I 
108TH CONGRESS 
1ST SESSION H. R. 2473
To amend title XVIII of the Social Security Act to provide for a voluntary 
program for prescription drug coverage under the Medicare Program, 
to modernize the Medicare Program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 16, 2003
Mr. THOMAS (for himself and Mr. TAUZIN) introduced the following bill; 
which was referred jointly to the Committees on Energy and Commerce, 
and Ways and Means 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for a voluntary program for prescription drug coverage 
under the Medicare Program, to modernize the Medicare 
Program, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU-
RITY ACT; REFERENCES TO BIPA AND SEC-
RETARY; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Medicare Prescription Drug and Modernization Act of 
2003’’.
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this 
Act an amendment is expressed in terms of an amendment 
to or repeal of a section or other provision, the reference 
shall be considered to be made to that section or other 
provision of the Social Security Act. 
(c) BIPA; SECRETARY.—In this Act: 
(1) BIPA.—The term ‘‘BIPA’’ means the 
Medicare, Medicaid, and SCHIP Benefits Improve-
ment and Protection Act of 2000, as enacted into 
law by section 1(a)(6) of Public Law 106–554. 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(d) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; amendments to Social Security Act; references to BIPA and 
Secretary; table of contents. 
TITLE I—MEDICARE PRESCRIPTION DRUG BENEFIT 
Sec. 101. Establishment of a medicare prescription drug benefit. 
‘‘PART D—VOLUNTARY PRESCRIPTION DRUG BENEFIT PROGRAM 
‘‘Sec. 1860D–1. Benefits; eligibility; enrollment; and coverage period. 
‘‘Sec. 1860D–2. Requirements for qualified prescription drug coverage. 
‘‘Sec. 1860D–3. Beneficiary protections for qualified prescription drug cov-
erage. 
‘‘Sec. 1860D–4. Requirements for and contracts with prescription drug 
plan (PDP) sponsors. 
‘‘Sec. 1860D–5. Process for beneficiaries to select qualified prescription 
drug coverage. 
‘‘Sec. 1860D–6. Submission of bids and premiums. 
‘‘Sec. 1860D–7. Premium and cost-sharing subsidies for low-income indi-
viduals. 
‘‘Sec. 1860D–8. Subsidies for all medicare beneficiaries for qualified pre-
scription drug coverage. 
‘‘Sec. 1860D–9. Medicare Prescription Drug Trust Fund.
‘‘Sec. 1860D–10. Definitions; application to medicare advantage and 
EFFS programs; treatment of references to provisions in 
part C. 
Sec. 102. Offering of qualified prescription drug coverage under Medicare Ad-
vantage and enhanced fee-for-service (EFFS) program. 
Sec. 103. Medicaid amendments. 
‘‘Sec. 1935. Special provisions relating to medicare prescription drug ben-
efit. 
Sec. 104. Medigap transition. 
Sec. 105. Medicare prescription drug discount card endorsement program. 
Sec. 106. Disclosure of return information for purposes of carrying out medi-
care catastrophic prescription drug program. 
Sec. 107. State pharmaceutical assistance transition commission. 
TITLE II—MEDICARE ENHANCED FEE-FOR-SERVICE AND 
MEDICARE ADVANTAGE PROGRAMS; MEDICARE COMPETITION 
Sec. 200. Medicare modernization and revitalization. 
Subtitle A—Medicare Enhanced Fee-for-Service Program 
Sec. 201. Establishment of enhanced fee-for-service (EFFS) program under 
medicare. 
‘‘PART E—ENHANCED FEE-FOR-SERVICE PROGRAM 
‘‘Sec. 1860E–1. Offering of enhanced fee-for-service plans throughout the 
United States. 
‘‘Sec. 1860E–2. Offering of enhanced fee-for-service (EFFS) plans. 
‘‘Sec. 1860E–3. Submission of bids; beneficiary savings; payment of plans. 
‘‘Sec. 1860E–4. Premiums; organizational and financial requirements; es-
tablishment of standards; contracts with EFFS organiza-
tions. 
