[House Report 116-690]
[From the U.S. Government Publishing Office]
116th Congress } { Rept. 116-690
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
OPIOID WORKFORCE ACT OF 2019
_______
December 24, 2020.--Committed to the Committee on the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Neal, from the Committee on Ways and Means, submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 3414]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 3414) to amend title XVIII of the Social Security
Act to provide for the distribution of additional residency
positions to help combat the opioid crisis, having considered
the same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND........................................... 4
A. Purpose and Summary................................. 4
B. Background and Need for Legislation................. 4
C. Legislative History................................. 6
II. EXPLANATION OF THE BILL.......................................... 6
A. Opioid Workforce Act of 2019........................ 6
III. VOTES OF THE COMMITTEE........................................... 8
IV. BUDGET EFFECTS OF THE BILL....................................... 9
A. Committee Estimate of Budgetary Effects............. 9
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 10
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 10
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE...... 12
A. Committee Oversight Findings and Recommendations.... 12
B. Statement of General Performance Goals and
Objectives......................................... 12
C. Information Relating to Unfunded Mandates........... 12
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 13
E. Duplication of Federal Programs..................... 13
F. Hearings............................................ 13
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED........... 13
VII. DISSENTING VIEWS............................................... 134
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Opioid Workforce Act of 2019''.
SEC. 2. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS TO HELP COMBAT
OPIOID CRISIS.
(a) In General.--Section 1886(h) of the Social Security Act (42
U.S.C. 1395ww(h)) is amended--
(1) in paragraph (4)(F)(i), by striking ``paragraphs (7) and
(8)'' and inserting ``paragraphs (7), (8), and (9)'';
(2) in paragraph (4)(H)(i), by striking ``paragraphs (7) and
(8)'' and inserting ``paragraphs (7), (8), and (9)'';
(3) in paragraph (7)(E), by inserting ``paragraph (9),''
after ``paragraph (8),''; and
(4) by adding at the end the following new paragraph:
``(9) Distribution of additional residency positions to help
combat opioid crisis.--
``(A) Additional residency positions.--During the
period of fiscal years 2022 through 2026 (and
succeeding fiscal years if the Secretary determines
that there are additional full-time-equivalent
residency positions available to distribute under
subparagraph (D)), the Secretary shall distribute
additional full-time-equivalent residency positions to
increase the otherwise applicable resident limit for
each qualifying hospital that submits a timely
application under this paragraph by such number as the
Secretary may approve, effective beginning July 1 of
the fiscal year of the increase. The aggregate number
of additional full-time-equivalent residency positions
available for distribution under this paragraph shall
be equal to 500 in fiscal year 2022 and 500 over the
period of fiscal years 2023 through 2026, distributed
in accordance with the succeeding subparagraphs of this
paragraph.
``(B) Distribution for fiscal year 2022.--
``(i) In general.--For fiscal year 2022, the
positions available for distribution for such
fiscal year (as described in subparagraph (A))
may only be distributed to hospitals that have
established (as of the date of the enactment of
this paragraph) approved programs in addiction
medicine, addiction psychiatry, or pain
medicine, as determined by the Secretary.
``(ii) Considerations in distribution.--The
Secretary shall distribute additional residency
positions under this subparagraph based on the
demonstrated likelihood, as determined by the
Secretary, of the hospital filling such
positions within the first 4 training years (as
specified by the Secretary) after the increase
would be effective.
``(iii) Requirements.--A hospital that
receives an increase in the otherwise
applicable resident limit under this
subparagraph shall ensure, during the 5-year
period beginning after the date of such
increase, that the hospital uses the positions
made available under this subparagraph for a
program described in clause (i) or a program
that is a prerequisite (as determined by the
Secretary) for such a program so described,
such as internal medicine. The Secretary may
determine whether a hospital has met the
requirements under this clause during such 5-
year period in such manner and at such time as
the Secretary determines appropriate, including
at the end of such 5-year period.
``(iv) Redistribution of positions if
hospital no longer meets certain
requirements.--In the case in which the
Secretary determines that a hospital described
in clause (iii) does not meet the requirements
of such clause, the Secretary shall--
``(I) reduce the otherwise applicable
resident limit of the hospital by the
amount by which such limit was
increased under this subparagraph; and
``(II) provide for the distribution
of positions attributable to such
reduction in accordance with the
requirements of this paragraph.
``(v) Positions not distributed during fiscal
year 2022.--If the number of full-time-
equivalent residency positions distributed
under this subparagraph is less than the
aggregate number of positions available for
distribution for fiscal year 2022 (as described
in subparagraph (A)), the difference between
such number distributed and such number
available for distribution shall be added to
the aggregate number of positions available for
distribution under subparagraph (C).
``(C) Distribution for fiscal years 2023 through
2026.--
``(i) In general.--For the period of fiscal
years 2023 through 2026, the positions
available for distribution for such period (as
described in subparagraph (A)), and any
positions made available pursuant to
subparagraph (B)(v), shall be distributed to
hospitals which demonstrate to the Secretary
that the hospital has established or will
establish an approved residency training
program in addiction medicine, addiction
psychiatry, or pain medicine.
``(ii) Considerations in distribution.--The
Secretary shall distribute additional residency
positions under this subparagraph based on the
demonstrated likelihood, as determined by the
Secretary, of the hospital filling such
positions within the first 4 training years (as
specified by the Secretary) after the increase
would be effective.
``(iii) Requirements.--A hospital that
receives an increase in the otherwise
applicable resident limit under this
subparagraph shall ensure, during the 5-year
period beginning after the date of such
increase, that the hospital uses the positions
made available under this subparagraph for a
program described in clause (i) or a program
that is a prerequisite (as determined by the
Secretary) for such a program so described,
such as internal medicine. The Secretary may
determine whether a hospital has met the
requirements under this clause during such 5-
year period in such manner and at such time as
the Secretary determines appropriate, including
at the end of such 5-year period.
``(iv) Redistribution of positions if
hospital no longer meets certain
requirements.--In the case where the Secretary
determines that a hospital described in clause
(iii) does not meet the requirements of such
clause, the Secretary shall--
``(I) reduce the otherwise applicable
resident limit of the hospital by the
amount by which such limit was
increased under this subparagraph; and
``(II) provide for the distribution
of positions attributable to such
reduction in accordance with the
requirements of this paragraph.
``(D) Distribution of remaining positions.--If the
aggregate number of positions distributed under
subparagraphs (B) and (C) during the period of fiscal
years 2022 through 2026 is less than 1000, the
Secretary shall distribute the remaining residency
positions in succeeding fiscal years according to
criteria consistent with this paragraph until such time
as the aggregate amount of positions distributed under
this paragraph is equal to 1000.
``(E) Limitation.--An individual hospital may not
receive more than 25 full-time-equivalent residency
positions under this paragraph.
``(F) Notification.--The Secretary shall notify
hospitals of the number of positions distributed to the
hospital under this paragraph as a result of an
increase in the otherwise applicable resident limit by
January 1 of the fiscal year of the increase. Such
increase shall be effective beginning July 1 of that
fiscal year.
``(G) Application of per resident amounts for primary
care and nonprimary care.--With respect to additional
residency positions in a hospital attributable to the
increase provided under this paragraph, the approved
FTE per resident amounts are deemed to be equal to the
hospital per resident amounts for primary care and
nonprimary care computed under paragraph (2)(D) for
that hospital.
``(H) Permitting facilities to apply aggregation
rules.--The Secretary shall permit hospitals receiving
additional residency positions attributable to the
increase provided under this paragraph to, beginning in
the fifth year after the effective date of such
increase, apply such positions to the limitation amount
under paragraph (4)(F) that may be aggregated pursuant
to paragraph (4)(H) among members of the same
affiliated group.
``(I) Clarification.--Chapter 35 of title 44, United
States Code, shall not apply to the implementation of
this paragraph.
``(J) Definitions.--In this paragraph:
``(i) Otherwise applicable resident limit.--
The term `otherwise applicable resident limit'
means, with respect to a hospital, the limit
otherwise applicable under paragraph (4)(F)(i)
on the resident level for the hospital
determined without regard to this paragraph but
taking into account paragraphs (7)(A), (7)(B),
(8)(A), and (8)(B).
``(ii) Resident level.--The term `resident
level' has the meaning given such term in
paragraph (7)(C)(i).''.
(b) IME.--
(1) In general.--Section 1886(d)(5)(B)(v) of the Social
Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the third
sentence, is amended by striking ``and (h)(8)'' and inserting
``(h)(8), and (h)(9)''.
(2) Conforming provision.--Section 1886(d)(5)(B) of the
Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended--
(A) by redesignating clause (x), as added by section
5505(b) of the Patient Protection and Affordable Care
Act (Public Law 111-148), as clause (xi) and moving
such clause 4 ems to the left; and
(B) by adding after clause (xi), as redesignated by
subparagraph (A), the following new clause:
``(xii) For discharges occurring on or after July 1, 2022,
insofar as an additional payment amount under this subparagraph
is attributable to residency positions distributed to a
hospital under subsection (h)(9), the indirect teaching
adjustment factor shall be computed in the same manner as
provided under clause (ii) with respect to such residency
positions.''.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 3414, the ``Opioid Workforce Act of 2019,''
as amended and ordered reported by the Committee on Ways and
Means on June 26, 2019, increases the number of residency
positions available to help address the physician shortage as
it relates to the opioid crisis as well as other substance use
and mental health disorders. The bill will open a total of
1,000 positions from fiscal year (FY) 2021 through FY 2025 to
be filled with residents training in addiction medicine,
addiction psychiatry, or pain management. Hospitals with
existing training programs in any of the target specialties
will have priority access to the expanded residency slots, up
to 25 slots over the five years of the program.
This bill was introduced by Representatives Brad Schneider
(D-IL), Susan Brooks (R-IN), Ann Kuster (D-NH), and Elise
Stefanik (R-NY).
B. Background and Need for Legislation
The opioid crisis has increased demand for providers and
specialists trained in handling addiction medicine and pain
management. The demand for these specialists has far outpaced
the availability, and as a result many of the individuals in
crisis are being managed by emergency services or primary care
physicians--neither of which is trained in how to work with
patients to overcome addiction. In 2015, at the height of the
opioid crisis, Pew Trusts estimated that more than 330,000
addiction service positions would need to be filled before
2020, just to keep pace with demand.\1\
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\1\Christine Vestal, How Severe is the Shortage of Substance Abuse
Specialists? PEW (Apr. 1, 2015), https://www.pewtrusts.org/en/research-
and-analysis/blogs/stateline/2015/4/01/how-severe-is-the-shortage-of-
substance-abuse-specialists.
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Similarly, more than 75 percent of all U.S. counties are
considered mental health shortage areas, and half of all U.S.
counties have no mental health professional.\2\ According to
the National Alliance on Mental Illness, one in five American
adults experiences a mental illness in a given year, and one in
25 experiences a serious mental illness that interferes with
their daily activities.\3\ In the Medicare population, this
rate is higher, with more than a quarter of beneficiaries
experiencing some kind of mental disorder.\4\
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\2\Rural Behavioral Health: Telehealth Challenges and
Opportunities, 9:2 Substance Abuse & Mental Health Srvs. Admin. at 4
(2016), https://store.samhsa.gov/sites/default/files/d7/priv/sma16-
4989.pdf.
\3\Mental Health By the Numbers, Nat.'l Alliance on Mental Illness
(Sept. 2019), https://www.nami.org/mhstats.
\4\Beth McGinty, Medicare's Mental Health Coverage: How COVID-19
Highlights Gaps and Opportunities for Improvement, The Commonwealth
Fund (July 9, 2020), https://www.commonwealthfund.org/publications/
issue-briefs/2020/jul/medicare-mental-health-coverage-covid-19-gaps-
opportunities.
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Graduate Medical Education (GME) is the education in the
form of a residency or fellowship that takes place after a
provider completes medical school. GME funding is primarily
provided through Medicare through direct and indirect GME and
covers costs such as resident salaries and benefits, teaching
hospital compensation, and funding for underserved populations.
The passage of the Balanced Budget Act of 1997 capped the
number of residency slots that would be paid for under Direct
GME thus limiting the number of future providers to meet
demand.\5\
---------------------------------------------------------------------------
\5\Consolidate and Reduce Federal Payments for Graduate Medical
Education at Teaching Hospitals, Congressional Budget Office (Dec. 13,
2018), https://www.cbo.gov/budget-options/54738.
---------------------------------------------------------------------------
GME programs are heavily audited and are required to submit
detailed financial data. Teaching hospitals comply with these
federally mandated transparency measures by annually submitting
detailed Medicare cost reports to CMS. Such information
includes audited financial data, total Medicare payments, total
Medicare GME payments, number of resident FTEs trained, number
of resident FTEs over the cap, number of resident FTEs trained
outside the hospital, and total GME costs, among other metrics.
During Committee consideration of H.R. 3414 Representative
Adrian Smith (R-NE) offered an amendment that would have
duplicated these existing reporting requirements and placed
increased burdens on GMEs. The Committee accordingly rejected
the amendment.
H.R. 3414 begins to address the extreme provider shortage
by creating additional training slots for residents training in
addiction medicine, addiction psychiatry, or pain management.
This legislation has the support of a broad cross section
of medical organizations, including the Association of American
Medical Colleges, American Hospital Association, America's
Essential Hospitals, Federation of American Hospitals, Greater
New York Hospital Association, Healthcare Leadership Council,
the American Society of Addiction Medicine, National Council
for Behavioral Health, American Academy of Addiction
Psychiatry, American Osteopathic Academy of Addiction Medicine,
American Psychiatric Association, American Association of
Colleges of Osteopathic Medicine, Healthcare Association of New
York State, California Hospital Association, and the Hospital
and Health System Association of Pennsylvania. In a letter
expressing support for H.R. 3414, 56 organizations, including
those above, stated that the ``Opioid Workforce Act of 2019 is
a targeted and important step the Congress must take to help
ensure a robust physician workforce that can deliver high-
quality care to those suffering from substance use
disorders.''\6\
---------------------------------------------------------------------------
\6\Letter from 56 Health Care Organizations to the Honorable
Richard Neal and the Honorable Kevin Brady in Support of H.R. 3414, Am.
Osteopathic Academy of Addiction Medicine (June 26, 2019), https://
aoaam.org/resources/Documents/Newsletter%20Articles/
Opioid%20Workforce%20Act%20Sign-On%20Letter_2019%20FINAL_6-26.pdf.
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C. Legislative History
Background
H.R. 3414 was introduced on June 21, 2019 and was referred
to the Committee on Ways and Means and additionally the
Committee on Energy and Commerce.
Committee hearings
On June 4, 2019, the Committee on Ways and Means held a
full committee Member Day hearing to discuss the range of
issues, concerns, and proposals among on-committee and off-
committee members. During that hearing, Representatives Brad
Schneider (D-IL), Jackie Walorski (R-IN), Xochitl Torres Small
(D-NM) and Anthony Brindisi (D-NY) discussed the opioid
epidemic and the national physician shortage--particularly for
mental health services--as well as the importance of increasing
Graduate Medical Education (GME) slots.
Committee action
The Committee on Ways and Means marked up H.R. 3414, the
``Opioid Workforce Act of 2019,'' on June 26, 2019, and ordered
the bill, as amended, favorably reported (with a quorum being
present) by a roll-call vote of 25 to 12.
II. EXPLANATION OF THE BILL
A. Opioid Workforce Act of 2019
CURRENT LAW\7\
---------------------------------------------------------------------------
\7\All discussions of Current Law in this report refer to current
law as of the date of the markup (i.e., June 26, 2019) and do not
reflect subsequent law changes.
---------------------------------------------------------------------------
The Social Security Act (SSA; 42 U.S.C. 1395l) Sections
1886(h) and 1886(d)(5)(B) require the Secretary of Health and
Human Services (HHS Secretary) to make Medicare GME payments to
hospitals for the Medicare share of direct and indirect costs,
respectively, of an approved medical residency training program
in allopathic or osteopathic medicine, dentistry, and
podiatry.\8\ Direct costs include resident stipends,
supervisory physician salaries, and administrative costs.
Indirect costs associated with residency programs relate to the
higher patient care costs in teaching hospitals relative to
non-teaching hospitals. Medicare uses different formulae for
determining payments for direct costs (referred to as Direct
Graduate Medical Education or DGME) and indirect costs
(referred to as Indirect Medical Education or IME). DGME is a
lump sum (or pass-through) payment and IME is an adjustment to
a hospital's per-discharge Medicare payment.
---------------------------------------------------------------------------
\8\Social Security Act, 42 U.S.C. 13951 Sec. Sec. 1886(h),
1886(d)(5)(B).
---------------------------------------------------------------------------
Medicare GME payments for training residents in allopathic
and osteopathic medicine are subject to a hospital-specific
limit or ``cap'' on the number of full-time equivalents (FTEs).
The FTE cap is based on the number of FTE residents that a
hospital was training in the base year, which is the hospital's
most recent cost reporting period ending on or before December
31, 1996. The FTE cap applies to both DGME and IME payments.
There are some options that permit a hospital to increase
its Medicare GME FTE cap. For example, a hospital may increase
its FTE cap if it establishes a new GME program that meets
Medicare requirements for a new program. The Centers for
Medicare & Medicaid Services (CMS), however, maintains
stringent requirements for new programs because it interprets
the intent of the FTE cap statute to be a limit on the growth
of Medicare-funded FTEs, particularly in hospitals with
existing medical residency programs. Other options for a
hospital to increase its FTE cap include establishing a new
rural training track or a hospital may receive a temporary FTE
cap increase for training residents that were in-training at
another hospital that has closed.
REASONS FOR CHANGE
The opioid crisis has increased demand for providers and
specialists trained in handling addiction medicine and pain
management. The demand for these specialists has far outpaced
the availability. As a result, many of the individuals in
crisis are being managed by emergency services or primary
care--neither of which is trained in how to work with patients
to overcome addiction. Effective July 1, 2022, this bill will
support the training of 1,000 new residencies for physicians
trained to treat patients with substance use disorders to
significantly increase access to patients in need and begin
addressing the physician shortage.
EXPLANATION OF PROVISIONS
Section 1. Short title. The short title for this bill is
the Opioid Workforce Act of 2019.
Section 2. Distribution of additional residency positions
to help combat opioid crisis. This section increases the number
of GME residency slots available to train addiction specialists
to help combat the opioid crisis and other substance use and
mental health disorders.
Effective Fiscal Year (FY) 2022, the Secretary of the
Department of Health and Human Services is directed to increase
the applicable resident limit for qualifying hospitals that
apply under this provision to add 1,000 aggregate FTE resident
positions distributed nationwide. Five-hundred positions will
be distributed to hospitals with established programs in
addiction medicine, addiction psychiatry, or pain medicine.
Effective FY 2023, the remaining 500 positions will be
distributed to hospitals who have or will establish an approved
residency training program in addiction medicine, addiction
psychiatry, or pain medicine. The additional positions must be
used to increase residency training in the identified areas of
medicine, or the additional positions will be redistributed. No
individual hospital may receive more than 25 full-time
residency positions under this provision.
EFFECTIVE DATE
Section 2: Effective beginning on FY 2022.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 3414, the Opioid Workforce Act of 2019,
on June 26, 2019.
The Chairman's amendment in the nature of a substitute was
adopted by voice vote (with a quorum being present).
The bill, H.R. 3414, was ordered favorably reported as
amended by a 25 12 roll-call vote (with a quorum being
present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Neal......................... X ....... ......... Mr. Brady.......... ....... X .........
Mr. Lewis........................ X ....... ......... Mr. Nunes.......... ....... ....... .........
Mr. Doggett...................... X ....... ......... Mr. Buchanan....... X ....... .........
Mr. Thompson..................... X ....... ......... Mr. Smith (NE)..... ....... X .........
Mr. Larson....................... X ....... ......... Mr. Marchant....... ....... X .........
Mr. Blumenauer................... ....... ....... ......... Mr. Reed........... ....... X .........
Mr. Kind......................... X ....... ......... Mr. Kelly.......... X ....... .........
Mr. Pascrell..................... X ....... ......... Mr. Holding........ ....... ....... .........
Mr. Davis........................ X ....... ......... Mr. Smith (MO)..... ....... X .........
Ms. Sanchez...................... X ....... ......... Mr. Rice........... ....... X .........
Mr. Higgins...................... X ....... ......... Mr. Schweikert..... ....... X .........
Ms. Sewell....................... X ....... ......... Ms. Walorski....... ....... ....... .........
Ms. DelBene...................... X ....... ......... Mr. LaHood......... ....... X .........
Ms. Chu.......................... X ....... ......... Mr. Wenstrup....... ....... X .........
Ms. Moore........................ X ....... ......... Mr. Arrington...... ....... X .........
Mr. Kildee....................... X ....... ......... Mr. Ferguson....... ....... X .........
Mr. Boyle........................ X ....... ......... Mr. Estes.......... ....... X .........
Mr. Beyer........................ X ....... .........
Mr. Evans........................ X ....... .........
Mr. Schneider.................... X ....... .........
Mr. Suozzi....................... X ....... .........
Mr. Panetta...................... X ....... .........
Ms. Murphy....................... X ....... .........
Mr. Gomez........................ X ....... .........
Mr. Horsford..................... ....... ....... .........
----------------------------------------------------------------------------------------------------------------
Votes on Amendments
A roll call vote was conducted on the following amendments
to the Chairman's Amendment in the Nature of a Substitute.
An amendment to the amendment in the nature of a substitute
which would improve transparency and reporting on the new
Medicare GME slots created under the amendment in the nature of
a substitute was offered by Representatives Estes and Wenstrup.
The amendment was defeated by a roll call vote of 16 yeas
to 24 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Neal......................... ....... X ......... Mr. Brady.......... X ....... .........
Mr. Lewis........................ ....... X ......... Mr. Nunes.......... X ....... .........
Mr. Doggett...................... ....... X ......... Mr. Buchanan....... X ....... .........
Mr. Thompson..................... ....... X ......... Mr. Smith.......... X ....... .........
Mr. Larson....................... ....... X ......... Mr. Marchant....... X ....... .........
Mr. Blumenauer................... ....... X ......... Mr. Reed........... X ....... .........
Mr. Kind......................... ....... X ......... Mr. Kelly.......... X ....... .........
Mr. Pascrell..................... ....... X ......... Mr. Holding........ X ....... .........
Mr. Davis........................ ....... X ......... Mr. Smith.......... X ....... .........
Ms. Sanchez...................... ....... X ......... Mr. Rice........... X ....... .........
Mr. Higgins...................... ....... X ......... Mr. Schweikert..... X ....... .........
Ms. Sewell....................... ....... X ......... Ms. Walorski....... ....... ....... .........
Ms. DelBene...................... ....... X ......... Mr. LaHood (IL).... X ....... .........
Ms. Chu (CA)..................... ....... X ......... Mr. Wenstrup....... X ....... .........
Ms. Moore........................ ....... X ......... Mr. Arrington...... X ....... .........
Mr. Kildee....................... ....... X ......... Mr. Ferguson....... X ....... .........
Mr. Boyle........................ ....... X ......... Mr. Estes.......... X ....... .........
Mr. Beyer........................ ....... X .........
Mr. Evans........................ ....... X .........
Mr. Schneider.................... ....... X .........
Mr. Suozzi....................... ....... X .........
Mr. Panetta...................... ....... X .........
Ms. Murphy....................... ....... X .........
Mr. Gomez........................ ....... X .........
Mr. Horsford..................... ....... ....... .........
----------------------------------------------------------------------------------------------------------------
An amendment to the amendment in the nature of a substitute
which would prioritize new slots created by the Amendment in
the nature of a substitute was offered by Representatives Jason
Smith, Arrington, Reed, Holding, Kelly, and Ferguson.
The amendment was defeated by a roll call vote of 15 yeas
to 22 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Neal......................... ....... X ......... Mr. Brady.......... X ....... .........
Mr. Lewis........................ ....... X ......... Mr. Nunes.......... ....... ....... .........
Mr. Doggett...................... ....... X ......... Mr. Buchanan....... X ....... .........
Mr. Thompson..................... ....... X ......... Mr. Smith.......... X ....... .........
Mr. Larson....................... ....... X ......... Mr. Marchant....... X ....... .........
Mr. Blumenauer................... ....... X ......... Mr. Reed........... X ....... .........
Mr. Kind......................... X ....... ......... Mr. Kelly.......... X ....... .........
Mr. Pascrell..................... ....... X ......... Mr. Holding........ X ....... .........
Mr. Davis........................ ....... X ......... Mr. Smith.......... X ....... .........
Ms. Sanchez...................... ....... X ......... Mr. Rice........... X ....... .........
Mr. Higgins...................... ....... X ......... Mr. Schweikert..... X ....... .........
Ms. Sewell....................... ....... X ......... Ms. Walorski....... ....... ....... .........
Ms. DelBene...................... ....... X ......... Mr. LaHood (IL).... X ....... .........
Ms. Chu (CA)..................... ....... X ......... Mr. Wenstrup....... X ....... .........
Ms. Moore........................ ....... X ......... Mr. Arrington...... X ....... .........
Mr. Kildee....................... ....... X ......... Mr. Ferguson....... X ....... .........
Mr. Boyle........................ ....... X ......... Mr. Estes.......... X ....... .........
Mr. Beyer........................ ....... X .........
Mr. Evans........................ ....... X .........
Mr. Schneider.................... ....... X .........
Mr. Suozzi....................... ....... X .........
Mr. Panetta...................... ....... X .........
Ms. Murphy....................... ....... X .........
Mr. Gomez........................ ....... X .........
Mr. Horsford..................... ....... ....... .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 3414, as
reported. The Committee agrees with the estimate prepared by
the Congressional Budget Office (CBO), which is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 16, 2019.
Hon. Richard Neal,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3414, the Opioid
Workforce Act of 2019.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Jamease
Kowalczyk and Sarah Sajewski.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The bill would
Increase the limit on residency positions in
hospitals that are eligible for Medicare payments
Estimated budgetary effects would primarily stem from
Increased Medicare payments for graduate
medical education
Areas of significant uncertainty include
The number of specialty positions versus
sub-specialty positions
The time needed to fill 1,000 new full-time
equivalent residency positions
Bill summary: H.R. 3414 would increase by up to 1,000 the
number of full-time equivalent (FTE) residency positions
eligible for Medicare payments. Those 1,000 additional
positions would be for programs in addiction medicine,
addiction psychiatry, and pain medicine, or for associated pre-
requisite programs. The first 500 of those positions would
become available in fiscal year 2022. The next 500 positions
would become available during fiscal years 2023 through 2026.
Estimated federal cost: The estimated budgetary effect of
H.R. 3414 is shown in Table 1. The costs of the legislation
fall within budget function 570 (Medicare).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 3414
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
--------------------------------------------------------------------------------------------------
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019-2024 2019-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Increases in the Deficit From Changes in Direct Spending
Estimated Budget Authority........................... 0 0 0 15 80 125 150 160 170 180 190 220 1,070
Estimated Outlays.................................... 0 0 0 15 80 125 150 160 170 180 190 220 1,070
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes H.R. 3414
will be enacted near the end of 2019.
CBO estimates that enacting H.R. 3414 would increase
Medicare spending by increasing the number of FTE residency
positions for which Medicare will pay. Currently, Medicare pays
certain hospitals for some of the costs associated with medical
education through two types of payments: direct graduate
medical education (DGME) and indirect medical education (IME)
payments. DGME is the amount Medicare pays for costs directly
associated with internships and residency training (like
salaries). The amount of DGME payment varies based on whether
the position involves training for a specialty or a sub-
specialty. Sub-specialty positions are paid at half the rate of
specialty positions. IME payments cover additional costs for
patient care related to internship and residency training and
do not vary by specialty or sub-specialty. DGME and IME
payments are calculated separately for each hospital. For
fiscal year 2022, CBO estimates the average DGME payment to be
about $40,000 per FTE and the average IME payment to be about
$100,000 per FTE.
Developing and expanding a graduate medical education (GME)
program can take time and be expensive; therefore, CBO expects
that the number of residency positions would increase gradually
between fiscal years 2022 and 2026. CBO estimates that all
1,000 residency positions would be filled in fiscal year 2026,
with 500 positions in sub-specialty programs in addiction
medicine, addiction psychiatry, and pain medicine, and 500
positions in pre-requisite residency programs (such as internal
medicine). Based on projected DGME and IME payments per
resident, CBO estimates that enacting H.R. 3414 would increase
direct spending by $1.1 billion over the 2020-2029 period.
Two key factors of this estimate are subject to
uncertainty: the number of specialty versus sub-specialty
positions that would be created and the length of the ramp-up
period for creating them. Because the size of DGME payments
varies by type of position, a change in the percentage
allocated to each type could result in higher or lower spending
than estimated here. Furthermore, if GME programs respond to
this legislation by increasing the number of available
positions at a faster or slower rate than CBO estimates,
spending could also vary.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 1.
Increase in long-term deficits: CBO estimates that enacting
H.R. 3414 would increase on-budget deficits by more than $5
billion beginning in the second or third of the four
consecutive 10-year periods beginning in 2030.
Mandates: None.
Estimate prepared by: Federal Costs: Jamease Kowalczyk,
Sarah Sajewski; Mandates: Andrew Laughlin.
Estimate reviewed by: Tom Bradley, Chief, Health Systems
and Medicare Cost Estimates Unit; Leo Lex, Deputy Assistant
Director for Budget Analysis; Theresa Gullo, Assistant Director
for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee made findings and recommendations that are
reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
to Congress pursuant to section 21 of Public Law 111-139; or
(3) a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance, published
pursuant to section 6104 of title 31, United States Code.
F. Hearings
In compliance with Sec. 103(i) of H. Res. 6 (116th
Congress) the following hearing was used to develop or consider
H.R. 3414: Committee on Ways and Means ``Member Day Hearing,''
held on June 4, 2019.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part E--Miscellaneous Provisions
* * * * * * *
payment to hospitals for inpatient hospital services
Sec. 1886. (a)(1)(A)(i) The Secretary, in determining the
amount of the payments that may be made under this title with
respect to operating costs of inpatient hospital services (as
defined in paragraph (4)) shall not recognize as reasonable (in
the efficient delivery of health services) costs for the
provision of such services by a hospital for a cost reporting
period to the extent such costs exceed the applicable
percentage (as determined under clause (ii)) of the average of
such costs for all hospitals in the same grouping as such
hospital for comparable time periods.
(ii) For purposes of clause (i), the applicable percentage
for hospital cost reporting periods beginning--
(I) on or after October 1, 1982, and before October
1, 1983, is 120 percent;
(II) on or after October 1, 1983, and before October
1, 1984, is 115 percent; and
(III) on or after October 1, 1984, is 110 percent.
(B)(i) For purposes of subparagraph (A) the Secretary shall
establish case mix indexes for all short- term hospitals, and
shall set limits for each hospital based upon the general mix
of types of medical cases with respect to which such hospital
provides services for which payment may be made under this
title.
