[Congressional Record Volume 148, Number 68 (Thursday, May 23, 2002)]
[Senate]
[Pages S4862-S4863]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. MURRAY (for herself and Ms. Cantwell):
  S. 2568. 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; to the Committee on Finance.
  Mrs. MURRAY. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2568

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``MediFair Act of 2002''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Regional inequities in medicare reimbursement has 
     created barriers to care for seniors and the disabled.
       (2) The regional inequities in medicare reimbursement 
     penalize States that have cost-effective health care delivery 
     systems and rewards those States with high utilization rates 
     and that provide inefficient care.
       (3) Over a lifetime, those inequities can mean as much as a 
     $50,000 difference in the cost of care provided per 
     beneficiary.
       (4) Regional inequities have resulted in creating very 
     different medicare programs for seniors and the disabled 
     based on where they live.
       (5) Because the Medicare+Choice rate is based on the fee-
     for-service reimbursement rate, regional inequities have 
     allowed some medicare beneficiaries access to plans with 
     significantly more benefits including prescription drugs. 
     Beneficiaries in States with lower reimbursement rates have 
     not benefited to the same degree as beneficiaries in other 
     parts of the country.
       (6) Regional inequities in medicare reimbursement 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.
       (7) Regional inequities in medicare reimbursement can limit 
     timely access to new technology for beneficiaries in States 
     with lower reimbursement rates.
       (8) Regional inequities in medicare reimbursement, if left 
     unchecked, will reduce access to medicare services and impact 
     healthy outcomes for beneficiaries.
       (9) Regional inequities in medicare reimbursement are not 
     just a rural versus urban problem. Many States with large 
     urban centers are at the bottom of the national average for 
     per beneficiary costs.

[[Page S4863]]

     SEC. 3. IMPROVING FAIRNESS OF PAYMENTS TO PROVIDERS 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 following new 
     section:


``improving payment equity under the original medicare fee-for-service 
                                program

       ``Sec. 1897. (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 entities and individuals for items and services provided 
     under the original medicare fee-for-service program under 
     parts A and B.
       ``(b) System Requirements.--
       ``(1) Increase for states below the national average.--
     Under the system established under subsection (a), if a State 
     average per beneficiary amount for a year is less than the 
     national average per beneficiary amount for such year, then 
     the Secretary (beginning in 2003) 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 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 section had not been enacted by reducing 
     the amount of applicable payments in each State that the 
     Secretary determines has--
       ``(i) a State average per beneficiary amount for a year 
     that is greater than the national average per beneficiary 
     amount for such year; and
       ``(ii) healthy outcome measurements or quality care 
     measurements that indicate that a reduction in applicable 
     payments would encourage more efficient use of, and reduce 
     overuse of, items and services for which payment is made 
     under this title.
       ``(B) Limitation.--The Secretary shall not reduce 
     applicable payments under subparagraph (A) to a State that--
       ``(i) has a State average per beneficiary amount for a year 
     that is greater than the national average per beneficiary 
     amount for such year; and
       ``(ii) has healthy outcome measurements or quality care 
     measurements that indicate that the applicable payments are 
     being used to improve the access of beneficiaries to quality 
     care.
       ``(3) Determination of averages.--
       ``(A) State average per beneficiary amount.--Each year 
     (beginning in 2002), 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 2002), the Secretary shall determine the 
     national average per beneficiary amount which shall be equal 
     to the average of the State average per beneficiary amount 
     determined under subparagraph (A) for the year.
       ``(4) Definitions.--In this section:
       ``(A) Applicable payments.--The term `applicable payments' 
     means payments made to entities and individuals for items and 
     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.
       ``(B) State.--The term `State' has the meaning given such 
     term in section 210(h).
       ``(c) Beneficiaries Held Harmless.--The provisions 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 consultation with the 
     Medicare Payment Advisory Commission, 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 OUTCOMES 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 
     implemented, would encourage--
       (1) healthy outcomes and quality care under the medicare 
     program in States with respect to which payments are reduced 
     under section 1897(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 Commission shall 
     submit to Congress the recommendations developed under 
     subsection (a).
                                 ______