I 
108TH CONGRESS 
1ST SESSION H. R. 2904
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 
JULY 25, 2003
Mr. SMITH of Washington 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 with-
in the jurisdiction 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 ‘‘MediFair Act of 
2003’’. 
SEC. 2. FINDINGS. 
Congress makes the following findings:
tion had not been enacted by reducing the 
amount of applicable payments in each State 
that the Secretary determines has—
‘‘(i) a State average per beneficiary 
amount for a year that is greater than the 
national average per beneficiary amount 
for such year; and 
‘‘(ii) healthy outcome measurements 
or quality care measurements that indicate 
that a reduction in applicable payments 
would encourage more efficient use of, and 
reduce overuse of, items and services for 
which payment is made under this title. 
‘‘(B) LIMITATION.—The Secretary shall 
not reduce applicable payments under subpara-
graph (A) to a State that—
‘‘(i) has a State average per bene-
ficiary amount for a year that is greater 
than the national average per beneficiary 
amount for such year; and 
‘‘(ii) has healthy outcome measure-
ments or quality care measurements that 
indicate that the applicable payments are 
being used to improve the access of bene-
ficiaries to quality care.
‘‘(3) DETERMINATION OF AVERAGES.—
‘‘(A) STATE AVERAGE PER BENEFICIARY 
AMOUNT.—Each year (beginning in 2003), the 
Secretary shall determine a State average per 
beneficiary amount for each State which shall 
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 
2003), 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 amount determined under 
subparagraph (A) for the year. 
‘‘(4) DEFINITIONS.—In this section: 
‘‘(A) APPLICABLE PAYMENTS.—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 bene-
ficiaries enrolled under such parts that reside in 
the State.
‘‘(B) STATE.—The term ‘State’ has the 
meaning given such term in section 210(h). 
‘‘(c) BENEFICIARIES HELD HARMLESS.—The provi-
sions of this section shall not affect—
‘‘(1) the entitlement to items and services of a 
beneficiary under this title, including the scope of 
such items and services; or 
‘‘(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.’’. 
SEC. 4. MEDPAC RECOMMENDATIONS ON HEALTHY OUT-
COMES AND QUALITY CARE. 
(a) RECOMMENDATIONS.—The Medicare Payment 
Advisory Commission established under section 1805 of 
the Social Security Act (42 U.S.C. 1395b–6) shall develop 
recommendations on policies and practices that, if imple-
mented, would encourage—
(1) healthy outcomes and quality care under the 
medicare program in States with respect to which 
payments are reduced under section 1897(b)(2) of 
such Act (as added by section 3); and 
(2) the efficient use of payments made under 
the medicare program in such States. 
(b) SUBMISSION.—Not later than the date that is 9 
months after the date of enactment of this Act, the Com-
mission shall submit to Congress the recommendations de-
veloped under subsection (a).
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