I
107TH CONGRESS
2D SESSION
H. R. 3882
To amend title XVIII of the Social Security Act to reform the medicare
physician payment update system through repeal of the sustainable
growth rate (SGR) payment update system.
IN THE HOUSE OF REPRESENTATIVES
MARCH 6, 2002
Mrs. JOHNSON of Connecticut introduced the following bill; which was referred
to the Committee on Energy and Commerce, and in addition to the Com-
mittee 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 reform
the medicare physician payment update system through
repeal of the sustainable growth rate (SGR) payment
update system.
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 ‘‘Preserving Patient Ac-
cess to Physicians Act of 2002’’.
SEC. 2. REFORM OF THE MEDICARE PHYSICIAN PAYMENT
UPDATE SYSTEM THROUGH ELIMINATION OF
THE SUSTAINABLE GROWTH RATE (SGR) PAY-
MENT UPDATE SYSTEM.
(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 paragraphs:
‘‘(5) UPDATE
FOR
2003.—The update to the
single conversion factor established in paragraph
(1)(C) for 2003 is 2.5 percent.
‘‘(6) UPDATE
FOR
YEARS
BEGINNING
WITH
2004.—
‘‘(A) IN GENERAL.—Unless otherwise pro-
vided by law, subject to the budget-neutrality
factor determined by the Secretary under sub-
section (c)(2)(B)(ii), the update to the single
conversion factor established in paragraph
(1)(C) for a year beginning with 2004 is equal
to the product of—
‘‘(i) 1 plus the Secretary’s estimate of
the percentage change in the value of the
input price index (as provided under sub-
paragraph (B)(ii)) for the year (divided by
100); and
‘‘(ii) 1 minus the Secretary’s estimate
of the productivity adjustment factor under
subparagraph (C) for the year.
‘‘(B) INPUT PRICE INDEX.—
‘‘(i) ESTABLISHMENT.—Taking into
account the mix of goods and services in-
cluded in computing the medicare economic
index (referred to in the fourth sentence of
section 1842(b)(3)), the Secretary shall es-
tablish an index that reflects the weighted-
average input prices for physicians’ serv-
ices for a year. Such index shall only ac-
count for input prices and not changes in
costs that may result from other factors
(such as productivity).
‘‘(ii) ANNUAL ESTIMATE OF CHANGE
IN INDEX.—The Secretary shall estimate,
before the beginning of each year (begin-
ning with 2004) the change in the value of
the input price index under clause (i) from
the previous year to the year involved.
‘‘(C) PRODUCTIVITY
ADJUSTMENT
FAC-
TOR.—The Secretary shall estimate, and cause
to be published in the Federal Register not
later than November 1 before the beginning of
each year (beginning with 2004), a productivity
adjustment factor that reflects the Secretary’s
estimate of growth in multifactor productivity
in the national economy, taking into account
growth in productivity attributable to both labor
and nonlabor factors. Such adjustment may be
based on a multi-year moving average of pro-
ductivity (based on data published by the Bu-
reau of Labor Statistics).’’.
(b) CONFORMING AMENDMENTS.—Section 1848 of
the such Act (42 U.S.C. 1395w–4) is amended—
(1) in subsection (d)(1)(A), by striking ‘‘sub-
paragraph (B))’’ and all that follows and inserting
the following: ‘‘subparagraph (B))—
‘‘(i) for years before 2001, adjusted
by the update (established under para-
graph (3)) for the year involved;
‘‘(ii) for 2001 and 2002, multiplied by
the update (established under paragraph
(4)) for the year involved;
‘‘(iii) for 2003, multiplied by the up-
date (established under paragraph (5)) for
that year; and
‘‘(iv) for 2004 and each subsequent
year, multiplied by the update (established
under paragraph (6)) for the year in-
volved.’’;
(2) by striking clause (i) of subsection
(d)(1)(E) and inserting the following:
‘‘(i) cause to have published in the
Federal Register not later than November
1—
‘‘(I) of 2000 and each subsequent
year, the conversion factor which will
apply to physicians’ services for the
succeeding year;
‘‘(II) of 2000 and 2001, the up-
date determined under paragraph (4)
for such succeeding year and the al-
lowed expenditures under such para-
graph for the succeeding year;
‘‘(III) of 2002, the update deter-
mined under paragraph (5) for 2003;
and
‘‘(IV) of 2003 and each subse-
quent year, the update determined
under paragraph (6) for the suc-
ceeding year; and’’;
(3) in subsection (d)(1)(E)(ii), by inserting
‘‘(for years before 2003)’’ after ‘‘the sustainable
growth rate’’;
(4) in subsection (d)(4)—
(A) in the heading, by striking ‘‘YEARS BE-
GINNING WITH 2001’’ and inserting ‘‘2001 AND
2002’’;
(B) in subparagraph (A), in the matter
preceding clause (i), by striking ‘‘for a year be-
ginning with 2001’’ and inserting ‘‘for 2001
and 2002’’;
(C) in subparagraph (C)(iii), by striking
‘‘YEARS BEGINNING WITH 2000.—The allowed
expenditures for a year (beginning with 2000)’’
and inserting ‘‘2000 AND 2001.—The allowed ex-
penditures for each of years 2000 and 2001’’;
(D) in subparagraph (E), by striking ‘‘BE-
GINNING WITH 2001’’ and ‘‘for a year beginning
with 2001’’ and inserting ‘‘2001 AND 2002’’ and
‘‘for 2001 and 2002’’, respectively; and
(E) in subparagraph (F), by striking ‘‘sub-
paragraph (A)’’ and all that follows and insert-
ing ‘‘subparagraph (A), for each of 2001 and
2002, of ¥0.2 percent.’’; and
(5) in subsection (f)—
(A) in paragraph (1)(B), by striking ‘‘No-
vember 1 of each succeeding year’’ and insert-
ing ‘‘November 1, 2001,’’;
(B) in paragraph (2), by inserting ‘‘and
ending with 2002’’ after ‘‘beginning with
2000’’;
(C) in paragraph (3), by striking ‘‘for a
year beginning with 2001’’ and inserting ‘‘for
2001 and 2002’’;
(D) by striking subparagraph (C) of para-
graph (3); and
(E) in paragraph (4)(C)(ii), by inserting
‘‘and ending with 2002’’ after ‘‘beginning with
2000’’.
(c) MEDPAC REPORT
ON PAYMENT
FOR PHYSI-
CIANS’ SERVICES.—Not later than 1 year after the date
of the enactment of this Act, the Medicare Payment Advi-
sory Commission shall submit to Congress a report on the
effect of refinements to the practice expense component
of payments for physicians’ services, after the transition
to full resource-based payment system in 2002, under sec-
tion 1848 of the Social Security Act (42 U.S.C. 1395w–
4) that examines the following matters by physician spe-
cialty:
(1) The effect of such refinements on payment
for physicians’ services.
(2) The interaction of the practice expense com-
ponent with other components of and adjustments to
payment for physicians’ services under such section.
(3) The appropriateness of the amount of com-
pensation by reason of such refinements on physi-
cians.
(4) The effect of such refinements on access to
care by medicare beneficiaries to physicians’ serv-
ices.
(5) The effect of such refinements on physician
participation under the medicare program.
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