I 
109TH CONGRESS 
1ST SESSION H. R. 4042 
To amend title XVIII of the Social Security Act to modernize payments 
for ambulatory surgical centers under the Medicare Program. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 7, 2005 
Mr. HERGER introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee 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 modernize 
payments for ambulatory surgical centers 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 ‘‘Ambulatory Surgical 
Center Medicare Payment Modernization Act of 2005’’.
SEC. 2. MEDICARE PAYMENT FOR AMBULATORY SURGICAL 
CENTER SERVICES. 
(a) IN GENERAL.—Section 1833(i) of the Social Se-
curity Act (42 U.S.C. 1395l(i)) is amended to read as fol-
lows: 
‘‘(i)(1) Payment shall be made under this part in the 
amount specified under paragraph (2) for facility services 
furnished to an individual in an ambulatory surgical cen-
ter in connection with any outpatient surgical procedure 
covered under this part as a hospital outpatient depart-
ment service, except for those procedures that the Sec-
retary designates, in consultation with appropriate trade 
and professional organizations (including those having di-
rect experience with ambulatory surgical centers) as pos-
ing a significant safety risk or requiring an overnight stay 
when performed in ambulatory surgical centers. Not less 
frequently than once every two years the Secretary shall 
review and, may, after public comment, make appropriate 
adjustments to this list of procedures excluded from cov-
erage when performed in ambulatory surgical centers as 
the Secretary deems necessary. 
‘‘(2)(A) Subject to subparagraphs (B) and (C), the 
amount of payment to be made under this subsection for 
facility services furnished to an individual in an ambula-
tory surgical center in accordance with paragraph (1) shall 
be equal to 75 percent of the fee schedule amount deter-
mined under paragraph (3)(A) of subsection (t) for pay-
ment of the same service furnished in hospital outpatient 
departments, as adjusted under paragraphs (4)(A), (6), 
and (15) of such subsection, less a 20 percent beneficiary 
copayment. 
‘‘(B) For covered ambulatory surgical center services 
furnished on or after January 1, 2008, and before Janu-
ary 1, 2012, for which the ambulatory surgical center pay-
ment amount payable under this subsection in 2007 (in 
this subsection referred to as the ‘2007 ASC payment 
amount’) is less than 75 percent of the hospital OPD fee 
schedule amount under subsection (t) in 2007 for the 
same services, the amount of payment under this sub-
section shall be calculated as follows: 
‘‘(i) For services furnished during 2008, the 
amount shall be equal to the sum of— 
‘‘(I) 80 percent of the 2007 ASC payment 
amount, as increased by the percentage increase 
in the consumer price index for all urban con-
sumers (United States city average) as esti-
mated by the Secretary for the 12-month period 
ending with December 31, 2006; and 
‘‘(II) 20 percent of the payment amount 
under paragraph (2)(A) for 2008.
‘‘(ii) For services furnished during 2009, the 
amount shall be equal to the sum of— 
‘‘(I) 60 percent of the 2007 ASC payment 
amount as increased under clause (i)(I) and as 
further increased by the percentage increase in 
the consumer price index for all urban con-
sumers (United States city average) as esti-
mated by the Secretary for the 12-month period 
ending with December 31, 2007; and 
‘‘(II) 40 percent of the payment amount 
under paragraph (2)(A) for 2009. 
‘‘(iii) For services furnished during 2010, the 
amount shall be equal to the sum of— 
‘‘(I) 40 percent of the 2007 ASC payment 
amount as increased under clauses (i)(I) and 
(ii)(I) and as further increased by the percent-
age increase in the consumer price index for all 
urban consumers (United States city average) 
as estimated by the Secretary for the 12-month 
period ending with December 31, 2008; and 
‘‘(II) 60 percent of the payment amount 
under paragraph (2)(A) for 2010. 
‘‘(iv) For services furnished during 2011, the 
amount shall be equal to the sum of—
‘‘(I) 20 percent of the 2007 ASC payment 
amount as increased under clauses (i)(I), (ii)(I), 
and (iii)(I) and as further increased by the per-
centage increase in the consumer price index for 
all urban consumers (United States city aver-
age) as estimated by the Secretary for the 12- 
month period ending with December 31, 2009; 
and 
‘‘(II) 80 percent of the payment amount 
under paragraph (2)(A) for 2011. 
‘‘(C) For covered ambulatory surgical center services 
for which the 2007 ASC payment amount is— 
‘‘(i) greater than 75 percent, but less than 100 
percent, of the hospital OPD fee schedule amount 
under subsection (t) in 2007 for the same services, 
the amount of payment under this subsection shall 
be the greater of the 2007 ASC payment amount 
or— 
‘‘(I) for services furnished in 2008, the 
payment amount under subparagraph (B)(i); 
‘‘(II) for services furnished in 2009, the 
payment amount under subparagraph (B)(ii); 
‘‘(III) for services furnished in 2010, the 
payment amount under subparagraph (B)(iii);
‘‘(IV) for services furnished in 2011, the 
payment amount under subparagraph (B)(iv); 
or 
‘‘(V) in 2012 and subsequent years, the 
payment amount under subparagraph (A), 
but in no case in excess of the then applicable hos-
pital OPD fee schedule amount; or 
‘‘(ii) greater than the hospital OPD fee sched-
ule amount under subsection (t) in 2007 for the 
same services, the amount of payment under this 
subsection— 
‘‘(I) for services furnished during 2008, is 
equal to the midpoint between the 2007 ASC 
payment amount and 100 percent of such 2007 
hospital OPD fee schedule amount; or 
‘‘(II) for services furnished in a subsequent 
year is equal to the greater of the 2007 hospital 
OPD fee schedule amount or the payment 
amount specified under subclause (I) through 
(V) of clause (i) for the year involved, but but 
in no case in excess of the then applicable hos-
pital OPD fee schedule amount.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1832(a)(2)(F)(i) of such Act (42 
U.S.C. 1395k(a)(2)(F)(i)) is amended—
(A) by striking ‘‘section 1833(i)(1)(A)’’ 
and inserting ‘‘section 1833(i)(1)’’; 
(B) by striking ‘‘the standard overhead 
amount 
as 
determined 
under 
section 
1833(i)(2)(A)’’ and inserting ‘‘the amount de-
termined under section 1833(i)(2)’’; and 
(C) by striking all that follows ‘‘as full 
payment for such services’’ and inserting ‘‘, 
or’’. 
(2) Section 1833(a)(1)(G) of such Act (42 
U.S.C. 1395l(a)(1)(G)) is amended— 
(A) by striking ‘‘subsection (i)(1)(A)’’ and 
inserting ‘‘subsection (i)(1)’’; 
(B) by striking ‘‘for services furnished be-
ginning’’ and all that follows through ‘‘sub-
section (i)(2)(D)’’; and 
(C) by striking ‘‘such revised payment sys-
tem’’ and inserting ‘‘under subsection (i)(2)’’. 
(3) Section 1833(a)(4) of such Act (42 U.S.C. 
1395l(a)(4)) is amended— 
(A) by striking ‘‘section 1833(i)(1)(A)’’ 
and inserting ‘‘subsection (i)(1)’’; and 
(B) by striking ‘‘paragraph (2) or (3) of 
subsection 
(i)’’ 
and 
inserting 
‘‘subsection 
(i)(1)’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to ambulatory surgical center serv-
ices furnished on or after January 1, 2008. 
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