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Text of the Medicare Physician Payment Reform Act of 2009

This bill was enacted after being signed by the President on February 27, 2010. The text of the bill below is as of Oct 29, 2009 (Introduced).

This is not the latest text of this bill.

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Source: GPO

I

111th CONGRESS

1st Session

H. R. 3961

IN THE HOUSE OF REPRESENTATIVES

October 29, 2009

(for himself, Mr. Rangel, Mr. Waxman, Mr. George Miller of California, Mr. Stark, Mr. Pallone, and Mr. Andrews) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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 reform the Medicare SGR payment system for physicians.

1.

Short title

This Act may be cited as the Medicare Physician Payment Reform Act of 2009.

2.

Medicare sustainable growth rate reform

(a)

Transitional update for 2010

Section 1848(d) of the Social Security Act (42 U.S.C. 1395w–4(d)) is amended by adding at the end the following new paragraph:

(10)

Update for 2010

The update to the single conversion factor established in paragraph (1)(C) for 2010 shall be the percentage increase in the MEI (as defined in section 1842(i)(3)) for that year.

.

(b)

Rebasing SGR using 2009; limitation on cumulative adjustment period

Section 1848(d)(4) of such Act (42 U.S.C. 1395w–4(d)(4)) is amended—

(1)

in subparagraph (B), by striking subparagraph (D) and inserting subparagraphs (D) and (G); and

(2)

by adding at the end the following new subparagraph:

(G)

Rebasing using 2009 for future update adjustments

In determining the update adjustment factor under subparagraph (B) for 2011 and subsequent years—

(i)

the allowed expenditures for 2009 shall be equal to the amount of the actual expenditures for physicians’ services during 2009; and

(ii)

the reference in subparagraph (B)(ii)(I) to April 1, 1996 shall be treated as a reference to January 1, 2009 (or, if later, the first day of the fifth year before the year involved).

.

(c)

Limitation on physicians’ services included in target growth rate computation to services covered under physician fee schedule

Effective for services furnished on or after January 1, 2009, section 1848(f)(4)(A) of such Act is amended by striking (such as clinical and all that follows through in a physician’s office and inserting for which payment under this part is made under the fee schedule under this section, for services for practitioners described in section 1842(b)(18)(C) on a basis related to such fee schedule, or for services described in section 1861(p) (other than such services when furnished in the facility of a provider of services).

(d)

Establishment of separate target growth rates for categories of services

(1)

Establishment of service categories

Subsection (j) of section 1848 of the Social Security Act (42 U.S.C. 1395w–4) is amended by adding at the end the following new paragraph:

(5)

Service categories

For services furnished on or after January 1, 2009, each of the following categories of physicians’ services (as defined in paragraph (3)) shall be treated as a separate service category:

(A)

Evaluation and management services that are procedure codes (for services covered under this title) for—

(i)

services in the category designated Evaluation and Management in the Health Care Common Procedure Coding System (established by the Secretary under subsection (c)(5) as of December 31, 2009, and as subsequently modified by the Secretary); and

(ii)

preventive services (as defined in section 1861(iii)) for which payment is made under this section.

(B)

All other services not described in subparagraph (A).

Service categories established under this paragraph shall apply without regard to the specialty of the physician furnishing the service.

.

(2)

Establishment of separate conversion factors for each service category

Subsection (d)(1) of section 1848 of the Social Security Act (42 U.S.C. 1395w–4) is amended—

(A)

in subparagraph (A)—

(i)

by designating the sentence beginning The conversion factor as clause (i) with the heading Application of single conversion factor.— and with appropriate indentation;

(ii)

by striking The conversion factor and inserting Subject to clause (ii), the conversion factor; and

(iii)

by adding at the end the following new clause:

(ii)

Application of multiple conversion factors beginning with 2011

(I)

In general

In applying clause (i) for years beginning with 2011, separate conversion factors shall be established for each service category of physicians’ services (as defined in subsection (j)(5)) and any reference in this section to a conversion factor for such years shall be deemed to be a reference to the conversion factor for each of such categories.

(II)

Initial conversion factors

Such factors for 2011 shall be based upon the single conversion factor for the previous year multiplied by the update established under paragraph (11) for such category for 2011.

(III)

Updating of conversion factors

Such factor for a service category for a subsequent year shall be based upon the conversion factor for such category for the previous year and adjusted by the update established for such category under paragraph (11) for the year involved.

; and

(B)

in subparagraph (D), by striking other physicians’ services and inserting for physicians’ services described in the service category described in subsection (j)(5)(B).

