I
107TH CONGRESS
2D SESSION
H. R. 4702
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
MAY 9, 2002
Mr. SAM JOHNSON of Texas (for himself, Mr. NORWOOD, Mr. CRANE, Ms.
DUNN of Washington, and Mr. HERGER) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Energy and Commerce, for a period to be sub-
sequently 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 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 2002’’.
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 a Medicare+Choice 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 a
Medicare+Choice plan (other than an MSA
plan) under part C, the eligible organization
under the contract or the Medicare+Choice or-
ganization 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 a Medicare+Choice 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 a Medicare+Choice plan, other
than an MSA plan) for services covered
under the contract;
‘‘(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 MSA 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) 
MEDICARE+CHOICE
PLAN; 
MSA
PLAN.—The terms ‘Medicare+Choice 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
amended—
(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 a Medicare+Choice 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 inserting ‘‘(other than
under an MSA plan)’’ after ‘‘Medicare+Choice organiza-
tion under part C’’.