I
107TH CONGRESS
1ST SESSION
H. R. 3569
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
DECEMBER 20, 2001
Mr. BEREUTER (for himself, Mr. FOLEY, Mr. HALL of Texas, Mr. MCHUGH,
Mr. FROST, Mr. HEFLEY, Mr. LEACH, Mr. PETERSON of Pennsylvania,
Mr. OSBORNE, Mr. MCINTYRE, Mr. SANDLIN, Mr. BASS, Mr. GORDON,
Mr. MCINNIS, Mr. LATHAM, Mr. GREEN of Wisconsin, Mr. PETRI, Mr.
HILLIARD, Mrs. EMERSON, Mr. TOWNS, Mr. SCHAFFER, Mrs. CUBIN,
Mr. TERRY, and Mr. TURNER) 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.
This Act may be cited as the ‘‘Rural Equity Payment
Index Reform Act’’.
SEC. 2. FINDINGS.
Congress makes the following findings:
(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 in Medicare+Choice and has
put in place floors that increase monthly payments
by more than one-third in some of the lowest pay-
ment counties over what would otherwise occur. But
this change addresses only a very small fraction of
medicare beneficiaries who are presently enrolled in
Medicare+Choice plans operating 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 Medicare help to reduce aggregate
per capita payment variation as rural hospitals are
in large part located in low payment counties.
(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 medi-
care’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. 3. 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 by adding at the end
the following new subparagraph:
‘‘(D) FLOOR FOR WORK GEOGRAPHIC INDI-
CES.—
‘‘(i) IN
GENERAL.—Notwithstanding
the work geographic index otherwise cal-
culated under subparagraph (A)(iii), no
such index applied for payment under this
section shall be less than—
‘‘(I) 0.976 for services furnished
during 2002;
‘‘(II) 0.987 for services furnished
during 2003;
‘‘(III) 0.995 for services fur-
nished during 2004; and
‘‘(IV) 1.000 for services fur-
nished during 2005 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).’’.
Æ