(3)

Establishing updates for conversion factors for service categories

Section 1848(d) of the Social Security Act (42 U.S.C. 1395w–4(d)), as amended by subsection (a), is amended—

(A)

in paragraph (4)(C)(iii), by striking The allowed and inserting Subject to paragraph (11)(B), the allowed; and

(B)

by adding at the end the following new paragraph:

(11)

Updates for service categories beginning with 2011

(A)

In general

In applying paragraph (4) for a year beginning with 2011, the following rules apply:

(i)

Application of separate update adjustments for each service category

Pursuant to paragraph (1)(A)(ii)(I), the update shall be made to the conversion factor for each service category (as defined in subsection (j)(5)) based upon an update adjustment factor for the respective category and year and the update adjustment factor shall be computed, for a year, separately for each service category.

(ii)

Computation of allowed and actual expenditures based on service categories

In computing the prior year adjustment component and the cumulative adjustment component under clauses (i) and (ii) of paragraph (4)(B), the following rules apply:

(I)

Application based on service categories

The allowed expenditures and actual expenditures shall be the allowed and actual expenditures for the service category, as determined under subparagraph (B).

(II)

Application of category specific target growth rate

The growth rate applied under clause (ii)(II) of such paragraph shall be the target growth rate for the service category involved under subsection (f)(5).

(B)

Determination of allowed expenditures

In applying paragraph (4) for a year beginning with 2010, notwithstanding subparagraph (C)(iii) of such paragraph, the allowed expenditures for a service category for a year is an amount computed by the Secretary as follows:

(i)

For 2010

For 2010:

(I)

Total 2009 actual expenditures for all services included in SGR computation for each service category

Compute total actual expenditures for physicians’ services (as defined in subsection (f)(4)(A)) for 2009 for each service category.

(II)

Increase by growth rate to obtain 2010 allowed expenditures for service category

Compute allowed expenditures for the service category for 2010 by increasing the allowed expenditures for the service category for 2009 computed under subclause (I) by the target growth rate for such service category under subsection (f) for 2010.

(ii)

For subsequent years

For a subsequent year, take the amount of allowed expenditures for such category for the preceding year (under clause (i) or this clause) and increase it by the target growth rate determined under subsection (f) for such category and year.

.

(4)

Application of separate target growth rates for each category

(A)

In general

Section 1848(f) of the Social Security Act (42 U.S.C. 1395w–4(f)) is amended by adding at the end the following new paragraph:

(5)

Application of separate target growth rates for each service category beginning with 2010

The target growth rate for a year beginning with 2010 shall be computed and applied separately under this subsection for each service category (as defined in subsection (j)(5)) and shall be computed using the same method for computing the target growth rate except that the factor described in paragraph (2)(C) for—

(A)

the service category described in subsection (j)(5)(A) shall be increased by 0.02; and

(B)

the service category described in subsection (j)(5)(B) shall be increased by 0.01.

.

(B)

Use of target growth rates

Section 1848 of such Act is further amended—

(i)

in subsection (d)—

(I)

in paragraph (1)(E)(ii), by inserting or target after sustainable; and

(II)

in paragraph (4)(B)(ii)(II), by inserting or target after sustainable;

(ii)

in the heading of subsection (f), by inserting and target growth rate after sustainable growth rate;

(iii)

in subsection (f)(1)—

(I)

by striking and at the end of subparagraph (A);

(II)

in subparagraph (B), by inserting before 2010 after each succeeding year and by striking the period at the end and inserting ; and; and

(III)

by adding at the end the following new subparagraph:

(C)

November 1 of each succeeding year the target growth rate for such succeeding year and each of the 2 preceding years.

; and

(iv)

in subsection (f)(2), in the matter before subparagraph (A), by inserting after beginning with 2000 the following: and ending with 2009.

(e)

Application to health care group demonstration program and successor accountable care organization pilot program

In applying the target growth rate under subsections (d) and (f) of section 1848 of the Social Security Act to services furnished by a practitioner to beneficiaries who are attributable to a health care group under the demonstration program provided under section 1886A of such Act (or to an accountable care organization under a pilot program that is a succcessor to such demonstration program under a section of such Act), the Secretary of Health and Human Services shall develop, not later than January 1, 2012, for application beginning with 2012, a method that—

(1)

allows each such group or organization to have its own expenditure targets and updates for such practitioners, with respect to beneficiaries who are attributable to that group or organization, that are consistent with the methodologies described in such subsection (f); and

(2)

provides that the target growth rate applicable to other physicians shall not apply to such physicians to the extent that the physicians’ services are furnished through the group or organization.

In applying paragraph (1), the Secretary of Health and Human Services may apply the difference in the update under such paragraph on a claim-by-claim or lump sum basis and such a payment shall be taken into account under the demonstration or pilot program.