Medicare Fee-for-Service Modifications and Medicaid Provisions of H.R. 1 as Enacted Page: 4 of 111
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Medicare Fee-for-Service Modifications
and Medicaid Provisions of
H.R. 1 as Enacted
On November 22, 2003, the House of Representatives voted 220 to 215 to
approve the conference report on H.R. 1, the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003. The Senate, on November 24th,
voted 54 to 44 to approve the conference report. The bill was signed by the President
in a ceremony on December 8th. The legislation adds a prescription drug benefit to
Medicare and replaces the existing Medicare+Choice program with a new
MedicareAdvantage program that establishes managed care payments based on a
system of bids and benchmarks. The bill also contains numerous provisions that
would generally increase fee-for-service payments within Medicare's Part A and Part
B program (also known as traditional Medicare), especially for rural health care
providers; numerous regulatory and administrative practices will also be modified.
This report discusses the fee-for-service (FFS) provisions of the legislation, those
affecting Medicaid as well as the Medicare cost containment provisions'. It
compares the provisions in the bill as enacted with those in the Medicare reform bills
that were originally passed by the Senate and the House.
The Medicare FFS provisions in the bill are found primarily in Titles GGIII
through VIII; some FFS provisions are included in Titles VIII through X as noted.
The cost containment provisions are in Title VIII and the Medicaid and other
provisions are in Title X. An overview of the entire legislation can be found in CRS
Changes to Medicare's Fee for Service Program
The legislation contains extensive changes to Medicare's FFS program,
including payment increases and, in certain instances, decreases; development of
competitive acquisition programs; implementation or refinement of other prospective
payment systems (notably, the development of an end-stage renal disease (ESRD)
basic payment system); expansion of covered preventive benefits; establishment of
demonstration programs; and required studies. The anticipated financial impact of
these changes on any individual provider, physician, or supplier will vary depending
on many factors, such as the unique characteristics of the individual or entity
participating in Medicare as well as the number and type of services provided to the
'Cost containment provisions require an analysis of general tax revenue financing of the
Medicare program as well as a Presidential and Congressional response when "excess
general revenue financing of Medicare" exceeds a threshold of 45%.
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Medicare Fee-for-Service Modifications and Medicaid Provisions of H.R. 1 as Enacted, report, January 16, 2004; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc806778/m1/4/: accessed May 25, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.