I 108th CONGRESS 2d Session H. R. 3935 IN THE HOUSE OF REPRESENTATIVES March 10, 2004 Mr. Wu introduced the following 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 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 provide geographic equity in fee-for-service reimbursement for providers under the Medicare Program.

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Short title

This Act may be cited as the &short-title1;.

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Improving fairness of payments to providers under the Medicare fee-for-service program

Title XVIII of the Social Security Act, as amended by section 1016 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173), is amended by adding at the end the following new section:

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Improving fairness of payments under the original Medicare fee-for-service program

(a)

Establishment of system

Notwithstanding any other provision of law, the Secretary shall establish a system for making adjustments to the amount of payment made to providers of services and health care professionals for services provided under the original medicare fee-for-service program under parts A and B. (b)

System requirements

(1)

Adjustments

Under the system described in subsection (a), the Secretary (beginning in fiscal year 2005 or calendar year 2005, as the Secretary determines appropriate for the type of services involved) shall make the following adjustments: (A)

States above national average

Subject to subparagraph (C), if a State average per beneficiary amount, but for the application of this section, for a year is greater than 100 percent of the national average per beneficiary amount for such year, then the Secretary shall reduce 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 subsequent year being at 100 percent of the national average per beneficiary amount for such subsequent year. (B)

States below national average

Subject to subparagraph (C), if such a State average per beneficiary amount for a year is less than 100 percent of the national average per beneficiary amount for such year, then the Secretary 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 subsequent year being at 100 percent of the national average per beneficiary amount for such subsequent year. (C)

3-year phase in

In applying this paragraph for— (i)fiscal year 2005 or calendar year 2005, the amount of any increase or decrease under subparagraph (A) or (B) shall be 25 percent of the amount of the increase or decrease otherwise provided; (ii)fiscal year 2006 or calendar year 2006, the amount of any increase or decrease under subparagraph (A) or (B) shall be 50 percent of the amount of the increase or decrease otherwise provided; and (iii)fiscal year 2007 or calendar year 2007, the amount of any increase or decrease under subparagraph (A) or (B) shall be 75 percent of the amount of the increase or decrease otherwise provided. (2)

Determination of averages

(A)

State average per beneficiary amount

Each year (beginning in 2004), the Secretary shall determine a State average per beneficiary amount for each State which shall be equal to the Secretary’s estimate of the average amount of expenditures under the original medicare fee-for-service program under parts A and B for the year for a beneficiary enrolled under such parts that resides in the State. (B)

National average per beneficiary amount

Each year (beginning in 2004), the Secretary shall determine the national average per beneficiary amount which shall be equal to the average of the State average per beneficiary amounts determined under subparagraph (B) for the year. (3)

Applicable payments defined

In this section, the term applicable payments means payments made to providers of services and health care professionals for services provided under the original medicare fee-for-service program under parts A and B to beneficiaries enrolled under such parts that reside in the State. (c)

Beneficiaries held harmless

The provisions of this section shall not effect— (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

The Secretary, in consultation with the Medicare Payment Advisory Commission, shall promulgate regulations to carry out this section.

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