I 
111TH CONGRESS 
1ST SESSION 
H. R. 902 
To amend title XVIII of the Social Security Act to improve the provision 
of items and services provided to Medicare beneficiaries residing in rural 
areas. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 4, 2009 
Mr. SMITH of Washington (for himself, Mr. DICKS, Mr. MCDERMOTT, Mr. 
INSLEE, Mr. BAIRD, and Mr. LARSEN of Washington) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committee on Energy and Commerce, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend title XVIII of the Social Security Act to improve 
the provision of items and services provided to Medicare 
beneficiaries residing in rural areas. 
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 ‘‘MediFair Act of 
2009’’. 
SEC. 2. FINDINGS. 
Congress makes the following findings: 
VerDate Nov 24 2008 
00:44 Feb 08, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H902.IH
H902
rfrederick on PROD1PC67 with BILLS
(1) Regional inequities in medicare reimburse-
ment have created barriers to care for seniors and 
the disabled. 
(2) The regional inequities in medicare reim-
bursement penalize States that have cost-effective 
health care delivery systems and reward those States 
with high utilization rates and that provide ineffi-
cient care. 
(3) Comparatively, in 2003, per capita spending 
under traditional Medicare was $5,661 for bene-
ficiaries in Seattle, $9,752 for those in Los Angeles, 
and $11,340 for those in Miami. 
(4) Over a lifetime, regional inequities can 
mean as much as a $125,000 difference in the cost 
of care provided per beneficiary. 
(5) Regional inequities have resulted in creating 
very different Medicare programs and amount of 
care received for seniors and the disabled based on 
where they live. 
(6) Because the Medicare Advantage rate is 
based on the fee-for-service reimbursement rate, re-
gional inequities have allowed some Medicare bene-
ficiaries access to Medicare Advantage plans with 
significantly more benefits and reduced cost sharing. 
Beneficiaries in States with lower Medicare Advan-
VerDate Nov 24 2008 
00:44 Feb 08, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H902.IH
H902
rfrederick on PROD1PC67 with BILLS
tage reimbursement rates have not benefitted to the 
same degree as beneficiaries in other parts of the 
country. 
(7) Regional inequities in medicare reimburse-
ment have created an unfair competitive advantage 
for hospitals and other health care providers in 
States that receive above average payments. Higher 
payments mean that those providers can pay higher 
salaries in a tight, competitive market. 
(8) Regional inequities in medicare reimburse-
ment, if left unchecked, will reduce access to medi-
care services and impact healthy outcomes for bene-
ficiaries. 
SEC. 3. IMPROVING FAIRNESS OF PAYMENTS TO PRO-
VIDERS UNDER THE MEDICARE FEE-FOR- 
SERVICE PROGRAM. 
Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘IMPROVING PAYMENT EQUITY UNDER THE ORIGINAL 
MEDICARE FEE-FOR-SERVICE PROGRAM 
‘‘SEC. 1899. (a) IN GENERAL.—Notwithstanding any 
other provision of law, the Secretary shall establish a sys-
tem for making adjustments to the amount of payment 
made to entities and individuals for items and services 
VerDate Nov 24 2008 
00:44 Feb 08, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H902.IH
H902
rfrederick on PROD1PC67 with BILLS
provided under the original medicare fee-for-service pro-
gram under parts A and B. 
‘‘(b) SYSTEM REQUIREMENTS.— 
‘‘(1) INCREASE FOR STATES BELOW THE NA-
TIONAL
AVERAGE.—Under the system established 
under subsection (a), if a State average per bene-
ficiary amount for a year is less than the national 
average per beneficiary amount for such year, then 
the Secretary (beginning in 2010) shall increase the 
amount of applicable payments in such a manner as 
will result (as estimated by the Secretary) in the 
State average per beneficiary amount for the subse-
quent year being equal to the national average per 
beneficiary amount for such subsequent year. 
‘‘(2) REDUCTION FOR CERTAIN STATES ABOVE 
THE
NATIONAL
AVERAGE
TO
ENHANCE
QUALITY 
CARE AND MAINTAIN BUDGET NEUTRALITY.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
ensure that the increase in payments under 
paragraph (1) does not cause the estimated 
amount of expenditures under this title for a 
year to increase or decrease from the estimated 
amount of expenditures under this title that 
would have been made in such year if this sec-
tion had not been enacted by reducing the 
VerDate Nov 24 2008 
00:44 Feb 08, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H902.IH
H902
rfrederick on PROD1PC67 with BILLS
‘‘(B) STATE.—The term ‘State’ has the 
meaning given such term in section 210(h). 
‘‘(c) BENEFICIARIES HELD HARMLESS.—The provi-
sions of this section shall not affect— 
‘‘(1) the entitlement to items and services of a 
beneficiary under this title, including the scope of 
such items and services; or 
‘‘(2) any liability of the beneficiary with respect 
to such items and services. 
‘‘(d) REGULATIONS.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Medicare Payment Advisory Commis-
sion, shall promulgate regulations to carry out this 
section. 
‘‘(2) PROTECTING
RURAL
COMMUNITIES.—In 
promulgating the regulations pursuant to paragraph 
(1), the Secretary shall give special consideration to 
rural areas.’’. 
SEC. 4. MEDPAC RECOMMENDATIONS ON HEALTHY OUT-
COMES AND QUALITY CARE. 
(a) RECOMMENDATIONS.—The Medicare Payment 
Advisory Commission established under section 1805 of 
the Social Security Act (42 U.S.C. 1395b–6) shall develop 
recommendations on policies and practices that, if imple-
mented, would encourage— 
VerDate Nov 24 2008 
00:44 Feb 08, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H902.IH
H902
rfrederick on PROD1PC67 with BILLS
(1) healthy outcomes and quality care under the 
medicare program in States with respect to which 
payments are reduced under section 1899(b)(2) of 
such Act (as added by section 3); and 
(2) the efficient use of payments made under 
the medicare program in such States. 
(b) SUBMISSION.—Not later than the date that is 9 
months after the date of enactment of this Act, the Com-
mission shall submit to Congress the recommendations de-
veloped under subsection (a). 
Æ 
VerDate Nov 24 2008 
00:44 Feb 08, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6301
E:\BILLS\H902.IH
H902
rfrederick on PROD1PC67 with BILLS