(ii) The Secretary shall set such limits for a cost reporting
period of a hospital--
(I) by updating available data for a previous period
to the immediate preceding cost reporting period by the
estimated average rate of change of hospital costs
industry-wide, and
(II) by projecting for the cost reporting period by
the applicable percentage increase (as defined in
subsection (b)(3)(B)).
(C) The limitation established under subparagraph (A) for any
hospital shall in no event be lower than the allowable
operating costs of inpatient hospital services (as defined in
paragraph (4)) recognized under this title for such hospital
for such hospital's last cost reporting period prior to the
hospital's first cost reporting period for which this section
is in effect.
(D) Subparagraph (A) shall not apply to cost reporting
periods beginning on or after October 1, 1983.
(2) The Secretary shall provide for such exemptions from, and
exceptions and adjustments to, the limitation established under
paragraph (1)(A) as he deems appropriate, including those which
he deems necessary to take into account--
(A) the special needs of sole community hospitals, of
new hospitals, of risk based health maintenance
organizations, and of hospitals which provide atypical
services or essential community services, and to take
into account extraordinary circumstances beyond the
hospital's control, medical and paramedical education
costs, significantly fluctuating population in the
service area of the hospital, and unusual labor costs,
(B) the special needs of psychiatric hospitals and of
public or other hospitals that serve a significantly
disproportionate number of patients who have low income
or are entitled to benefits under part A of this title,
and
(C) a decrease in the inpatient hospital services
that a hospital provides and that are customarily
provided directly by similar hospitals which results in
a significant distortion in the operating costs of
inpatient hospital services.
(3) The limitation established under paragraph (1)(A) shall
not apply with respect to any hospital which--
(A) is located outside of a standard metropolitan
statistical area, and
(B)(i) has less than 50 beds, and
(ii) was in operation and had less than 50 beds on
the date of the enactment of this section.
(4) For purposes of this section, the term ``operating costs
of inpatient hospital services'' includes all routine operating
costs, ancillary service operating costs, and special care unit
operating costs with respect to inpatient hospital services as
such costs are determined on an average per admission or per
discharge basis (as determined by the Secretary), and includes
the costs of all services for which payment may be made under
this title that are provided by the hospital (or by an entity
wholly owned or operated by the hospital) to the patient during
the 3 days (or, in the case of a hospital that is not a
subsection (d) hospital, during the 1 day) immediately
preceding the date of the patient's admission if such services
are diagnostic services (including clinical diagnostic
laboratory tests) or are other services related to the
admission (as defined by the Secretary). Such term does not
include costs of approved educational activities, a return on
equity capital, other capital-related costs (as defined by the
Secretary for periods before October 1, 1987), or costs with
respect to administering blood clotting factors to individuals
with hemophilia. In applying the first sentence of this
paragraph, the term ``other services related to the admission''
includes all services that are not diagnostic services (other
than ambulance and maintenance renal dialysis services) for
which payment may be made under this title that are provided by
a hospital (or an entity wholly owned or operated by the
hospital) to a patient--
(A) on the date of the patient's inpatient admission;
or
(B) during the 3 days (or, in the case of a hospital
that is not a subsection (d) hospital, during the 1
day) immediately preceding the date of such admission
unless the hospital demonstrates (in a form and manner,
and at a time, specified by the Secretary) that such
services are not related (as determined by the
Secretary) to such admission.
(b)(1) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, if the operating costs of inpatient
hospital services (as defined in subsection (a)(4)) of a
hospital (other than a subsection (d) hospital, as defined in
subsection (d)(1)(B) and other than a rehabilitation facility
described in subsection (j)(1)) for a cost reporting period
subject to this paragraph--
(A) are less than or equal to the target amount (as
defined in paragraph (3)) for that hospital for that
period, the amount of the payment with respect to such
operating costs payable under part A on a per discharge
or per admission basis (as the case may be) shall be
equal to the amount of such operating costs, plus--
(i) 15 percent of the amount by which the
target amount exceeds the amount of the
operating costs, or
(ii) 2 percent of the target amount,
whichever is less;
(B) are greater than the target amount but do not
exceed 110 percent of the target amount, the amount of
the payment with respect to those operating costs
payable under part A on a per discharge basis shall
equal the target amount; or
(C) are greater than 110 percent of the target
amount, the amount of the payment with respect to such
operating costs payable under part A on a per discharge
or per admission basis (as the case may be) shall be
equal to (i) the target amount, plus (ii) in the case
of cost reporting periods beginning on or after October
1, 1991, an additional amount equal to 50 percent of
the amount by which the operating costs exceed 110
percent of the target amount (except that such
additional amount may not exceed 10 percent of the
target amount) after any exceptions or adjustments are
made to such target amount for the cost reporting
period;
plus the amount, if any, provided under paragraph (2), except
that in no case may the amount payable under this title (other
than on the basis of a DRG prospective payment rate determined
under subsection (d)) with respect to operating costs of
inpatient hospital services exceed the maximum amount payable
with respect to such costs pursuant to subsection (a).
(2)(A) Except as provided in subparagraph (E), in addition to
the payment computed under paragraph (1), in the case of an
eligible hospital (described in subparagraph (B)) for a cost
reporting period beginning on or after October 1, 1997, the
amount of payment on a per discharge basis under paragraph (1)
shall be increased by the lesser of--
(i) 50 percent of the amount by which the operating
costs are less than the expected costs (as defined in
subparagraph (D)) for the period; or
(ii) 1 percent of the target amount for the period.
(B) For purposes of this paragraph, an ``eligible hospital''
means with respect to a cost reporting period, a hospital--
(i) that has received payments under this subsection
for at least 3 full cost reporting periods before that
cost reporting period, and
(ii) whose operating costs for the period are less
than the least of its target amount, its trended costs
(as defined in subparagraph (C)), or its expected costs
(as defined in subparagraph (D)) for the period.
(C) For purposes of subparagraph (B)(ii), the term ``trended
costs'' means for a hospital cost reporting period ending in a
fiscal year--
(i) in the case of a hospital for which its cost
reporting period ending in fiscal year 1996 was its
third or subsequent full cost reporting period for
which it receives payments under this subsection, the
lesser of the operating costs or target amount for that
hospital for its cost reporting period ending in fiscal
year 1996, or
(ii) in the case of any other hospital, the operating
costs for that hospital for its third full cost
reporting period for which it receives payments under
this subsection,
increased (in a compounded manner) for each succeeding fiscal
year (through the fiscal year involved) by the market basket
percentage increase for the fiscal year.
(D) For purposes of this paragraph, the term ``expected
costs'', with respect to the cost reporting period ending in a
fiscal year, means the lesser of the operating costs of
inpatient hospital services or target amount per discharge for
the previous cost reporting period updated by the market basket
percentage increase (as defined in paragraph (3)(B)(iii)) for
the fiscal year.
(E)(i) In the case of an eligible hospital that is a hospital
or unit that is within a class of hospital described in clause
(ii) with a 12-month cost reporting period beginning before the
enactment of this subparagraph, in determining the amount of
the increase under subparagraph (A), the Secretary shall
substitute for the percentage of the target amount applicable
under subparagraph (A)(ii)--
(I) for a cost reporting period beginning on or after
October 1, 2000, and before September 30, 2001, 1.5
percent; and
(II) for a cost reporting period beginning on or
after October 1, 2001, and before September 30, 2002, 2
percent.
(ii) For purposes of clause (i), each of the following shall
be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (iv) of such
subsection.
(3)(A) Except as provided in subparagraph (C) and succeeding
subparagraphs and in paragraph (7)(A)(ii), for purposes of this
subsection, the term ``target amount'' means, with respect to a
hospital for a particular 12-month cost reporting period--
(i) in the case of the first such reporting period
for which this subsection is in effect, the allowable
operating costs of inpatient hospital services (as
defined in subsection (a)(4)) recognized under this
title for such hospital for the preceding 12-month cost
reporting period, and
(ii) in the case of a later reporting period, the
target amount for the preceding 12-month cost reporting
period,
increased by the applicable percentage increase under
subparagraph (B) for that particular cost reporting period.
(B)(i) For purposes of subsection (d) and subsection (j) for
discharges occurring during a fiscal year, the ``applicable
percentage increase'' shall be--
(I) for fiscal year 1986, \1/2\ percent,
(II) for fiscal year 1987, 1.15 percent,
(III) for fiscal year 1988, 3.0 percent for hospitals
located in a rural area, 1.5 percent for hospitals
located in a large urban area (as defined in subsection
(d)(2)(D)), and 1.0 percent for hospitals located in
other urban areas,
(IV) for fiscal year 1989, the market basket
percentage increase minus 1.5 percentage points for
hospitals located in a rural area, the market basket
percentage increase minus 2.0 percentage points for
hospitals located in a large urban area, and the market
basket percentage increase minus 2.5 percentage points
for hospitals located in other urban areas,
(V) for fiscal year 1990, the market basket
percentage increase plus 4.22 percentage points for
hospitals located in a rural area, the market basket
percentage increase plus 0.12 percentage points for
hospitals located in a large urban area, and the market
basket percentage increase minus 0.53 percentage points
for hospitals located in other urban areas,
(VI) for fiscal year 1991, the market basket
percentage increase minus 2.0 percentage points for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.7 percentage
point for hospitals located in a rural area,
(VII) for fiscal year 1992, the market basket
percentage increase minus 1.6 percentage points for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.6 percentage
point for hospitals located in a rural area,
(VIII) for fiscal year 1993, the market basket
percentage increase minus 1.55 percentage point for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.55 for
hospitals located in a rural area,
(IX) for fiscal year 1994, the market basket
percentage increase minus 2.5 percentage points for
hospitals located in a large urban or other urban area,
and the market basket percentage increase minus 1.0
percentage point for hospitals located in a rural area,
(X) for fiscal year 1995, the market basket
percentage increase minus 2.5 percentage points for
hospitals located in a large urban or other urban area,
and such percentage increase for hospitals located in a
rural area as will provide for the average standardized
amount determined under subsection (d)(3)(A) for
hospitals located in a rural area being equal to such
average standardized amount for hospitals located in an
urban area (other than a large urban area),
(XI) for fiscal year 1996, the market basket
percentage increase minus 2.0 percentage points for
hospitals in all areas,
(XII) for fiscal year 1997, the market basket
percentage increase minus 0.5 percentage point for
hospitals in all areas,
(XIII) for fiscal year 1998, 0 percent,
(XIV) for fiscal year 1999, the market basket
percentage increase minus 1.9 percentage points for
hospitals in all areas,
(XV) for fiscal year 2000, the market basket
percentage increase minus 1.8 percentage points for
hospitals in all areas,
(XVI) for fiscal year 2001, the market basket
percentage increase for hospitals in all areas,
(XVII) for fiscal year 2002, the market basket
percentage increase minus 0.55 percentage points for
hospitals in all areas,
(XVIII) for fiscal year 2003, the market basket
percentage increase minus 0.55 percentage points for
hospitals in all areas,
(XIX) for each of fiscal years 2004 through 2006,
subject to clause (vii), the market basket percentage
increase for hospitals in all areas; and
(XX) for each subsequent fiscal year, subject to
clauses (viii), (ix), (xi), and (xii), the market
basket percentage increase for hospitals in all areas.
(ii) For purposes of subparagraphs (A) and (E), the
``applicable percentage increase'' for 12-month cost reporting
periods beginning during--
(I) fiscal year 1986, is 0.5 percent,
(II) fiscal year 1987, is 1.15 percent,
(III) fiscal year 1988, is the market basket
percentage increase minus 2.0 percentage points,
(IV) a subsequent fiscal year ending on or before
September 30, 1993, is the market basket percentage
increase,
(V) fiscal years 1994 through 1997, is the market
basket percentage increase minus the applicable
reduction (as defined in clause (v)(II)), or in the
case of a hospital for a fiscal year for which the
hospital's update adjustment percentage (as defined in
clause (v)(I)) is at least 10 percent, the market
basket percentage increase,
(VI) for fiscal year 1998, is 0 percent,
(VII) for fiscal years 1999 through 2002, is the
applicable update factor specified under clause (vi)
for the fiscal year, and
(VIII) subsequent fiscal years is the market basket
percentage increase.
(iii) For purposes of this subparagraph, the term ``market
basket percentage increase'' means, with respect to cost
reporting periods and discharges occurring in a fiscal year,
the percentage, estimated by the Secretary before the beginning
of the period or fiscal year, by which the cost of the mix of
goods and services (including personnel costs but excluding
nonoperating costs) comprising routine, ancillary, and special
care unit inpatient hospital services, based on an index of
appropriately weighted indicators of changes in wages and
prices which are representative of the mix of goods and
services included in such inpatient hospital services, for the
period or fiscal year will exceed the cost of such mix of goods
and services for the preceding 12-month cost reporting period
or fiscal year.
(iv) For purposes of subparagraphs (C) and (D), the
``applicable percentage increase'' is--
(I) for 12-month cost reporting periods beginning
during fiscal years 1986 through 1993, the applicable
percentage increase specified in clause (ii),
(II) for fiscal year 1994, the market basket
percentage increase minus 2.3 percentage points
(adjusted to exclude any portion of a cost reporting
period beginning during fiscal year 1993 for which the
applicable percentage increase is determined under
subparagraph (I)),
(III) for fiscal year 1995, the market basket
percentage increase minus 2.2 percentage points, and
(IV) for fiscal year 1996 and each subsequent fiscal
year, the applicable percentage increase under clause
(i).
(v) For purposes of clause (ii)(V)--
(I) a hospital's ``update adjustment percentage'' for
a fiscal year is the percentage by which the hospital's
allowable operating costs of inpatient hospital
services recognized under this title for the cost
reporting period beginning in fiscal year 1990 exceeds
the hospital's target amount (as determined under
subparagraph (A)) for such cost reporting period,
increased for each fiscal year (beginning with fiscal
year 1994) by the sum of any of the hospital's
applicable reductions under subclause (V) for previous
fiscal years; and
(II) the ``applicable reduction'' with respect to a
hospital for a fiscal year is the lesser of 1
percentage point or the percentage point difference
between 10 percent and the hospital's update adjustment
percentage for the fiscal year.
(vi) For purposes of clause (ii)(VII) for a fiscal year, if a
hospital's allowable operating costs of inpatient hospital
services recognized under this title for the most recent cost
reporting period for which information is available--
(I) is equal to, or exceeds, 110 percent of the
hospital's target amount (as determined under
subparagraph (A)) for such cost reporting period, the
applicable update factor specified under this clause is
the market basket percentage;
(II) exceeds 100 percent, but is less than 110
percent, of such target amount for the hospital, the
applicable update factor specified under this clause is
0 percent or, if greater, the market basket percentage
minus 0.25 percentage points for each percentage point
by which such allowable operating costs (expressed as a
percentage of such target amount) is less than 110
percent of such target amount;
(III) is equal to, or less than 100 percent, but
exceeds \2/3\ of such target amount for the hospital,
the applicable update factor specified under this
clause is 0 percent or, if greater, the market basket
percentage minus 2.5 percentage points; or
(IV) does not exceed \2/3\ of such target amount for
the hospital, the applicable update factor specified
under this clause is 0 percent.
(vii)(I) For purposes of clause (i)(XIX) for fiscal years
2005 and 2006, in a case of a subsection (d) hospital that does
not submit data to the Secretary in accordance with subclause
(II) with respect to such a fiscal year, the applicable
percentage increase under such clause for such fiscal year
shall be reduced by 0.4 percentage points. Such reduction shall
apply only with respect to the fiscal year involved, and the
Secretary shall not take into account such reduction in
computing the applicable percentage increase under clause
(i)(XIX) for a subsequent fiscal year.
(II) For fiscal years 2005 and 2006, each subsection (d)
hospital shall submit to the Secretary quality data (for a set
of 10 indicators established by the Secretary as of November 1,
2003) that relate to the quality of care furnished by the
hospital in inpatient settings in a form and manner, and at a
time, specified by the Secretary for purposes of this clause,
but with respect to fiscal year 2005, the Secretary shall
provide for a 30-day grace period for the submission of data by
a hospital.
(viii)(I) For purposes of clause (i) for fiscal year 2007 and
each subsequent fiscal year, in the case of a subsection (d)
hospital that does not submit, to the Secretary in accordance
with this clause, data required to be submitted on measures
selected under this clause with respect to such a fiscal year,
the applicable percentage increase under clause (i) for such
fiscal year shall be reduced by 2.0 percentage points (or,
beginning with fiscal year 2015, by one-quarter of such
applicable percentage increase (determined without regard to
clause (ix), (xi), or (xii))). Such reduction shall apply only
with respect to the fiscal year involved and the Secretary
shall not take into account such reduction in computing the
applicable percentage increase under clause (i) for a
subsequent fiscal year, and the Secretary and the Medicare
Payment Advisory Commission shall carry out the requirements
under section 5001(b) of the Deficit Reduction Act of 2005.
(II) Each subsection (d) hospital shall submit data on
measures selected under this clause to the Secretary in a form
and manner, and at a time, specified by the Secretary for
purposes of this clause. The Secretary may require hospitals to
submit data on measures that are not used for the determination
of value-based incentive payments under subsection (o).
(III) The Secretary shall expand, beyond the measures
specified under clause (vii)(II) and consistent with the
succeeding subclauses, the set of measures that the Secretary
determines to be appropriate for the measurement of the quality
of care (including medication errors) furnished by hospitals in
inpatient settings.
(IV) Effective for payments beginning with fiscal year 2007,
in expanding the number of measures under subclause (III), the
Secretary shall begin to adopt the baseline set of performance
measures as set forth in the November 2005 report by the
Institute of Medicine of the National Academy of Sciences under
section 238(b) of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003.
(V) Effective for payments for fiscal years 2008 through
2012, the Secretary shall add other measures that reflect
consensus among affected parties and, to the extent feasible
and practicable, shall include measures set forth by one or
more national consensus building entities.
(VI) For purposes of this clause and clause (vii), the
Secretary may replace any measures or indicators in appropriate
cases, such as where all hospitals are effectively in
compliance or the measures or indicators have been subsequently
shown not to represent the best clinical practice.
(VII) The Secretary shall establish procedures for making
information regarding measures submitted under this clause
available to the public. Such procedures shall ensure that a
hospital has the opportunity to review the data that are to be
made public with respect to the hospital prior to such data
being made public. The Secretary shall report quality measures
of process, structure, outcome, patients' perspectives on care,
efficiency, and costs of care that relate to services furnished
in inpatient settings in hospitals on the Internet website of
the Centers for Medicare & Medicaid Services.
(VIII) Effective for payments beginning with fiscal year
2013, with respect to quality measures for outcomes of care,
the Secretary shall provide for such risk adjustment as the
Secretary determines to be appropriate to maintain incentives
for hospitals to treat patients with severe illnesses or
conditions.
(IX)(aa) Subject to item (bb), effective for payments
beginning with fiscal year 2013, each measure specified by the
Secretary under this clause shall be endorsed by the entity
with a contract under section 1890(a).
(bb) In the case of a specified area or medical topic
determined appropriate by the Secretary for which a feasible
and practical measure has not been endorsed by the entity with
a contract under section 1890(a), the Secretary may specify a
measure that is not so endorsed as long as due consideration is
given to measures that have been endorsed or adopted by a
consensus organization identified by the Secretary.
(X) To the extent practicable, the Secretary shall, with
input from consensus organizations and other stakeholders, take
steps to ensure that the measures specified by the Secretary
under this clause are coordinated and aligned with quality
measures applicable to--
(aa) physicians under section 1848(k); and
(bb) other providers of services and suppliers under
this title.
(XI) The Secretary shall establish a process to validate
measures specified under this clause as appropriate. Such
process shall include the auditing of a number of randomly
selected hospitals sufficient to ensure validity of the
reporting program under this clause as a whole and shall
provide a hospital with an opportunity to appeal the validation
of measures reported by such hospital.
(XII)(aa) With respect to a Hospital Consumer Assessment of
Healthcare Providers and Systems survey (or a successor survey)
conducted on or after January 1, 2020, such survey may not
include questions about communication by hospital staff with an
individual about such individual's pain unless such questions
take into account, as applicable, whether an individual
experiencing pain was informed about risks associated with the
use of opioids and about non-opioid alternatives for the
treatment of pain.
(bb) The Secretary shall not include on the Hospital Compare
internet website any measures based on the questions appearing
on the Hospital Consumer Assessment of Healthcare Providers and
Systems survey in 2018 or 2019 about communication by hospital
staff with an individual about such individual's pain.
(ix)(I) For purposes of clause (i) for fiscal year 2015 and
each subsequent fiscal year, in the case of an eligible
hospital (as defined in subsection (n)(6)(B)) that is not a
meaningful EHR user (as defined in subsection (n)(3)) for an
EHR reporting period for such fiscal year, three-quarters of
the applicable percentage increase otherwise applicable under
clause (i) (determined without regard to clause (viii), (xi),
or (xii)) for such fiscal year shall be reduced by 33\1/3\
percent for fiscal year 2015, 66\2/3\ percent for fiscal year
2016, and 100 percent for fiscal year 2017 and each subsequent
fiscal year. Such reduction shall apply only with respect to
the fiscal year involved and the Secretary shall not take into
account such reduction in computing the applicable percentage
increase under clause (i) for a subsequent fiscal year.
(II) The Secretary may, on a case-by-case basis (and, with
respect to the application of subclause (I) for fiscal year
2017, for categories of subsection (d) hospitals, as
established by the Secretary and posted on the Internet website
of the Centers for Medicare & Medicaid Services prior to
December 15, 2015, an application for which must be submitted
to the Secretary by not later than April 1, 2016), exempt an
eligible hospital from the application of subclause (I) with
respect to a fiscal year if the Secretary determines, subject
to annual renewal, that requiring such hospital to be a
meaningful EHR user during such fiscal year would result in a
significant hardship, such as in the case of a hospital in a
rural area without sufficient Internet access. The Secretary
shall exempt an eligible hospital from the application of the
payment adjustment under subclause (I) with respect to a fiscal
year, subject to annual renewal, if the Secretary determines
that compliance with the requirement for being a meaningful EHR
user is not possible because the certified EHR technology used
by such hospital is decertified under a program kept or
recognized pursuant to section 3001(c)(5) of the Public Health
Service Act. In no case may a hospital be granted an exemption
under this subclause for more than 5 years.
(III) For fiscal year 2015 and each subsequent fiscal year, a
State in which hospitals are paid for services under section
1814(b)(3) shall adjust the payments to each subsection (d)
hospital in the State that is not a meaningful EHR user (as
defined in subsection (n)(3)) in a manner that is designed to
result in an aggregate reduction in payments to hospitals in
the State that is equivalent to the aggregate reduction that
would have occurred if payments had been reduced to each
subsection (d) hospital in the State in a manner comparable to
the reduction under the previous provisions of this clause. The
State shall report to the Secretary the methodology it will use
to make the payment adjustment under the previous sentence.
(IV) For purposes of this clause, the term ``EHR reporting
period'' means, with respect to a fiscal year, any period (or
periods) as specified by the Secretary.
(x)(I) The Secretary shall develop standard Internet website
reports tailored to meet the needs of various stakeholders such
as hospitals, patients, researchers, and policymakers. The
Secretary shall seek input from such stakeholders in
determining the type of information that is useful and the
formats that best facilitate the use of the information.
(II) The Secretary shall modify the Hospital Compare Internet
website to make the use and navigation of that website readily
available to individuals accessing it.
(xi)(I) For 2012 and each subsequent fiscal year, after
determining the applicable percentage increase described in
clause (i) and after application of clauses (viii) and (ix),
such percentage increase shall be reduced by the productivity
adjustment described in subclause (II).
(II) The productivity adjustment described in this subclause,
with respect to a percentage, factor, or update for a fiscal
year, year, cost reporting period, or other annual period, is a
productivity adjustment equal to the 10-year moving average of
changes in annual economy-wide private nonfarm business multi-
factor productivity (as projected by the Secretary for the 10-
year period ending with the applicable fiscal year, year, cost
reporting period, or other annual period).
(III) The application of subclause (I) may result in the
applicable percentage increase described in clause (i) being
less than 0.0 for a fiscal year, and may result in payment
rates under this section for a fiscal year being less than such
payment rates for the preceding fiscal year.
(xii) After determining the applicable percentage increase
described in clause (i), and after application of clauses
(viii), (ix), and (xi), the Secretary shall reduce such
applicable percentage increase--
(I) for each of fiscal years 2010 and 2011, by 0.25
percentage point;
(II) for each of fiscal years 2012 and 2013, by 0.1
percentage point;
(III) for fiscal year 2014, by 0.3 percentage point;
(IV) for each of fiscal years 2015 and 2016, by 0.2
percentage point; and
(V) for each of fiscal years 2017, 2018, and 2019, by
0.75 percentage point.
The application of this clause may result in the applicable
percentage increase described in clause (i) being less than 0.0
for a fiscal year, and may result in payment rates under this
section for a fiscal year being less than such payment rates
for the preceding fiscal year.
(C) In the case of a hospital that is a sole community
hospital (as defined in subsection (d)(5)(D)(iii)), subject to
subparagraphs (I) and (L), the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the applicable percentage increases
applied to such hospital under this paragraph
for cost reporting periods after the base cost
reporting period and up to and including such
first 12-month cost reporting period,
(ii) with respect to a later cost reporting period
beginning before fiscal year 1994, the target amount
for the preceding 12-month cost reporting period,
increased by the applicable percentage increase under
subparagraph (B)(iv) for discharges occurring in the
fiscal year in which that later cost reporting period
begins,
(iii) with respect to discharges occurring in fiscal
year 1994, the target amount for the cost reporting
period beginning in fiscal year 1993 increased by the
applicable percentage increase under subparagraph
(B)(iv), or
(iv) with respect to discharges occurring in fiscal
year 1995 and each subsequent fiscal year, the target
amount for the preceding year increased by the
applicable percentage increase under subparagraph
(B)(iv).
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(D) For cost reporting periods ending on or before September
30, 1994, and for cost reporting periods occurring on or after
October 1, 1997, and before October 1, 2022, in the case of a
hospital that is a medicare-dependent, small rural hospital (as
defined in subsection (d)(5)(G)), subject to subparagraph (K),
the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the applicable percentage increases
applied to such hospital under this paragraph
for cost reporting periods after the base cost
reporting period and up to and including such
first 12-month cost reporting period, or
(ii) with respect to a later cost reporting period
beginning before fiscal year 1994, the target amount
for the preceding 12-month cost reporting period,
increased by the applicable percentage increase under
subparagraph (B)(iv) for discharges occurring in the
fiscal year in which that later cost reporting period
begins,
(iii) with respect to discharges occurring in fiscal
year 1994, the target amount for the cost reporting
period beginning in fiscal year 1993 increased by the
applicable percentage increase under subparagraph
(B)(iv), and
(iv) with respect to discharges occurring during
fiscal year 1998 through fiscal year 2022, the target
amount for the preceding year increased by the
applicable percentage increase under subparagraph
(B)(iv).
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(E) In the case of a hospital described in clause (v) of
subsection (d)(1)(B), the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the sum of the applicable percentage
increases applied to such hospital under this
paragraph for cost reporting periods after the
base cost reporting period and up to and
including such first 12-month cost reporting
period, or
(ii) with respect to a later cost reporting period,
the target amount for the preceding 12-month cost
reporting period, increased by the applicable
percentage increase under subparagraph (B)(ii) for that
later cost reporting period.
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(F)(i) In the case of a hospital (or unit described in the
matter following clause (v) of subsection (d)(1)(B)) that
received payment under this subsection for inpatient hospital
services furnished during cost reporting periods beginning
before October 1, 1990, that is within a class of hospital
described in clause (iii), and that elects (in a form and
manner determined by the Secretary) this subparagraph to apply
to the hospital, the target amount for the hospital's 12-month
cost reporting period beginning during fiscal year 1998 is
equal to the average described in clause (ii).
(ii) The average described in this clause for a hospital or
unit shall be determined by the Secretary as follows:
(I) The Secretary shall determine the allowable
operating costs for inpatient hospital services for the
hospital or unit for each of the 5 cost reporting
periods for which the Secretary has the most recent
settled cost reports as of the date of the enactment of
this subparagraph.
(II) The Secretary shall increase the amount
determined under subclause (I) for each cost reporting
period by the applicable percentage increase under
subparagraph (B)(ii) for each subsequent cost reporting
period up to the cost reporting period described in
clause (i).
(III) The Secretary shall identify among such 5 cost
reporting periods the cost reporting periods for which
the amount determined under subclause (II) is the
highest, and the lowest.
(IV) The Secretary shall compute the averages of the
amounts determined under subclause (II) for the 3 cost
reporting periods not identified under subclause (III).
(iii) For purposes of this subparagraph, each of the
following shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(III) Hospitals described in clause (iii) of such
subsection.
(IV) Hospitals described in clause (iv) of such
subsection.
(V) Hospitals described in clause (v) of such
subsection.
(G)(i) In the case of a qualified long-term care hospital (as
defined in clause (ii)) that elects (in a form and manner
determined by the Secretary) this subparagraph to apply to the
hospital, the target amount for the hospital's 12-month cost
reporting period beginning during fiscal year 1998 is equal to
the allowable operating costs of inpatient hospital services
(as defined in subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost reporting period
beginning during fiscal year 1996, increased by the applicable
percentage increase for the cost reporting period beginning
during fiscal year 1997.
(ii) In clause (i), a ``qualified long-term care hospital''
means, with respect to a cost reporting period, a hospital
described in clause (iv) of subsection (d)(1)(B) during each of
the 2 cost reporting periods for which the Secretary has the
most recent settled cost reports as of the date of the
enactment of this subparagraph for each of which--
(I) the hospital's allowable operating costs of
inpatient hospital services recognized under this title
exceeded 115 percent of the hospital's target amount,
and
(II) the hospital would have a disproportionate
patient percentage of at least 70 percent (as
determined by the Secretary under subsection
(d)(5)(F)(vi)) if the hospital were a subsection (d)
hospital.
(H)(i) In the case of a hospital or unit that is within a
class of hospital described in clause (iv), for a cost
reporting period beginning during fiscal years 1998 through
2002, the target amount for such a hospital or unit may not
exceed the amount as updated up to or for such cost reporting
period under clause (ii).
(ii)(I) In the case of a hospital or unit that is within a
class of hospital described in clause (iv), the Secretary shall
estimate the 75th percentile of the target amounts for such
hospitals within such class for cost reporting periods ending
during fiscal year 1996, as adjusted under clause (iii).
(II) The Secretary shall update the amount determined under
subclause (I), for each cost reporting period after the cost
reporting period described in such subclause and up to the
first cost reporting period beginning on or after October 1,
1997, by a factor equal to the market basket percentage
increase.
(III) For cost reporting periods beginning during each of
fiscal years 1999 through 2002, subject to subparagraph (J),
the Secretary shall update such amount by a factor equal to the
market basket percentage increase.
