I 
108TH CONGRESS 
1ST SESSION H. R. 2624
To amend title XVIII of the Social Security Act to improve the provision 
of items and services provided to Medicare beneficiaries residing in rural 
areas. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 26, 2003
Mr. BOSWELL introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to improve 
the provision of items and services provided to Medicare 
beneficiaries residing in rural areas.
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 Fairness in 
Reimbursement Act’’.
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SEC. 2. IMPROVING FAIRNESS OF PAYMENTS TO PRO-
VIDERS UNDER THE MEDICARE FEE-FOR-
SERVICE PROGRAM. 
Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘IMPROVING FAIRNESS OF PAYMENTS UNDER THE 
ORIGINAL MEDICARE FEE-FOR-SERVICE PROGRAM 
‘‘SEC. 1897. (a) ESTABLISHMENT OF SYSTEM.—Not-
withstanding any other provision of law, the Secretary 
shall establish a system for making adjustments to the 
amount of payment made to entities and individuals for 
items and services provided under the original medicare 
fee-for-service program under parts A and B. 
‘‘(b) SYSTEM REQUIREMENTS.—
‘‘(1) ADJUSTMENTS.—Under the system de-
scribed in subsection (a), the Secretary (beginning in 
2002) shall make the following adjustments: 
‘‘(A) CERTAIN STATES ABOVE NATIONAL 
AVERAGE.—If a State average per beneficiary 
amount for a year is greater than 105 percent 
(or 110 percent in the case of the determination 
made in 2001) of the national average per ben-
eficiary amount for such year, then the Sec-
retary shall reduce the amount of applicable 
payments in such a manner as will result (as
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estimated by the Secretary) in the State aver-
age per beneficiary amount for the subsequent 
year being at 105 percent (or 110 percent in 
the case of payments made in 2002) of the na-
tional average per beneficiary amount for such 
subsequent year. 
‘‘(B) CERTAIN STATES BELOW NATIONAL 
AVERAGE.—If a State average per beneficiary 
amount for a year is less than 95 percent (or 
90 percent in the case of the determination 
made in 2001) of the national average per ben-
eficiary amount for such year, then the Sec-
retary shall increase the amount of applicable 
payments in such a manner as will result (as 
estimated by the Secretary) in the State aver-
age per beneficiary amount for the subsequent 
year being at 95 percent (or 90 percent in the 
case of payments made in 2002) of the national 
average per beneficiary amount for such subse-
quent year. 
‘‘(2) DETERMINATION OF AVERAGES.—
‘‘(A) STATE AVERAGE PER BENEFICIARY 
AMOUNT.—Each year (beginning in 2001), the 
Secretary shall determine a State average per 
beneficiary amount for each State which shall
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be equal to the Secretary’s estimate of the aver-
age amount of expenditures under the original 
medicare fee-for-service program under parts A 
and B for the year for a beneficiary enrolled 
under such parts that resides in the State. 
‘‘(B) NATIONAL
AVERAGE
PER
BENE-
FICIARY
AMOUNT.—Each year (beginning in 
2001), the Secretary shall determine the na-
tional average per beneficiary amount which 
shall be equal to the average of the State aver-
age per beneficiary amounts determined under 
subparagraph (B) for the year. 
‘‘(3) APPLICABLE
PAYMENTS
DEFINED.—In 
this section, the term ‘applicable payments’ means 
payments made to entities and individuals for items 
and services provided under the original medicare 
fee-for-service program under parts A and B to 
beneficiaries enrolled under such parts that reside in 
the State. 
‘‘(c) BENEFICIARIES HELD HARMLESS.—The provi-
sions of this section shall not effect—
‘‘(1) the entitlement to items and services of a 
beneficiary under this title, including the scope of 
such items and services; or
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‘‘(2) any liability of the beneficiary with respect 
to such items and services. 
‘‘(d) REGULATIONS.—
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Medicare Payment Advisory Commis-
sion, shall promulgate regulations to carry out this 
section. 
‘‘(2) PROTECTING
RURAL
COMMUNITIES.—In 
promulgating the regulations pursuant to paragraph 
(1), the Secretary shall give special consideration to 
rural areas. 
‘‘(e) BUDGET NEUTRALITY.—The Secretary shall en-
sure that the provisions contained in this section do not 
cause the estimated amount of expenditures under this 
title for a year to increase or decrease from the estimated 
amount of expenditures under this title that would have 
been made in such year if this section had not been en-
acted.’’. 
SEC. 3. IMPROVING FAIRNESS OF PAYMENTS FOR PHYSI-
CIANS’ SERVICES UNDER THE MEDICARE 
FEE-FOR-SERVICE PROGRAM. 
(a) ADJUSTMENT TO GEOGRAPHIC INDICES UNDER 
THE PHYSICIAN FEE SCHEDULE.—Section 1848(e)(1) of 
the Social Security Act (42 U.S.C. 1395w–4(e)(1)) is 
amended—
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(1) in subparagraph (A), by striking ‘‘(B) and 
(C)’’ and inserting (B), (C), and (D)’’ in the matter 
preceding clause (i); 
(2) by redesignating subparagraph (D) as sub-
paragraph (E); and 
(3) by adding after subparagraph (C) the fol-
lowing new subparagraph: 
‘‘(D) FLOOR
AND
CEILING
ON
GEO-
GRAPHIC
INDICES.—If any index established 
under clause (i), (ii), or (iii) of subparagraph 
(A) or under subparagraph (B), after applica-
tion of the second sentence of subparagraph 
(C), is—
‘‘(i) less that 0.950, the Secretary 
shall increase such index to 0.950; and 
‘‘(ii) greater that 1.05, the Secretary 
shall reduce such index to 1.05.’’. 
(b) BUDGET NEUTRALITY ADJUSTMENT FOR APPLI-
CATION OF FLOOR AND CEILING ON GEOGRAPHIC AD-
JUSTMENT.—Section 1848(d) of the Social Security Act 
(42 U.S.C. 1395w–4(d)) is amended—
(1) in paragraph (1)(A), by striking ‘‘The con-
version’’ and inserting ‘‘Subject to paragraph (5), 
the conversion’’; and
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(2) by adding at the end the following new 
paragraph: 
‘‘(5) BUDGET
NEUTRALITY
ADJUSTMENT 
FOR APPLICATION OF FLOOR AND CEILING ON 
GEOGRAPHIC
ADJUSTMENT.—Before applying 
an update for a year under this subsection, the 
Secretary shall (if necessary) provide for an ad-
justment to the conversion factor for that year 
to ensure that the aggregate payments under 
this part in that year shall be equal to aggre-
gate payments that would have been made 
under such part in that year if subsection 
(e)(1)(D) had not been enacted.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to payments for items and services 
provided on and after January 1, 2002.
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