I 
109TH CONGRESS 
1ST SESSION 
H. R. 709 
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 
FEBRUARY 9, 2005 
Mr. SAM JOHNSON of Texas (for himself, Mr. HERGER, and Mr. NORWOOD) 
introduced the following bill; which was referred to the Committee on 
Ways and Means, and in addition to the Committee on Energy and Com-
merce, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion 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 profes-
sionals for the provision of health services for which 
no payment is sought under the Medicare Program. 
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 Beneficiary 
Freedom To Contract Act of 2005’’.
SEC. 2. USE OF PRIVATE CONTRACTS BY MEDICARE BENE-
FICIARIES FOR PROFESSIONAL SERVICES. 
(a) IN GENERAL.—Section 1802(b) of the Social Se-
curity Act (42 U.S.C. 1395a) is amended to read as fol-
lows: 
‘‘(b) CLARIFICATION
OF USE
OF PRIVATE CON-
TRACTS
BY MEDICARE BENEFICIARIES
FOR PROFES-
SIONAL SERVICES.— 
‘‘(1) IN GENERAL.—Nothing in this title shall 
prohibit a medicare beneficiary from entering into a 
private contract with a physician or health care 
practitioner for the provision of medicare covered 
professional services (as defined in paragraph 
(5)(C)) if— 
‘‘(A) the services are covered under a pri-
vate contract that is between the beneficiary 
and the physician or practitioner and meets the 
requirements of paragraph (2); 
‘‘(B) under the private contract no claim 
for payment for services covered under the con-
tract is to be submitted (and no payment made) 
under part A or B, under a contract under sec-
tion 1876, or under an MA plan (other than an 
MSA plan); and 
‘‘(C)(i) the Secretary has been provided 
with the minimum information necessary to
avoid any payment under part A or B for serv-
ices covered under the contract, or 
‘‘(ii) in the case of an individual enrolled 
under a contract under section 1876 or an MA 
plan (other than an MSA plan) under part C, 
the eligible organization under the contract or 
the MA organization offering the plan has been 
provided the minimum information necessary to 
avoid any payment under such contract or plan 
for services covered under the contract. 
‘‘(2) 
REQUIREMENTS
FOR
PRIVATE
CON-
TRACTS.—The requirements in this paragraph for a 
private contract between a medicare beneficiary and 
a physician or health care practitioner are as fol-
lows: 
‘‘(A) GENERAL FORM OF CONTRACT.—The 
contract is in writing and is signed by the medi-
care beneficiary. 
‘‘(B) NO CLAIMS TO BE SUBMITTED FOR 
COVERED
SERVICES.—The contract provides 
that no party to the contract (and no entity on 
behalf of any party to the contract) shall sub-
mit any claim for (or request) payment for 
services covered under the contract under part 
A or B, under a contract under section 1876,
or under an MA plan (other than an MSA 
plan). 
‘‘(C) SCOPE OF SERVICES.—The contract 
identifies the medicare covered professional 
services and the period (if any) to be covered 
under the contract, but does not cover any serv-
ices furnished— 
‘‘(i) before the contract is entered 
into; or 
‘‘(ii) for the treatment of an emer-
gency medical condition (as defined in sec-
tion 1867(e)(1)(A)), unless the contract 
was entered into before the onset of the 
emergency medical condition. 
‘‘(D) CLEAR DISCLOSURE OF TERMS.—The 
contract clearly indicates that by signing the 
contract the medicare beneficiary— 
‘‘(i) agrees not to submit a claim (or 
to request that anyone submit a claim) 
under part A or B (or under section 1876 
or under an MA plan, other than an MSA 
plan) for services covered under the con-
tract; 
‘‘(ii) agrees to be responsible, whether 
through insurance or otherwise, for pay-
ment for such services and understands 
that no reimbursement will be provided 
under such part, contract, or plan for such 
services; 
‘‘(iii) acknowledges that no limits 
under this title (including limits under 
paragraph (1) and (3) of section 1848(g)) 
will apply to amounts that may be charged 
for such services; 
‘‘(iv) acknowledges that medicare sup-
plemental policies under section 1882 do 
not, and other supplemental health plans 
and policies may elect not to, make pay-
ments for such services because payment is 
not made under this title; and 
‘‘(v) acknowledges that the beneficiary 
has the right to have such services pro-
vided by (or under the supervision of) 
other physicians or health care practi-
tioners for whom payment would be made 
under such part, contract, or plan. 
Such contract shall also clearly indicate whether 
the physician or practitioner involved is ex-
cluded from participation under this title.
‘‘(3) MODIFICATIONS.—The parties to a private 
contract may mutually agree at any time to modify 
or terminate the contract on a prospective basis, 
consistent with the provisions of paragraphs (1) and 
(2). 
