I 

111TH CONGRESS 

1ST SESSION H. R. 3356 

To amend title XVIII of the Social Security Act to clarify the use of private 

contracts by Medicare beneficiaries for professional services and to allow 

individuals to choose to opt out of the Medicare part A benefits. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 28, 2009 

Mr. SAM JOHNSON of Texas (for himself, Mr. BRADY of Texas, and Mr. 

REICHERT) 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 use of private contracts by Medicare beneficiaries 

for professional services and to allow individuals to 

choose to opt out of the Medicare part A benefits. 

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 Choose Act of 2009’’. 


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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 an 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 en4 rolled under a contract under section 1876 

5 or an MA plan (other than an MSA plan) 

6 under part C, the eligible organization 

7 under the contract or the MA organization 

8 offering the plan has been provided the 

9 minimum information necessary to avoid 

10 any payment under such contract or plan 

11 for services covered under the contract. 

12 ‘‘(2) REQUIREMENTS FOR PRIVATE CON13 TRACTS.—The requirements in this paragraph for a 

14 private contract between a medicare beneficiary and 

15 a physician or health care practitioner are as fol16 lows: 

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

18 contract is in writing and is signed by the medi19 care beneficiary. 

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

21 COVERED SERVICES.—The contract provides 

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

23 behalf of any party to the contract) shall sub24 mit any claim for (or request) payment for 

25 services covered under the contract under part 


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1 A or B, under a contract under section 1876, 

2 or under an MA plan (other than an MSA 

3 plan). 

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

5 identifies the medicare covered professional 

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

7 under the contract, but does not cover any serv8 ices furnished— 

9 ‘‘(i) before the contract is entered 

10 into; or 

11 ‘‘(ii) for the treatment of an emer12 gency medical condition (as defined in sec13 tion 1867(e)(1)(A)), unless the contract 

14 was entered into before the onset of the 

15 emergency medical condition. 

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

17 contract clearly indicates that by signing the 

18 contract the medicare beneficiary— 

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

20 to request that anyone submit a claim) 

21 under part A or B (or under section 1876 

22 or under an MA plan, other than an MSA 

23 plan) for services covered under the con24 tract; 


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

2 through insurance or otherwise, for pay3 ment for such services and understands 

4 that no reimbursement will be provided 

5 under such part, contract, or plan for such 

6 services; 

7 ‘‘(iii) acknowledges that no limits 

8 under this title (including limits under 

9 paragraphs (1) and (3) of section 1848(g)) 

10 will apply to amounts that may be charged 

11 for such services; 

12 ‘‘(iv) acknowledges that medicare sup13 plemental policies under section 1882 do 

14 not, and other supplemental health plans 

15 and policies may elect not to, make pay16 ments for such services because payment is 

17 not made under this title; and 

18 ‘‘(v) acknowledges that the beneficiary 

19 has the right to have such services pro20 vided by (or under the supervision of) 

21 other physicians or health care practi22 tioners for whom payment would be made 

23 under such part, contract, or plan. 


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1 Such contract shall also clearly indicate whether 

2 the physician or practitioner involved is ex3 cluded from participation under this title. 

4 ‘‘(3) MODIFICATIONS.—The parties to a private 

5 contract may mutually agree at any time to modify 

6 or terminate the contract on a prospective basis, 

7 consistent with the provisions of paragraphs (1) and 

8 (2). 

9 ‘‘(4) NO REQUIREMENTS FOR SERVICES FUR10 NISHED TO MSA PLAN ENROLLEES.—The require11 ments of paragraphs (1) and (2) do not apply to any 

12 contract or arrangement for the provision of services 

13 to a medicare beneficiary enrolled in an MSA plan 

14 under part C. 

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

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

17 term ‘health care practitioner’ means a practi18 tioner described in section 1842(b)(18)(C). 

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

20 ‘medicare beneficiary’ means an individual who 

21 is enrolled under part B. 