Subtitle B—Medicare Advantage Program 
CHAPTER 1—IMPLEMENTATION OF PROGRAM 
Sec. 211. Implementation of medicare advantage program. 
Sec. 212. Medicare advantage improvements. 
CHAPTER 2—IMPLEMENTATION OF COMPETITION PROGRAM 
Sec. 221. Competition program beginning in 2006. 
CHAPTER 3—ADDITIONAL REFORMS 
Sec. 231. Making permanent change in medicare advantage reporting deadlines 
and annual, coordinated election period. 
Sec. 232. Avoiding duplicative State regulation. 
Sec. 233. Specialized medicare advantage plans for special needs beneficiaries. 
Sec. 234. Medicare MSAs. 
Sec. 235. Extension of reasonable cost contracts. 
Subtitle C—Application of FEHBP-Style Competitive Reforms 
Sec. 241. Application of FEHBP-style competitive reform beginning in 2010. 
TITLE III—COMBATTING WASTE, FRAUD, AND ABUSE
Sec. 301. Medicare secondary payor (MSP) provisions. 
Sec. 302. Competitive acquisition of certain items and services. 
Sec. 303. Competitive acquisition of covered outpatient drugs and biologicals. 
Sec. 304. Demonstration project for use of recovery audit contractors. 
TITLE IV—RURAL HEALTH CARE IMPROVEMENTS 
Sec. 401. Enhanced disproportionate share hospital (DSH) treatment for rural 
hospitals and urban hospitals with fewer than 100 beds. 
Sec. 402. Immediate establishment of uniform standardized amount in rural 
and small urban areas. 
Sec. 403. Establishment of essential rural hospital classification. 
Sec. 404. More frequent update in weights used in hospital market basket. 
Sec. 405. Improvements to critical access hospital program. 
Sec. 406. Redistribution of unused resident positions. 
Sec. 407. Two-year extension of hold harmless provisions for small rural hos-
pitals and sole community hospitals under prospective payment 
system for hospital outpatient department services. 
Sec. 408. Exclusion of certain rural health clinic and federally qualified health 
center services from the prospective payment system for skilled 
nursing facilities. 
Sec. 409. Recognition of attending nurse practitioners as attending physicians 
to serve hospice patients. 
Sec. 410. Improvement in payments to retain emergency capacity for ambu-
lance services in rural areas. 
Sec. 411. One-year increase for home health services furnished in a rural area. 
Sec. 412. Providing safe harbor for certain collaborative efforts that benefit 
medically underserved populations. 
Sec. 413. GAO study of geographic differences in payments for physicians’ 
services. 
Sec. 414. Treatment of missing cost reporting periods for sole community hos-
pitals. 
TITLE V—PROVISIONS RELATING TO PART A 
Subtitle A—Inpatient Hospital Services 
Sec. 501. Revision of acute care hospital payment updates. 
Sec. 502. Recognition of new medical technologies under inpatient hospital 
PPS. 
Sec. 503. Increase in Federal rate for hospitals in Puerto Rico. 
Sec. 504. Wage index adjustment reclassification reform . 
Sec. 505. MedPAC report on specialty hospitals. 
Subtitle B—Other Provisions 
Sec. 511. Payment for covered skilled nursing facility services. 
Sec. 512. Coverage of hospice consultation services. 
TITLE VI—PROVISIONS RELATING TO PART B 
Subtitle A—Physicians’ Services 
Sec. 601. Revision of updates for physicians’ services. 
Sec. 602. Studies on access to physicians’ services. 
Sec. 603. MedPAC report on payment for physicians’ services.
Subtitle B—Preventive Services 
Sec. 611. Coverage of an initial preventive physical examination. 
Sec. 612. Coverage of cholesterol and blood lipid screening. 
Sec. 613. Waiver of deductible for colorectal cancer screening tests. 
Sec. 614. Improved payment for certain mammography services. 
Subtitle C—Other Services 
Sec. 621. Hospital outpatient department (HOPD) payment reform. 
Sec. 622. Payment for ambulance services. 
Sec. 623. Renal dialysis services. 
Sec. 624. One-year moratorium on therapy caps; provisions relating to reports. 