(iii) In applying clause (ii)(I) in the case of a hospital or
unit, the Secretary shall provide for an appropriate adjustment
to the labor-related portion of the amount determined under
such subparagraph to take into account differences between
average wage-related costs in the area of the hospital and the
national average of such costs within the same class of
hospital.
(iv) For purposes of this subparagraph, each of the following
shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(III) Hospitals described in clause (iv) of such
subsection.
(I)(i) Subject to subparagraph (L), for cost reporting
periods beginning on or after October 1, 2000, in the case of a
sole community hospital there shall be substituted for the
amount otherwise determined under subsection (d)(5)(D)(i), if
such substitution results in a greater amount of payment under
this section for the hospital--
(I) with respect to discharges occurring in fiscal
year 2001, 75 percent of the amount otherwise
applicable to the hospital under subsection
(d)(5)(D)(i) (referred to in this clause as the
``subsection (d)(5)(D)(i) amount'') and 25 percent of
the rebased target amount (as defined in clause (ii));
(II) with respect to discharges occurring in fiscal
year 2002, 50 percent of the subsection (d)(5)(D)(i)
amount and 50 percent of the rebased target amount;
(III) with respect to discharges occurring in fiscal
year 2003, 25 percent of the subsection (d)(5)(D)(i)
amount and 75 percent of the rebased target amount; and
(IV) with respect to discharges occurring after
fiscal year 2003, 100 percent of the rebased target
amount.
(ii) For purposes of this subparagraph, the ``rebased target
amount'' has the meaning given the term ``target amount'' in
subparagraph (C) except that--
(I) there shall be substituted for the base cost
reporting period the 12-month cost reporting period
beginning during fiscal year 1996;
(II) any reference in subparagraph (C)(i) to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after October 1, 2000;
and
(III) applicable increase percentage shall only be
applied under subparagraph (C)(iv) for discharges
occurring in fiscal years beginning with fiscal year
2002.
(iii) In no case shall a hospital be denied treatment as a
sole community hospital or payment (on the basis of a target
rate as such as a hospital) because data are unavailable for
any cost reporting period due to changes in ownership, changes
in fiscal intermediaries, or other extraordinary circumstances,
so long as data for at least one applicable base cost reporting
period is available.
(J) For cost reporting periods beginning during fiscal year
2001, for a hospital described in subsection (d)(1)(B)(iv)--
(i) the limiting or cap amount otherwise determined
under subparagraph (H) shall be increased by 2 percent;
and
(ii) the target amount otherwise determined under
subparagraph (A) shall be increased by 25 percent
(subject to the limiting or cap amount determined under
subparagraph (H), as increased by clause (i)).
(K)(i) With respect to discharges occurring on or after
October 1, 2006, in the case of a medicare-dependent, small
rural hospital, for purposes of applying subparagraph (D)--
(I) there shall be substituted for the base cost
reporting period described in subparagraph (D)(i) the
12-month cost reporting period beginning during fiscal
year 2002; and
(II) any reference in such subparagraph to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after October 1, 2006.
(ii) This subparagraph shall only apply to a hospital if the
substitution described in clause (i)(I) results in an increase
in the target amount under subparagraph (D) for the hospital.
(L)(i) For cost reporting periods beginning on or after
January 1, 2009, in the case of a sole community hospital there
shall be substituted for the amount otherwise determined under
subsection (d)(5)(D)(i) of this section, if such substitution
results in a greater amount of payment under this section for
the hospital, the subparagraph (L) rebased target amount.
(ii) For purposes of this subparagraph, the term
``subparagraph (L) rebased target amount'' has the meaning
given the term ``target amount'' in subparagraph (C), except
that--
(I) there shall be substituted for the base cost
reporting period the 12-month cost reporting period
beginning during fiscal year 2006;
(II) any reference in subparagraph (C)(i) to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after January 1, 2009;
and
(III) the applicable percentage increase shall only
be applied under subparagraph (C)(iv) for discharges
occurring on or after January 1, 2009.
(4)(A)(i) The Secretary shall provide for an exception and
adjustment to (and in the case of a hospital described in
subsection (d)(1)(B)(iii), may provide an exemption from) the
method under this subsection for determining the amount of
payment to a hospital where events beyond the hospital's
control or extraordinary circumstances, including changes in
the case mix of such hospital, create a distortion in the
increase in costs for a cost reporting period (including any
distortion in the costs for the base period against which such
increase is measured). The Secretary may provide for such other
exemptions from, and exceptions and adjustments to, such method
as the Secretary deems appropriate, including the assignment of
a new base period which is more representative, as determined
by the Secretary, of the reasonable and necessary cost of
inpatient services and including those which he deems necessary
to take into account a decrease in the inpatient hospital
services that a hospital provides and that are customarily
provided directly by similar hospitals which results in a
significant distortion in the operating costs of inpatient
hospital services. The Secretary shall announce a decision on
any request for an exemption, exception, or adjustment under
this paragraph not later than 180 days after receiving a
completed application from the intermediary for such exemption,
exception, or adjustment, and shall include in such decision a
detailed explanation of the grounds on which such request was
approved or denied.
(ii) The payment reductions under paragraph (3)(B)(ii)(V)
shall not be considered by the Secretary in making adjustments
pursuant to clause (i). In making such reductions, the
Secretary shall treat the applicable update factor described in
paragraph (3)(B)(vi) for a fiscal year as being equal to the
market basket percentage for that year.
(B) In determining under subparagraph (A) whether to assign a
new base period which is more representative of the reasonable
and necessary cost to a hospital of providing inpatient
services, the Secretary shall take into consideration--
(i) changes in applicable technologies and medical
practices, or differences in the severity of illness
among patients, that increase the hospital's costs;
(ii) whether increases in wages and wage-related
costs for hospitals located in the geographic area in
which the hospital is located exceed the average of the
increases in such costs paid by hospitals in the United
States; and
(iii) such other factors as the Secretary considers
appropriate in determining increases in the hospital's
costs of providing inpatient services.
(C) Paragraph (1) shall not apply to payment of hospitals
which is otherwise determined under paragraph (3) of section
1814(b).
(5) In the case of any hospital having any cost reporting
period of other than a 12-month period, the Secretary shall
determine the 12-month period which shall be used for purposes
of this section.
(6) In the case of any hospital which becomes subject to the
taxes under section 3111 of the Internal Revenue Code of 1954,
with respect to any or all of its employees, for part or all of
a cost reporting period, and was not subject to such taxes with
respect to any or all of its employees for all or part of the
12-month base cost reporting period referred to in subsection
(b)(3)(A)(i), the Secretary shall provide for an adjustment by
increasing the base period amount described in such subsection
for such hospital by an amount equal to the amount of such
taxes which would have been paid or accrued by such hospital
for such base period if such hospital had been subject to such
taxes for all of such base period with respect to all its
employees, minus the amount of any such taxes actually paid or
accrued for such base period.
(7)(A) Notwithstanding paragraph (1), in the case of a
hospital or unit that is within a class of hospital described
in subparagraph (B) which first receives payments under this
section on or after October 1, 1997--
(i) for each of the first 2 cost reporting periods
for which the hospital has a settled cost report, the
amount of the payment with respect to operating costs
described in paragraph (1) under part A on a per
discharge or per admission basis (as the case may be)
is equal to the lesser of--
(I) the amount of operating costs for such
respective period, or
(II) 110 percent of the national median (as
estimated by the Secretary) of the target
amount for hospitals in the same class as the
hospital for cost reporting periods ending
during fiscal year 1996, updated by the
hospital market basket increase percentage to
the fiscal year in which the hospital first
received payments under this section, as
adjusted under subparagraph (C); and
(ii) for purposes of computing the target amount for
the subsequent cost reporting period, the target amount
for the preceding cost reporting period is equal to the
amount determined under clause (i) for such preceding
period.
(B) For purposes of this paragraph, each of the following
shall be treated as a separate class of hospital:
(i) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(ii) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(iii) Hospitals described in clause (iv) of such
subsection.
(C) In applying subparagraph (A)(i)(II) in the case of a
hospital or unit, the Secretary shall provide for an
appropriate adjustment to the labor-related portion of the
amount determined under such subparagraph to take into account
differences between average wage-related costs in the area of
the hospital and the national average of such costs within the
same class of hospital.
(c)(1) The Secretary may provide, in his discretion, that
payment with respect to services provided by a hospital in a
State may be made in accordance with a hospital reimbursement
control system in a State, rather than in accordance with the
other provisions of this title, if the chief executive officer
of the State requests such treatment and if--
(A) the Secretary determines that the system, if
approved under this subsection, will apply (i) to
substantially all non- Federal acute care hospitals (as
defined by the Secretary) in the State and (ii) to the
review of at least 75 percent of all revenues or
expenses in the State for inpatient hospital services
and of revenues or expenses for inpatient hospital
services provided under the State's plan approved under
title XIX;
(B) the Secretary has been provided satisfactory
assurances as to the equitable treatment under the
system of all entities (including Federal and State
programs) that pay hospitals for inpatient hospital
services, of hospital employees, and of hospital
patients;
(C) the Secretary has been provided satisfactory
assurances that under the system, over 36-month periods
(the first such period beginning with the first month
in which this subsection applies to that system in the
State), the amount of payments made under this title
under such system will not exceed the amount of
payments which would otherwise have been made under
this title not using such system;
(D) the Secretary determines that the system will not
preclude an eligible organization (as defined in
section 1876(b)) from negotiating directly with
hospitals with respect to the organization's rate of
payment for inpatient hospital services; and
(E) the Secretary determines that the system requires
hospitals to meet the requirement of section
1866(a)(1)(G) and the system provides for the exclusion
of certain costs in accordance with section 1862(a)(14)
(except for such waivers thereof as the Secretary
provides by regulation).
The Secretary cannot deny the application of a State under this
subsection on the ground that the State's hospital
reimbursement control system is based on a payment methodology
other than on the basis of a diagnosis-related group or on the
ground that the amount of payments made under this title under
such system must be less than the amount of payments which
would otherwise have been made under this title not using such
system. If the Secretary determines that the conditions
described in subparagraph (C) are based on maintaining payment
amounts at no more than a specified percentage increase above
the payment amounts in a base period, the State has the option
of applying such test (for inpatient hospital services under
part A) on an aggregate payment basis or on the basis of the
amount of payment per inpatient discharge or admission. If the
Secretary determines that the conditions described in
subparagraph (C) are based on maintaining aggregate payment
amounts below a national average percentage increase in total
payments under part A for inpatient hospital services, the
Secretary cannot deny the application of a State under this
subsection on the ground that the State's rate of increase in
such payments for such services must be less than such national
average rate of increase.
(2) In determining under paragraph (1)(C) the amount of
payment which would otherwise have been made under this title
for a State, the Secretary may provide for appropriate
adjustment of such amount to take into account previous
reductions effected in the amount of payments made under this
title in the State due to the operation of the hospital
reimbursement control system in the State if the system has
resulted in an aggregate rate of increase in operating costs of
inpatient hospital services (as defined in subsection (a)(4))
under this title for hospitals in the State which is less than
the aggregate rate of increase in such costs under this title
for hospitals in the United States.
(3) The Secretary shall discontinue payments under a system
described in paragraph (1) if the Secretary--
(A) determines that the system no longer meets the
requirements of subparagraphs (A), (D), and (E) of
paragraph (1) and, if applicable, the requirements of
paragraph (5), or
(B) has reason to believe that the assurances
described in subparagraph (B) or (C) of paragraph (1)
(or, if applicable, in paragraph (5)) are not being (or
will not be) met.
(4) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if--
(A) the requirements of subparagraphs (A), (B), (C),
(D), and (E) of paragraph (1) have been met with
respect to the system, and
(B) with respect to that system a waiver of certain
requirements of title XVIII of the Social Security Act
has been approved on or before (and which is in effect
as of) the date of the enactment of the Social Security
Amendments of 1983, pursuant to section 402(a) of the
Social Security Amendments of 1967 or section 222(a) of
the Social Security Amendments of 1972.
With respect to a State system described in this paragraph, the
Secretary shall judge the effectiveness of such system on the
basis of its rate of increase or inflation in inpatient
hospital payments for individuals under this title, as compared
to the national rate of increase or inflation for such
payments, with the State retaining the option to have the test
applied on the basis of the aggregate payments under the State
system as compared to aggregate payments which would have been
made under the national system since October 1, 1984, to the
most recent date for which annual data are available.
(5) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if--
(A) the requirements of subparagraphs (A), (B), (C),
(D), and (E) of paragraph (1) have been met with
respect to the system;
(B) the Secretary determines that the system--
(i) is operated directly by the State or by
an entity designated pursuant to State law,
(ii) provides for payment of hospitals
covered under the system under a methodology
(which sets forth exceptions and adjustments,
as well as any method for changes in the
methodology) by which rates or amounts to be
paid for hospital services during a specified
period are established under the system prior
to the defined rate period, and
(iii) hospitals covered under the system will
make such reports (in lieu of cost and other
reports, identified by the Secretary, otherwise
required under this title) as the Secretary may
require in order to properly monitor assurances
provided under this subsection;
(C) the State has provided the Secretary with
satisfactory assurances that operation of the system
will not result in any change in hospital admission
practices which result in--
(i) a significant reduction in the proportion
of patients (receiving hospital services
covered under the system) who have no third-
party coverage and who are unable to pay for
hospital services,
(ii) a significant reduction in the
proportion of individuals admitted to hospitals
for inpatient hospital services for which
payment is (or is likely to be) less than the
anticipated charges for or costs of such
services,
(iii) the refusal to admit patients who would
be expected to require unusually costly or
prolonged treatment for reasons other than
those related to the appropriateness of the
care available at the hospital, or
(iv) the refusal to provide emergency
services to any person who is in need of
emergency services if the hospital provides
such services;
(D) any change by the State in the system which has
the effect of materially reducing payments to hospitals
can only take effect upon 60 days notice to the
Secretary and to the hospitals the payment to which is
likely to be materially affected by the change; and
(E) the State has provided the Secretary with
satisfactory assurances that in the development of the
system the State has consulted with local governmental
officials concerning the impact of the system on public
hospitals.
The Secretary shall respond to requests of States under this
paragraph within 60 days of the date the request is submitted
to the Secretary.
(6) If the Secretary determines that the assurances described
in paragraph (1)(C) have not been met with respect to any 36-
month period, the Secretary may reduce payments under this
title to hospitals under the system in an amount equal to the
amount by which the payment under this title under such system
for such period exceeded the amount of payments which would
otherwise have been made under this title not using such
system.
(7) In the case of a State which made a request under
paragraph (5) before December 31, 1984, for the approval of a
State hospital reimbursement control system and which request
was approved--
(A) in applying paragraphs (1)(C) and (6), a
reference to a ``36-month period'' is deemed a
reference to a ``48-month period'', and
(B) in order to allow the State the opportunity to
provide the assurances described in paragraph (1)(C)
for a 48-month period, the Secretary may not
discontinue payments under the system, under the
authority of paragraph (3)(A) because the Secretary has
reason to believe that such assurances are not being
(or will not be) met, before July 1, 1986.
(d)(1)(A) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, the amount of the payment with
respect to the operating costs of inpatient hospital services
(as defined in subsection (a)(4)) of a subsection (d) hospital
(as defined in subparagraph (B)) for inpatient hospital
discharges in a cost reporting period or in a fiscal year--
(i) beginning on or after October 1, 1983, and before
October 1, 1984, is equal to the sum of--
(I) the target percentage (as defined in
subparagraph (C)) of the hospital's target
amount for the cost reporting period (as
defined in subsection (b)(3)(A), but determined
without the application of subsection (a)), and
(II) the DRG percentage (as defined in
subparagraph (C)) of the regional adjusted DRG
prospective payment rate determined under
paragraph (2) for such discharges;
(ii) beginning on or after October 1, 1984, and
before October 1, 1987, is equal to the sum of--
(I) the target percentage (as defined in
subparagraph (C)) of the hospital's target
amount for the cost reporting period (as
defined in subsection (b)(3)(A), but determined
without the application of subsection (a)), and
(II) the DRG percentage (as defined in
subparagraph (C)) of the applicable combined
adjusted DRG prospective payment rate
determined under subparagraph (D) for such
discharges; or
(iii) beginning on or after April 1, 1988, is equal
to
(I) the national adjusted DRG prospective
payment rate determined under paragraph (3) for
such discharges, or
(II) for discharges occurring during a fiscal
year ending on or before September 30, 1996,
the sum of 85 percent of the national adjusted
DRG prospective payment rate determined under
paragraph (3) for such discharges and 15
percent of the regional adjusted DRG
prospective payment rate determined under such
paragraph, but only if the average standardized
amount (described in clause (i)(I) or clause
(ii)(I) of paragraph (3)(D)) for hospitals
within the region of, and in the same large
urban or other area (or, for discharges
occurring during a fiscal year ending on or
before September 30, 1994, the same rural,
large urban, or other urban area) as, the
hospital is greater than the average
standardized amount (described in the
respective clause) for hospitals within the
United States in that type of area for
discharges occurring during such fiscal year.
(B) As used in this section, the term ``subsection (d)
hospital'' means a hospital located in one of the fifty States
or the District of Columbia other than--
(i) a psychiatric hospital (as defined in section
1861(f)),
(ii) a rehabilitation hospital (as defined by the
Secretary),
(iii) a hospital whose inpatients are predominantly
individuals under 18 years of age,
(iv) a hospital which has an average inpatient length
of stay (as determined by the Secretary) of greater
than 25 days,
(v)(I) a hospital that the Secretary has classified,
at any time on or before December 31, 1990, (or, in the
case of a hospital that, as of the date of the
enactment of this clause, is located in a State
operating a demonstration project under section
1814(b), on or before December 31, 1991) for purposes
of applying exceptions and adjustments to payment
amounts under this subsection, as a hospital involved
extensively in treatment for or research on cancer,
(II) a hospital that was recognized as a
comprehensive cancer center or clinical cancer research
center by the National Cancer Institute of the National
Institutes of Health as of April 20, 1983, that is
located in a State which, as of December 19, 1989, was
not operating a demonstration project under section
1814(b), that applied and was denied, on or before
December 31, 1990, for classification as a hospital
involved extensively in treatment for or research on
cancer under this clause (as in effect on the day
before the date of the enactment of this subclause),
that as of the date of the enactment of this subclause,
is licensed for less than 50 acute care beds, and that
demonstrates for the 4-year period ending on December
31, 1996, that at least 50 percent of its total
discharges have a principal finding of neoplastic
disease, as defined in subparagraph (E), or
(III) a hospital that was recognized as a clinical
cancer research center by the National Cancer Institute
of the National Institutes of Health as of February 18,
1998, that has never been reimbursed for inpatient
hospital services pursuant to a reimbursement system
under a demonstration project under section 1814(b),
that is a freestanding facility organized primarily for
treatment of and research on cancer and is not a unit
of another hospital, that as of the date of the
enactment of this subclause, is licensed for 162 acute
care beds, and that demonstrates for the 4-year period
ending on June 30, 1999, that at least 50 percent of
its total discharges have a principal finding of
neoplastic disease, as defined in subparagraph (E), or
(vi) a hospital that first received payment under
this subsection in 1986 which has an average inpatient
length of stay (as determined by the Secretary) of
greater than 20 days and that has 80 percent or more of
its annual medicare inpatient discharges with a
principal diagnosis that reflects a finding of
neoplastic disease in the 12-month cost reporting
period ending in fiscal year 1997;
and, in accordance with regulations of the Secretary, does not
include a psychiatric or rehabilitation unit of the hospital
which is a distinct part of the hospital (as defined by the
Secretary). A hospital that was classified by the Secretary on
or before September 30, 1995, as a hospital described in clause
(iv) (as in effect as of such date) shall continue to be so
classified (or, in the case of a hospital described in clause
(iv)(II), as so in effect, shall be classified under clause
(vi) on and after the effective date of such clause (vi) and
for cost reporting periods beginning on or after January 1,
2015, shall not be subject to subsection (m) as of the date of
such classification) notwithstanding that it is located in the
same building as, or on the same campus as, another hospital.
(C) For purposes of this subsection, for cost reporting
periods beginning--
(i) on or after October 1, 1983, and before October
1, 1984, the ``target percentage'' is 75 percent and
the ``DRG percentage'' is 25 percent;
(ii) on or after October 1, 1984, and before October
1, 1985, the ``target percentage'' is 50 percent and
the ``DRG percentage'' is 50 percent;
(iii) on or after October 1, 1985, and before October
1, 1986, the ``target percentage'' is 45 percent and
the ``DRG percentage'' is 55 percent; and
(iv) on or after October 1, 1986, and before October
1, 1987, the ``target percentage'' is 25 percent and
the ``DRG percentage'' is 75 percent.
(D) For purposes of subparagraph (A)(ii)(II), the
``applicable combined adjusted DRG prospective payment rate''
for discharges occurring--
(i) on or after October 1, 1984, and before October
1, 1986, is a combined rate consisting of 25 percent of
the national adjusted DRG prospective payment rate, and
75 percent of the regional adjusted DRG prospective
payment rate, determined under paragraph (3) for such
discharges; and
(ii) on or after October 1, 1986, and before October
1, 1987, is a combined rate consisting of 50 percent of
the national adjusted DRG prospective payment rate, and
50 percent of the regional adjusted DRG prospective
payment rate, determined under paragraph (3) for such
discharges.
(E) For purposes of subclauses (II) and (III) of subparagraph
(B)(v) only, the term ``principal finding of neoplastic
disease'' means the condition established after study to be
chiefly responsible for occasioning the admission of a patient
to a hospital, except that only discharges with ICD-9-CM
principal diagnosis codes of 140 through 239, V58.0, V58.1,
V66.1, V66.2, or 990 will be considered to reflect such a
principal diagnosis.
(2) The Secretary shall determine a national adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in fiscal year 1984 involving inpatient hospital services of a
subsection (d) hospital in the United States, and shall
determine a regional adjusted DRG prospective payment rate for
such discharges in each region, for which payment may be made
under part A of this title. Each such rate shall be determined
for hospitals located in urban or rural areas within the United
States or within each such region, respectively, as follows:
(A) Determining allowable individual hospital costs
for base period.--The Secretary shall determine the
allowable operating costs per discharge of inpatient
hospital services for the hospital for the most recent
cost reporting period for which data are available.
(B) Updating for fiscal year 1984.--The Secretary
shall update each amount determined under subparagraph
(A) for fiscal year 1984 by--
(i) updating for fiscal year 1983 by the
estimated average rate of change of hospital
costs industry-wide between the cost reporting
period used under such subparagraph and fiscal
year 1983 and the most recent case-mix data
available, and
(ii) projecting for fiscal year 1984 by the
applicable percentage increase (as defined in
subsection (b)(3)(B)) for fiscal year 1984.
(C) Standardizing amounts.--The Secretary shall
standardize the amount updated under subparagraph (B)
for each hospital by--
(i) excluding an estimate of indirect medical
education costs (taking into account, for
discharges occurring after September 30, 1986,
the amendments made by section 9104(a) of the
Medicare and Medicaid Budget Reconciliation
Amendments of 1985), except that the Secretary
shall not take into account any reduction in
the amount of additional payments under
paragraph (5)(B)(ii) resulting from the
amendment made by section 4621(a)(1) of the
Balanced Budget Act of 1997 or any additional
payments under such paragraph resulting from
the application of section 111 of the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999, of section 302 of the Medicare,
Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, or the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003,
(ii) adjusting for variations among hospitals
by area in the average hospital wage level,
(iii) adjusting for variations in case mix
among hospitals, and
(iv) for discharges occurring on or after
October 1, 1986, excluding an estimate of the
additional payments to certain hospitals to be
made under paragraph (5)(F), except that the
Secretary shall not exclude additional payments
under such paragraph made as a result of the
enactment of section 6003(c) of the Omnibus
Budget Reconciliation Act of 1989, the
enactment of section 4002(b) of the Omnibus
Budget Reconciliation Act of 1990, the
enactment of section 303 of the Medicare,
Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, or the enactment of
section 402(a)(1) of the Medicare Prescription
Drug, Improvement, and Modernization Act of
2003.
(D) Computing urban and rural averages.--The
Secretary shall compute an average of the standardized
amounts determined under subparagraph (C) for the
United States and for each region--
(i) for all subsection (d) hospitals located
in an urban area within the United States or
that region, respectively, and
(ii) for all subsection (d) hospitals located
in a rural area within the United States or
that region, respectively.
For purposes of this subsection, the term ``region''
means one of the nine census divisions, comprising the
fifty States and the District of Columbia, established
by the Bureau of the Census for statistical and
reporting purposes; the term ``urban area'' means an
area within a Metropolitan Statistical Area (as defined
by the Office of Management and Budget) or within such
similar area as the Secretary has recognized under
subsection (a) by regulation; the term ``large urban
area'' means, with respect to a fiscal year, such an
urban area which the Secretary determines (in the
publications described in subsection (e)(5) before the
fiscal year) has a population of more than 1,000,000
(as determined by the Secretary based on the most
recent available population data published by the
Bureau of the Census); and the term ``rural area''
means any area outside such an area or similar area. A
hospital located in a Metropolitan Statistical Area
shall be deemed to be located in the region in which
the largest number of the hospitals in the same
Metropolitan Statistical Area are located, or, at the
option of the Secretary, the region in which the
majority of the inpatient discharges (with respect to
which payments are made under this title) from
hospitals in the same Metropolitan Statistical Area are
made.
(E) Reducing for value of outlier payments.--The
Secretary shall reduce each of the average standardized
amounts determined under subparagraph (D) by a
proportion equal to the proportion (estimated by the
Secretary) of the amount of payments under this
subsection based on DRG prospective payment rates which
are additional payments described in paragraph (5)(A)
(relating to outlier payments).
(F) Maintaining budget neutrality.--The Secretary
shall adjust each of such average standardized amounts
as may be required under subsection (e)(1)(B) for that
fiscal year.
(G) Computing drg-specific rates for urban and rural
hospitals in the united states and in each region.--For
each discharge classified within a diagnosis-related
group, the Secretary shall establish a national DRG
prospective payment rate and shall establish a regional
DRG prospective payment rate for each region, each of
which is equal--
(i) for hospitals located in an urban area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (D),
reduced under subparagraph (E), and
adjusted under subparagraph (F)) for
hospitals located in an urban area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group; and
(ii) for hospitals located in a rural area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (D),
reduced under subparagraph (E), and
adjusted under subparagraph (F)) for
hospitals located in a rural area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group.
(H) Adjusting for different area wage levels.--The
Secretary shall adjust the proportion, (as estimated by
the Secretary from time to time) of hospitals' costs
which are attributable to wages and wage-related costs,
of the national and regional DRG prospective payment
rates computed under subparagraph (G) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the national average hospital wage
level.
(3) The Secretary shall determine a national adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in a fiscal year after fiscal year 1984 involving inpatient
hospital services of a subsection (d) hospital in the United
States, and shall determine, for fiscal years before fiscal
year 1997, a regional adjusted DRG prospective payment rate for
such discharges in each region for which payment may be made
under part A of this title. Each such rate shall be determined
for hospitals located in large urban, other urban, or rural
areas within the United States and within each such region,
respectively, as follows:
(A) Updating previous standardized amounts.--(i) For
discharges occurring in a fiscal year beginning before
October 1, 1987, the Secretary shall compute an average
standardized amount for hospitals located in an urban
area and for hospitals located in a rural area within
the United States and for hospitals located in an urban
area and for hospitals located in a rural area within
each region, equal to the respective average
standardized amount computed for the previous fiscal
year under paragraph (2)(D) or under this subparagraph,
increased for the fiscal year involved by the
applicable percentage increase under subsection
(b)(3)(B). With respect to discharges occurring on or
after October 1, 1987, the Secretary shall compute
urban and rural averages on the basis of discharge
weighting rather than hospital weighting, making
appropriate adjustments to ensure that computation on
such basis does not result in total payments under this
section that are greater or less than the total
payments that would have been made under this section
but for this sentence, and making appropriate changes
in the manner of determining the reductions under
subparagraph (C)(ii).
(ii) For discharges occurring in a fiscal year
beginning on or after October 1, 1987, and ending on or
before September 30, 1994, the Secretary shall compute
an average standardized amount for hospitals located in
a large urban area, for hospitals located in a rural
area, and for hospitals located in other urban areas,
within the United States and within each region, equal
to the respective average standardized amount computed
for the previous fiscal year under this subparagraph
increased by the applicable percentage increase under
subsection (b)(3)(B)(i) with respect to hospitals
located in the respective areas for the fiscal year
involved.
(iii) For discharges occurring in the fiscal year
beginning on October 1, 1994, the average standardized
amount for hospitals located in a rural area shall be
equal to the average standardized amount for hospitals
located in an urban area. For discharges occurring on
or after October 1, 1994, the Secretary shall adjust
the ratio of the labor portion to non-labor portion of
each average standardized amount to equal such ratio
for the national average of all standardized amounts.
(iv)(I) Subject to subclause (II), for discharges
occurring in a fiscal year beginning on or after
October 1, 1995, the Secretary shall compute an average
standardized amount for hospitals located in a large
urban area and for hospitals located in other areas
within the United States and within each region equal
to the respective average standardized amount computed
for the previous fiscal year under this subparagraph
increased by the applicable percentage increase under
subsection (b)(3)(B)(i) with respect to hospitals
located in the respective areas for the fiscal year
involved.
(II) For discharges occurring in a fiscal year
(beginning with fiscal year 2004), the Secretary shall
compute a standardized amount for hospitals located in
any area within the United States and within each
region equal to the standardized amount computed for
the previous fiscal year under this subparagraph for
hospitals located in a large urban area (or, beginning
with fiscal year 2005, for all hospitals in the
previous fiscal year) increased by the applicable
percentage increase under subsection (b)(3)(B)(i) for
the fiscal year involved.
(v) Average standardized amounts computed under this
paragraph shall be adjusted to reflect the most recent
case-mix data available.
(vi) Insofar as the Secretary determines that the
adjustments under paragraph (4)(C)(i) for a previous
fiscal year (or estimates that such adjustments for a
future fiscal year) did (or are likely to) result in a
change in aggregate payments under this subsection
during the fiscal year that are a result of changes in
the coding or classification of discharges that do not
reflect real changes in case mix, the Secretary may
adjust the average standardized amounts computed under
this paragraph for subsequent fiscal years so as to
eliminate the effect of such coding or classification
changes.
(B) Reducing for value of outlier payments.--The
Secretary shall reduce each of the average standardized
amounts determined under subparagraph (A) by a factor
equal to the proportion of payments under this
subsection (as estimated by the Secretary) based on DRG
prospective payment amounts which are additional
payments described in paragraph (5)(A) (relating to
outlier payments).
(C)(i) Maintaining budget neutrality for fiscal year
1985.--For discharges occurring in fiscal year 1985,
the Secretary shall adjust each of such average
standardized amounts as may be required under
subsection (e)(1)(B) for that fiscal year.
