region to 

13 region be included in the ‘other’ office 

14 expense category; and 

15 ‘‘(III) considering a representa16 tive range of professional and non17 professional personnel employed in a 

18 medical office based on the use of the 

19 American Community Survey data or 

20 other reliable data for wage adjust21 ments. 

22 Such adjustments shall be made without 

23 regard to adjustments made pursuant to 

24 clauses (i) and (ii) and shall be made in a 

25 budget neutral manner. 


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1 ‘‘(vi) SPECIAL RULE.—If the Sec2 retary does not complete the analysis de3 scribed in clause (iv) and make any adjust4 ments the Secretary determines appro5 priate for 2012 or a subsequent year under 

6 clause (v), the Secretary shall apply clause 

7 (ii) for services furnished during 2012 or a 

8 subsequent year in the same manner as 

9 such clause applied for services furnished 

10 during 2011.’’. 

11 SEC. 3. ELIMINATION OF SWEETHEART DEAL THAT IN12 CREASES MEDICARE REIMBURSEMENT JUST 

13 FOR FRONTIER STATES. 

14 Effective as if included in the enactment of the Pa15 tient Protection and Affordable Care Act (Public Law 

16 111–148), section 10324 of such Act (and the amend17 ments made by such section) is repealed. 

Æ 


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