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107TH CONGRESS
1ST SESSION
H. R. 3351
To amend title XVIII of the Social Security Act to specify the update
for payments under the Medicare physician fee schedule for 2002 and
to direct the Medicare Payment Advisory Commission to conduct a study
on replacing the use of the sustainable growth rate as a factor in
determining such update in subsequent years.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 27, 2001
Mr. BILIRAKIS (for himself, Mr. BROWN of Ohio, Mr. TAUZIN, Mr. DINGELL,
Mr. UPTON, Mr. BRYANT, Mr. GANSKE, Mr. DEAL of Georgia, Mr. SES-
SIONS, Mr. FLETCHER, Mr. COOKSEY, Mr. BURR of North Carolina, Mr.
BUYER, Mr. NORWOOD, Mr. TERRY, Mr. BAKER, Mr. PAUL, Mr.
SCHROCK, Mr. MANZULLO, Mr. LATOURETTE, Mr. JOHNSON of Illinois,
Mr. PICKERING, Mr. LAMPSON, Mr. BARTON of Texas, Mr. SHADEGG,
Mr. BEREUTER, Mr. WAXMAN, Mr. KENNEDY of Rhode Island, Mr.
RUSH, Mr. TOWNS, Mr. GREEN of Texas, Mr. ROSS, Mr. LUTHER, Mr.
GORDON, Mr. HALL of Texas, Mr. ANDREWS, Mr. MCDERMOTT, Mr.
STRICKLAND, Mr. THOMPSON of California, Mr. ENGEL, Mr. WYNN, Mr.
BARRETT of Wisconsin, Mr. STUPAK, Mr. KLECZKA, Mr. SHIMKUS, Mr.
GREENWOOD, and Mrs. THURMAN) introduced the following bill; which
was referred to the Committee on Energy and Commerce, and in addition
to the Committee on Ways and Means, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to specify
the update for payments under the Medicare physician
fee schedule for 2002 and to direct the Medicare Pay-
ment Advisory Commission to conduct a study on replac-
HR 3351 IH1S
ing the use of the sustainable growth rate as a factor
in determining such update in subsequent years.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medicare Physician
Payment Fairness Act of 2001’’.
SEC. 2. SPECIFICATION OF THE UPDATE FOR PAYMENTS
UNDER 
THE 
MEDICARE 
PHYSICIAN 
FEE
SCHEDULE FOR 2002.
(a) IN GENERAL.—Section 1848(d) of the Social Se-
curity Act (42 U.S.C. 1395w–4(d)) is amended by adding
at the end the following new paragraph:
‘‘(5) CONVERSION FACTOR FOR 2002.—
‘‘(A) IN
GENERAL.—Notwithstanding the
update otherwise determined under paragraph
(4) for 2002, the conversion factor established
under this subsection for 2002 shall be 0.9 per-
cent less than the conversion factor established
under this subsection for 2001.
‘‘(B) NO EFFECT FOR SUBSEQUENT PERI-
ODS.—The conversion factor under paragraph
(1) and the update adjustment factor under
paragraph (4)(B) for a year after 2002 shall be
applied and computed as if subparagraph (A)
had not been in effect.
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‘‘(C) CONFORMING
PROVISIONS
TO
EN-
SURE
NO
EFFECT
FOR
SUBSEQUENT
PERI-
ODS.—In carrying out subparagraph (B):
‘‘(i) NO EFFECT ON TARGET FOR AL-
LOWED EXPENDITURES.—The allowed ex-
penditures under paragraph (4)(C)(iii) for
years after 2002 shall be applied and com-
puted as if subparagraph (A) had not been
in effect.
‘‘(ii) REMOVAL
OF
ADDITIONAL
EX-
PENDITURES
FROM
ACTUAL
EXPENDI-
TURES.—In applying paragraph (4)(B) for
years beginning with 2003, the actual ex-
penditures for 2002 shall be the actual ex-
penditures otherwise determined multiplied
by the ratio of (I) the amount of the con-
version factor that would have applied for
2002 under this subsection but for this
paragraph, to (II) the amount of the con-
version factor that is applied for 2002
under this paragraph.
‘‘(iii) NOT TREATED AS CHANGE IN
LAW
AND
REGULATION
IN
SUSTAINABLE
GROWTH RATE DETERMINATION.—The en-
actment of this paragraph shall not be
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treated as a change in law for purposes of
applying subsection (f)(2)(D).’’.
(b) CONFORMING AMENDMENTS.—Section 1848(d)
of the such Act (42 U.S.C. 1395w–4(d)) is amended—
(1) in paragraph (1)(A), by inserting ‘‘and sub-
ject to paragraph (5)’’ after ‘‘with 2001’’;
(2) in paragraph (4)(A), by inserting ‘‘(includ-
ing paragraph (5))’’ after ‘‘Unless otherwise pro-
vided by law’’;
(3) in paragraph (4)(B), by inserting ‘‘and sub-
paragraphs (B) and (C) of paragraph (5)’’ after
‘‘subparagraph (D)’’ in the matter preceding clause
(i); and
(4) in paragraph (4)(C)(iii), by striking ‘‘The
allowed expenditures’’ and inserting ‘‘Subject to
paragraph (5)(C)(i), the allowed expenditures’’.
(c) CONTINUED APPLICATION OF ‘‘PAY-AS-YOU-GO’’
RULES.—Nothing in this section shall be construed as
waiving the application of the pay-as-you-go provisions of
section 252 of the Balanced Budget and Emergency Def-
icit Control Act of 1985 (Public Law 99–177).
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SEC. 3. STUDY AND REPORT BY MEDPAC ON REPLACING OR
MODIFYING 
THE 
SUSTAINABLE 
GROWTH
RATE AS A FACTOR IN DETERMINING THE UP-
DATE FOR PAYMENTS UNDER THE MEDICARE
PHYSICIAN FEE SCHEDULE.
(a) STUDY.—The Medicare Payment Advisory Com-
mission shall conduct a study on replacing or modifying
the sustainable growth rate (as determined under sub-
section (f) of section 1848 of the Social Security Act (42
U.S.C. 1395w–4)) as a factor in determining the update
for payments under the Medicare physician fee schedule
under such section such that the factor used more fully
accounts for changes in the unit costs of providing physi-
cians’ services.
(b) REPORT TO CONGRESS.—Not later than March
1, 2002, the Commission shall submit to Congress a report
on the study conducted under subsection (a) together with
such recommendations for legislation and administrative
action as the Commission determines appropriate.
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