22 ‘‘(C) MEDICARE COVERED PROFESSIONAL

23 SERVICES.—The term ‘medicare covered profes24 sional services’ means— 


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

2 section 1861(q), and including services de3 scribed in section 1861(s)(2)(A)), and 

4 ‘‘(ii) professional services of health 

5 care practitioners, including services de6 scribed in section 1842(b)(18)(D), 

7 for which payment may be made under part A 

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

9 under a Medicare Advantage plan but for the 

10 provisions of a private contract that meets the 

11 requirements of paragraph (2). 

12 ‘‘(D) MA PLAN; MSA PLAN.—The terms 

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

14 given such terms in section 1859. 

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

16 has the meaning given such term in section 

17 1861(r).’’. 

18 (b) CONFORMING AMENDMENTS CLARIFYING EX19 EMPTION FROM LIMITING CHARGE AND FROM REQUIRE20 MENT FOR SUBMISSION OF CLAIMS.—Section 1848(g) of 

21 the Social Security Act (42 U.S.C. 1395w–4(g)) is amend22 ed— 

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

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


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

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

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

4 inserting ‘‘Subject to paragraph (8), for’’; and 

5 (4) by adding at the end the following new 

6 paragraph: 

7 ‘‘(8) EXEMPTION FROM REQUIREMENTS FOR

8 SERVICES FURNISHED UNDER PRIVATE CON9 TRACTS.— 

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

11 1802(b)(1), paragraphs (1), (3), and (4) do not 

12 apply with respect to physicians’ services (and 

13 services described in section 1861(s)(2)(A)) fur14 nished to an individual by (or under the super15 vision of) a physician if the conditions described 

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

17 the services. 

18 ‘‘(B) NO RESTRICTIONS FOR ENROLLEES

19 IN MSA PLANS.—Such paragraphs do not apply 

20 with respect to services furnished to individuals 

21 enrolled with MSA plans under part C, without 

22 regard to whether the conditions described in 

23 subparagraphs (A) through (C) of section 

24 1802(b)(1) are met. 


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1 ‘‘(C) APPLICATION TO ENROLLEES IN

2 OTHER PLANS.—Subject to subparagraph (B) 

3 and section 1852(k)(2), the provisions of sub4 paragraph (A) shall apply in the case of an in5 dividual enrolled under a contract under section 

6 1876 or under an MA plan (other than an MSA 

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

8 apply to individuals not enrolled under such a 

9 contract or plan.’’. 

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

11 1842(b)(18) of the Social Security Act (42 U.S.C. 

12 1395u(b)(18)) is amended by adding at the end the fol13 lowing: 

14 ‘‘(E) The provisions of section 1848(g)(8) 

15 shall apply with respect to exemption from limi16 tations on charges and from billing require17 ments for services of health care practitioners 

18 described in this paragraph in the same manner 

19 as such provisions apply to exemption from the 

20 requirements referred to in section 

21 1848(g)(8)(A) for physicians’ services.’’. 

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

23 1395cc(a)(1)(O)) is amended by striking ‘‘enrolled with a 

24 Medicare Advantage organization under part C’’ and inVerDate Nov 24 2008 23:27 Jul 29, 2009 Jkt 079200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3356.IH H3356

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1 serting ‘‘enrolled with an MA organization under part C 

2 (other than under an MSA plan)’’. 

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

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

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

6 contracts entered into on or after that date. 

7 SEC. 3. ALLOWING INDIVIDUALS TO CHOOSE TO OPT OUT 

8 OF THE MEDICARE PART A BENEFIT. 

9 (a) IN GENERAL.—Any individual who is otherwise 

10 entitled to benefits under part A of title XVIII of the So11 cial Security Act may elect (in such form and manner as 

12 may be specified by the Secretary of Health and Human 

13 Services) to waive such entitlement. 

14 (b) INDIVIDUALS OPTING OUT OF MEDICARE PART

15 A ELIGIBLE FOR HEALTH SAVINGS ACCOUNTS.—Section 

16 223 of the Internal Revenue Code of 1986 is amended— 

17 (1) in subsection (b), by striking paragraph (7), 

18 and 

19 (2) in subsection (d)(2)(C)(iv), by inserting 

20 ‘‘and who has not waived the rights to benefits 

21 under part A of title XVIII of such Act’’ after ‘‘So22 cial Security Act’’. 

Æ 


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