II 110th CONGRESS 1st Session S. 498 IN THE SENATE OF THE UNITED STATES February 6, 2007 Mr. Feingold (for himself and Ms. Collins) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to improve the Medicare program for beneficiaries residing in rural areas.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Rural Medicare Equity Act of 2007. (b)

Table of contents

The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Elimination of geographic physician work adjustment factor from geographic indices used to adjust payments under the physician fee schedule. Sec. 3. Clinical rotation demonstration project. Sec. 4. Medicare rural health care quality improvement demonstration projects. Sec. 5. Ensuring proportional representation of interests of rural areas on the Medicare Payment Advisory Commission. Sec. 6. Implementation of GAO recommendations regarding geographic adjustment indices under the Medicare physician fee schedule.

2.

Elimination of geographic physician work adjustment factor from geographic indices used to adjust payments under the physician fee schedule

(a)

Findings

Congress finds the following: (1)Variations in the geographic physician work adjustment factors under section 1848(e) of the Social Security Act (42 U.S.C. 1395w–4(e)) result in inequity between localities in payments under the Medicare physician fee schedule. (2)Beneficiaries under the Medicare program that reside in areas where such adjustment factors are high have relatively more access to services that are paid based on such fee schedule. (3)There are a number of studies indicating that the market for health care professionals has become nationalized and historically low labor costs in rural and small urban areas have disappeared. (4)Elimination of the adjustment factors described in paragraph (1) would equalize the reimbursement rate for services reimbursed under the Medicare physician fee schedule while remaining budget-neutral. (b)

Elimination

Section 1848(e) of the Social Security Act (42 U.S.C. 1395w–4(e)) is amended— (1)in paragraph (1)(A)(iii), by striking an index and inserting for services provided before January 1, 2008, an index; and (2)in paragraph (2), by inserting , for services provided before January 1, 2008, after paragraph (4)), and. (c)

Budget neutrality adjustment for elimination of geographic physician work adjustment factor

Section 1848(d) of the Social Security Act (42 U.S.C. 1395w–4(d)), as amended by section 101 of the Medicare Improvement and Extension Act of 2006, is amended— (1)in paragraph (1)(A), by striking The conversion and inserting Subject to paragraph (8), the conversion; and (2)by adding at the end the following new paragraph: (8)

Budget neutrality adjustment for Elimination of geographic physician work adjustment factor

Before applying an update for a year under this subsection, the Secretary shall (if necessary) provide for an adjustment to the conversion factor for that year to ensure that the aggregate payments under this part in that year shall be equal to aggregate payments that would have been made under such part in that year if the amendments made by section 2(b) of the Rural Medicare Equity Act of 2007 had not been enacted. .

3.

Clinical rotation demonstration project

(a)

Establishment

Not later than 6 months after the date of enactment of this Act, the Secretary shall establish a demonstration project that provides for demonstration grants designed to provide financial or other incentives to hospitals to attract educators and clinical practitioners so that hospitals that serve beneficiaries under the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) who are residents of underserved areas may host clinical rotations. (b)

Duration of project

The demonstration project shall be conducted over a 5-year period. (c)

Waiver

The Secretary shall waive such provisions of titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq. and 1395 et seq.) as may be necessary to conduct the demonstration project under this section. (d)

Reports

The Secretary shall submit to the appropriate committees of Congress interim reports on the demonstration project and a final report on such project within 6 months after the conclusion of the project together with recommendations for such legislative or administrative action as the Secretary determines appropriate. (e)

Funding

There are appropriated to the Secretary $20,000,000 to carry out this section. (f)

Definitions

In this section: (1)

Hospital

The term hospital means any subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)) that had indirect or direct costs of medical education during the most recent cost reporting period preceding the date of enactment of this Act. (2)

Secretary

The term Secretary means the Secretary of Health and Human Services. (3)

Underserved area

The term underserved area means such medically underserved urban areas and medically underserved rural areas as the Secretary may specify.

4.

Medicare rural health care quality improvement demonstration projects

(a)

Establishment

(1)

In general

Not later than 6 months after the date of enactment of this Act, the Secretary of Health and Human Services (in this section referred to as the Secretary) shall establish not more that 10 demonstration projects to provide for improvements, as recommended by the Institute of Medicine, in the quality of health care provided to individuals residing in rural areas. (2)

Activities

Activities under the projects may include public health surveillance, emergency room videoconferencing, virtual libraries, telemedicine, electronic health records, data exchange networks, and any other activities determined appropriate by the Secretary. (3)

Consultation

The Secretary shall consult with the Rural Health Quality Advisory Commission, the Office of Rural Health Policy of the Health Resources and Services Administration, the Agency for Healthcare Research and Quality, and the Centers for Medicare & Medicaid Services in carrying out the provisions of this section. (b)

Duration

Each demonstration project under this section shall be conducted over a 4-year period. (c)

Demonstration project sites

The Secretary shall ensure that the demonstration projects under this section are conducted at a variety of sites representing the diversity of rural communities in the Nation. (d)

Waiver

The Secretary shall waive such provisions of titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq. and 1395 et seq.) as may be necessary to conduct the demonstration projects under this section. (e)

Independent evaluation

The Secretary shall enter into an arrangement with an entity that has experience working directly with rural health systems for the conduct of an independent evaluation of the projects conducted under this section. (f)

Reports

The Secretary shall submit to the appropriate committees of Congress interim reports on each demonstration project and a final report on such project within 6 months after the conclusion of the project. Such reports shall include recommendations regarding the expansion of the project to other areas and recommendations for such other legislative or administrative action as the Secretary determines appropriate. (g)

Funding

There are appropriated to the Secretary $50,000,000 to carry out this section.

5.

Ensuring proportional representation of interests of rural areas on the Medicare Payment Advisory Commission

(a)

In general

Section 1805(c)(2) of the Social Security Act (42 U.S.C. 1395b–6(c)(2)) is amended— (1)in subparagraph (A), by inserting consistent with subparagraph (E) after rural representatives; and (2)by adding at the end the following new subparagraph: (E)

Proportional representation of interests of rural areas

In order to provide a balance between urban and rural representatives under subparagraph (A), the proportion of members who represent the interests of health care providers and Medicare beneficiaries located in rural areas shall be no less than the proportion, of the total number of Medicare beneficiaries, who reside in rural areas. . (b)

Effective date

The amendments made by subsection (a) shall apply with respect to appointments made to the Medicare Payment Advisory Commission after the date of the enactment of this Act.

6.

Implementation of GAO recommendations regarding geographic adjustment indices under the Medicare physician fee schedule

Not later than 180 days after the date of enactment of this Act, the Secretary of Health and Human Services shall implement the recommendations contained in the March 2005 GAO report 05–119 entitled Medicare Physician Fees: Geographic Adjustment Indices are Valid in Design, but Data and Methods Need Refinement..