I
107TH CONGRESS
1ST SESSION
H. R. 3511
To amend title XVIII of the Social Security Act to continue the 2001
conversion factor under the Medicare physician fee schedule for the
first 6 months of 2002, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
DECEMBER 18, 2001
Mr. FLETCHER (for himself, Mr. PETERSON of Minnesota, and Mrs. JOHNSON
of Connecticut) 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 provisions as fall within
the jurisdiction of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to continue
the 2001 conversion factor under the Medicare physician
fee schedule for the first 6 months of 2002, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CONTINUATION OF 2001 CONVERSION FACTOR
UNDER 
THE 
MEDICARE 
PHYSICIAN 
FEE
SCHEDULE FOR FIRST 6 MONTHS OF 2002;
MEDPAC REPORT ON SUSTAINABLE GROWTH
RATE.
(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
FIRST
MONTHS OF 2002.—
‘‘(A) IN
GENERAL.—Notwithstanding the
update otherwise determined under paragraph
(4) for 2002, the conversion factor established
under this subsection for services furnished
during the first 6 months of 2002 shall be the
conversion factor established under this sub-
section 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 services furnished on or
after July 1, 2002, shall be applied and com-
puted as if subparagraph (A) had not been in
effect.
‘‘(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 the first 6 months of 2002
shall be the actual expenditures otherwise
determined multiplied by the ratio of (I)
the amount of the conversion factor that
would have applied for the first 6 months
of 2002 under this subsection but for this
paragraph, to (II) the amount of the con-
version factor that is applied for the first
6 months of 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
treated as a change in law for purposes of
applying subsection (f)(2)(D).’’.
(b) CONFORMING AMENDMENTS.—Section 1848(d)
of 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).
(d) STUDY AND REPORT BY MEDPAC ON REPLAC-
ING OR MODIFYING THE SUSTAINABLE GROWTH RATE AS
A FACTOR
IN DETERMINING
THE UPDATE
FOR PAY-
MENTS UNDER THE MEDICARE PHYSICIAN FEE SCHED-
ULE.—
(1) STUDY.—The Medicare Payment Advisory
Commission shall conduct a study on replacing or
modifying the sustainable growth rate (as deter-
mined under subsection (f) of section 1848 of the
Social Security Act (42 U.S.C. 1395w–4)) as a fac-
tor in determining the update for payments under
the medicare physician fee schedule under such sec-
tion such that the factor used more fully accounts
for changes in the unit costs of providing physicians’
services.
(2) REPORT
TO
CONGRESS.—Not later than
March 1, 2002, the Commission shall submit to
Congress a report on the study conducted under
paragraph (1) together with such recommendations
for legislation and administrative action as the Com-
mission determines appropriate.
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