MediFair Act of 2005

        [Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 868 Introduced in House (IH)]

109th CONGRESS
1st Session
H. R. 868

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.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

February 16, 2005

Mr. Smith of Washington (for himself, Mr. Baird, Mr. Dicks, Mr. Inslee,
Mr. Larsen of Washington, and Mr. McDermott) 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 improve the
provision of items and services provided to Medicare beneficiaries
residing in rural areas.

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 2005''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Regional inequities in medicare reimbursement have
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 reward 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 MedicareAdvantage 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.

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. 1898. (a) In General.--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 2006) 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 2005), 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 2005), 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).
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