(ii) Reducing for savings from amendment to indirect
teaching adjustment for discharges after September 30,
1986.--For discharges occurring after September 30,
1986, the Secretary shall further reduce each of the
average standardized amounts (in a proportion which
takes into account the differing effects of the
standardization effected under paragraph (2)(C)(i)) so
as to provide for a reduction in the total of the
payments (attributable to this paragraph) made for
discharges occurring on or after October 1, 1986, of an
amount equal to the estimated reduction in the payment
amounts under paragraph (5)(B) that would have resulted
from the enactment of the amendments made by section
9104 of the Medicare and Medicaid Budget Reconciliation
Amendments of 1985 and by section 4003(a)(1) of the
Omnibus Budget Reconciliation Act of 1987 if the factor
described in clause (ii)(II) of paragraph (5)(B)
(determined without regard to amendments made by the
Omnibus Budget Reconciliation Act of 1990) were applied
for discharges occurring on or after such date instead
of the factor described in clause (ii) of that
paragraph.
(D) Computing drg-specific rates for hospitals.--For
each discharge classified within a diagnosis-related
group, the Secretary shall establish for the fiscal
year a national DRG prospective payment rate and shall
establish, for fiscal years before fiscal year 1997, a
regional DRG prospective payment rate for each region
which is equal--
(i) for fiscal years before fiscal year 2004,
for hospitals located in a large urban area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (A),
reduced under subparagraph (B), and
adjusted or reduced under subparagraph
(C)) for the fiscal year for hospitals
located in such a large urban area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group;
(ii) for fiscal years before fiscal year
2004, for hospitals located in other areas in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (A),
reduced under subparagraph (B), and
adjusted or reduced under subparagraph
(C)) for the fiscal year for hospitals
located in other areas in the United
States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group; and
(iii) for a fiscal year beginning after
fiscal year 2003, for hospitals located in all
areas, to the product of--
(I) the applicable standardized
amount (computed under subparagraph
(A)), reduced under subparagraph (B),
and adjusted or reduced under
subparagraph (C) for the fiscal year;
and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group.
(E) Adjusting for different area wage levels.--
(i) In general.--Except as provided in clause
(ii) or (iii), the Secretary shall adjust the
proportion, (as estimated by the Secretary from
time to time) of hospitals' costs which are
attributable to wages and wage-related costs,
of the DRG prospective payment rates computed
under subparagraph (D) for area differences in
hospital wage levels by a factor (established
by the Secretary) reflecting the relative
hospital wage level in the geographic area of
the hospital compared to the national average
hospital wage level. Not later than October 1,
1990, and October 1, 1993 (and at least every
12 months thereafter), the Secretary shall
update the factor under the preceding sentence
on the basis of a survey conducted by the
Secretary (and updated as appropriate) of the
wages and wage-related costs of subsection (d)
hospitals in the United States. Not less often
than once every 3 years the Secretary (through
such survey or otherwise) shall measure the
earnings and paid hours of employment by
occupational category and shall exclude data
with respect to the wages and wage-related
costs incurred in furnishing skilled nursing
facility services. Any adjustments or updates
made under this subparagraph for a fiscal year
(beginning with fiscal year 1991) shall be made
in a manner that assures that the aggregate
payments under this subsection in the fiscal
year are not greater or less than those that
would have been made in the year without such
adjustment. The Secretary shall apply the
previous sentence for any period as if the
amendments made by section 403(a)(1) of the
Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 and the amendments
made by section 10324(a)(1) of the Patient
Protection and Affordable Care Act had not been
enacted.
(ii) Alternative proportion to be adjusted
beginning in fiscal year 2005.--For discharges
occurring on or after October 1, 2004, the
Secretary shall substitute ``62 percent'' for
the proportion described in the first sentence
of clause (i), unless the application of this
clause would result in lower payments to a
hospital than would otherwise be made.
(iii) Floor on area wage index for hospitals
in frontier states.--
(I) In general.--Subject to subclause
(IV), for discharges occurring on or
after October 1, 2010, the area wage
index applicable under this
subparagraph to any hospital which is
located in a frontier State (as defined
in subclause (II)) may not be less than
1.00.
(II) Frontier state defined.--In this
clause, the term ``frontier State''
means a State in which at least 50
percent of the counties in the State
are frontier counties.
(III) Frontier county defined.--In
this clause, the term ``frontier
county'' means a county in which the
population per square mile is less than
6.
(IV) Limitation.--This clause shall
not apply to any hospital located in a
State that receives a non-labor related
share adjustment under paragraph
(5)(H).
(4)(A) The Secretary shall establish a classification of
inpatient hospital discharges by diagnosis-related groups and a
methodology for classifying specific hospital discharges within
these groups.
(B) For each such diagnosis-related group the Secretary shall
assign an appropriate weighting factor which reflects the
relative hospital resources used with respect to discharges
classified within that group compared to discharges classified
within other groups.
(C)(i) The Secretary shall adjust the classifications and
weighting factors established under subparagraphs (A) and (B),
for discharges in fiscal year 1988 and at least annually
thereafter, to reflect changes in treatment patterns,
technology (including a new medical service or technology under
paragraph (5)(K)), and other factors which may change the
relative use of hospital resources.
(ii) For discharges in fiscal year 1990, the Secretary shall
reduce the weighting factor for each diagnosis-related group by
1.22 percent.
(iii) Any such adjustment under clause (i) for discharges in
a fiscal year (beginning with fiscal year 1991) shall be made
in a manner that assures that the aggregate payments under this
subsection for discharges in the fiscal year are not greater or
less than those that would have been made for discharges in the
year without such adjustment.
(D)(i) For discharges occurring on or after October 1, 2008,
the diagnosis-related group to be assigned under this paragraph
for a discharge described in clause (ii) shall be a diagnosis-
related group that does not result in higher payment based on
the presence of a secondary diagnosis code described in clause
(iv).
(ii) A discharge described in this clause is a discharge
which meets the following requirements:
(I) The discharge includes a condition identified by
a diagnosis code selected under clause (iv) as a
secondary diagnosis.
(II) But for clause (i), the discharge would have
been classified to a diagnosis-related group that
results in a higher payment based on the presence of a
secondary diagnosis code selected under clause (iv).
(III) At the time of admission, no code selected
under clause (iv) was present.
(iii) As part of the information required to be reported by a
hospital with respect to a discharge of an individual in order
for payment to be made under this subsection, for discharges
occurring on or after October 1, 2007, the information shall
include the secondary diagnosis of the individual at admission.
(iv) By not later than October 1, 2007, the Secretary shall
select diagnosis codes associated with at least two conditions,
each of which codes meets all of the following requirements (as
determined by the Secretary):
(I) Cases described by such code have a high cost or
high volume, or both, under this title.
(II) The code results in the assignment of a case to
a diagnosis-related group that has a higher payment
when the code is present as a secondary diagnosis.
(III) The code describes such conditions that could
reasonably have been prevented through the application
of evidence-based guidelines.
The Secretary may from time to time revise (through addition or
deletion of codes) the diagnosis codes selected under this
clause so long as there are diagnosis codes associated with at
least two conditions selected for discharges occurring during
any fiscal year.
(v) In selecting and revising diagnosis codes under clause
(iv), the Secretary shall consult with the Centers for Disease
Control and Prevention and other appropriate entities.
(vi) Any change resulting from the application of this
subparagraph shall not be taken into account in adjusting the
weighting factors under subparagraph (C)(i) or in applying
budget neutrality under subparagraph (C)(iii).
(5)(A)(i) For discharges occurring during fiscal years ending
on or before September 30, 1997, the Secretary shall provide
for an additional payment for a subsection (d) hospital for any
discharge in a diagnosis-related group, the length of stay of
which exceeds the mean length of stay for discharges within
that group by a fixed number of days, or exceeds such mean
length of stay by some fixed number of standard deviations,
whichever is the fewer number of days.
(ii) For cases which are not included in clause (i), a
subsection (d) hospital may request additional payments in any
case where charges, adjusted to cost, exceed a fixed multiple
of the applicable DRG prospective payment rate, or exceed such
other fixed dollar amount, whichever is greater, or for
discharges in fiscal years beginning on or after October 1,
1994, exceed the sum of the applicable DRG prospective payment
rate plus any amounts payable under subparagraphs (B) and (F)
plus a fixed dollar amount determined by the Secretary.
(iii) The amount of such additional payment under clauses (i)
and (ii) shall be determined by the Secretary and shall (except
as payments under clause (i) are required to be reduced to take
into account the requirements of clause (v)) approximate the
marginal cost of care beyond the cutoff point applicable under
clause (i) or (ii).
(iv) The total amount of the additional payments made under
this subparagraph for discharges in a fiscal year may not be
less than 5 percent nor more than 6 percent of the total
payments projected or estimated to be made based on DRG
prospective payment rates for discharges in that year.
(v) The Secretary shall provide that--
(I) the day outlier percentage for fiscal year 1995
shall be 75 percent of the day outlier percentage for
fiscal year 1994;
(II) the day outlier percentage for fiscal year 1996
shall be 50 percent of the day outlier percentage for
fiscal year 1994; and
(III) the day outlier percentage for fiscal year 1997
shall be 25 percent of the day outlier percentage for
fiscal year 1994.
(vi) For purposes of this subparagraph the term ``day outlier
percentage'' means, for a fiscal year, the percentage of the
total additional payments made by the Secretary under this
subparagraph for discharges in that fiscal year which are
additional payments under clause (i).
(B) The Secretary shall provide for an additional payment
amount for subsection (d) hospitals with indirect costs of
medical education, in an amount computed in the same manner as
the adjustment for such costs under regulations (in effect as
of January 1, 1983) under subsection (a)(2), except as follows:
(i) The amount of such additional payment shall be
determined by multiplying (I) the sum of the amount
determined under paragraph (1)(A)(ii)(II) (or, if
applicable, the amount determined under paragraph
(1)(A)(iii)) and, for cases qualifying for additional
payment under subparagraph (A)(i), the amount paid to
the hospital under subparagraph (A), by (II) the
indirect teaching adjustment factor described in clause
(ii).
(ii) For purposes of clause (i)(II), the indirect
teaching adjustment factor is equal to c
(((1+r) to the nth power) - 1), where ``r'' is the
ratio of the hospital's full-time equivalent interns
and residents to beds and ``n'' equals .405. Subject to
clause (ix), for discharges occurring--
(I) on or after October 1, 1988, and before
October 1, 1997, ``c'' is equal to 1.89;
(II) during fiscal year 1998, ``c'' is equal
to 1.72;
(III) during fiscal year 1999, ``c'' is equal
to 1.6;
(IV) during fiscal year 2000, ``c'' is equal
to 1.47;
(V) during fiscal year 2001, ``c'' is equal
to 1.54;
(VI) during fiscal year 2002, ``c'' is equal
to 1.6;
(VII) on or after October 1, 2002, and before
April 1, 2004, ``c'' is equal to 1.35;
(VIII) on or after April 1, 2004, and before
October 1, 2004, ``c'' is equal to 1.47;
(IX) during fiscal year 2005, ``c'' is equal
to 1.42;
(X) during fiscal year 2006, ``c'' is equal
to 1.37;
(XI) during fiscal year 2007, ``c'' is equal
to 1.32; and
(XII) on or after October 1, 2007, ``c'' is
equal to 1.35.
(iii) In determining such adjustment the Secretary
shall not distinguish between those interns and
residents who are employees of a hospital and those
interns and residents who furnish services to a
hospital but are not employees of such hospital.
(iv)(I) Effective for discharges occurring on or
after October 1, 1997, and before July 1, 2010, all the
time spent by an intern or resident in patient care
activities under an approved medical residency training
program at an entity in a nonhospital setting shall be
counted towards the determination of full-time
equivalency if the hospital incurs all, or
substantially all, of the costs for the training
program in that setting.
(II) Effective for discharges occurring on or after
July 1, 2010, all the time spent by an intern or
resident in patient care activities in a nonprovider
setting shall be counted towards the determination of
full-time equivalency if a hospital incurs the costs of
the stipends and fringe benefits of the intern or
resident during the time the intern or resident spends
in that setting. If more than one hospital incurs these
costs, either directly or through a third party, such
hospitals shall count a proportional share of the time,
as determined by written agreement between the
hospitals, that a resident spends training in that
setting.
(v) In determining the adjustment with respect to a
hospital for discharges occurring on or after October
1, 1997, the total number of full-time equivalent
interns and residents in the fields of allopathic and
osteopathic medicine in either a hospital or
nonhospital setting may not exceed the number (or, 130
percent of such number in the case of a hospital
located in a rural area) of such full-time equivalent
interns and residents in the hospital with respect to
the hospital's most recent cost reporting period ending
on or before December 31, 1996. Rules similar to the
rules of subsection (h)(4)(F)(ii) shall apply for
purposes of this clause. The provisions of subsections
(h)(4)(H)(vi), (h)(7), [and (h)(8)] (h)(8) , and (h)(9)
shall apply with respect to the first sentence of this
clause in the same manner as they apply with respect to
subsection (h)(4)(F)(i).
(vi) For purposes of clause (ii)--
(I) ``r'' may not exceed the ratio of the
number of interns and residents, subject to the
limit under clause (v), with respect to the
hospital for its most recent cost reporting
period to the hospital's available beds (as
defined by the Secretary) during that cost
reporting period, and
(II) for the hospital's cost reporting
periods beginning on or after October 1, 1997,
subject to the limits described in clauses (iv)
and (v), the total number of full-time
equivalent residents for payment purposes shall
equal the average of the actual full-time
equivalent resident count for the cost
reporting period and the preceding two cost
reporting periods.
In the case of the first cost reporting period
beginning on or after October 1, 1997, subclause (II)
shall be applied by using the average for such period
and the preceding cost reporting period.
(vii) If any cost reporting period beginning on or
after October 1, 1997, is not equal to twelve months,
the Secretary shall make appropriate modifications to
ensure that the average full-time equivalent residency
count pursuant to subclause (II) of clause (vi) is
based on the equivalent of full twelve-month cost
reporting periods.
(viii) Rules similar to the rules of subsection
(h)(4)(H) shall apply for purposes of clauses (v) and
(vi).
(ix) For discharges occurring on or after July 1,
2005, insofar as an additional payment amount under
this subparagraph is attributable to resident positions
redistributed to a hospital under subsection (h)(7)(B),
in computing the indirect teaching adjustment factor
under clause (ii) the adjustment shall be computed in a
manner as if ``c'' were equal to 0.66 with respect to
such resident positions.
(x) For discharges occurring on or after July 1,
2011, insofar as an additional payment amount under
this subparagraph is attributable to resident positions
distributed to a hospital under subsection (h)(8)(B),
the indirect teaching adjustment factor shall be
computed in the same manner as provided under clause
(ii) with respect to such resident positions.
[(x)] (xi)(I) The provisions of subparagraph (K) of
subsection (h)(4) shall apply under this subparagraph
in the same manner as they apply under such subsection.
(II) In determining the hospital's number of full-
time equivalent residents for purposes of this
subparagraph, all the time spent by an intern or
resident in an approved medical residency training
program in non-patient care activities, such as
didactic conferences and seminars, as such time and
activities are defined by the Secretary, that occurs in
the hospital shall be counted toward the determination
of full-time equivalency if the hospital--
(aa) is recognized as a subsection (d)
hospital;
(bb) is recognized as a subsection (d) Puerto
Rico hospital;
(cc) is reimbursed under a reimbursement
system authorized under section 1814(b)(3); or
(dd) is a provider-based hospital outpatient
department.
(III) In determining the hospital's number of full-
time equivalent residents for purposes of this
subparagraph, all the time spent by an intern or
resident in an approved medical residency training
program in research activities that are not associated
with the treatment or diagnosis of a particular
patient, as such time and activities are defined by the
Secretary, shall not be counted toward the
determination of full-time equivalency.
(xii) For discharges occurring on or after July 1,
2022, insofar as an additional payment amount under
this subparagraph is attributable to residency
positions distributed to a hospital under subsection
(h)(9), the indirect teaching adjustment factor shall
be computed in the same manner as provided under clause
(ii) with respect to such residency positions.
(C)(i) The Secretary shall provide for such exceptions and
adjustments to the payment amounts established under this
subsection (other than under paragraph (9)) as the Secretary
deems appropriate to take into account the special needs of
regional and national referral centers (including those
hospitals of 275 or more beds located in rural areas). A
hospital which is classified as a rural hospital may appeal to
the Secretary to be classified as a rural referral center under
this clause on the basis of criteria (established by the
Secretary) which shall allow the hospital to demonstrate that
it should be so reclassified by reason of certain of its
operating characteristics being similar to those of a typical
urban hospital located in the same census region and which
shall not require a rural osteopathic hospital to have more
than 3,000 discharges in a year in order to be classified as a
rural referral center. Such characteristics may include wages,
scope of services, service area, and the mix of medical
specialties. The Secretary shall publish the criteria not later
than August 17, 1984, for implementation by October 1, 1984. An
appeal allowed under this clause must be submitted to the
Secretary (in such form and manner as the Secretary may
prescribe) during the quarter before the first quarter of the
hospital's cost reporting period (or, in the case of a cost
reporting period beginning during October 1984, during the
first quarter of that period), and the Secretary must make a
final determination with respect to such appeal within 60 days
after the date the appeal was submitted. Any payment
adjustments necessitated by a reclassification based upon the
appeal shall be effective at the beginning of such cost
reporting period.
(ii) The Secretary shall provide, under clause (i), for the
classification of a rural hospital as a regional referral
center if the hospital has a case mix index equal to or greater
than the median case mix index for hospitals (other than
hospitals with approved teaching programs) located in an urban
area in the same region (as defined in paragraph (2)(D)), has
at least 5,000 discharges a year or, if less, the median number
of discharges in urban hospitals in the region in which the
hospital is located (or, in the case of a rural osteopathic
hospital, meets the criterion established by the Secretary
under clause (i) with respect to the annual number of
discharges for such hospitals), and meets any other criteria
established by the Secretary under clause (i).
(D)(i) For any cost reporting period beginning on or after
April 1, 1990, with respect to a subsection (d) hospital which
is a sole community hospital, payment under paragraph (1)(A)
shall be--
(I) an amount based on 100 percent of the hospital's
target amount for the cost reporting period, as defined
in subsection (b)(3)(C), or
(II) the amount determined under paragraph
(1)(A)(iii),
whichever results in greater payment to the hospital.
(ii) In the case of a sole community hospital that
experiences, in a cost reporting period compared to the
previous cost reporting period, a decrease of more than 5
percent in its total number of inpatient cases due to
circumstances beyond its control, the Secretary shall provide
for such adjustment to the payment amounts under this
subsection (other than under paragraph (9)) as may be necessary
to fully compensate the hospital for the fixed costs it incurs
in the period in providing inpatient hospital services,
including the reasonable cost of maintaining necessary core
staff and services.
(iii) For purposes of this title, the term ``sole community
hospital'' means any hospital--
(I) that the Secretary determines is located more
than 35 road miles from another hospital,
(II) that, by reason of factors such as the time
required for an individual to travel to the nearest
alternative source of appropriate inpatient care (in
accordance with standards promulgated by the
Secretary), location, weather conditions, travel
conditions, or absence of other like hospitals (as
determined by the Secretary), is the sole source of
inpatient hospital services reasonably available to
individuals in a geographic area who are entitled to
benefits under part A, or
(III) that is located in a rural area and designated
by the Secretary as an essential access community
hospital under section 1820(i)(1) as in effect on
September 30, 1997.
(iv) The Secretary shall promulgate a standard for
determining whether a hospital meets the criteria for
classification as a sole community hospital under clause
(iii)(II) because of the time required for an individual to
travel to the nearest alternative source of appropriate
inpatient care.
(v) If the Secretary determines that, in the case of a
hospital located in a rural area and designated by the
Secretary as an essential access community hospital under
section 1820(i)(1) as in effect on September 30, 1997, the
hospital has incurred increases in reasonable costs during a
cost reporting period as a result of becoming a member of a
rural health network (as defined in section 1820(d)) in the
State in which it is located, and in incurring such increases,
the hospital will increase its costs for subsequent cost
reporting periods, the Secretary shall increase the hospital's
target amount under subsection (b)(3)(C) to account for such
incurred increases.
(E)(i) The Secretary shall estimate the amount of
reimbursement made for services described in section
1862(a)(14) with respect to which payment was made under part B
in the base reporting periods referred to in paragraph (2)(A)
and with respect to which payment is no longer being made.
(ii) The Secretary shall provide for an adjustment to the
payment for subsection (d) hospitals in each fiscal year so as
appropriately to reflect the net amount described in clause
(i).
(F)(i) Subject to subsection (r), for discharges occurring on
or after May 1, 1986, the Secretary shall provide, in
accordance with this subparagraph, for an additional payment
amount for each subsection (d) hospital which--
(I) serves a significantly disproportionate number of
low-income patients (as defined in clause (v)), or
(II) is located in an urban area, has 100 or more
beds, and can demonstrate that its net inpatient care
revenues (excluding any of such revenues attributable
to this title or State plans approved under title XIX),
during the cost reporting period in which the
discharges occur, for indigent care from State and
local government sources exceed 30 percent of its total
of such net inpatient care revenues during the period.
(ii) Subject to clause (ix), the amount of such payment for
each discharge shall be determined by multiplying (I) the sum
of the amount determined under paragraph (1)(A)(ii)(II) (or, if
applicable, the amount determined under paragraph (1)(A)(iii))
and, for cases qualifying for additional payment under
subparagraph (A)(i), the amount paid to the hospital under
subparagraph (A) for that discharge, by (II) the
disproportionate share adjustment percentage established under
clause (iii) or (iv) for the cost reporting period in which the
discharge occurs.
(iii) The disproportionate share adjustment percentage for a
cost reporting period for a hospital described in clause
(i)(II) is equal to 35 percent.
(iv) The disproportionate share adjustment percentage for a
cost reporting period for a hospital that is not described in
clause (i)(II) and that--
(I) is located in an urban area and has 100 or more
beds or is described in the second sentence of clause
(v), is equal to the percent determined in accordance
with the applicable formula described in clause (vii);
(II) is located in an urban area and has less than
100 beds, is equal to 5 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (xiii);
(III) is located in a rural area and is not described
in subclause (IV) or (V) or in the second sentence of
clause (v), is equal to 4 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (xii);
(IV) is located in a rural area, is classified as a
rural referral center under subparagraph (C), and is
classified as a sole community hospital under
subparagraph (D), is equal to 10 percent or, if
greater, the percent determined in accordance with the
applicable formula described in clause (viii) or,
subject to clause (xiv) and for discharges occurring on
or after April 1, 2001, the greater of the percentages
determined under clause (x) or (xi);
(V) is located in a rural area, is classified as a
rural referral center under subparagraph (C), and is
not classified as a sole community hospital under
subparagraph (D), is equal to the percent determined in
accordance with the applicable formula described in
clause (viii) or, subject to clause (xiv) and for
discharges occurring on or after April 1, 2001, is
equal to the percent determined in accordance with
clause (xi); or
(VI) is located in a rural area, is classified as a
sole community hospital under subparagraph (D), and is
not classified as a rural referral center under
subparagraph (C), is 10 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (x).
(v) In this subparagraph, a hospital ``serves a significantly
disproportionate number of low income patients'' for a cost
reporting period if the hospital has a disproportionate patient
percentage (as defined in clause (vi)) for that period which
equals, or exceeds--
(I) 15 percent, if the hospital is located in an
urban area and has 100 or more beds,
(II) 30 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in a rural area and has more than 100 beds,
or is located in a rural area and is classified as a
sole community hospital under subparagraph (D),
(III) 40 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in an urban area and has less than 100 beds,
or
(IV) 45 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in a rural area and is not described in
subclause (II).
A hospital located in a rural area and with 500 or more beds
also ``serves a significantly disproportionate number of low
income patients'' for a cost reporting period if the hospital
has a disproportionate patient percentage (as defined in clause
(vi)) for that period which equals or exceeds a percentage
specified by the Secretary.
(vi) In this subparagraph, the term ``disproportionate
patient percentage'' means, with respect to a cost reporting
period of a hospital, the sum of--
(I) the fraction (expressed as a percentage), the
numerator of which is the number of such hospital's
patient days for such period which were made up of
patients who (for such days) were entitled to benefits
under part A of this title and were entitled to
supplementary security income benefits (excluding any
State supplementation) under title XVI of this Act, and
the denominator of which is the number of such
hospital's patient days for such fiscal year which were
made up of patients who (for such days) were entitled
to benefits under part A of this title, and
(II) the fraction (expressed as a percentage), the
numerator of which is the number of the hospital's
patient days for such period which consist of patients
who (for such days) were eligible for medical
assistance under a State plan approved under title XIX,
but who were not entitled to benefits under part A of
this title, and the denominator of which is the total
number of the hospital's patient days for such period.
In determining under subclause (II) the number of the
hospital's patient days for such period which consist of
patients who (for such days) were eligible for medical
assistance under a State plan approved under title XIX, the
Secretary may, to the extent and for the period the Secretary
determines appropriate, include patient days of patients not so
eligible but who are regarded as such because they receive
benefits under a demonstration project approved under title XI.
(vii) The formula used to determine the disproportionate
share adjustment percentage for a cost reporting period for a
hospital described in clause (iv)(I) is--
(I) in the case of such a hospital with a
disproportionate patient percentage (as defined in
clause (vi)) greater than 20.2--
(a) for discharges occurring on or after
April 1, 1990, and on or before December 31,
1990, (P-20.2)(.65) + 5.62,
(b) for discharges occurring on or after
January 1, 1991, and on or before September 30,
1993, (P-20.2)(.7) + 5.62,
(c) for discharges occurring on or after
October 1, 1993, and on or before September 30,
1994, (P-20.2)(.8) + 5.88, and
(d) for discharges occurring on or after
October 1, 1994, (P-20.2)(.825) + 5.88; or
(II) in the case of any other such hospital--
(a) for discharges occurring on or after
April 1, 1990, and on or before December 31,
1990, (P-15)(.6) + 2.5,
(b) for discharges occurring on or after
January 1, 1991, and on or before September 30,
1993, (P-15)(.6) + 2.5,
(c) for discharges occurring on or after
October 1, 1993, (P-15)(.65) + 2.5,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(viii) Subject to clause (xiv), the formula used to determine
the disproportionate share adjustment percentage for a cost
reporting period for a hospital described in clause (iv)(IV) or
(iv)(V) is the percentage determined in accordance with the
following formula:(P-30)(.6) + 4.0, where ``P'' is the
hospital's disproportionate patient percentage (as defined in
clause (vi)).
(ix) In the case of discharges occurring--
(I) during fiscal year 1998, the additional payment
amount otherwise determined under clause (ii) shall be
reduced by 1 percent;
(II) during fiscal year 1999, such additional payment
amount shall be reduced by 2 percent;
(III) during fiscal years 2000 and 2001, such
additional payment amount shall be reduced by 3 percent
and 2 percent, respectively;
(IV) during fiscal year 2002, such additional payment
amount shall be reduced by 3 percent; and
(V) during fiscal year 2003 and each subsequent
fiscal year, such additional payment amount shall be
reduced by 0 percent.
(x) Subject to clause (xiv), for purposes of clause (iv)(VI)
(relating to sole community hospitals), in the case of a
hospital for a cost reporting period with a disproportionate
patient percentage (as defined in clause (vi)) that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than
30.0, such adjustment percentage is equal to 5.25
percent; or
(III) is equal to or exceeds 30, such adjustment
percentage is equal to 10 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xi) Subject to clause (xiv), for purposes of clause (iv)(V)
(relating to rural referral centers), in the case of a hospital
for a cost reporting period with a disproportionate patient
percentage (as defined in clause (vi)) that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than
30.0, such adjustment percentage is equal to 5.25
percent; or
(III) is equal to or exceeds 30, such adjustment
percentage is determined in accordance with the
following formula: (P-30)(.6) + 5.25,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xii) Subject to clause (xiv), for purposes of clause
(iv)(III) (relating to small rural hospitals generally), in the
case of a hospital for a cost reporting period with a
disproportionate patient percentage (as defined in clause (vi))
that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment
percentage is equal to 5.25 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xiii) Subject to clause (xiv), for purposes of clause
(iv)(II) (relating to urban hospitals with less than 100 beds),
in the case of a hospital for a cost reporting period with a
disproportionate patient percentage (as defined in clause (vi))
that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment
percentage is equal to 5.25 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xiv)(I) In the case of discharges occurring on or after
April 1, 2004, subject to subclause (II), there shall be
substituted for the disproportionate share adjustment
percentage otherwise determined under clause (iv) (other than
subclause (I)) or under clause (viii), (x), (xi), (xii), or
(xiii), the disproportionate share adjustment percentage
determined under clause (vii) (relating to large, urban
hospitals).
(II) Under subclause (I), the disproportionate share
adjustment percentage shall not exceed 12 percent for a
hospital that is not classified as a rural referral center
under subparagraph (C) or, in the case of discharges occurring
on or after October 1, 2006, as a medicare-dependent, small
rural hospital under subparagraph (G)(iv).
(G)(i) For any cost reporting period beginning on or after
April 1, 1990, and before October 1, 1994, or discharges
occurring on or after October 1, 1997, and before October 1,
2022, in the case of a subsection (d) hospital which is a
medicare-dependent, small rural hospital, payment under
paragraph (1)(A) shall be equal to the sum of the amount
determined under clause (ii) and the amount determined under
paragraph (1)(A)(iii).
(ii) The amount determined under this clause is--
(I) for discharges occurring during the 36-month
period beginning with the first day of the cost
reporting period that begins on or after April 1, 1990,
the amount by which the hospital's target amount for
the cost reporting period (as defined in subsection
(b)(3)(D)) exceeds the amount determined under
paragraph (1)(A)(iii); and
(II) for discharges occurring during any subsequent
cost reporting period (or portion thereof) and before
October 1, 1994, or discharges occurring on or after
October 1, 1997, and before October 1, 2022, 50 percent
(or 75 percent in the case of discharges occurring on
or after October 1, 2006) of the amount by which the
hospital's target amount for the cost reporting period
or for discharges in the fiscal year (as defined in
subsection (b)(3)(D)) exceeds the amount determined
under paragraph (1)(A)(iii).
(iii) In the case of a medicare dependent, small rural
hospital that experiences, in a cost reporting period compared
to the previous cost reporting period, a decrease of more than
5 percent in its total number of inpatient cases due to
circumstances beyond its control, the Secretary shall provide
for such adjustment to the payment amounts under this
subsection (other than under paragraph (9)) as may be necessary
to fully compensate the hospital for the fixed costs it incurs
in the period in providing inpatient hospital services,
including the reasonable cost of maintaining necessary core
staff and services.
(iv) The term ``medicare-dependent, small rural hospital''
means, with respect to any cost reporting period to which
clause (i) applies, any hospital--
(I) that is located in--
(aa) a rural area; or
(bb) a State with no rural area (as defined
in paragraph (2)(D)) and satisfies any of the
criteria in subclause (I), (II), or (III) of
paragraph (8)(E)(ii),
(II) that has not more than 100 beds,
(III) that is not classified as a sole community
hospital under subparagraph (D), and
(IV) for which not less than 60 percent of its
inpatient days or discharges during the cost reporting
period beginning in fiscal year 1987, or two of the
three most recently audited cost reporting periods for
which the Secretary has a settled cost report, were
attributable to inpatients entitled to benefits under
part A.