Sec. 625. Adjustment to payments for services furnished in ambulatory surgical 
centers. 
Sec. 626. Payment for certain shoes and inserts under the fee schedule for 
orthotics and prosthetics. 
Sec. 627. Waiver of part B late enrollment penalty for certain military retirees; 
special enrollment period. 
Sec. 628. Part B deductible. 
TITLE VII—PROVISIONS RELATING TO PARTS A AND B 
Subtitle A—Home Health Services 
Sec. 701. Update in home health services. 
Sec. 702. Establishment of reduced copayment for a home health service epi-
sode of care for certain beneficiaries. 
Sec. 703. MedPAC study on medicare margins of home health agencies. 
Subtitle B—Direct Graduate Medical Education 
Sec. 711. Extension of update limitation on high cost programs. 
Subtitle C—Chronic Care Improvement 
Sec. 721. Voluntary chronic care improvement under traditional fee-for-service. 
Sec. 722. Chronic care improvement under medicare advantage and enhanced 
fee-for-service programs. 
Sec. 723. Institute of Medicine report. 
Sec. 724. MedPAC report. 
Subtitle D—Other Provisions 
Sec. 731. Modifications to medicare payment advisory commission (MedPAC). 
Sec. 732. Demonstration project for medical adult day care services. 
Sec. 733. Improvements in national and local coverage determination process to 
respond to changes in technology. 
Sec. 734. Treatment of certain physician pathology services. 
TITLE VIII—MEDICARE BENEFITS ADMINISTRATION 
Sec. 801. Establishment of Medicare Benefits Administration. 
TITLE IX—REGULATORY REDUCTION AND CONTRACTING 
REFORM 
Subtitle A—Regulatory Reform
Sec. 901. Construction; definition of supplier. 
‘‘Supplier 
Sec. 902. Issuance of regulations. 
Sec. 903. Compliance with changes in regulations and policies. 
Sec. 904. Reports and studies relating to regulatory reform. 
Subtitle B—Contracting Reform 
Sec. 911. Increased flexibility in medicare administration. 
Sec. 912. Requirements for information security for medicare administrative 
contractors. 
Subtitle C—Education and Outreach 
Sec. 921. Provider education and technical assistance. 
‘‘Sec. 1889. Provider education and technical assistance. 
Sec. 922. Small provider technical assistance demonstration program. 
Sec. 923. Medicare Provider Ombudsman; Medicare Beneficiary Ombudsman. 
Sec. 924. Beneficiary outreach demonstration program. 
Sec. 925. Inclusion of additional information in notices to beneficiaries about 
skilled nursing facility benefits. 
Sec. 926. Information on medicare-certified skilled nursing facilities in hospital 
discharge plans. 
Subtitle D—Appeals and Recovery 
Sec. 931. Transfer of responsibility for medicare appeals. 
Sec. 932. Process for expedited access to review. 
Sec. 933. Revisions to medicare appeals process. 
Sec. 934. Prepayment review. 
Sec. 935. Recovery of overpayments. 
Sec. 936. Provider enrollment process; right of appeal. 
Sec. 937. Process for correction of minor errors and omissions without pur-
suing appeals process. 
Sec. 938. Prior determination process for certain items and services; advance 
beneficiary notices. 
Subtitle V—Miscellaneous Provisions 
Sec. 941. Policy development regarding evaluation and management (E & M) 
documentation guidelines. 
Sec. 942. Improvement in oversight of technology and coverage. 
Sec. 943. Treatment of hospitals for certain services under medicare secondary 
payor (MSP) provisions. 
Sec. 944. EMTALA improvements. 
Sec. 945. Emergency Medical Treatment and Active Labor Act (EMTALA) 
technical advisory group. 
Sec. 946. Authorizing use of arrangements to provide core hospice services in 
certain circumstances. 
Sec. 947. Application of osha bloodborne pathogens standard to certain hos-
pitals. 
Sec. 948. BIPA-related technical amendments and corrections. 
Sec. 949. Conforming authority to waive a program exclusion. 
Sec. 950. Treatment of certain dental claims. 
Sec. 951. Furnishing hospitals with information to compute DSH formula.