1980: The Omnibus Reconciliation Act of 1980 expanded home health services by eliminating the limit on the number of home health visits, the prior hospitalization requirement, and the deductible for any Part B benefits. It also required the Secretary to develop a list of surgical procedures that could be done on an outpatient basis in an ambulatory surgical center and would be reimbursed on a prospective payment system. The "Baucus Amendments" brought Medicare supplemental insurance, also called "Medigap," under federal oversight and established a voluntary certification program for Medigap policies.

1981: The Omnibus Budget Reconciliation Act of 1981 (OBRA 1981) included provisions to slow the growth in Medicare spending, including a change that resulted in an increase in the inpatient hospital deductible.

1982: The Tax Equity and Fiscal Responsibility Act (TEFRA) increased the Part B premium to cover 25% of program costs as part of policies designed to slow the growth of Medicare spending. Hospice services for the terminally ill were added to Medicare's covered benefits. TEFRA facilitated HMOs' participation in the Medicare program and established a risk-based prospective payment system for these plans. The Act also expanded HCFA's quality oversight efforts by replacing Professional Standards Review Organizations (PSROs) with Peer Review Organizations (PROs). TEFRA imposed a ceiling on the amount Medicare would pay for a hospital discharge and required HHS to submit a plan for prospective payments to hospitals and nursing homes. TEFRA required federal employees to begin paying the HI payroll tax.

1984: The Deficit Reduction Act of 1984 (DEFRA) froze physician fees, established the Participating Physicians' Program, and established fee schedules for laboratory services, all of which were intended to slow the growth of Medicare's spending and constrain the federal deficit.