Subclause (I)(bb) shall apply for purposes of payment under
clause (ii) only for discharges of a hospital occurring on or
after the effective date of a determination of medicare-
dependent small rural hospital status made by the Secretary
with respect to the hospital after the date of the enactment of
this sentence. For purposes of applying subclause (II) of
paragraph (8)(E)(ii) under subclause (I)(bb), such subclause
(II) shall be applied by inserting ``as of January 1, 2018,''
after ``such State'' each place it appears.
(H) The Secretary may provide for such adjustments to the
payment amounts under this subsection as the Secretary deems
appropriate to take into account the unique circumstances of
hospitals located in Alaska and Hawaii.
(I)(i) The Secretary shall provide by regulation for such
other exceptions and adjustments to such payment amounts under
this subsection as the Secretary deems appropriate.
(ii) In making adjustments under clause (i) for transfer
cases (as defined by the Secretary) in a fiscal year, not
taking in account the effect of subparagraph (J), the Secretary
may make adjustments to each of the average standardized
amounts determined under paragraph (3) to assure that the
aggregate payments made under this subsection for such fiscal
year are not greater or lesser than those that would have
otherwise been made in such fiscal year.
(J)(i) The Secretary shall treat the term ``transfer case''
(as defined in subparagraph (I)(ii)) as including the case of a
qualified discharge (as defined in clause (ii)), which is
classified within a diagnosis-related group described in clause
(iii), and which occurs on or after October 1, 1998. In the
case of a qualified discharge for which a substantial portion
of the costs of care are incurred in the early days of the
inpatient stay (as defined by the Secretary), in no case may
the payment amount otherwise provided under this subsection
exceed an amount equal to the sum of--
(I) 50 percent of the amount of payment under this
subsection for transfer cases (as established under
subparagraph (I)(i)), and
(II) 50 percent of the amount of payment which would
have been made under this subsection with respect to
the qualified discharge if no transfer were involved.
(ii) For purposes of clause (i), subject to clause (iii), the
term ``qualified discharge'' means a discharge classified with
a diagnosis-related group (described in clause (iii)) of an
individual from a subsection (d) hospital, if upon such
discharge the individual--
(I) is admitted as an inpatient to a hospital or
hospital unit that is not a subsection (d) hospital for
the provision of inpatient hospital services;
(II) is admitted to a skilled nursing facility;
(III) is provided home health services from a home
health agency, if such services relate to the condition
or diagnosis for which such individual received
inpatient hospital services from the subsection (d)
hospital, and if such services are provided within an
appropriate period (as determined by the Secretary);
(IV) for discharges occurring on or after October 1,
2018, is provided hospice care by a hospice program; or
(V) for discharges occurring on or after October 1,
2000, the individual receives post discharge services
described in clause (iv)(I).
(iii) Subject to clause (iv), a diagnosis-related group
described in this clause is--
(I) 1 of 10 diagnosis-related groups selected by the
Secretary based upon a high volume of discharges
classified within such groups and a disproportionate
use of post discharge services described in clause
(ii); and
(II) a diagnosis-related group specified by the
Secretary under clause (iv)(II).
(iv) The Secretary shall include in the proposed rule
published under subsection (e)(5)(A) for fiscal year 2001, a
description of the effect of this subparagraph. The Secretary
shall include in the proposed rule published for fiscal year
2019, a description of the effect of clause (ii)(IV). The
Secretary may include in the proposed rule (and in the final
rule published under paragraph (6)) for fiscal year 2001 or a
subsequent fiscal year, a description of--
(I) post-discharge services not described in
subclauses (I), (II), (III), and, in the case of
proposed and final rules for fiscal year 2019 and
subsequent fiscal years, (IV) of clause (ii), the
receipt of which results in a qualified discharge; and
(II) diagnosis-related groups described in clause
(iii)(I) in addition to the 10 selected under such
clause.
(K)(i) Effective for discharges beginning on or after October
1, 2001, the Secretary shall establish a mechanism to recognize
the costs of new medical services and technologies under the
payment system established under this subsection. Such
mechanism shall be established after notice and opportunity for
public comment (in the publications required by subsection
(e)(5) for a fiscal year or otherwise). Such mechanism shall be
modified to meet the requirements of clause (viii).
(ii) The mechanism established pursuant to clause (i) shall--
(I) apply to a new medical service or technology if,
based on the estimated costs incurred with respect to
discharges involving such service or technology, the
DRG prospective payment rate otherwise applicable to
such discharges under this subsection is inadequate
(applying a threshold specified by the Secretary that
is the lesser of 75 percent of the standardized amount
(increased to reflect the difference between cost and
charges) or 75 percent of one standard deviation for
the diagnosis-related group involved);
(II) provide for the collection of data with respect
to the costs of a new medical service or technology
described in subclause (I) for a period of not less
than two years and not more than three years beginning
on the date on which an inpatient hospital code is
issued with respect to the service or technology;
(III) provide for additional payment to be made under
this subsection with respect to discharges involving a
new medical service or technology described in
subclause (I) that occur during the period described in
subclause (II) in an amount that adequately reflects
the estimated average cost of such service or
technology; and
(IV) provide that discharges involving such a service
or technology that occur after the close of the period
described in subclause (II) will be classified within a
new or existing diagnosis-related group with a
weighting factor under paragraph (4)(B) that is derived
from cost data collected with respect to discharges
occurring during such period.
(iii) For purposes of clause (ii)(II), the term ``inpatient
hospital code'' means any code that is used with respect to
inpatient hospital services for which payment may be made under
this subsection and includes an alphanumeric code issued under
the International Classification of Diseases, 9th Revision,
Clinical Modification (``ICD-9-CM'') and its subsequent
revisions.
(iv) For purposes of clause (ii)(III), the term ``additional
payment'' means, with respect to a discharge for a new medical
service or technology described in clause (ii)(I), an amount
that exceeds the prospective payment rate otherwise applicable
under this subsection to discharges involving such service or
technology that would be made but for this subparagraph.
(v) The requirement under clause (ii)(III) for an additional
payment may be satisfied by means of a new-technology group
(described in subparagraph (L)), an add-on payment, a payment
adjustment, or any other similar mechanism for increasing the
amount otherwise payable with respect to a discharge under this
subsection. The Secretary may not establish a separate fee
schedule for such additional payment for such services and
technologies, by utilizing a methodology established under
subsection (a) or (h) of section 1834 to determine the amount
of such additional payment, or by other similar mechanisms or
methodologies.
(vi) For purposes of this subparagraph and subparagraph (L),
a medical service or technology will be considered a ``new
medical service or technology'' if the service or technology
meets criteria established by the Secretary after notice and an
opportunity for public comment.
(vii) Under the mechanism under this subparagraph, the
Secretary shall provide for the addition of new diagnosis and
procedure codes in April 1 of each year, but the addition of
such codes shall not require the Secretary to adjust the
payment (or diagnosis-related group classification) under this
subsection until the fiscal year that begins after such date.
(viii) The mechanism established pursuant to clause (i) shall
be adjusted to provide, before publication of a proposed rule,
for public input regarding whether a new service or technology
represents an advance in medical technology that substantially
improves the diagnosis or treatment of individuals entitled to
benefits under part A as follows:
(I) The Secretary shall make public and periodically
update a list of all the services and technologies for
which an application for additional payment under this
subparagraph is pending.
(II) The Secretary shall accept comments,
recommendations, and data from the public regarding
whether the service or technology represents a
substantial improvement.
(III) The Secretary shall provide for a meeting at
which organizations representing hospitals, physicians,
such individuals, manufacturers, and any other
interested party may present comments, recommendations,
and data to the clinical staff of the Centers for
Medicare & Medicaid Services before publication of a
notice of proposed rulemaking regarding whether service
or technology represents a substantial improvement.
(ix) Before establishing any add-on payment under this
subparagraph with respect to a new technology, the Secretary
shall seek to identify one or more diagnosis-related groups
associated with such technology, based on similar clinical or
anatomical characteristics and the cost of the technology.
Within such groups the Secretary shall assign an eligible new
technology into a diagnosis-related group where the average
costs of care most closely approximate the costs of care of
using the new technology. No add-on payment under this
subparagraph shall be made with respect to such new technology
and this clause shall not affect the application of paragraph
(4)(C)(iii).
(L)(i) In establishing the mechanism under subparagraph (K),
the Secretary may establish new-technology groups into which a
new medical service or technology will be classified if, based
on the estimated average costs incurred with respect to
discharges involving such service or technology, the DRG
prospective payment rate otherwise applicable to such
discharges under this subsection is inadequate.
(ii) Such groups--
(I) shall not be based on the costs associated with a
specific new medical service or technology; but
(II) shall, in combination with the applicable
standardized amounts and the weighting factors assigned
to such groups under paragraph (4)(B), reflect such
cost cohorts as the Secretary determines are
appropriate for all new medical services and
technologies that are likely to be provided as
inpatient hospital services in a fiscal year.
(iii) The methodology for classifying specific hospital
discharges within a diagnosis-related group under paragraph
(4)(A) or a new-technology group shall provide that a specific
hospital discharge may not be classified within both a
diagnosis-related group and a new-technology group.
(6) The Secretary shall provide for publication in the
Federal Register, on or before the August 1 before each fiscal
year (beginning with fiscal year 1984), of a description of the
methodology and data used in computing the adjusted DRG
prospective payment rates under this subsection, including any
adjustments required under subsection (e)(1)(B).
(7) There shall be no administrative or judicial review under
section 1878 or otherwise of--
(A) the determination of the requirement, or the
proportional amount, of any adjustment effected
pursuant to subsection (e)(1) or the determination of
the applicable percentage increase under paragraph
(12)(A)(ii),
(B) the establishment of diagnosis-related groups, of
the methodology for the classification of discharges
within such groups, and of the appropriate weighting
factors thereof under paragraph (4), including the
selection and revision of codes under paragraph (4)(D),
and
(C) the determination of whether services provided
prior to a patient's inpatient admission are related to
the admission (as described in subsection (a)(4)).
(8)(A) In the case of any hospital which is located in an
area which is, at any time after April 20, 1983, reclassified
from an urban to a rural area, payments to such hospital for
the first two cost reporting periods for which such
reclassification is effective shall be made as follows:
(i) For the first such cost reporting period, payment
shall be equal to the amount payable to such hospital
for such reporting period on the basis of the rural
classification, plus an amount equal to two-thirds of
the amount (if any) by which--
(I) the amount which would have been payable
to such hospital for such reporting period on
the basis of an urban classification, exceeds
(II) the amount payable to such hospital for
such reporting period on the basis of the rural
classification.
(ii) For the second such cost reporting period,
payment shall be equal to the amount payable to such
hospital for such reporting period on the basis of the
rural classification, plus an amount equal to one-third
of the amount (if any) by which--
(I) the amount which would have been payable
to such hospital for such reporting period on
the basis of an urban classification, exceeds
(II) the amount payable to such hospital for
such reporting period on the basis of the rural
classification.
(B)(i) For purposes of this subsection, the Secretary shall
treat a hospital located in a rural county adjacent to one or
more urban areas as being located in the urban metropolitan
statistical area to which the greatest number of workers in the
county commute, if the rural county would otherwise be
considered part of an urban area, under the standards for
designating Metropolitan Statistical Areas (and for designating
New England County Metropolitan Areas) described in clause
(ii), if the commuting rates used in determining outlying
counties (or, for New England, similar recognized areas) were
determined on the basis of the aggregate number of resident
workers who commute to (and, if applicable under the standards,
from) the central county or counties of all contiguous
Metropolitan Statistical Areas (or New England County
Metropolitan Areas).
(ii) The standards described in this clause for cost
reporting periods beginning in a fiscal year--
(I) before fiscal year 2003, are the standards
published in the Federal Register on January 3, 1980,
or, at the election of the hospital with respect to
fiscal years 2001 and 2002, standards so published on
March 30, 1990; and
(II) after fiscal year 2002, are the standards
published in the Federal Register by the Director of
the Office of Management and Budget based on the most
recent available decennial population data.
Subparagraphs (C) and (D) shall not apply with respect to the
application of subclause (I).
(C)(i) If the application of subparagraph (B) or a decision
of the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10), by treating hospitals located
in a rural county or counties as being located in an urban
area, or by treating hospitals located in one urban area as
being located in another urban area--
(I) reduces the wage index for that urban area (as
applied under this subsection) by 1 percentage point or
less, the Secretary, in calculating such wage index
under this subsection, shall exclude those hospitals so
treated, or
(II) reduces the wage index for that urban area by
more than 1 percentage point (as applied under this
subsection), the Secretary shall calculate and apply
such wage index under this subsection separately to
hospitals located in such urban area (excluding all the
hospitals so treated) and to the hospitals so treated
(as if such hospitals were located in such urban area).
(ii) If the application of subparagraph (B) or a decision of
the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10), by treating hospitals located
in a rural county or counties as not being located in the rural
area in a State, reduces the wage index for that rural area (as
applied under this subsection), the Secretary shall calculate
and apply such wage index under this subsection as if the
hospitals so treated had not been excluded from calculation of
the wage index for that rural area.
(iii) The application of subparagraph (B) or a decision of
the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10) may not result in the reduction
of any county's wage index to a level below the wage index for
rural areas in the State in which the county is located.
(iv) The application of subparagraph (B) or a decision of the
Medicare Geographic Classification Review Board or of the
Secretary under paragraph (10) may not result in a reduction in
an urban area's wage index if--
(I) the urban area has a wage index below the wage
index for rural areas in the State in which it is
located; or
(II) the urban area is located in a State that is
composed of a single urban area.
(v) This subparagraph shall apply with respect to discharges
occurring in a fiscal year only if the Secretary uses a method
for making adjustments to the DRG prospective payment rate for
area differences in hospital wage levels under paragraph (3)(E)
for the fiscal year that is based on the use of Metropolitan
Statistical Area classifications.
(D) The Secretary shall make a proportional adjustment in the
standardized amounts determined under paragraph (3) to assure
that the provisions of subparagraphs (B) and (C) or a decision
of the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10) do not result in aggregate
payments under this section that are greater or less than those
that would otherwise be made.
(E)(i) For purposes of this subsection, not later than 60
days after the receipt of an application (in a form and manner
determined by the Secretary) from a subsection (d) hospital
described in clause (ii), the Secretary shall treat the
hospital as being located in the rural area (as defined in
paragraph (2)(D)) of the State in which the hospital is
located.
(ii) For purposes of clause (i), a subsection (d) hospital
described in this clause is a subsection (d) hospital that is
located in an urban area (as defined in paragraph (2)(D)) and
satisfies any of the following criteria:
(I) The hospital is located in a rural census tract
of a metropolitan statistical area (as determined under
the most recent modification of the Goldsmith
Modification, originally published in the Federal
Register on February 27, 1992 (57 Fed. Reg. 6725)).
(II) The hospital is located in an area designated by
any law or regulation of such State as a rural area (or
is designated by such State as a rural hospital).
(III) The hospital would qualify as a rural,
regional, or national referral center under paragraph
(5)(C) or as a sole community hospital under paragraph
(5)(D) if the hospital were located in a rural area.
(IV) The hospital meets such other criteria as the
Secretary may specify.
(9)(A) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, the amount of the payment with
respect to the operating costs of inpatient hospital services
of a subsection (d) Puerto Rico hospital for inpatient hospital
discharges is equal to the sum of--
(i) the applicable Puerto Rico percentage (specified
in subparagraph (E)) of the Puerto Rico adjusted DRG
prospective payment rate (determined under subparagraph
(B) or (C)) for such discharges,
(ii) the applicable Federal percentage (specified in
subparagraph (E)) of--
(I) for discharges beginning in a fiscal year
beginning on or after October 1, 1997, and
before October 1, 2003, the discharge-weighted
average of--
(aa) the national adjusted DRG
prospective payment rate (determined
under paragraph (3)(D)) for hospitals
located in a large urban area,
(bb) such rate for hospitals located
in other urban areas, and
(cc) such rate for hospitals located
in a rural area,
for such discharges, adjusted in the manner
provided in paragraph (3)(E) for different area
wage levels; and
(II) for discharges in a fiscal year
beginning on or after October 1, 2003, the
national DRG prospective payment rate
determined under paragraph (3)(D)(iii) for
hospitals located in any area for such
discharges, adjusted in the manner provided in
paragraph (3)(E) for different area wage
levels.
As used in this section, the term ``subsection (d) Puerto Rico
hospital'' means a hospital that is located in Puerto Rico and
that would be a subsection (d) hospital (as defined in
paragraph (1)(B)) if it were located in one of the 50 States.
(B) The Secretary shall determine a Puerto Rico adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in fiscal year 1988 involving inpatient hospital services of a
subsection (d) Puerto Rico hospital for which payment may be
made under part A of this title. Such rate shall be determined
for such hospitals located in urban or rural areas within
Puerto Rico, as follows:
(i) The Secretary shall determine the target amount
(as defined in subsection (b)(3)(A)) for the hospital
for the cost reporting period beginning in fiscal year
1987 and increase such amount by prorating the
applicable percentage increase (as defined in
subsection (b)(3)(B)) to update the amount to the
midpoint in fiscal year 1988.
(ii) The Secretary shall standardize the amount
determined under clause (i) for each hospital by--
(I) excluding an estimate of indirect medical
education costs,
(II) adjusting for variations among hospitals
by area in the average hospital wage level,
(III) adjusting for variations in case mix
among hospitals, and
(IV) excluding an estimate of the additional
payments to certain subsection (d) Puerto Rico
hospitals to be made under subparagraph
(D)(iii) (relating to disproportionate share
payments).
(iii) The Secretary shall compute a discharge
weighted average of the standardized amounts determined
under clause (ii) for all hospitals located in an urban
area and for all hospitals located in a rural area (as
such terms are defined in paragraph (2)(D)).
(iv) The Secretary shall reduce the average
standardized amount by a proportion equal to the
proportion (estimated by the Secretary) of the amount
of payments under this paragraph which are additional
payments described in subparagraph (D)(i) (relating to
outlier payments).
(v) For each discharge classified within a diagnosis-
related group for hospitals located in an urban or
rural area, respectively, the Secretary shall establish
a Puerto Rico DRG prospective payment rate equal to the
product of--
(I) the average standardized amount (computed
under clause (iii) and reduced under clause
(iv)) for hospitals located in an urban or
rural area, respectively, and
(II) the weighting factor (determined under
paragraph (4)(B)) for that diagnosis-related
group.
(vi) The Secretary shall adjust the proportion (as
estimated by the Secretary from time to time) of
hospitals' costs which are attributable to wages and
wage-related costs, of the Puerto Rico DRG prospective
payment rate computed under clause (v) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the Puerto Rican average hospital
wage level.
(C) The Secretary shall determine a Puerto Rico adjusted DRG
prospective payment rate, for each inpatient hospital discharge
after fiscal year 1988 involving inpatient hospital services of
a subsection (d) Puerto Rico hospital for which payment may be
made under part A of this title. Such rate shall be determined
for hospitals located in urban or rural areas within Puerto
Rico as follows:
(i)(I) For discharges in a fiscal year after fiscal
year 1988 and before fiscal year 2004, the Secretary
shall compute an average standardized amount for
hospitals located in an urban area and for hospitals
located in a rural area equal to the respective average
standardized amount computed for the previous fiscal
year under subparagraph (B)(iii) or under this clause,
increased for fiscal year 1989 by the applicable
percentage increase under subsection (b)(3)(B), and
adjusted for subsequent fiscal years in accordance with
the final determination of the Secretary under
subsection (e)(4), and adjusted to reflect the most
recent case-mix data available.
(II) For discharges occurring in a fiscal year
(beginning with fiscal year 2004), the Secretary shall
compute an average standardized amount for hospitals
located in any area of Puerto Rico that is equal to the
average standardized amount computed under subclause
(I) for fiscal year 2003 for hospitals in a large urban
area (or, beginning with fiscal year 2005, for all
hospitals in the previous fiscal year) increased by the
applicable percentage increase under subsection
(b)(3)(B) for the fiscal year involved.
(ii) The Secretary shall reduce each of the average
standardized amounts (or for fiscal year 2004 and
thereafter, the average standardized amount) by a
proportion equal to the proportion (estimated by the
Secretary) of the amount of payments under this
paragraph which are additional payments described in
subparagraph (D)(i) (relating to outlier payments).
(iii) For each discharge classified within a
diagnosis-related group for hospitals located in an
urban or rural area, respectively, the Secretary shall
establish a Puerto Rico DRG prospective payment rate
equal to the product of--
(I) the average standardized amount (computed
under clause (i) and reduced under clause
(ii)), and
(II) the weighting factor (determined under
paragraph (4)(B)) for that diagnosis-related
group.
(iv)(I) The Secretary shall adjust the proportion (as
estimated by the Secretary from time to time) of
hospitals' costs which are attributable to wages and
wage-related costs, of the Puerto Rico DRG prospective
payment rate computed under clause (iii) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the Puerto Rico average hospital
wage level. The second and third sentences of paragraph
(3)(E)(i) shall apply to subsection (d) Puerto Rico
hospitals under this clause in the same manner as they
apply to subsection (d) hospitals under such paragraph
and, for purposes of this clause, any reference in such
paragraph to a subsection (d) hospital is deemed a
reference to a subsection (d) Puerto Rico hospital.
(II) For discharges occurring on or after October 1,
2004, the Secretary shall substitute ``62 percent'' for
the proportion described in the first sentence of
clause (i), unless the application of this subclause
would result in lower payments to a hospital than would
otherwise be made.
(D) The following provisions of paragraph (5) shall apply to
subsection (d) Puerto Rico hospitals receiving payment under
this paragraph in the same manner and to the extent as they
apply to subsection (d) hospitals receiving payment under this
subsection:
(i) Subparagraph (A) (relating to outlier payments).
(ii) Subparagraph (B) (relating to payments for
indirect medical education costs), except that for this
purpose the sum of the amount determined under
subparagraph (A) of this paragraph and the amount paid
to the hospital under clause (i) of this subparagraph
shall be substituted for the sum referred to in
paragraph (5)(B)(i)(I).
(iii) Subparagraph (F) (relating to disproportionate
share payments), except that for this purpose the sum
described in clause (ii) of this subparagraph shall be
substituted for the sum referred to in paragraph
(5)(F)(ii)(I).
(iv) Subparagraph (H) (relating to exceptions and
adjustments).
(E) For purposes of subparagraph (A), for discharges
occurring--
(i) on or after October 1, 1987, and before October
1, 1997, the applicable Puerto Rico percentage is 75
percent and the applicable Federal percentage is 25
percent;
(ii) on or after October 1, 1997, and before April 1,
2004, the applicable Puerto Rico percentage is 50
percent and the applicable Federal percentage is 50
percent;
(iii) on or after April 1, 2004, and before October
1, 2004, the applicable Puerto Rico percentage is 37.5
percent and the applicable Federal percentage is 62.5
percent;
(iv) on or after October 1, 2004, and before January
1, 2016, the applicable Puerto Rico percentage is 25
percent and the applicable Federal percentage is 75
percent; and
(v) on or after January 1, 2016, the applicable
Puerto Rico percentage is 0 percent and the applicable
Federal percentage is 100 percent.
(10)(A) There is hereby established the Medicare Geographic
Classification Review Board (hereinafter in this paragraph
referred to as the ``Board'').
(B)(i) The Board shall be composed of 5 members appointed by
the Secretary without regard to the provisions of title 5,
United States Code, governing appointments in the competitive
service. Two of such members shall be representative of
subsection (d) hospitals located in a rural area under
paragraph (2)(D). At least 1 member shall be knowledgeable in
the field of analyzing costs with respect to the provision of
inpatient hospital services.
(ii) The Secretary shall make initial appointments to the
Board as provided in this paragraph within 180 days after the
date of the enactment of this paragraph.
(C)(i) The Board shall consider the application of any
subsection (d) hospital requesting that the Secretary change
the hospital's geographic classification for purposes of
determining for a fiscal year--
(I) the hospital's average standardized amount under
paragraph (2)(D), or
(II) the factor used to adjust the DRG prospective
payment rate for area differences in hospital wage
levels that applies to such hospital under paragraph
(3)(E).
(ii) A hospital requesting a change in geographic
classification under clause (i) for a fiscal year shall submit
its application to the Board not later than the first day of
the 13-month period ending on September 30 of the preceding
fiscal year.
(iii)(I) The Board shall render a decision on an application
submitted under clause (i) not later than 180 days after the
deadline referred to in clause (ii).
(II) Appeal of decisions of the Board shall be subject to the
provisions of section 557b of title 5, United States Code. The
Secretary shall issue a decision on such an appeal not later
than 90 days after the date on which the appeal is filed. The
decision of the Secretary shall be final and shall not be
subject to judicial review.
(D)(i) The Secretary shall publish guidelines to be utilized
by the Board in rendering decisions on applications submitted
under this paragraph, and shall include in such guidelines the
following:
(I) Guidelines for comparing wages, taking into
account (to the extent the Secretary determines
appropriate) occupational mix, in the area in which the
hospital is classified and the area in which the
hospital is applying to be classified.
(II) Guidelines for determining whether the county in
which the hospital is located should be treated as
being a part of a particular Metropolitan Statistical
Area.
(III) Guidelines for considering information provided
by an applicant with respect to the effects of the
hospital's geographic classification on access to
inpatient hospital services by medicare beneficiaries.
(IV) Guidelines for considering the appropriateness
of the criteria used to define New England County
Metropolitan Areas.
(ii) Notwithstanding clause (i), if the Secretary uses a
method for making adjustments to the DRG prospective payment
rate for area differences in hospital wage levels under
paragraph (3)(E) that is not based on the use of Metropolitan
Statistical Area classifications, the Secretary may revise the
guidelines published under clause (i) to the extent such
guidelines are used to determine the appropriateness of the
geographic area in which the hospital is determined to be
located for purposes of making such adjustments.
(iii) Under the guidelines published by the Secretary under
clause (i), in the case of a hospital which has ever been
classified by the Secretary as a rural referral center under
paragraph (5)(C), the Board may not reject the application of
the hospital under this paragraph on the basis of any
comparison between the average hourly wage of the hospital and
the average hourly wage of hospitals in the area in which it is
located.
(iv) The Secretary shall publish the guidelines described in
clause (i) by July 1, 1990.
(v) Any decision of the Board to reclassify a subsection (d)
hospital for purposes of the adjustment factor described in
subparagraph (C)(i)(II) for fiscal year 2001 or any fiscal year
thereafter shall be effective for a period of 3 fiscal years,
except that the Secretary shall establish procedures under
which a subsection (d) hospital may elect to terminate such
reclassification before the end of such period.
(vi) Such guidelines shall provide that, in making decisions
on applications for reclassification for the purposes described
in clause (v) for fiscal year 2003 and any succeeding fiscal
year, the Board shall base any comparison of the average hourly
wage for the hospital with the average hourly wage for
hospitals in an area on--
(I) an average of the average hourly wage amount for
the hospital from the most recently published hospital
wage survey data of the Secretary (as of the date on
which the hospital applies for reclassification) and
such amount from each of the two immediately preceding
surveys; and
(II) an average of the average hourly wage amount for
hospitals in such area from the most recently published
hospital wage survey data of the Secretary (as of the
date on which the hospital applies for
reclassification) and such amount from each of the two
immediately preceding surveys.
(E)(i) The Board shall have full power and authority to make
rules and establish procedures, not inconsistent with the
provisions of this title or regulations of the Secretary, which
are necessary or appropriate to carry out the provisions of
this paragraph. In the course of any hearing the Board may
administer oaths and affirmations. The provisions of
subsections (d) and (e) of section 205 with respect to subpenas
shall apply to the Board to the same extent as such provisions
apply to the Secretary with respect to title II.
(ii) The Board is authorized to engage such technical
assistance and to receive such information as may be required
to carry out its functions, and the Secretary shall, in
addition, make available to the Board such secretarial,
clerical, and other assistance as the Board may require to
carry out its functions.
(F)(i) Each member of the Board who is not an officer or
employee of the Federal Government shall be compensated at a
rate equal to the daily equivalent of the annual rate of basic
pay prescribed for grade GS-18 of the General Schedule under
section 5332 of title 5, United States Code, for each day
(including travel time) during which such member is engaged in
the performance of the duties of the Board. Each member of the
Board who is an officer or employee of the United States shall
serve without compensation in addition to that received for
service as an officer or employee of the United States.
(ii) Members of the Board shall be allowed travel expenses,
including per diem in lieu of subsistence, at rates authorized
for employees of agencies under subchapter I of chapter 57 of
title 5, United States Code, while away from their homes or
regular places of business in the performance of services for
the Board.
(11) Additional payments for managed care
enrollees.--
(A) In general.--For portions of cost
reporting periods occurring on or after January
1, 1998, the Secretary shall provide for an
additional payment amount for each applicable
discharge of any subsection (d) hospital that
has an approved medical residency training
program.
(B) Applicable discharge.--For purposes of
this paragraph, the term ``applicable
discharge'' means the discharge of any
individual who is enrolled under a risk-sharing
contract with an eligible organization under
section 1876 and who is entitled to benefits
under part A or any individual who is enrolled
with a Medicare+Choice organization under part
C.
(C) Determination of amount.--The amount of
the payment under this paragraph with respect
to any applicable discharge shall be equal to
the applicable percentage (as defined in
subsection (h)(3)(D)(ii)) of the estimated
average per discharge amount that would
otherwise have been paid under paragraph (5)(B)
if the individuals had not been enrolled as
described in subparagraph (B).
(D) Special rule for hospitals under
reimbursement system.--The Secretary shall
establish rules for the application of this
paragraph to a hospital reimbursed under a
reimbursement system authorized under section
1814(b)(3) in the same manner as it would apply
to the hospital if it were not reimbursed under
such section.
(12) Payment adjustment for low-volume hospitals.--
(A) In general.--In addition to any payments
calculated under this section for a subsection
(d) hospital, for discharges occurring during a
fiscal year (beginning with fiscal year 2005),
the Secretary shall provide for an additional
payment amount to each low-volume hospital (as
defined in subparagraph (C)(i)) for discharges
occurring during that fiscal year that is equal
to the applicable percentage increase
(determined under subparagraph (B) or (D) for
the hospital involved) in the amount paid to
such hospital under this section for such
discharges (determined without regard to this
paragraph).
(B) Applicable percentage increase.--For
discharges occurring in fiscal years 2005
through 2010 and for discharges occurring in
fiscal year 2023 and subsequent fiscal years,
the Secretary shall determine an applicable
percentage increase for purposes of
subparagraph (A) as follows:
(i) The Secretary shall determine the
empirical relationship for subsection
(d) hospitals between the standardized
cost-per-case for such hospitals and
the total number of discharges of such
hospitals and the amount of the
additional incremental costs (if any)
that are associated with such number of
discharges.
