areas under section 332(a) of the Public Health
Service Act (42 U.S.C. 254e(a)).
‘‘(3) DESIGNATION OF AREAS.—The Secretary
shall designate an area in a State selected under
paragraph (5) as a medicare health professional
shortage area if the Secretary determines, using the
methodology established under subsection (b)(1)(B),
that individuals enrolled under part B and residing
in the area have inadequate access to primary care
physicians.
‘‘(4) TERMS AND CONDITIONS.—
‘‘(A) INCENTIVE
PAYMENT
IN
ADDITION
TO PAYMENT OTHERWISE MADE.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), the incentive payment made under the
demonstration project for a physician’s
service shall be in addition to the amount
otherwise made for the service under part
B.
‘‘(ii) NO PAYMENTS UNDER THE IN-
CENTIVE PAYMENT PROGRAM IN A DEM-
ONSTRATION
STATE
DURING
OPERATION
OF THE DEMONSTRATION PROGRAM.—Sub-
ject to subparagraph (D), notwithstanding
section 1833(m), during the operation of
the demonstration project in a State se-
lected under paragraph (5), the Secretary
may not make any incentive payment to
any physician under such section for any
service furnished in any part of such State,
regardless of—
‘‘(I) whether the physician is eli-
gible for bonus payments under the
demonstration program; and
‘‘(II) where the service was fur-
nished in the State.
‘‘(B) AMOUNT OF INCENTIVE PAYMENT.—
The amount of the incentive payment for a phy-
sician’s service furnished under the demonstra-
tion project shall be an amount equal to 40 per-
cent of the payment amount for the service
under part B.
‘‘(C) NO
EFFECT
ON
AMOUNT
OF
CO-
INSURANCE
AN
INDIVIDUAL
IS
REQUIRED
TO
PAY.—The amount of any coinsurance that an
individual enrolled under part B is responsible
for paying with respect to a physicians’ service
furnished to the individual shall be determined
as if this section had not been enacted.
‘‘(D) NO EFFECT ON PAYMENTS TO CRIT-
ICAL ACCESS HOSPITALS.—The amount of pay-
ment for outpatient critical access services of a
critical access hospital under section 1834(g)
shall be determined as if this section had not
been enacted.
‘‘(5) DEMONSTRATION
SITES.—The Secretary
shall conduct the demonstration project in 5 States
selected by the Secretary as demonstration sites.
‘‘(6) AUTOMATION OF INCENTIVE PAYMENTS.—
‘‘(A) IN GENERAL.—Under the demonstra-
tion project, incentive payments under para-
graph (1)(B) to a primary care physician shall
be made automatically to the physician rather
than the physician being responsible for deter-
mining when a payment is required to be made
under that paragraph.
‘‘(B) INCENTIVE PAYMENT BASED ON ZIP
CODES.—In order to comply with subparagraph
(A), the Secretary shall establish procedures in
which the amount of payment otherwise made
for a physician’s service is automatically in-
creased by the amount of the incentive payment
under the demonstration project if the service
was furnished in any zip code that is entirely or
partially in a designated medicare health pro-
fessional shortage area in a State selected
under paragraph (5).
‘‘(7) DURATION.—The demonstration project
shall be conducted for a 3-year period. The period
for establishing the methodology under subsection
(b) shall not be counted for purposes determining
such 3-year period.
‘‘(b) ESTABLISHMENT OF METHODOLOGY FOR AS-
SISTING
SECRETARY
IN
DESIGNATING
MEDICARE
HEALTH PROFESSIONAL SHORTAGE AREAS.—
‘‘(1) IN GENERAL.—The Secretary shall select
1 or more Federal rural health research centers
within the Health Resources Services Administration
to establish a methodology to assist the Secretary in
designating areas within the States selected under
subsection (a)(5) as medicare health professional
shortage areas pursuant to subsection (a)(3).
‘‘(2) RULES
FOR
ESTABLISHING
METHOD-
OLOGY.—
‘‘(A) IN GENERAL.—The methodology es-
tablished under paragraph (1) shall address—
‘‘(i) how to measure the percentage of
the total population in an area that con-
sists of individuals enrolled under part B;
and
‘‘(ii) the appropriate ratio of such in-
dividuals to primary care physicians in an
area in order to ensure that such individ-
uals have adequate access to services fur-
nished by such physicians.
‘‘(B) METHODOLOGY MAY BE SIMILAR TO
METHODOLOGIES
USED
UNDER
THE
PUBLIC
HEALTH SERVICE ACT.—The methodology es-
tablished under paragraph (1) may be similar
to methodologies utilized by the Secretary for
designating areas, and population groups within
areas, as health professional shortage areas
under section 332(a) of the Public Health Serv-
ice Act (42 U.S.C. 254e(a)).
‘‘(C) CONSULTATION.—The Federal rural
health research centers selected under para-
graph (1) shall consult with the State and local
medical societies of the States selected under
subsection (a)(5) in establishing the method-
ology under paragraph (1).
‘‘(c) NO EFFECT ON DESIGNATION AS A HEALTH
PROFESSIONAL SHORTAGE AREA.—Except as provided in
subsection (a)(4)(A)(ii), the designation of an area as a
medicare health professional shortage area under sub-
section (a)(3) shall have no effect on the designation of
such area as a health professional shortage area under
section 332(a) of the Public Health Service Act (42 U.S.C.
254e(a)).
‘‘(d) WAIVER
AUTHORITY.—The Secretary may
waive such requirements of title XI and this title as may
be necessary for the purpose of carrying out the dem-
onstration project.
‘‘(e) REPORT.—
‘‘(1) IN GENERAL.—Not later than 6 months
after the completion of the demonstration project,
the Secretary shall submit to Congress a report on
such project.
‘‘(2) CONTENTS.—The report submitted under
paragraph (1) shall contain—
‘‘(A) an evaluation of whether the dem-
onstration project has had the effect of stabi-
lizing, maintaining, or increasing access of indi-
viduals enrolled under part B to physicians’
services furnished by primary care physicians,
including whether the amount of the incentive
payment is adequate to stabilize, maintain, or
increase such access and if not, then what
amount will;