I 
108TH CONGRESS 
1ST SESSION 
H. R. 33
To amend title XVIII of the Social Security Act to establish a minimum 
geographic cost-of-practice index value for physicians’ services furnished 
under the Medicare Program. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 7, 2003
Mr. BEREUTER (for himself, Mr. BERRY, Mr. FOLEY, Mr. MURTHA, Mr. KIL-
DEE, Mr. COSTELLO, Mr. GREEN of Wisconsin, Mr. NETHERCUTT, Mr. 
MCINTYRE, Mr. TOWNS, Mr. LUCAS of Oklahoma, Mrs. WILSON of New 
Mexico, Mr. BOUCHER, Mr. TERRY, Mr. BAIRD, Mrs. CUBIN, Mr. BASS, 
Mr. FROST, and Mr. OSBORNE) 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 de-
termined 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 establish 
a minimum geographic cost-of-practice index value for 
physicians’ services furnished under the Medicare Pro-
gram.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Rural Equity Payment Index Reform Act of 2003’’.
(b) FINDINGS.—Congress makes the following find-
ings: 
(1) Variations in the physician work adjustment 
factors under section 1848(e) of the Social Security 
Act (42 U.S.C. 1395w–4w(e)) result in a physician 
work payment inequity between urban and rural lo-
calities under the medicare physician fee schedule. 
(2) The amount the medicare program spends 
on its beneficiaries varies substantially across the 
country, far more than can be accounted for by dif-
ferences in the cost of living or differences in health 
status. 
(3) Since beneficiaries and others pay into the 
program on the basis of income and wages and bene-
ficiaries pay the same premium for Part B services, 
these payments result in substantial crosssubsidies 
from people living in low payment States with con-
servative practice styles or beneficiary preferences to 
people living in higher payment States with aggres-
sive practice styles or beneficiary preferences. 
(4) Congress has been mindful of these vari-
ations when it comes to capitation payments made 
to managed care plans under the Medicare+Choice 
program and has put in place floors that increase 
monthly payments by more than one-third in some
of the lowest payment counties over what would oth-
erwise occur. But this change addresses only a very 
small fraction of medicare beneficiaries who are 
presently enrolled in Medicare+Choice plans oper-
ating in low payment counties. 
(5) Unfortunately, Congress has only begun to 
address the underlying problem of substantial geo-
graphic variations in fee-for-service spending under 
traditional medicare. 
(6) Improvements in rural hospital payment 
systems under the medicare program help to reduce 
aggregate per capita payment variation as rural hos-
pitals are in large part located in low payment coun-
ties. 
(7) Many rural communities have great dif-
ficulty attracting and retaining physicians and other 
skilled health professionals. 
(8) Targeted efforts to provide relief to rural 
doctors in low payment localities would further re-
duce variation by improving access to primary and 
tertiary services along with more equitable payment. 
(9) Geographic adjustment factors in the medi-
care program’s resource-based relative value scale 
unfairly suppress fee-for-service payments to rural 
providers.
(10) Actual costs are not presently being meas-
ured accurately and payments do not reflect the 
costs of providing care. 
(11) Unless something is done about medicare 
payment in rural areas, as the baby boom cohort 
ages into medicare, the financial demands on rural 
communities to subsidize care for their aged and dis-
abled medicare beneficiaries will progress from dif-
ficult to impossible in another 10 years. 
(12) The impact on rural health care infra-
structure will be first felt in economically depressed 
rural areas where the ability to shift costs is already 
limited. 
SEC. 2. PHYSICIAN FEE SCHEDULE WAGE INDEX REVISION. 
Section 1848(e)(1) of the Social Security Act (42 
U.S.C. 1395w–4(e)(1)) is amended—
(1) in subparagraph (A), by striking ‘‘subpara-
graphs (B) and (C)’’ and inserting ‘‘subparagraphs 
(B), (C), and (E)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(E) FLOOR FOR WORK GEOGRAPHIC INDI-
CES.—
‘‘(i) IN
GENERAL.—Notwithstanding 
the work geographic index otherwise cal-
culated under subparagraph (A)(iii), in no 
case may the work geographic index ap-
plied for payment under this section be 
less than—
‘‘(I) 0.976 for services furnished 
during 2004; 
‘‘(II) 0.987 for services furnished 
during 2005; 
‘‘(III) 0.995 for services fur-
nished during 2006; and 
‘‘(IV) 1.000 for services fur-
nished during 2007 and subsequent 
years. 
‘‘(ii) EXEMPTION
FROM
LIMITATION 
ON ANNUAL ADJUSTMENTS.—The increase 
in expenditures attributable to clause (i) 
shall not be taken into account in applying 
subsection (c)(2)(B)(ii)(II).’’.
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