(ii) The applicable percentage
increase shall be determined based upon
such relationship in a manner that
reflects, based upon the number of such
discharges for a subsection (d)
hospital, such additional incremental
costs.
(iii) In no case shall the applicable
percentage increase exceed 25 percent.
(C) Definitions.--
(i) Low-volume hospital.--For
purposes of this paragraph, the term
``low-volume hospital'' means, for a
fiscal year, a subsection (d) hospital
(as defined in paragraph (1)(B)) that
the Secretary determines is located
more than 25 road miles (or, with
respect to fiscal years 2011 through
2022, 15 road miles) from another
subsection (d) hospital and has--
(I) with respect to each of
fiscal years 2005 through 2010,
less than 800 discharges during
the fiscal year;
(II) with respect to each of
fiscal years 2011 through 2018,
less than 1,600 discharges of
individuals entitled to, or
enrolled for, benefits under
part A during the fiscal year
or portion of fiscal year;
(III) with respect to each of
fiscal years 2019 through 2022,
less than 3,800 discharges
during the fiscal year; and
(IV) with respect to fiscal
year 2023 and each subsequent
fiscal year, less than 800
discharges during the fiscal
year.
(ii) Discharge.--For purposes of
subparagraphs (B) and (D) and clause
(i), the term ``discharge'' means an
inpatient acute care discharge of an
individual regardless (except as
provided in clause (i)(II) and
subparagraph (D)(i)) of whether the
individual is entitled to benefits
under part A.
(iii) Treatment of indian health service and
non-indian health service facilities.--For
purposes of determining whether--
(I) a subsection (d) hospital of the
Indian Health Service (whether operated
by such Service or by an Indian tribe
or tribal organization (as those terms
are defined in section 4 of the Indian
Health Care Improvement Act)), or
(II) a subsection (d) hospital other
than a hospital of the Indian Health
Service meets the mileage criterion
under clause (i) with respect to fiscal
year 2011 or a succeeding fiscal year,
the Secretary shall apply the policy
described in the regulation at part
412.101(e) of title 42, Code of Federal
Regulations (as in effect on the date
of enactment of this clause).
(D) Temporary applicable percentage
increase.--For discharges occurring in fiscal
years 2011 through 2022, the Secretary shall
determine an applicable percentage increase for
purposes of subparagraph (A) using a continuous
linear sliding scale ranging from 25 percent
for low-volume hospitals--
(i) with respect to each of fiscal
years 2011 through 2018, with 200 or
fewer discharges of individuals
entitled to, or enrolled for, benefits
under part A in the fiscal year or the
portion of fiscal year to 0 percent for
low-volume hospitals with greater than
1,600 discharges of such individuals in
the fiscal yearor portion of fiscal
year; and
(ii) with respect to each of fiscal
years 2019 through 2022, with 500 or
fewer discharges in the fiscal year to
0 percent for low-volume hospitals with
greater than 3,800 discharges in the
fiscal year.
(13)(A) In order to recognize commuting patterns among
geographic areas, the Secretary shall establish a process
through application or otherwise for an increase of the wage
index applied under paragraph (3)(E) for subsection (d)
hospitals located in a qualifying county described in
subparagraph (B) in the amount computed under subparagraph (D)
based on out-migration of hospital employees who reside in that
county to any higher wage index area.
(B) The Secretary shall establish criteria for a qualifying
county under this subparagraph based on the out-migration
referred to in subparagraph (A) and differences in the area
wage indices. Under such criteria the Secretary shall,
utilizing such data as the Secretary determines to be
appropriate, establish--
(i) a threshold percentage, established by the
Secretary, of the weighted average of the area wage
index or indices for the higher wage index areas
involved;
(ii) a threshold (of not less than 10 percent) for
minimum out-migration to a higher wage index area or
areas; and
(iii) a requirement that the average hourly wage of
the hospitals in the qualifying county equals or
exceeds the average hourly wage of all the hospitals in
the area in which the qualifying county is located.
(C) For purposes of this paragraph, the term ``higher wage
index area'' means, with respect to a county, an area with a
wage index that exceeds that of the county.
(D) The increase in the wage index under subparagraph (A) for
a qualifying county shall be equal to the percentage of the
hospital employees residing in the qualifying county who are
employed in any higher wage index area multiplied by the sum of
the products, for each higher wage index area of--
(i) the difference between--
(I) the wage index for such higher wage index
area, and
(II) the wage index of the qualifying county;
and
(ii) the number of hospital employees residing in the
qualifying county who are employed in such higher wage
index area divided by the total number of hospital
employees residing in the qualifying county who are
employed in any higher wage index area.
(E) The process under this paragraph may be based upon the
process used by the Medicare Geographic Classification Review
Board under paragraph (10). As the Secretary determines to be
appropriate to carry out such process, the Secretary may
require hospitals (including subsection (d) hospitals and other
hospitals) and critical access hospitals, as required under
section 1866(a)(1)(T), to submit data regarding the location of
residence, or the Secretary may use data from other sources.
(F) A wage index increase under this paragraph shall be
effective for a period of 3 fiscal years, except that the
Secretary shall establish procedures under which a subsection
(d) hospital may elect to waive the application of such wage
index increase.
(G) A hospital in a county that has a wage index increase
under this paragraph for a period and that has not waived the
application of such an increase under subparagraph (F) is not
eligible for reclassification under paragraph (8) or (10)
during that period.
(H) Any increase in a wage index under this paragraph for a
county shall not be taken into account for purposes of--
(i) computing the wage index for portions of the wage
index area (not including the county) in which the
county is located; or
(ii) applying any budget neutrality adjustment with
respect to such index under paragraph (8)(D).
(I) The thresholds described in subparagraph (B), data on
hospital employees used under this paragraph, and any
determination of the Secretary under the process described in
subparagraph (E) shall be final and shall not be subject to
judicial review.
(e)(1)(A) For cost reporting periods of hospitals beginning
in fiscal year 1984 or fiscal year 1985, the Secretary shall
provide for such proportional adjustment in the applicable
percentage increase (otherwise applicable to the periods under
subsection (b)(3)(B)) as may be necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsection (d)(1)(A)(i)(I) for that fiscal year
for operating costs of inpatient hospital services of
hospitals (excluding payments made under section
1866(a)(1)(F)),
are not greater or less than--
(ii) the target percentage (as defined in subsection
(d)(1)(C)) of the payment amounts which would have been
payable for such services for those same hospitals for
that fiscal year under this section under the law as in
effect before the date of the enactment of the Social
Security Amendments of 1983 (excluding payments made
under section 1866(a)(1)(F));
except that the adjustment made under this subparagraph shall
apply only to subsection (d) hospitals and shall not apply for
purposes of making computations under subsection (d)(2)(B)(ii)
or subsection (d)(3)(A).
(B) For discharges occurring in fiscal year 1984 or fiscal
year 1985, the Secretary shall provide under subsections
(d)(2)(F) and (d)(3)(C) for such equal proportional adjustment
in each of the average standardized amounts otherwise computed
for that fiscal year as may be necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsection (d)(1)(A)(i)(II) and (d)(5) for that
fiscal year for operating costs of inpatient hospital
services of hospitals (excluding payments made under
section 1866(a)(1)(F)),
are not greater or less than--
(ii) the DRG percentage (as defined in subsection
(d)(1)(C)) of the payment amounts which would have been
payable for such services for those same hospitals for
that fiscal year under this section under the law as in
effect before the date of the enactment of the Social
Security Amendments of 1983 (excluding payments made
under section 1866(a)(1)(F)).
(C) For discharges occurring in fiscal year 1988, the
Secretary shall provide for such equal proportional adjustment
in each of the average standardized amounts otherwise computed
under subsection (d)(3) for that fiscal year as may be
necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsections (d)(1)(A)(iii), (d)(5), and (d)(9)
for that fiscal year for operating costs of inpatient
hospital services of subsection (d) hospitals and
subsection (d) Puerto Rico hospitals,
are not greater or less than--
(ii) the payment amounts that would have been payable
for such services for those same hospitals for that
fiscal year but for the enactment of the amendments
made by section 9304 of the Omnibus Budget
Reconciliation Act of 1986.
(4)(A) Taking into consideration the recommendations of the
Commission, the Secretary shall recommend for each fiscal year
(beginning with fiscal year 1988) an appropriate change factor
for inpatient hospital services for discharges in that fiscal
year which will take into account amounts necessary for the
efficient and effective delivery of medically appropriate and
necessary care of high quality. The appropriate change factor
may be different for all large urban subsection (d) hospitals,
other urban subsection (d) hospitals, urban subsection (d)
Puerto Rico hospitals, rural subsection (d) hospitals, and
rural subsection (d) Puerto Rico hospitals, and all other
hospitals and units not paid under subsection (d), and may vary
among such other hospitals and units.
(B) In addition to the recommendation made under subparagraph
(A), the Secretary shall, taking into consideration the
recommendations of the Commission under paragraph (2)(B),
recommend for each fiscal year (beginning with fiscal year
1992) other appropriate changes in each existing reimbursement
policy under this title under which payments to an institution
are based upon prospectively determined rates.
(5) The Secretary shall cause to have published in the
Federal Register, not later than--
(A) the April 1 before each fiscal year (beginning
with fiscal year 1986), the Secretary's proposed
recommendations under paragraph (4) for that fiscal
year for public comment, and
(B) the August 1 before such fiscal year after such
consideration of public comment on the proposal as is
feasible in the time available, the Secretary's final
recommendations under such paragraph for that year.
The Secretary shall include in the publication referred to in
subparagraph (A) for a fiscal year the report of the
Commission's recommendations submitted under paragraph (3) for
that fiscal year. To the extent that the Secretary's
recommendations under paragraph (4) differ from the
Commission's recommendations for that fiscal year, the
Secretary shall include in the publication referred to in
subparagraph (A) an explanation of the Secretary's grounds for
not following the Commission's recommendations.
(f)(1)(A) The Secretary shall maintain a system for the
reporting of costs of hospitals receiving payments computed
under subsection (d).
(B)(i) Subject to clause (ii), the Secretary shall place into
effect a standardized electronic cost reporting format for
hospitals under this title.
(ii) The Secretary may delay or waive the implementation of
such format in particular instances where such implementation
would result in financial hardship (in particular with respect
to hospitals with a small percentage of inpatients entitled to
benefits under this title).
(2) If the Secretary determines, based upon information
supplied by a quality improvement organization under part B of
title XI, that a hospital, in order to circumvent the payment
method established under subsection (b) or (d) of this section,
has taken an action that results in the admission of
individuals entitled to benefits under part A unnecessarily,
unnecessary multiple admissions of the same such individuals,
or other inappropriate medical or other practices with respect
to such individuals, the Secretary may--
(A) deny payment (in whole or in part) under part A
with respect to inpatient hospital services provided
with respect to such an unnecessary admission (or
subsequent admission of the same individual), or
(B) require the hospital to take other corrective
action necessary to prevent or correct the
inappropriate practice.
(3) The provisions of subsections (c) through (g) of section
1128 shall apply to determinations made under paragraph (2) in
the same manner as they apply to exclusions effected under
section 1128(b)(13).
(g)(1)(A) Notwithstanding section 1861(v), instead of any
amounts that are otherwise payable under this title with
respect to the reasonable costs of subsection (d) hospitals and
subsection (d) Puerto Rico hospitals for capital-related costs
of inpatient hospital services, the Secretary shall, for
hospital cost reporting periods beginning on or after October
1, 1991, provide for payments for such costs in accordance with
a prospective payment system established by the Secretary.
Aggregate payments made under subsection (d) and this
subsection during fiscal years 1992 through 1995 shall be
reduced in a manner that results in a reduction (as estimated
by the Secretary) in the amount of such payments equal to a 10
percent reduction in the amount of payments attributable to
capital-related costs that would otherwise have been made
during such fiscal year had the amount of such payments been
based on reasonable costs (as defined in section 1861(v)). For
discharges occurring after September 30, 1993, the Secretary
shall reduce by 7.4 percent the unadjusted standard Federal
capital payment rate (as described in 42 CFR 412.308(c), as in
effect on the date of the enactment of the Omnibus Budget
Reconciliation Act of 1993) and shall (for hospital cost
reporting periods beginning on or after October 1, 1993)
redetermine which payment methodology is applied to the
hospital under such system to take into account such reduction.
In addition to the reduction described in the preceding
sentence, for discharges occurring on or after October 1, 1997,
the Secretary shall apply the budget neutrality adjustment
factor used to determine the Federal capital payment rate in
effect on September 30, 1995 (as described in section 412.352
of title 42 of the Code of Federal Regulations), to (i) the
unadjusted standard Federal capital payment rate (as described
in section 412.308(c) of that title, as in effect on September
30, 1997), and (ii) the unadjusted hospital-specific rate (as
described in section 412.328(e)(1) of that title, as in effect
on September 30, 1997), and, for discharges occurring on or
after October 1, 1997, and before October 1, 2002, reduce the
rates described in clauses (i) and (ii) by 2.1 percent.
(B) Such system--
(i) shall provide for (I) a payment on a per
discharge basis, and (II) an appropriate weighting of
such payment amount as relates to the classification of
the discharge;
(ii) may provide for an adjustment to take into
account variations in the relative costs of capital and
construction for the different types of facilities or
areas in which they are located;
(iii) may provide for such exceptions (including
appropriate exceptions to reflect capital obligations)
as the Secretary determines to be appropriate, and
(iv) may provide for suitable adjustment to reflect
hospital occupancy rate.
(C) In this paragraph, the term ``capital-related costs'' has
the meaning given such term by the Secretary under subsection
(a)(4) as of September 30, 1987, and does not include a return
on equity capital.
(2)(A) The Secretary shall provide that the amount which is
allowable, with respect to reasonable costs of inpatient
hospital services for which payment may be made under this
title, for a return on equity capital for hospitals shall, for
cost reporting periods beginning on or after the date of the
enactment of this subsection, be equal to amounts otherwise
allowable under regulations in effect on March 1, 1983, except
that the rate of return to be recognized shall be equal to the
applicable percentage (described in subparagraph (B)) of the
average of the rates of interest, for each of the months any
part of which is included in the reporting period, on
obligations issued for purchase by the Federal Hospital
Insurance Trust Fund.
(B) In this paragraph, the ``applicable percentage'' is--
(i) 75 percent, for cost reporting periods beginning
during fiscal year 1987,
(ii) 50 percent, for cost reporting periods beginning
during fiscal year 1988,
(iii) 25 percent, for cost reporting periods
beginning during fiscal year 1989, and
(iv) 0 percent, for cost reporting periods beginning
on or after October 1, 1989.
(3)(A) Except as provided in subparagraph (B), in determining
the amount of the payments that may be made under this title
with respect to all the capital-related costs of inpatient
hospital services of a subsection (d) hospital and a subsection
(d) Puerto Rico hospital, the Secretary shall reduce the
amounts of such payments otherwise established under this title
by--
(i) 3.5 percent for payments attributable to portions
of cost reporting periods occurring during fiscal year
1987,
(ii) 7 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during fiscal year 1988 on or after
October 1, 1987, and before January 1, 1988,
(iii) 12 percent for payments attributable to
portions of cost reporting periods or discharges (as
the case may be) in fiscal year 1988, occurring on or
after January 1, 1988,
(iv) 15 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during fiscal year 1989, and
(v) 15 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during the period beginning January
1, 1990, and ending September 30, 1991.
(B) Subparagraph (A) shall not apply to payments with respect
to the capital-related costs of any hospital that is a sole
community hospital (as defined in subsection (d)(5)(D)(iii)) or
a critical access hospital (as defined in section 1861(mm)(1)).
(4) In determining the amount of the payments that are
attributable to portions of cost reporting periods occurring
during fiscal years 1998 through 2002 and that may be made
under this title with respect to capital-related costs of
inpatient hospital services of a hospital which is described in
clause (i), (ii), or (iv) of subsection (d)(1)(B) or a unit
described in the matter after clause (v) of such subsection,
the Secretary shall reduce the amounts of such payments
otherwise determined under this title by 15 percent.
(h) Payments for Direct Graduate Medical Education Costs.--
(1) Substitution of special payment rules.--
Notwithstanding section 1861(v), instead of any amounts
that are otherwise payable under this title with
respect to the reasonable costs of hospitals for direct
graduate medical education costs, the Secretary shall
provide for payments for such costs in accordance with
paragraph (3) of this subsection. In providing for such
payments, the Secretary shall provide for an allocation
of such payments between part A and part B (and the
trust funds established under the respective parts) as
reasonably reflects the proportion of direct graduate
medical education costs of hospitals associated with
the provision of services under each respective part.
(2) Determination of hospital-specific approved fte
resident amounts.--The Secretary shall determine, for
each hospital with an approved medical residency
training program, an approved FTE resident amount for
each cost reporting period beginning on or after July
1, 1985, as follows:
(A) Determining allowable average cost per
fte resident in a hospital's base period.--The
Secretary shall determine, for the hospital's
cost reporting period that began during fiscal
year 1984, the average amount recognized as
reasonable under this title for direct graduate
medical education costs of the hospital for
each full-time-equivalent resident.
(B) Updating to the first cost reporting
period.--
(i) In general.--The Secretary shall
update each average amount determined
under subparagraph (A) by the
percentage increase in the consumer
price index during the 12-month cost
reporting period described in such
subparagraph.
(ii) Exception.--The Secretary shall
not perform an update under clause (i)
in the case of a hospital if the
hospital's reporting period, described
in subparagraph (A), began on or after
July 1, 1984, and before October 1,
1984.
(C) Amount for first cost reporting period.--
For the first cost reporting period of the
hospital beginning on or after July 1, 1985,
the approved FTE resident amount for the
hospital is equal to the amount determined
under subparagraph (B) increased by 1 percent.
(D) Amount for subsequent cost reporting
periods.--
(i) In general.--Except as provided
in a subsequent clause, for each
subsequent cost reporting period, the
approved FTE resident amount for the
hospital is equal to the approved FTE
resident amount determined under this
paragraph for the previous cost
reporting period updated, through the
midpoint of the period, by projecting
the estimated percentage change in the
consumer price index during the 12-
month period ending at that midpoint,
with appropriate adjustments to reflect
previous under-or over-estimations
under this subparagraph in the
projected percentage change in the
consumer price index.
(ii) Freeze in update for fiscal
years 1994 and 1995.--For cost
reporting periods beginning during
fiscal year 1994 or fiscal year 1995,
the approved FTE resident amount for a
hospital shall not be updated under
clause (i) for a resident who is not a
primary care resident (as defined in
paragraph (5)(H)) or a resident
enrolled in an approved medical
residency training program in
obstetrics and gynecology.
(iii) Floor for locality adjusted
national average per resident amount.--
The approved FTE resident amount for a
hospital for the cost reporting period
beginning during fiscal year 2001 shall
not be less than 70 percent, and for
the cost reporting period beginning
during fiscal year 2002 shall not be
less than 85 percent, of the locality
adjusted national average per resident
amount computed under subparagraph (E)
for the hospital and period.
(iv) Adjustment in rate of increase
for hospitals with fte approved amount
above 140 percent of locality adjusted
national average per resident amount.--
(I) Freeze for fiscal years
2001 and 2002 and 2004 through
2013.--For a cost reporting
period beginning during fiscal
year 2001 or fiscal year 2002
or during the period beginning
with fiscal year 2004 and
ending with fiscal year 2013,
if the approved FTE resident
amount for a hospital for the
preceding cost reporting period
exceeds 140 percent of the
locality adjusted national
average per resident amount
computed under subparagraph (E)
for that hospital and period,
subject to subclause (III), the
approved FTE resident amount
for the period involved shall
be the same as the approved FTE
resident amount for the
hospital for such preceding
cost reporting period.
(II) 2 percent decrease in
update for fiscal years 2003,
2004, and 2005.--For the cost
reporting period beginning
during fiscal year 2003, if the
approved FTE resident amount
for a hospital for the
preceding cost reporting period
exceeds 140 percent of the
locality adjusted national
average per resident amount
computed under subparagraph (E)
for that hospital and preceding
period, the approved FTE
resident amount for the period
involved shall be updated in
the manner described in
subparagraph (D)(i) except
that, subject to subclause
(III), the consumer price index
applied for a 12-month period
shall be reduced (but not below
zero) by 2 percentage points.
(III) No adjustment below 140
percent.--In no case shall
subclause (I) or (II) reduce an
approved FTE resident amount
for a hospital for a cost
reporting period below 140
percent of the locality
adjusted national average per
resident amount computed under
subparagraph (E) for such
hospital and period.
(E) Determination of locality adjusted
national average per resident amount.--The
Secretary shall determine a locality adjusted
national average per resident amount with
respect to a cost reporting period of a
hospital beginning during a fiscal year as
follows:
(i) Determining hospital single per
resident amount.--The Secretary shall
compute for each hospital operating an
approved graduate medical education
program a single per resident amount
equal to the average (weighted by
number of full-time equivalent
residents, as determined under
paragraph (4)) of the primary care per
resident amount and the non-primary
care per resident amount computed under
paragraph (2) for cost reporting
periods ending during fiscal year 1997.
(ii) Standardizing per resident
amounts.--The Secretary shall compute a
standardized per resident amount for
each such hospital by dividing the
single per resident amount computed
under clause (i) by an average of the 3
geographic index values (weighted by
the national average weight for each of
the work, practice expense, and
malpractice components) as applied
under section 1848(e) for 1999 for the
fee schedule area in which the hospital
is located.
(iii) Computing of weighted
average.--The Secretary shall compute
the average of the standardized per
resident amounts computed under clause
(ii) for such hospitals, with the
amount for each hospital weighted by
the average number of full-time
equivalent residents at such hospital
(as determined under paragraph (4)).
(iv) Computing national average per
resident amount.--The Secretary shall
compute the national average per
resident amount, for a hospital's cost
reporting period that begins during
fiscal year 2001, equal to the weighted
average computed under clause (iii)
increased by the estimated percentage
increase in the consumer price index
for all urban consumers during the
period beginning with the month that
represents the midpoint of the cost
reporting periods described in clause
(i) and ending with the midpoint of the
hospital's cost reporting period that
begins during fiscal year 2001.
(v) Adjusting for locality.--The
Secretary shall compute the product
of--
(I) the national average per
resident amount computed under
clause (iv) for the hospital,
and
(II) the geographic index
value average (described and
applied under clause (ii)) for
the fee schedule area in which
the hospital is located.
(vi) Computing locality adjusted
amount.--The locality adjusted national
per resident amount for a hospital
for--
(I) the cost reporting period
beginning during fiscal year
2001 is the product computed
under clause (v); or
(II) each subsequent cost
reporting period is equal to
the locality adjusted national
per resident amount for the
hospital for the previous cost
reporting period (as determined
under this clause) updated,
through the midpoint of the
period, by projecting the
estimated percentage change in
the consumer price index for
all urban consumers during the
12-month period ending at that
midpoint.
(F) Treatment of certain hospitals.--In the
case of a hospital that did not have an
approved medical residency training program or
was not participating in the program under this
title for a cost reporting period beginning
during fiscal year 1984, the Secretary shall,
for the first such period for which it has such
a residency training program and is
participating under this title, provide for
such approved FTE resident amount as the
Secretary determines to be appropriate, based
on approved FTE resident amounts for comparable
programs.
(3) Hospital payment amount per resident.--
(A) In general.--The payment amount, for a
hospital cost reporting period beginning on or
after July 1, 1985, is equal to the product
of--
(i) the aggregate approved amount (as
defined in subparagraph (B)) for that
period, and
(ii) the hospital's medicare patient
load (as defined in subparagraph (C))
for that period.
(B) Aggregate approved amount.--As used in
subparagraph (A), the term ``aggregate approved
amount'' means, for a hospital cost reporting
period, the product of--
(i) the hospital's approved FTE
resident amount (determined under
paragraph (2)) for that period, and
(ii) the weighted average number of
full-time-equivalent residents (as
determined under paragraph (4)) in the
hospital's approved medical residency
training programs in that period.
The Secretary shall reduce the aggregate approved
amount to the extent payment is made under subsection
(k) for residents included in the hospital's count of
full-time equivalent residents.
(C) Medicare patient load.--As used in
subparagraph (A), the term ``medicare patient
load'' means, with respect to a hospital's cost
reporting period, the fraction of the total
number of inpatient-bed-days (as established by
the Secretary) during the period which are
attributable to patients with respect to whom
payment may be made under part A.
(D) Payment for managed care enrollees.--
(i) In general.--For portions of cost
reporting periods occurring on or after
January 1, 1998, the Secretary shall
provide for an additional payment
amount under this subsection for
services furnished to individuals who
are enrolled under a risk-sharing
contract with an eligible organization
under section 1876 and who are entitled
to part A or with a Medicare+Choice
organization under part C. The amount
of such a payment shall equal, subject
to clause (iii), the applicable
percentage of the product of--
(I) the aggregate approved
amount (as defined in
subparagraph (B)) for that
period; and
(II) the fraction of the
total number of inpatient-bed
days (as established by the
Secretary) during the period
which are attributable to such
enrolled individuals.
(ii) Applicable percentage.--For
purposes of clause (i), the applicable
percentage is--
(I) 20 percent in 1998,
(II) 40 percent in 1999,
(III) 60 percent in 2000,
(IV) 80 percent in 2001, and
(V) 100 percent in 2002 and
subsequent years.
(iii) Proportional reduction for
nursing and allied health education.--
The Secretary shall estimate a
proportional adjustment in payments to
all hospitals determined under clauses
(i) and (ii) for portions of cost
reporting periods beginning in a year
(beginning with 2000) such that the
proportional adjustment reduces
payments in an amount for such year
equal to the total additional payment
amounts for nursing and allied health
education determined under subsection
(l) for portions of cost reporting
periods occurring in that year.
(iv) Special rule for hospitals under
reimbursement system.--The Secretary
shall establish rules for the
application of this subparagraph to a
hospital reimbursed under a
reimbursement system authorized under
section 1814(b)(3) in the same manner
as it would apply to the hospital if it
were not reimbursed under such section.
(4) Determination of full-time-equivalent
residents.--
(A) Rules.--The Secretary shall establish
rules consistent with this paragraph for the
computation of the number of full-time-
equivalent residents in an approved medical
residency training program.
(B) Adjustment for part-year or part-time
residents.--Such rules shall take into account
individuals who serve as residents for only a
portion of a period with a hospital or
simultaneously with more than one hospital.
(C) Weighting factors for certain
residents.--Subject to subparagraph (D), such
rules shall provide, in calculating the number
of full-time-equivalent residents in an
approved residency program--
(i) before July 1, 1986, for each
resident the weighting factor is 1.00,
(ii) on or after July 1, 1986, for a
resident who is in the resident's
initial residency period (as defined in
paragraph (5)(F)), the weighting factor
is 1.00,
(iii) on or after July 1, 1986, and
before July 1, 1987, for a resident who
is not in the resident's initial
residency period (as defined in
paragraph (5)(F)), the weighting factor
is .75, and
(iv) on or after July 1, 1987, for a
resident who is not in the resident's
initial residency period (as defined in
paragraph (5)(F)), the weighting factor
is .50.
(D) Foreign medical graduates required to
pass fmgems examination.--
(i) In general.--Except as provided
in clause (ii), such rules shall
provide that, in the case of an
individual who is a foreign medical
graduate (as defined in paragraph
(5)(D)), the individual shall not be
counted as a resident on or after July
1, 1986, unless--
(I) the individual has passed
the FMGEMS examination (as
defined in paragraph (5)(E)),
or
(II) the individual has
previously received
certification from, or has
previously passed the
examination of, the Educational
Commission for Foreign Medical
Graduates.
(ii) Transition for current fmgs.--On
or after July 1, 1986, but before July
1, 1987, in the case of a foreign
medical graduate who--
(I) has served as a resident
before July 1, 1986, and is
serving as a resident after
that date, but
(II) has not passed the
FMGEMS examination or a
previous examination of the
Educational Commission for
Foreign Medical Graduates
before July 1, 1986,
the individual shall be counted as a
resident at a rate equal to one-half of
the rate at which the individual would
otherwise be counted.
(E) Counting time spent in outpatient
settings.--Subject to subparagraphs (J) and
(K), such rules shall provide that only time
spent in activities relating to patient care
shall be counted and that--
(i) effective for cost reporting
periods beginning before July 1, 2010,
all the time;
(ii) effective for cost reporting
periods beginning on or after July 1,
2010, all the time so spent by a
resident shall be counted towards the
determination of full-time equivalency,
without regard to the setting in which
the activities are performed, if a
hospital incurs the costs of the
stipends and fringe benefits of the
resident during the time the resident
spends in that setting. If more than
one hospital incurs these costs, either
directly or through a third party, such
hospitals shall count a proportional
share of the time, as determined by
written agreement between the
hospitals, that a resident spends
training in that setting.
so spent by a resident under an approved
medical residency training program shall be
counted towards the determination of full-time
equivalency, without regard to the setting in
which the activities are performed, if the
hospital incurs all, or substantially all, of
the costs for the training program in that
setting.
Any hospital claiming under this subparagraph
for time spent in a nonprovider setting shall
maintain and make available to the Secretary
records regarding the amount of such time and
such amount in comparison with amounts of such
time in such base year as the Secretary shall
specify.
(F) Limitation on number of residents in
allopathic and osteopathic medicine.--
(i) In general.--Such rules shall
provide that for purposes of a cost
reporting period beginning on or after
October 1, 1997, subject to [paragraphs
(7) and (8)] paragraphs (7), (8), and
(9), the total number of full-time
equivalent residents before application
of weighting factors (as determined
under this paragraph) with respect to a
hospital's approved medical residency
training program in the fields of
allopathic medicine and osteopathic
medicine may not exceed the number (or,
130 percent of such number in the case
of a hospital located in a rural area)
of such full-time equivalent residents
for the hospital's most recent cost
reporting period ending on or before
December 31, 1996.
(ii) Counting primary care residents
on certain approved leaves of absence
in base year fte count.--
(I) In general.--In
determining the number of such
full-time equivalent residents
for a hospital's most recent
cost reporting period ending on
or before December 31, 1996,
for purposes of clause (i), the
Secretary shall count an
individual to the extent that
the individual would have been
counted as a primary care
resident for such period but
for the fact that the
individual, as determined by
the Secretary, was on maternity
or disability leave or a
similar approved leave of
absence.
(II) Limitation to 3 fte
residents for any hospital.--
The total number of individuals
counted under subclause (I) for
a hospital may not exceed 3
full-time equivalent residents.
(G) Counting interns and residents for fy
1998 and subsequent years.--
(i) In general.--For cost reporting
periods beginning during fiscal years
beginning on or after October 1, 1997,
subject to the limit described in
subparagraph (F), the total number of
full-time equivalent residents for
determining a hospital's graduate
medical education payment shall equal
the average of the actual full-time
equivalent resident counts for the cost
reporting period and the preceding two
cost reporting periods.
