TABLE 4.1 Major Legislation Relating to the Medicare Program

Year

Title and Description

1935

SOCIAL SECURITY ACT

Extended the federal government’s role in underwriting health care for the elderly by providing monthly cash payments from federal funds for medical expenses.

1965

SOCIAL SECURITY AMENDMENTS

Title XVIII, Medicare, established compulsory Hospital Insurance (Part A) and optional Supplementary Medical Insurance (Part B) for persons age 65 and older. Benefits for Part A are financed by a payroll tax through the Social Security System, and Part B benefits are financed through a monthly premium.

1972

SOCIAL SECURITY AMENDMENTS

(P.L. 92–603)

Extended Medicare benefits to the disabled and end-stage renal disease patients. Voluntary enrollment in Part A through a premium payment was made available to people age 65 and older otherwise not eligible for Part A. Established the Professional Standards Review Organization (PSRO) program to control health care costs and improve quality of care through utilization and quality monitoring.

1981

OMNIBUS BUDGET RECONCILIATION ACT

(OBRA) (P.L. 97–35)

Eliminated the carryover from the previous year of incurred expenses for meeting the Part B deductible and raised the deductible from $60 to $75 per year. Raised the Part A deductible and coinsurance rate.

1982

TAX EQUITY AND FISCAL RESPONSIBILITY ACT

(TEFRA) (P.L. 97–248)

Established a cost-per-case basis for reimbursement and placed a limit on the annual rate of increase in hospital revenues. Extended Medicare coverage to all federal employees who previously had not been eligible. Replaced the PSRO program with the Utilization and Quality Control Peer Review Organization (PRO) program for utilization and quality monitoring.

1983

SOCIAL SECURITY AMENDMENTS

(P.L. 98–21)

Established the Prospective Payment System (PPS) for reimbursement of hospital services. The hospital is paid a single price per discharge based on prices set prospectively for diagnosis-related groups (DRGs).



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