‘‘(4) NO REQUIREMENTS FOR SERVICES FUR-
NISHED TO MSA PLAN ENROLLEES.—The require-
ments of paragraphs (1) and (2) do not apply to any 
contract or arrangement for the provision of services 
to a medicare beneficiary enrolled in an MA plan 
under part C. 
‘‘(5) DEFINITIONS.—In this subsection: 
‘‘(A) HEALTH CARE PRACTITIONER.—The 
term ‘health care practitioner’ means a practi-
tioner described in section 1842(b)(18)(C). 
‘‘(B) MEDICARE BENEFICIARY.—The term 
‘medicare beneficiary’ means an individual who 
is enrolled under part B. 
‘‘(C) MEDICARE COVERED PROFESSIONAL 
SERVICES.—The term ‘medicare covered profes-
sional services’ means— 
‘‘(i) physicians’ services (as defined in 
section 1861(q), and including services de-
scribed in section 1861(s)(2)(A)), and
‘‘(ii) professional services of health 
care practitioners, including services de-
scribed in section 1842(b)(18)(D), 
for which payment may be made under part A 
or B, under a contract under section 1876, or 
under a Medicare+Choice plan but for the pro-
visions of a private contract that meets the re-
quirements of paragraph (2). 
‘‘(D) MA PLAN; MSA
PLAN.—The terms 
‘MA plan’ and ‘MSA plan’ have the meanings 
given such terms in section 1859. 
‘‘(E) PHYSICIAN.—The term ‘physician’ 
has the meaning given such term in section 
1861(r).’’. 
(b) CONFORMING AMENDMENTS CLARIFYING EX-
EMPTION FROM LIMITING CHARGE AND FROM REQUIRE-
MENT FOR SUBMISSION OF CLAIMS.—Section 1848(g) of 
the Social Security Act (42 U.S.C. 1395w–4(g)) is amend-
ed— 
(1) in paragraph (1)(A), by striking ‘‘In’’ and 
inserting ‘‘Subject to paragraph (8), in’’; 
(2) in paragraph (3)(A), by striking ‘‘Payment’’ 
and inserting ‘‘Subject to paragraph (8), payment’’; 
(3) in paragraph (4)(A), by striking ‘‘For’’ and 
inserting ‘‘Subject to paragraph (8), for’’; and
(4) by adding at the end the following new 
paragraph: 
‘‘(8) EXEMPTION
FROM
REQUIREMENTS
FOR 
SERVICES
FURNISHED
UNDER
PRIVATE
CON-
TRACTS.— 
‘‘(A) IN
GENERAL.—Pursuant to section 
1802(b)(1), paragraphs (1), (3), and (4) do not 
apply with respect to physicians’ services (and 
services described in section 1861(s)(2)(A)) fur-
nished to an individual by (or under the super-
vision of) a physician if the conditions described 
in section 1802(b)(1) are met with respect to 
the services. 
‘‘(B) NO RESTRICTIONS FOR ENROLLEES 
IN MSA PLANS.—Such paragraphs do not apply 
with respect to services furnished to individuals 
enrolled with MSA plans under part C, without 
regard to whether the conditions described in 
subparagraphs (A) through (C) of section 
1802(b)(1) are met. 
‘‘(C) APPLICATION
TO
ENROLLEES
IN 
OTHER PLANS.—Subject to subparagraph (B) 
and section 1852(k)(2), the provisions of sub-
paragraph (A) shall apply in the case of an in-
dividual enrolled under a contract under section
1876 or under an MA plan (other than an MSA 
plan) under part C, in the same manner as they 
apply to individuals not enrolled under such a 
contract or plan.’’. 
(c) 
CONFORMING
AMENDMENTS.—(1) 
Section 
1842(b)(18) of the Social Security Act (42 U.S.C. 
1395u(b)(18)) is amended by adding at the end the fol-
lowing: 
‘‘(E) The provisions of section 1848(g)(8) shall apply 
with respect to exemption from limitations on charges and 
from billing requirements for services of health care prac-
titioners described in this paragraph in the same manner 
as such provisions apply to exemption from the require-
ments referred to in section 1848(g)(8)(A) for physicians’ 
services.’’. 
(2) Section 1866(a)(1)(O) of such Act (42 U.S.C. 
1395cc(a)(1)(O)) is amended by striking ‘‘enrolled with a 
Medicare+Choice organization under part C’’ and insert-
ing ‘‘enrolled with an MA organization under part C 
(other than under an MSA plan)’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date that is 6 months 
after the date of the enactment of this Act and apply to 
contracts entered into on or after that date. 
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