(ii) Adjustment for short periods.--
If any cost reporting period beginning
on or after October 1, 1997, is not
equal to twelve months, the Secretary
shall make appropriate modifications to
ensure that the average full-time
equivalent resident counts pursuant to
clause (i) are based on the equivalent
of full twelve-month cost reporting
periods.
(iii) Transition rule for 1998.--In
the case of a hospital's first cost
reporting period beginning on or after
October 1, 1997, clause (i) shall be
applied by using the average for such
period and the preceding cost reporting
period.
(H) Special rules for application of
subparagraphs (f) and (g).--
(i) New facilities.--The Secretary
shall, consistent with the principles
of subparagraphs (F) and (G) and
subject to [paragraphs (7) and (8)]
paragraphs (7), (8), and (9), prescribe
rules for the application of such
subparagraphs in the case of medical
residency training programs established
on or after January 1, 1995. In
promulgating such rules for purposes of
subparagraph (F), the Secretary shall
give special consideration to
facilities that meet the needs of
underserved rural areas.
(ii) Aggregation.--The Secretary may
prescribe rules which allow
institutions which are members of the
same affiliated group (as defined by
the Secretary) to elect to apply the
limitation of subparagraph (F) on an
aggregate basis.
(iii) Data collection.--The Secretary
may require any entity that operates a
medical residency training program and
to which subparagraphs (F) and (G)
apply to submit to the Secretary such
additional information as the Secretary
considers necessary to carry out such
subparagraphs.
(iv) Nonrural hospitals operating
training programs in rural areas.--In
the case of a hospital that is not
located in a rural area but establishes
separately accredited approved medical
residency training programs (or rural
tracks) in an rural area or has an
accredited training program with an
integrated rural track, the Secretary
shall adjust the limitation under
subparagraph (F) in an appropriate
manner insofar as it applies to such
programs in such rural areas in order
to encourage the training of physicians
in rural areas.
(v) Special provider agreement.--If
an entity enters into a provider
agreement pursuant to section 1866(a)
to provide hospital services on the
same physical site previously used by
Medicare Provider No. 05-0578--
(I) the limitation on the
number of total full time
equivalent residents under
subparagraph (F) and clauses
(v) and (vi)(I) of subsection
(d)(5)(B) applicable to such
provider shall be equal to the
limitation applicable under
such provisions to Provider No.
05-0578 for its cost reporting
period ending on June 30, 2006;
and
(II) the provisions of
subparagraph (G) and subsection
(d)(5)(B)(vi)(II) shall not be
applicable to such provider for
the first three cost reporting
years in which such provider
trains residents under any
approved medical residency
training program.
(vi) Redistribution of residency
slots after a hospital closes.--
(I) In general.--Subject to
the succeeding provisions of
this clause, the Secretary
shall, by regulation, establish
a process under which, in the
case where a hospital (other
than a hospital described in
clause (v)) with an approved
medical residency program
closes on or after a date that
is 2 years before the date of
enactment of this clause, the
Secretary shall increase the
otherwise applicable resident
limit under this paragraph for
other hospitals in accordance
with this clause.
(II) Priority for hospitals
in certain areas.--Subject to
the succeeding provisions of
this clause, in determining for
which hospitals the increase in
the otherwise applicable
resident limit is provided
under such process, the
Secretary shall distribute the
increase to hospitals in the
following priority order (with
preference given within each
category to hospitals that are
members of the same affiliated
group (as defined by the
Secretary under clause (ii)) as
the closed hospital):
(aa) First, to
hospitals located in
the same core-based
statistical area as, or
a core-based
statistical area
contiguous to, the
hospital that closed.
(bb) Second, to
hospitals located in
the same State as the
hospital that closed.
(cc) Third, to
hospitals located in
the same region of the
country as the hospital
that closed.
(dd) Fourth, only if
the Secretary is not
able to distribute the
increase to hospitals
described in item (cc),
to qualifying hospitals
in accordance with the
provisions of paragraph
(8).
(III) Requirement hospital
likely to fill position within
certain time period.--The
Secretary may only increase the
otherwise applicable resident
limit of a hospital under such
process if the Secretary
determines the hospital has
demonstrated a likelihood of
filling the positions made
available under this clause
within 3 years.
(IV) Limitation.--The
aggregate number of increases
in the otherwise applicable
resident limits for hospitals
under this clause shall be
equal to the number of resident
positions in the approved
medical residency programs that
closed on or after the date
described in subclause (I).
(V) Administration.--Chapter
35 of title 44, United States
Code, shall not apply to the
implementation of this clause.
(J) Treatment of certain nonprovider and
didactic activities.--Such rules shall provide
that all time spent by an intern or resident in
an approved medical residency training program
in a nonprovider setting that is primarily
engaged in furnishing patient care (as defined
in paragraph (5)(K)) in non-patient care
activities, such as didactic conferences and
seminars, but not including research not
associated with the treatment or diagnosis of a
particular patient, as such time and activities
are defined by the Secretary, shall be counted
toward the determination of full-time
equivalency.
(K) Treatment of certain other activities.--
In determining the hospital's number of full-
time equivalent residents for purposes of this
subsection, all the time that is spent by an
intern or resident in an approved medical
residency training program on vacation, sick
leave, or other approved leave, as such time is
defined by the Secretary, and that does not
prolong the total time the resident is
participating in the approved program beyond
the normal duration of the program shall be
counted toward the determination of full-time
equivalency.
(5) Definitions and special rules.--As used in this
subsection:
(A) Approved medical residency training
program.--The term ``approved medical residency
training program'' means a residency or other
postgraduate medical training program
participation in which may be counted toward
certification in a specialty or subspecialty
and includes formal postgraduate training
programs in geriatric medicine approved by the
Secretary.
(B) Consumer price index.--The term
``consumer price index'' refers to the Consumer
Price Index for All Urban Consumers (United
States city average), as published by the
Secretary of Commerce.
(C) Direct graduate medical education
costs.--The term ``direct graduate medical
education costs'' means direct costs of
approved educational activities for approved
medical residency training programs.
(D) Foreign medical graduate.--The term
``foreign medical graduate'' means a resident
who is not a graduate of--
(i) a school of medicine accredited
by the Liaison Committee on Medical
Education of the American Medical
Association and the Association of
American Medical Colleges (or approved
by such Committee as meeting the
standards necessary for such
accreditation),
(ii) a school of osteopathy
accredited by the American Osteopathic
Association, or approved by such
Association as meeting the standards
necessary for such accreditation, or
(iii) a school of dentistry or
podiatry which is accredited (or meets
the standards for accreditation) by an
organization recognized by the
Secretary for such purpose.
(E) FMGEMS examination.--The term ``FMGEMS
examination'' means parts I and II of the
Foreign Medical Graduate Examination in the
Medical Sciences or any successor examination
recognized by the Secretary for this purpose.
(F) Initial residency period.--The term
``initial residency period'' means the period
of board eligibility, except that--
(i) except as provided in clause
(ii), in no case shall the initial
period of residency exceed an aggregate
period of formal training of more than
five years for any individual, and
(ii) a period, of not more than two
years, during which an individual is in
a geriatric residency or fellowship
program or a preventive medicine
residency or fellowship program which
meets such criteria as the Secretary
may establish, shall be treated as part
of the initial residency period, but
shall not be counted against any
limitation on the initial residency
period.
Subject to subparagraph (G)(v), the initial
residency period shall be determined, with
respect to a resident, as of the time the
resident enters the residency training program.
(G) Period of board eligibility.--
(i) General rule.--Subject to clauses
(ii), (iii), (iv), and (v), the term
``period of board eligibility'' means,
for a resident, the minimum number of
years of formal training necessary to
satisfy the requirements for initial
board eligibility in the particular
specialty for which the resident is
training.
(ii) Application of 1985-1986
directory.--Except as provided in
clause (iii), the period of board
eligibility shall be such period
specified in the 1985-1986 Directory of
Residency Training Programs published
by the Accreditation Council on
Graduate Medical Education.
(iii) Changes in period of board
eligibility.--On or after July 1, 1989,
if the Accreditation Council on
Graduate Medical Education, in its
Directory of Residency Training
Programs--
(I) increases the minimum
number of years of formal
training necessary to satisfy
the requirements for a
specialty, above the period
specified in its 1985-1986
Directory, the Secretary may
increase the period of board
eligibility for that specialty,
but not to exceed the period of
board eligibility specified in
that later Directory, or
(II) decreases the minimum
number of years of formal
training necessary to satisfy
the requirements for a
specialty, below the period
specified in its 1985-1986
Directory, the Secretary may
decrease the period of board
eligibility for that specialty,
but not below the period of
board eligibility specified in
that later Directory.
(iv) Special rule for certain primary
care combined residency programs.--(I)
In the case of a resident enrolled in a
combined medical residency training
program in which all of the individual
programs (that are combined) are for
training a primary care resident (as
defined in subparagraph (H)), the
period of board eligibility shall be
the minimum number of years of formal
training required to satisfy the
requirements for initial board
eligibility in the longest of the
individual programs plus one additional
year.
(II) A resident enrolled in a
combined medical residency training
program that includes an obstetrics and
gynecology program shall qualify for
the period of board eligibility under
subclause (I) if the other programs
such resident combines with such
obstetrics and gynecology program are
for training a primary care resident.
(v) Child neurology training
programs.--In the case of a resident
enrolled in a child neurology residency
training program, the period of board
eligibility and the initial residency
period shall be the period of board
eligibility for pediatrics plus 2
years.
(H) Primary care resident.--The term
``primary care resident'' means a resident
enrolled in an approved medical residency
training program in family medicine, general
internal medicine, general pediatrics,
preventive medicine, geriatric medicine, or
osteopathic general practice.
(I) Resident.--The term ``resident'' includes
an intern or other participant in an approved
medical residency training program.
(J) Adjustments for certain family practice
residency programs.--
(i) In general.--In the case of an
approved medical residency training
program (meeting the requirements of
clause (ii)) of a hospital which
received funds from the United States,
a State, or a political subdivision of
a State or an instrumentality of such a
State or political subdivision (other
than payments under this title or a
State plan under title XIX) for the
program during the cost reporting
period that began during fiscal year
1984, the Secretary shall--
(I) provide for an average
amount under paragraph (2)(A)
that takes into account the
Secretary's estimate of the
amount that would have been
recognized as reasonable under
this title if the hospital had
not received such funds, and
(II) reduce the payment
amount otherwise provided under
this subsection in an amount
equal to the proportion of such
program funds received during
the cost reporting period
involved that is allocable to
this title.
(ii) Additional requirements.--A
hospital's approved medical residency
program meets the requirements of this
clause if--
(I) the program is limited to
training for family and
community medicine;
(II) the program is the only
approved medical residency
program of the hospital; and
(III) the average amount
determined under paragraph
(2)(A) for the hospital (as
determined without regard to
the increase in such amount
described in clause (i)(I))
does not exceed $10,000.
(K) Nonprovider setting that is primarily
engaged in furnishing patient care.--The term
``nonprovider setting that is primarily engaged
in furnishing patient care'' means a
nonprovider setting in which the primary
activity is the care and treatment of patients,
as defined by the Secretary.
(6) Incentive payment under plans for voluntary
reduction in number of residents.--
(A) In general.--In the case of a voluntary
residency reduction plan for which an
application is approved under subparagraph (B),
subject to subparagraph (F), each hospital
which is part of the qualifying entity
submitting the plan shall be paid an applicable
hold harmless percentage (as specified in
subparagraph (E)) of the sum of--
(i) the amount (if any) by which--
(I) the amount of payment
which would have been made
under this subsection if there
had been a 5-percent reduction
in the number of full-time
equivalent residents in the
approved medical education
training programs of the
hospital as of June 30, 1997,
exceeds
(II) the amount of payment
which is made under this
subsection, taking into account
the reduction in such number
effected under the reduction
plan; and
(ii) the amount of the reduction in
payment under subsection (d)(5)(B) for
the hospital that is attributable to
the reduction in number of residents
effected under the plan below 95
percent of the number of full-time
equivalent residents in such programs
of the hospital as of June 30, 1997.
The determination of the amounts under clauses
(i) and (ii) for any year shall be made on the
basis of the provisions of this title in effect
on the application deadline date for the first
calendar year to which the reduction plan
applies.
(B) Approval of plan applications.--The
Secretary may not approve the application of an
qualifying entity unless--
(i) the application is submitted in a
form and manner specified by the
Secretary and by not later than
November 1, 1999,
(ii) the application provides for the
operation of a plan for the reduction
in the number of full-time equivalent
residents in the approved medical
residency training programs of the
entity consistent with the requirements
of subparagraph (D);
(iii) the entity elects in the
application the period of residency
training years (not greater than 5)
over which the reduction will occur;
(iv) the entity will not reduce the
proportion of its residents in primary
care (to the total number of residents)
below such proportion as in effect as
of the applicable time described in
subparagraph (D)(v); and
(v) the Secretary determines that the
application and the entity and such
plan meet such other requirements as
the Secretary specifies in regulations.
(C) Qualifying entity.--For purposes of this
paragraph, any of the following may be a
qualifying entity:
(i) Individual hospitals operating
one or more approved medical residency
training programs.
(ii) Two or more hospitals that
operate such programs and apply for
treatment under this paragraph as a
single qualifying entity.
(iii) A qualifying consortium (as
described in section 4628 of the
Balanced Budget Act of 1997).
(D) Residency reduction requirements.--
(i) Individual hospital applicants.--
In the case of a qualifying entity
described in subparagraph (C)(i), the
number of full-time equivalent
residents in all the approved medical
residency training programs operated by
or through the entity shall be reduced
as follows:
(I) If the base number of
residents exceeds 750
residents, by a number equal to
at least 20 percent of such
base number.
(II) Subject to subclause
(IV), if the base number of
residents exceeds 600 but is
less than 750 residents, by 150
residents.
(III) Subject to subclause
(IV), if the base number of
residents does not exceed 600
residents, by a number equal to
at least 25 percent of such
base number.
(IV) In the case of a
qualifying entity which is
described in clause (v) and
which elects treatment under
this subclause, by a number
equal to at least 20 percent of
the base number.
(ii) Joint applicants.--In the case
of a qualifying entity described in
subparagraph (C)(ii), the number of
full-time equivalent residents in the
aggregate for all the approved medical
residency training programs operated by
or through the entity shall be reduced
as follows:
(I) Subject to subclause
(II), by a number equal to at
least 25 percent of the base
number.
(II) In the case of such a
qualifying entity which is
described in clause (v) and
which elects treatment under
this subclause, by a number
equal to at least 20 percent of
the base number.
(iii) Consortia.--In the case of a
qualifying entity described in
subparagraph (C)(iii), the number of
full-time equivalent residents in the
aggregate for all the approved medical
residency training programs operated by
or through the entity shall be reduced
by a number equal to at least 20
percent of the base number.
(iv) Manner of reduction.--The
reductions specified under the
preceding provisions of this
subparagraph for a qualifying entity
shall be below the base number of
residents for that entity and shall be
fully effective not later than the 5th
residency training year in which the
application under subparagraph (B) is
effective.
(v) Entities providing assurance of
increase in primary care residents.--An
entity is described in this clause if--
(I) the base number of
residents for the entity is
less than 750 or the entity is
described in subparagraph
(C)(ii); and
(II) the entity represents in
its application under
subparagraph (B) that it will
increase the number of full-
time equivalent residents in
primary care by at least 20
percent (from such number
included in the base number of
residents) by not later than
the 5th residency training year
in which the application under
subparagraph (B) is effective.
If a qualifying entity fails to comply
with the representation described in
subclause (II) by the end of such 5th
residency training year, the entity
shall be subject to repayment of all
amounts paid under this paragraph, in
accordance with procedures established
to carry out subparagraph (F).
(vi) Base number of residents
defined.--For purposes of this
paragraph, the term ``base number of
residents'' means, with respect to a
qualifying entity (or its participating
hospitals) operating approved medical
residency training programs, the number
of full-time equivalent residents in
such programs (before application of
weighting factors) of the entity as of
the most recent residency training year
ending before June 30, 1997, or, if
less, for any subsequent residency
training year that ends before the date
the entity makes application under this
paragraph.
(E) Applicable hold harmless percentage.--For
purposes of subparagraph (A), the ``applicable
hold harmless percentage'' for the--
(i) first and second residency
training years in which the reduction
plan is in effect, 100 percent,
(ii) third such year, 75 percent,
(iii) fourth such year, 50 percent,
and
(iv) fifth such year, 25 percent.
(F) Penalty for noncompliance.--
(i) In general.--No payment may be
made under this paragraph to a hospital
for a residency training year if the
hospital has failed to reduce the
number of full-time equivalent
residents (in the manner required under
subparagraph (D)) to the number agreed
to by the Secretary and the qualifying
entity in approving the application
under this paragraph with respect to
such year.
(ii) Increase in number of residents
in subsequent years.--If payments are
made under this paragraph to a
hospital, and if the hospital increases
the number of full-time equivalent
residents above the number of such
residents permitted under the reduction
plan as of the completion of the plan,
then, as specified by the Secretary,
the entity is liable for repayment to
the Secretary of the total amounts paid
under this paragraph to the entity.
(G) Treatment of rotating residents.--In
applying this paragraph, the Secretary shall
establish rules regarding the counting of
residents who are assigned to institutions the
medical residency training programs in which
are not covered under approved applications
under this paragraph.
(7) Redistribution of unused resident positions.--
(A) Reduction in limit based on unused
positions.--
(i) Programs subject to reduction.--
(I) In general.--Except as
provided in subclause (II), if
a hospital's reference resident
level (specified in clause
(ii)) is less than the
otherwise applicable resident
limit (as defined in
subparagraph (C)(ii)),
effective for portions of cost
reporting periods occurring on
or after July 1, 2005, the
otherwise applicable resident
limit shall be reduced by 75
percent of the difference
between such otherwise
applicable resident limit and
such reference resident level.
(II) Exception for small
rural hospitals.--This
subparagraph shall not apply to
a hospital located in a rural
area (as defined in subsection
(d)(2)(D)(ii)) with fewer than
250 acute care inpatient beds.
(ii) Reference resident level.--
(I) In general.--Except as
otherwise provided in
subclauses (II) and (III), the
reference resident level
specified in this clause for a
hospital is the resident level
for the most recent cost
reporting period of the
hospital ending on or before
September 30, 2002, for which a
cost report has been settled
(or, if not, submitted (subject
to audit)), as determined by
the Secretary.
(II) Use of most recent
accounting period to recognize
expansion of existing
programs.--If a hospital
submits a timely request to
increase its resident level due
to an expansion of an existing
residency training program that
is not reflected on the most
recent settled cost report,
after audit and subject to the
discretion of the Secretary,
the reference resident level
for such hospital is the
resident level for the cost
reporting period that includes
July 1, 2003, as determined by
the Secretary.
(III) Expansions under newly
approved programs.--Upon the
timely request of a hospital,
the Secretary shall adjust the
reference resident level
specified under subclause (I)
or (II) to include the number
of medical residents that were
approved in an application for
a medical residency training
program that was approved by an
appropriate accrediting
organization (as determined by
the Secretary) before January
1, 2002, but which was not in
operation during the cost
reporting period used under
subclause (I) or (II), as the
case may be, as determined by
the Secretary.
(iii) Affiliation.--The provisions of
clause (i) shall be applied to
hospitals which are members of the same
affiliated group (as defined by the
Secretary under paragraph (4)(H)(ii))
as of July 1, 2003.
(B) Redistribution.--
(i) In general.--The Secretary is
authorized to increase the otherwise
applicable resident limit for each
qualifying hospital that submits a
timely application under this
subparagraph by such number as the
Secretary may approve for portions of
cost reporting periods occurring on or
after July 1, 2005. The aggregate
number of increases in the otherwise
applicable resident limits under this
subparagraph may not exceed the
Secretary's estimate of the aggregate
reduction in such limits attributable
to subparagraph (A).
(ii) Considerations in
redistribution.--In determining for
which hospitals the increase in the
otherwise applicable resident limit is
provided under clause (i), the
Secretary shall take into account the
demonstrated likelihood of the hospital
filling the positions within the first
3 cost reporting periods beginning on
or after July 1, 2005, made available
under this subparagraph, as determined
by the Secretary.
(iii) Priority for rural and small
urban areas.--In determining for which
hospitals and residency training
programs an increase in the otherwise
applicable resident limit is provided
under clause (i), the Secretary shall
distribute the increase to programs of
hospitals located in the following
priority order:
(I) First, to hospitals
located in rural areas (as
defined in subsection
(d)(2)(D)(ii)).
(II) Second, to hospitals
located in urban areas that are
not large urban areas (as
defined for purposes of
subsection (d)).
(III) Third, to other
hospitals in a State if the
residency training program
involved is in a specialty for
which there are not other
residency training programs in
the State.
Increases of residency limits within
the same priority category under this
clause shall be determined by the
Secretary.
(iv) Limitation.--In no case shall
more than 25 full-time equivalent
additional residency positions be made
available under this subparagraph with
respect to any hospital.
(v) Application of locality adjusted
national average per resident amount.--
With respect to additional residency
positions in a hospital attributable to
the increase provided under this
subparagraph, notwithstanding any other
provision of this subsection, the
approved FTE resident amount is deemed
to be equal to the locality adjusted
national average per resident amount
computed under paragraph (4)(E) for
that hospital.
(vi) Construction.--Nothing in this
subparagraph shall be construed as
permitting the redistribution of
reductions in residency positions
attributable to voluntary reduction
programs under paragraph (6), under a
demonstration project approved as of
October 31, 2003, under the authority
of section 402 of Public Law 90-248, or
as affecting the ability of a hospital
to establish new medical residency
training programs under paragraph
(4)(H).
(C) Resident level and limit defined.--In
this paragraph:
(i) Resident level.--The term
``resident level'' means, with respect
to a hospital, the total number of
full-time equivalent residents, before
the application of weighting factors
(as determined under paragraph (4)), in
the fields of allopathic and
osteopathic medicine for the hospital.
(ii) Otherwise applicable resident
limit.--The term ``otherwise applicable
resident limit'' means, with respect to
a hospital, the limit otherwise
applicable under subparagraphs (F)(i)
and (H) of paragraph (4) on the
resident level for the hospital
determined without regard to this
paragraph.
(D) Adjustment based on settled cost
report.--In the case of a hospital with a dual
accredited osteopathic and allopathic family
practice program for which--
(i) the otherwise applicable resident
limit was reduced under subparagraph
(A)(i)(I); and
(ii) such reduction was based on a
reference resident level that was
determined using a cost report and
where a revised or corrected notice of
program reimbursement was issued for
such cost report between September 1,
2006 and September 15, 2006, whether as
a result of an appeal or otherwise, and
the reference resident level under such
settled cost report is higher than the
level used for the reduction under
subparagraph (A)(i)(I);
the Secretary shall apply subparagraph
(A)(i)(I) using the higher resident reference
level and make any necessary adjustments to
such reduction. Any such necessary adjustments
shall be effective for portions of cost
reporting periods occurring on or after July 1,
2005.
(E) Judicial review.--There shall be no
administrative or judicial review under section
1869, 1878, or otherwise, with respect to
determinations made under this this paragraph,
paragraph (8), paragraph (9), or paragraph
(4)(H)(vi).
(8) Distribution of additional residency positions.--
(A) Reductions in limit based on unused
positions.--
(i) In general.--Except as provided
in clause (ii), if a hospital's
reference resident level (as defined in
subparagraph (H)(i)) is less than the
otherwise applicable resident limit (as
defined in subparagraph (H)(iii)),
effective for portions of cost
reporting periods occurring on or after
July 1, 2011, the otherwise applicable
resident limit shall be reduced by 65
percent of the difference between such
otherwise applicable resident limit and
such reference resident level.
(ii) Exceptions.--This subparagraph
shall not apply to--
(I) a hospital located in a
rural area (as defined in
subsection (d)(2)(D)(ii)) with
fewer than 250 acute care
inpatient beds;
(II) a hospital that was part
of a qualifying entity which
had a voluntary residency
reduction plan approved under
paragraph (6)(B) or under the
authority of section 402 of
Public Law 90-248, if the
hospital demonstrates to the
Secretary that it has a
specified plan in place for
filling the unused positions by
not later than 2 years after
the date of enactment of this
paragraph; or
(III) a hospital described in
paragraph (4)(H)(v).
(B) Distribution.--
(i) In general.--The Secretary shall
increase the otherwise applicable
resident limit for each qualifying
hospital that submits an application
under this subparagraph by such number
as the Secretary may approve for
portions of cost reporting periods
occurring on or after July 1, 2011. The
aggregate number of increases in the
otherwise applicable resident limit
under this subparagraph shall be equal
to the aggregate reduction in such
limits attributable to subparagraph (A)
(as estimated by the Secretary).
(ii) Requirements.--Subject to clause
(iii), a hospital that receives an
increase in the otherwise applicable
resident limit under this subparagraph
shall ensure, during the 5-year period
beginning on the date of such increase,
that--
(I) the number of full-time
equivalent primary care
residents, as defined in
paragraph (5)(H) (as determined
by the Secretary), excluding
any additional positions under
subclause (II), is not less
than the average number of
full-time equivalent primary
care residents (as so
determined) during the 3 most
recent cost reporting periods
ending prior to the date of
enactment of this paragraph;
and
(II) not less than 75 percent
of the positions attributable
to such increase are in a
primary care or general surgery
residency (as determined by the
Secretary).
The Secretary may determine whether a
hospital has met the requirements under
this clause during such 5-year period
in such manner and at such time as the
Secretary determines appropriate,
including at the end of such 5-year
period.
(iii) Redistribution of positions if
hospital no longer meets certain
requirements.--In the case where the
Secretary determines that a hospital
described in clause (ii) does not meet
either of the requirements under
subclause (I) or (II) of such clause,
the Secretary shall--
(I) reduce the otherwise
applicable resident limit of
the hospital by the amount by
which such limit was increased
under this paragraph; and
(II) provide for the
distribution of positions
attributable to such reduction
in accordance with the
requirements of this paragraph.
(C) Considerations in redistribution.--In
determining for which hospitals the increase in
the otherwise applicable resident limit is
provided under subparagraph (B), the Secretary
shall take into account--
(i) the demonstration likelihood of
the hospital filling the positions made
available under this paragraph within
the first 3 cost reporting periods
beginning on or after July 1, 2011, as
determined by the Secretary; and
(ii) whether the hospital has an
accredited rural training track (as
described in paragraph (4)(H)(iv)).
(D) Priority for certain areas.--In
determining for which hospitals the increase in
the otherwise applicable resident limit is
provided under subparagraph (B), subject to
subparagraph (E), the Secretary shall
distribute the increase to hospitals based on
the following factors:
(i) Whether the hospital is located
in a State with a resident-to-
population ratio in the lowest quartile
(as determined by the Secretary).
(ii) Whether the hospital is located
in a State, a territory of the United
States, or the District of Columbia
that is among the top 10 States,
territories, or Districts in terms of
the ratio of--
(I) the total population of
the State, territory, or
District living in an area
designated (under such section
332(a)(1)(A)) as a health
professional shortage area (as
of the date of enactment of
this paragraph); to
(II) the total population of
the State, territory, or
District (as determined by the
Secretary based on the most
recent available population
data published by the Bureau of
the Census).
(iii) Whether the hospital is located
in a rural area (as defined in
subsection (d)(2)(D)(ii)).
(E) Reservation of positions for certain
hospitals.--
(i) In general.--Subject to clause
(ii), the Secretary shall reserve the
positions available for distribution
under this paragraph as follows:
(I) 70 percent of such
positions for distribution to
hospitals described in clause
(i) of subparagraph (D).
(II) 30 percent of such
positions for distribution to
hospitals described in clause
(ii) and (iii) of such
subparagraph.
(ii) Exception if positions not
redistributed by july 1, 2011.--In the
case where the Secretary does not
distribute positions to hospitals in
accordance with clause (i) by July 1,
2011, the Secretary shall distribute
such positions to other hospitals in
accordance with the considerations
described in subparagraph (C) and the
priority described in subparagraph (D).
(F) Limitation.--A hospital may not receive
more than 75 full-time equivalent additional
residency positions under this paragraph.
(G) Application of per resident amounts for
primary care and nonprimary care.--With respect
to additional residency positions in a hospital
attributable to the increase provided under
this paragraph, the approved FTE per resident
amounts are deemed to be equal to the hospital
per resident amounts for primary care and
nonprimary care computed under paragraph (2)(D)
for that hospital.
(H) Definitions.--In this paragraph:
(i) Reference resident level.--The
term ``reference resident level''
means, with respect to a hospital, the
highest resident level for any of the 3
most recent cost reporting periods
(ending before the date of the
enactment of this paragraph) of the
hospital for which a cost report has
been settled (or, if not, submitted
(subject to audit)), as determined by
the Secretary.
(ii) Resident level.--The term
``resident level'' has the meaning
given such term in paragraph (7)(C)(i).
(iii) Otherwise applicable resident
limit.--The term ``otherwise applicable
resident limit'' means, with respect to
a hospital, the limit otherwise
applicable under subparagraphs (F)(i)
and (H) of paragraph (4) on the
resident level for the hospital
determined without regard to this
paragraph but taking into account
paragraph (7)(A).
(I) Affiliation.--The provisions of this
paragraph shall be applied to hospitals which
are members of the same affiliated group (as
defined by the Secretary under paragraph
(4)(H)(ii)) and the reference resident level
for each such hospital shall be the reference
resident level with respect to the cost
reporting period that results in the smallest
difference between the reference resident level
and the otherwise applicable resident limit.
(9) Distribution of additional residency positions to
help combat opioid crisis.--
(A) Additional residency positions.--During
the period of fiscal years 2022 through 2026
(and succeeding fiscal years if the Secretary
determines that there are additional full-time-
equivalent residency positions available to
distribute under subparagraph (D)), the
Secretary shall distribute additional full-
time-equivalent residency positions to increase
the otherwise applicable resident limit for
each qualifying hospital that submits a timely
application under this paragraph by such number
as the Secretary may approve, effective
beginning July 1 of the fiscal year of the
increase. The aggregate number of additional
full-time-equivalent residency positions
available for distribution under this paragraph
shall be equal to 500 in fiscal year 2022 and
500 over the period of fiscal years 2023
through 2026, distributed in accordance with
the succeeding subparagraphs of this paragraph.
(B) Distribution for fiscal year 2022.--
(i) In general.--For fiscal year
2022, the positions available for
distribution for such fiscal year (as
described in subparagraph (A)) may only
be distributed to hospitals that have
established (as of the date of the
enactment of this paragraph) approved
programs in addiction medicine,
addiction psychiatry, or pain medicine,
as determined by the Secretary.
(ii) Considerations in
distribution.--The Secretary shall
distribute additional residency
positions under this subparagraph based
on the demonstrated likelihood, as
determined by the Secretary, of the
hospital filling such positions within
the first 4 training years (as
specified by the Secretary) after the
increase would be effective.
(iii) Requirements.--A hospital that
receives an increase in the otherwise
applicable resident limit under this
subparagraph shall ensure, during the
5-year period beginning after the date
of such increase, that the hospital
uses the positions made available under
this subparagraph for a program
described in clause (i) or a program
that is a prerequisite (as determined
by the Secretary) for such a program so
described, such as internal medicine.
The Secretary may determine whether a
hospital has met the requirements under
this clause during such 5-year period
in such manner and at such time as the
Secretary determines appropriate,
including at the end of such 5-year
period.
(iv) Redistribution of positions if
hospital no longer meets certain
requirements.--In the case in which the
Secretary determines that a hospital
described in clause (iii) does not meet
the requirements of such clause, the
Secretary shall--
(I) reduce the otherwise
applicable resident limit of
the hospital by the amount by
which such limit was increased
under this subparagraph; and
(II) provide for the
distribution of positions
attributable to such reduction
in accordance with the
requirements of this paragraph.
(v) Positions not distributed during
fiscal year 2022.--If the number of
full-time-equivalent residency
positions distributed under this
subparagraph is less than the aggregate
number of positions available for
distribution for fiscal year 2022 (as
described in subparagraph (A)), the
difference between such number
distributed and such number available
for distribution shall be added to the
aggregate number of positions available
for distribution under subparagraph
(C).
(C) Distribution for fiscal years 2023
through 2026.--
(i) In general.--For the period of
fiscal years 2023 through 2026, the
positions available for distribution
for such period (as described in
subparagraph (A)), and any positions
made available pursuant to subparagraph
(B)(v), shall be distributed to
hospitals which demonstrate to the
Secretary that the hospital has
established or will establish an
approved residency training program in
addiction medicine, addiction
psychiatry, or pain medicine.
(ii) Considerations in
distribution.--The Secretary shall
distribute additional residency
positions under this subparagraph based
on the demonstrated likelihood, as
determined by the Secretary, of the
hospital filling such positions within
the first 4 training years (as
specified by the Secretary) after the
increase would be effective.
(iii) Requirements.--A hospital that
receives an increase in the otherwise
applicable resident limit under this
subparagraph shall ensure, during the
5-year period beginning after the date
of such increase, that the hospital
uses the positions made available under
this subparagraph for a program
described in clause (i) or a program
that is a prerequisite (as determined
by the Secretary) for such a program so
described, such as internal medicine.
The Secretary may determine whether a
hospital has met the requirements under
this clause during such 5-year period
in such manner and at such time as the
Secretary determines appropriate,
including at the end of such 5-year
period.
(iv) Redistribution of positions if
hospital no longer meets certain
requirements.--In the case where the
Secretary determines that a hospital
described in clause (iii) does not meet
the requirements of such clause, the
Secretary shall--
(I) reduce the otherwise
applicable resident limit of
the hospital by the amount by
which such limit was increased
under this subparagraph; and
(II) provide for the
distribution of positions
attributable to such reduction
in accordance with the
requirements of this paragraph.
(D) Distribution of remaining positions.--If
the aggregate number of positions distributed
under subparagraphs (B) and (C) during the
period of fiscal years 2022 through 2026 is
less than 1000, the Secretary shall distribute
the remaining residency positions in succeeding
fiscal years according to criteria consistent
with this paragraph until such time as the
aggregate amount of positions distributed under
this paragraph is equal to 1000.
(E) Limitation.--An individual hospital may
not receive more than 25 full-time-equivalent
residency positions under this paragraph.
(F) Notification.--The Secretary shall notify
hospitals of the number of positions
distributed to the hospital under this
paragraph as a result of an increase in the
otherwise applicable resident limit by January
1 of the fiscal year of the increase. Such
increase shall be effective beginning July 1 of
that fiscal year.
(G) Application of per resident amounts for
primary care and nonprimary care.--With respect
to additional residency positions in a hospital
attributable to the increase provided under
this paragraph, the approved FTE per resident
amounts are deemed to be equal to the hospital
per resident amounts for primary care and
nonprimary care computed under paragraph (2)(D)
for that hospital.
(H) Permitting facilities to apply
aggregation rules.--The Secretary shall permit
hospitals receiving additional residency
positions attributable to the increase provided
under this paragraph to, beginning in the fifth
year after the effective date of such increase,
apply such positions to the limitation amount
under paragraph (4)(F) that may be aggregated
pursuant to paragraph (4)(H) among members of
the same affiliated group.
(I) Clarification.--Chapter 35 of title 44,
United States Code, shall not apply to the
implementation of this paragraph.
(J) Definitions.--In this paragraph:
(i) Otherwise applicable resident
limit.--The term ``otherwise applicable
resident limit'' means, with respect to
a hospital, the limit otherwise
applicable under paragraph (4)(F)(i) on
the resident level for the hospital
determined without regard to this
paragraph but taking into account
paragraphs (7)(A), (7)(B), (8)(A), and
(8)(B).
(ii) Resident level.--The term
``resident level'' has the meaning
given such term in paragraph (7)(C)(i).
(i) Avoiding Duplicative Payments to Hospitals Participating
in Rural Demonstration Programs.--The Secretary shall reduce
any payment amounts otherwise determined under this section to
the extent necessary to avoid duplication of any payment made
under section 4005(e) of the Omnibus Budget Reconciliation Act
of 1987.
(j) Prospective Payment for Inpatient Rehabilitation
Services.--
(1) Payment during transition period.--
(A) In general.--Notwithstanding section
1814(b), but subject to the provisions of
section 1813, the amount of the payment with
respect to the operating and capital costs of
inpatient hospital services of a rehabilitation
hospital or a rehabilitation unit (in this
subsection referred to as a ``rehabilitation
facility''), other than a facility making an
election under subparagraph (F) in a cost
reporting period beginning on or after October
1, 2000, and before October 1, 2002, is equal
to the sum of--
(i) the TEFRA percentage (as defined
in subparagraph (C)) of the amount that
would have been paid under part A with
respect to such costs if this
subsection did not apply, and
(ii) the prospective payment
percentage (as defined in subparagraph
(C)) of the product of (I) the per unit
payment rate established under this
subsection for the fiscal year in which
the payment unit of service occurs, and
(II) the number of such payment units
occurring in the cost reporting period.
(B) Fully implemented system.--
Notwithstanding section 1814(b), but subject to
the provisions of section 1813, the amount of
the payment with respect to the operating and
capital costs of inpatient hospital services of
a rehabilitation facility for a payment unit in
a cost reporting period beginning on or after
October 1, 2002, or, in the case of a facility
making an election under subparagraph (F), for
any cost reporting period described in such
subparagraph, is equal to the per unit payment
rate established under this subsection for the
fiscal year in which the payment unit of
service occurs.
(C) TEFRA and prospective payment percentages
specified.--For purposes of subparagraph (A),
for a cost reporting period beginning--
(i) on or after October 1, 2000, and
before October 1, 2001, the ``TEFRA
percentage'' is 66\2/3\ percent and the
``prospective payment percentage'' is
33\1/3\ percent; and
(ii) on or after October 1, 2001, and
before October 1, 2002, the ``TEFRA
percentage'' is 33\1/3\ percent and the
``prospective payment percentage'' is
66\2/3\ percent.
(D) Payment unit.--For purposes of this
subsection, the term ``payment unit'' means a
discharge.
(E) Construction relating to transfer
authority.--Nothing in this subsection shall be
construed as preventing the Secretary from
providing for an adjustment to payments to take
into account the early transfer of a patient
from a rehabilitation facility to another site
of care.
(F) Election to apply full prospective
payment system.--A rehabilitation facility may
elect, not later than 30 days before its first
cost reporting period for which the payment
methodology under this subsection applies to
the facility, to have payment made to the
facility under this subsection under the
provisions of subparagraph (B) (rather than
subparagraph (A)) for each cost reporting
period to which such payment methodology
applies.
(2) Patient case mix groups.--
(A) Establishment.--The Secretary shall
establish--
(i) classes of patient discharges of
rehabilitation facilities by
functional-related groups (each in this
subsection referred to as a ``case mix
group''), based on impairment, age,
comorbidities, and functional
capability of the patient and such
other factors as the Secretary deems
appropriate to improve the explanatory
power of functional independence
measure-function related groups; and
(ii) a method of classifying specific
patients in rehabilitation facilities
within these groups.
(B) Weighting factors.--For each case mix
group the Secretary shall assign an appropriate
weighting which reflects the relative facility
resources used with respect to patients
classified within that group compared to
patients classified within other groups.
(C) Adjustments for case mix.--
(i) In general.--The Secretary shall
from time to time adjust the
classifications and weighting factors
established under this paragraph as
appropriate to reflect changes in
treatment patterns, technology, case
mix, number of payment units for which
payment is made under this title, and
other factors which may affect the
relative use of resources. Such
adjustments shall be made in a manner
so that changes in aggregate payments
under the classification system are a
result of real changes and are not a
result of changes in coding that are
unrelated to real changes in case mix.
(ii) Adjustment.--Insofar as the
Secretary determines that such
adjustments for a previous fiscal year
(or estimates that such adjustments for
a future fiscal year) did (or are
likely to) result in a change in
aggregate payments under the
classification system during the fiscal
year that are a result of changes in
the coding or classification of
patients that do not reflect real
changes in case mix, the Secretary
shall adjust the per payment unit
payment rate for subsequent years so as
to eliminate the effect of such coding
or classification changes.
(D) Data collection.--The Secretary is
authorized to require rehabilitation facilities
that provide inpatient hospital services to
submit such data as the Secretary deems
necessary to establish and administer the
prospective payment system under this
subsection.
(3) Payment rate.--
(A) In general.--The Secretary shall
determine a prospective payment rate for each
payment unit for which such rehabilitation
facility is entitled to receive payment under
this title. Subject to subparagraph (B), such
rate for payment units occurring during a
fiscal year shall be based on the average
payment per payment unit under this title for
inpatient operating and capital costs of
rehabilitation facilities using the most recent
data available (as estimated by the Secretary
as of the date of establishment of the system)
adjusted--
(i) by updating such per-payment-unit
amount to the fiscal year involved by
the weighted average of the applicable
percentage increases provided under
subsection (b)(3)(B)(ii) (for cost
reporting periods beginning during the
fiscal year) covering the period from
the midpoint of the period for such
data through the midpoint of fiscal
year 2000 and by an increase factor
(described in subparagraph (C))
specified by the Secretary for
subsequent fiscal years up to the
fiscal year involved;
(ii) by reducing such rates by a
factor equal to the proportion of
payments under this subsection (as
estimated by the Secretary) based on
prospective payment amounts which are
additional payments described in
paragraph (4) (relating to outlier and
related payments);
(iii) for variations among
rehabilitation facilities by area under
paragraph (6);
(iv) by the weighting factors
established under paragraph (2)(B); and
(v) by such other factors as the
Secretary determines are necessary to
properly reflect variations in
necessary costs of treatment among
rehabilitation facilities.
(B) Budget neutral rates.--The Secretary
shall establish the prospective payment amounts
under this subsection for payment units during
fiscal years 2001 and 2002 at levels such that,
in the Secretary's estimation, the amount of
total payments under this subsection for such
fiscal years (including any payment adjustments
pursuant to paragraphs (4) and (6) but not
taking into account any payment adjustment
resulting from an election permitted under
paragraph (1)(F)) shall be equal to 98 percent
for fiscal year 2001 and 100 percent for fiscal
year 2002 of the amount of payments that would
have been made under this title during the
fiscal years for operating and capital costs of
rehabilitation facilities had this subsection
not been enacted. In establishing such payment
amounts, the Secretary shall consider the
effects of the prospective payment system
established under this subsection on the total
number of payment units from rehabilitation
facilities and other factors described in
subparagraph (A).
(C) Increase factor.--
(i) In general.--For purposes of this
subsection for payment units in each
fiscal year (beginning with fiscal year
2001), the Secretary shall establish an
increase factor subject to clauses (ii)
and (iii). Such factor shall be based
on an appropriate percentage increase
in a market basket of goods and
services comprising services for which
payment is made under this subsection,
which may be the market basket
percentage increase described in
subsection (b)(3)(B)(iii). The increase
factor to be applied under this
subparagraph for each of fiscal years
2008 and 2009 shall be 0 percent.
(ii) Productivity and other
adjustment.--Subject to clause (iii),
after establishing the increase factor
described in clause (i) for a fiscal
year, the Secretary shall reduce such
increase factor--
(I) for fiscal year 2012 and
each subsequent fiscal year, by
the productivity adjustment
described in section
1886(b)(3)(B)(xi)(II); and
(II) for each of fiscal years
2010 through 2019, by the other
adjustment described in
subparagraph (D).
The application of this clause may
result in the increase factor under
this subparagraph being less than 0.0
for a fiscal year, and may result in
payment rates under this subsection for
a fiscal year being less than such
payment rates for the preceding fiscal
year.
(iii) Special rule for fiscal year
2018.--The increase factor to be
applied under this subparagraph for
fiscal year 2018, after the application
of clause (ii), shall be 1 percent.
(D) Other adjustment.--For purposes of
subparagraph (C)(ii)(II), the other adjustment
described in this subparagraph is--
(i) for each of fiscal years 2010 and
2011, 0.25 percentage point;
(ii) for each of fiscal years 2012
and 2013, 0.1 percentage point;
(iii) for fiscal year 2014, 0.3
percentage point;
(iv) for each of fiscal years 2015
and 2016, 0.2 percentage point; and
(v) for each of fiscal years 2017,
2018, and 2019, 0.75 percentage point.
(4) Outlier and special payments.--
(A) Outliers.--
(i) In general.--The Secretary may
provide for an additional payment to a
rehabilitation facility for patients in
a case mix group, based upon the
patient being classified as an outlier
based on an unusual length of stay,
costs, or other factors specified by
the Secretary.
(ii) Payment based on marginal cost
of care.--The amount of such additional
payment under clause (i) shall be
determined by the Secretary and shall
approximate the marginal cost of care
beyond the cutoff point applicable
under clause (i).
(iii) Total payments.--The total
amount of the additional payments made
under this subparagraph for payment
units in a fiscal year may not exceed 5
percent of the total payments projected
or estimated to be made based on
prospective payment rates for payment
units in that year.
(B) Adjustment.--The Secretary may provide
for such adjustments to the payment amounts
under this subsection as the Secretary deems
appropriate to take into account the unique
circumstances of rehabilitation facilities
located in Alaska and Hawaii.
(5) Publication.--The Secretary shall provide for
publication in the Federal Register, on or before
August 1 before each fiscal year (beginning with fiscal
year 2001), of the classification and weighting factors
for case mix groups under paragraph (2) for such fiscal
year and a description of the methodology and data used
in computing the prospective payment rates under this
subsection for that fiscal year.
(6) Area wage adjustment.--The Secretary shall adjust
the proportion (as estimated by the Secretary from time
to time) of rehabilitation facilities' costs which are
attributable to wages and wage-related costs, of the
prospective payment rates computed under paragraph (3)
for area differences in wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
rehabilitation facility compared to the national
average wage level for such facilities. Not later than
October 1, 2001 (and at least every 36 months
thereafter), the Secretary shall update the factor
under the preceding sentence on the basis of
information available to the Secretary (and updated as
appropriate) of the wages and wage-related costs
incurred in furnishing rehabilitation services. Any
adjustments or updates made under this paragraph for a
fiscal year shall be made in a manner that assures that
the aggregated payments under this subsection in the
fiscal year are not greater or less than those that
would have been made in the year without such
adjustment.
(7) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--For purposes of
fiscal year 2014 and each subsequent
fiscal year, in the case of a
rehabilitation facility that does not
submit data to the Secretary in
accordance with subparagraphs (C) and
(F) with respect to such a fiscal year,
after determining the increase factor
described in paragraph (3)(C), and
after application of subparagraphs
(C)(iii) and (D) of paragraph (3), the
Secretary shall reduce such increase
factor for payments for discharges
occurring during such fiscal year by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in the
increase factor described in paragraph
(3)(C) being less than 0.0 for a fiscal
year, and may result in payment rates
under this subsection for a fiscal year
being less than such payment rates for
the preceding fiscal year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the fiscal year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
this subsection for a subsequent fiscal year.
(C) Submission of quality data.--Subject to
subparagraph (G), for fiscal year 2014 and each
subsequent fiscal year, each rehabilitation
facility shall submit to the Secretary data on
quality measures specified under subparagraph
(D). Such data shall be submitted in a form and
manner, and at a time, specified by the
Secretary for purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to fiscal year
2014.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
and subparagraph (F)(i) available to the
public. Such procedures shall ensure that a
rehabilitation facility has the opportunity to
review the data that is to be made public with
respect to the facility prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in
rehabilitation facilities on the Internet
website of the Centers for Medicare & Medicaid
Services.
(F) Submission of additional data.--
(i) In general.--For the fiscal year
beginning on the specified application
date (as defined in subsection
(a)(2)(E) of section 1899B), as
applicable with respect to inpatient
rehabilitation facilities and quality
measures under subsection (c)(1) of
such section and measures under
subsection (d)(1) of such section, and
each subsequent fiscal year, in
addition to such data on the quality
measures described in subparagraph (C),
each rehabilitation facility shall
submit to the Secretary data on the
quality measures under such subsection
(c)(1) and any necessary data specified
by the Secretary under such subsection
(d)(1).
(ii) Standardized patient assessment
data.--For fiscal year 2019 and each
subsequent fiscal year, in addition to
such data described in clause (i), each
rehabilitation facility shall submit to
the Secretary standardized patient
assessment data required under
subsection (b)(1) of section 1899B.
(iii) Submission.--Such data shall be
submitted in the form and manner, and
at the time, specified by the Secretary
for purposes of this subparagraph.
(G) Non-duplication.--To the extent data
submitted under subparagraph (F) duplicates
other data required to be submitted under
subparagraph (C), the submission of such data
under subparagraph (F) shall be in lieu of the
submission of such data under subparagraph (C).
The previous sentence shall not apply insofar
as the Secretary determines it is necessary to
avoid a delay in the implementation of section
1899B, taking into account the different
specified application dates under subsection
(a)(2)(E) of such section.
(8) Limitation on review.--There shall be no
administrative or judicial review under section 1869,
1878, or otherwise of the establishment of--
(A) case mix groups, of the methodology for
the classification of patients within such
groups, and of the appropriate weighting
factors thereof under paragraph (2),
(B) the prospective payment rates under
paragraph (3),
(C) outlier and special payments under
paragraph (4), and
(D) area wage adjustments under paragraph
(6).
(k) Payment to Nonhospital Providers.--
(1) In general.--For cost reporting periods beginning
on or after October 1, 1997, the Secretary may
establish rules for payment to qualified nonhospital
providers for their direct costs of medical education,
if those costs are incurred in the operation of an
approved medical residency training program described
in subsection (h). Such rules shall specify the
amounts, form, and manner in which such payments will
be made and the portion of such payments that will be
made from each of the trust funds under this title.
(2) Qualified nonhospital providers.--For purposes of
this subsection, the term ``qualified nonhospital
providers'' means--
(A) a Federally qualified health center, as
defined in section 1861(aa)(4);
(B) a rural health clinic, as defined in
section 1861(aa)(2);
(C) Medicare+Choice organizations; and
(D) such other providers (other than
hospitals) as the Secretary determines to be
appropriate.
(l) Payment for Nursing and Allied Health Education for
Managed Care Enrollees.--
(1) In general.--For portions of cost reporting
periods occurring in a year (beginning with 2000), the
Secretary shall provide for an additional payment
amount for any hospital that receives payments for the
costs of approved educational activities for nurse and
allied health professional training under section
1861(v)(1).
(2) Payment amount.--The additional payment amount
under this subsection for each hospital for portions of
cost reporting periods occurring in a year shall be an
amount specified by the Secretary in a manner
consistent with the following:
(A) Determination of managed care enrollee
payment ratio for graduate medical education
payments.--The Secretary shall estimate the
ratio of payments for all hospitals for
portions of cost reporting periods occurring in
the year under subsection (h)(3)(D) to total
direct graduate medical education payments
estimated for such portions of periods under
subsection (h)(3).
(B) Application to fee-for-service nursing
and allied health education payments.--Such
ratio shall be applied to the Secretary's
estimate of total payments for nursing and
allied health education determined under
section 1861(v) for portions of cost reporting
periods occurring in the year to determine a
total amount of additional payments for nursing
and allied health education to be distributed
to hospitals under this subsection for portions
of cost reporting periods occurring in the
year; except that in no case shall such total
amount exceed $60,000,000 in any year.
(C) Application to hospital.--The amount of
payment under this subsection to a hospital for
portions of cost reporting periods occurring in
a year is equal to the total amount of payments
determined under subparagraph (B) for the year
multiplied by the ratio of--
(i) the product of (I) the
Secretary's estimate of the ratio of
the amount of payments made under
section 1861(v) to the hospital for
nursing and allied health education
activities for the hospital's cost
reporting period ending in the second
preceding fiscal year, to the
hospital's total inpatient days for
such period, and (II) the total number
of inpatient days (as established by
the Secretary) for such period which
are attributable to services furnished
to individuals who are enrolled under a
risk sharing contract with an eligible
organization under section 1876 and who
are entitled to benefits under part A
or who are enrolled with a
Medicare+Choice organization under part
C; to
(ii) the sum of the products
determined under clause (i) for such
cost reporting periods.
(m) Prospective Payment for Long-Term Care Hospitals.--
(1) Reference to establishment and implementation of
system.--For provisions related to the establishment
and implementation of a prospective payment system for
payments under this title for inpatient hospital
services furnished by a long-term care hospital
described in subsection (d)(1)(B)(iv), see section 123
of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 and section 307(b) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000.
(2) Update for rate year 2008.--In implementing the
system described in paragraph (1) for discharges
occurring during the rate year ending in 2008 for a
hospital, the base rate for such discharges for the
hospital shall be the same as the base rate for
discharges for the hospital occurring during the rate
year ending in 2007.
(3) Implementation for rate year 2010 and subsequent
years.--
(A) In general.--Subject to subparagraph (C),
in implementing the system described in
paragraph (1) for rate year 2010 and each
subsequent rate year, any annual update to a
standard Federal rate for discharges for the
hospital during the rate year, shall be
reduced--
(i) for rate year 2012 and each
subsequent rate year, by the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II); and
(ii) for each of rate years 2010
through 2019, by the other adjustment
described in paragraph (4).
(B) Special rule.--The application of this
paragraph may result in such annual update
being less than 0.0 for a rate year, and may
result in payment rates under the system
described in paragraph (1) for a rate year
being less than such payment rates for the
preceding rate year.
(C) Additional special rule.--For fiscal year
2018, the annual update under subparagraph (A)
for the fiscal year, after application of
clauses (i) and (ii) of subparagraph (A), shall
be 1 percent.
(4) Other adjustment.--For purposes of paragraph
(3)(A)(ii), the other adjustment described in this
paragraph is--
(A) for rate year 2010, 0.25 percentage
point;
(B) for rate year 2011, 0.50 percentage
point;
(C) for each of the rate years beginning in
2012 and 2013, 0.1 percentage point;
(D) for rate year 2014, 0.3 percentage point;
(E) for each of rate years 2015 and 2016, 0.2
percentage point; and
(F) for each of rate years 2017, 2018, and
2019, 0.75 percentage point.
(5) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--Under the system
described in paragraph (1), for rate
year 2014 and each subsequent rate
year, in the case of a long-term care
hospital that does not submit data to
the Secretary in accordance with
subparagraphs (C) and (F) with respect
to such a rate year, any annual update
to a standard Federal rate for
discharges for the hospital during the
rate year, and after application of
paragraph (3), shall be reduced by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in such
annual update being less than 0.0 for a
rate year, and may result in payment
rates under the system described in
paragraph (1) for a rate year being
less than such payment rates for the
preceding rate year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the rate year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
the system described in paragraph (1) for a
subsequent rate year.
(C) Submission of quality data.--Subject to
subparagraph (G), for rate year 2014 and each
subsequent rate year, each long-term care
hospital shall submit to the Secretary data on
quality measures specified under subparagraph
(D). Such data shall be submitted in a form and
manner, and at a time, specified by the
Secretary for purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to rate year
2014.
(iv) Additional quality measures.--
Not later than October 1, 2015, the
Secretary shall establish a functional
status quality measure for change in
mobility among inpatients requiring
ventilator support.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
and subparagraph (F)(i) available to the
public. Such procedures shall ensure that a
long-term care hospital has the opportunity to
review the data that is to be made public with
respect to the hospital prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in long-term
care hospitals on the Internet website of the
Centers for Medicare & Medicaid Services.
(F) Submission of additional data.--
(i) In general.--For the rate year
beginning on the specified application
date (as defined in subsection
(a)(2)(E) of section 1899B), as
applicable with respect to long-term
care hospitals and quality measures
under subsection (c)(1) of such section
and measures under subsection (d)(1) of
such section, and each subsequent rate
year, in addition to the data on the
quality measures described in
subparagraph (C), each long-term care
hospital (other than a hospital
classified under subsection
(d)(1)(B)(vi)) shall submit to the
Secretary data on the quality measures
under such subsection (c)(1) and any
necessary data specified by the
Secretary under such subsection (d)(1).
(ii) Standardized patient assessment
data.--For rate year 2019 and each
subsequent rate year, in addition to
such data described in clause (i), each
long-term care hospital (other than a
hospital classified under subsection
(d)(1)(B)(vi)) shall submit to the
Secretary standardized patient
assessment data required under
subsection (b)(1) of section 1899B.
(iii) Submission.--Such data shall be
submitted in the form and manner, and
at the time, specified by the Secretary
for purposes of this subparagraph.
(G) Non-duplication.--To the extent data
submitted under subparagraph (F) duplicates
other data required to be submitted under
subparagraph (C), the submission of such data
under subparagraph (F) shall be in lieu of the
submission of such data under subparagraph (C).
The previous sentence shall not apply insofar
as the Secretary determines it is necessary to
avoid a delay in the implementation of section
1899B, taking into account the different
specified application dates under subsection
(a)(2)(E) of such section.
(6) Application of site neutral ipps payment rate in
certain cases.--
(A) General application of site neutral ipps
payment amount for discharges failing to meet
applicable criteria.--
(i) In general.--For a discharge in
cost reporting periods beginning on or
after October 1, 2015, except as
provided in clause (ii) and
subparagraphs (C), (E), (F), and (G),
payment under this title to a long-term
care hospital for inpatient hospital
services shall be made at the
applicable site neutral payment rate
(as defined in subparagraph (B)).
(ii) Exception for certain discharges
meeting criteria.--Clause (i) shall not
apply (and payment shall be made to a
long-term care hospital without regard
to this paragraph) for a discharge if--
(I) the discharge meets the
ICU criterion under clause
(iii) or the ventilator
criterion under clause (iv);
and
(II) the discharge does not
have a principal diagnosis
relating to a psychiatric
diagnosis or to rehabilitation.
(iii) Intensive care unit (icu)
criterion.--
(I) In general.--The
criterion specified in this
clause (in this paragraph
referred to as the ``ICU
criterion''), for a discharge
from a long-term care hospital,
is that the stay in the long-
term care hospital ending with
such discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital that included at least
3 days in an intensive care
unit (ICU), as determined by
the Secretary.
(II) Determining icu days.--
In determining intensive care
unit days under subclause (I),
the Secretary shall use data
from revenue center codes 020x
or 021x (or such successor
codes as the Secretary may
establish).
(iv) Ventilator criterion.--The
criterion specified in this clause (in
this paragraph referred to as the
``ventilator criterion''), for a
discharge from a long-term care
hospital, is that--
(I) the stay in the long-term
care hospital ending with such
discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital; and
(II) the individual
discharged was assigned to a
Medicare-Severity-Long-Term-
Care-Diagnosis-Related-Group
(MS-LTC-DRG) based on the
receipt of ventilator services
of at least 96 hours.
(B) Applicable site neutral payment rate
defined.--
(i) In general.--In this paragraph,
the term ``applicable site neutral
payment rate'' means--
(I) for discharges in cost
reporting periods beginning
during fiscal years 2016
through 2019, the blended
payment rate specified in
clause (iii); and
(II) for discharges in cost
reporting periods beginning
during fiscal year 2020 or a
subsequent fiscal year, the
site neutral payment rate (as
defined in clause (ii)).
(ii) Site neutral payment rate
defined.--Subject to clause (iv), in
this paragraph, the term ``site neutral
payment rate'' means the lower of--
(I) the IPPS comparable per
diem amount determined under
paragraph (d)(4) of section
412.529 of title 42, Code of
Federal Regulations, including
any applicable outlier payments
under section 412.525 of such
title; or
(II) 100 percent of the
estimated cost for the services
involved.
(iii) Blended payment rate.--The
blended payment rate specified in this
clause, for a long-term care hospital
for inpatient hospital services for a
discharge, is comprised of--
(I) half of the site neutral
payment rate (as defined in
clause (ii)) for the discharge;
and
(II) half of the payment rate
that would otherwise be
applicable to such discharge
without regard to this
paragraph, as determined by the
Secretary.
(iv) Adjustment.--For each of fiscal
years 2018 through 2026, the amount
that would otherwise apply under clause
(ii)(I) for the year (determined
without regard to this clause) shall be
reduced by 4.6 percent.
(C) Limiting payment for all hospital
discharges to site neutral payment rate for
hospitals failing to meet applicable ltch
discharge thresholds.--
(i) Notice of ltch discharge payment
percentage.--For cost reporting periods
beginning during or after fiscal year
2016, the Secretary shall inform each
long-term care hospital of its LTCH
discharge payment percentage (as
defined in clause (iv)) for such
period.
(ii) Limitation.--For cost reporting
periods beginning during or after
fiscal year 2020, if the Secretary
determines for a long-term care
hospital that its LTCH discharge
payment percentage for the period is
not at least 50 percent--
(I) the Secretary shall
inform the hospital of such
fact; and
(II) subject to clause (iii),
for all discharges in the
hospital in each succeeding
cost reporting period, the
payment amount under this
subsection shall be the payment
amount that would apply under
subsection (d) for the
discharge if the hospital were
a subsection (d) hospital.
(iii) Process for reinstatement.--The
Secretary shall establish a process
whereby a long-term care hospital may
seek to and have the provisions of
subclause (II) of clause (ii)
discontinued with respect to that
hospital.
(iv) LTCH discharge payment
percentage.--In this subparagraph, the
term ``LTCH discharge payment
percentage'' means, with respect to a
long-term care hospital for a cost
reporting period beginning during or
after fiscal year 2020, the ratio
(expressed as a percentage) of--
(I) the number of Medicare
fee-for-service discharges for
such hospital and period for
which payment is not made at
the site neutral payment rate,
to
(II) the total number of
Medicare fee-for-service
discharges for such hospital
and period.
(D) Inclusion of subsection (d) puerto rico
hospitals.--In this paragraph, any reference in
this paragraph to a subsection (d) hospital
shall be deemed to include a reference to a
subsection (d) Puerto Rico hospital.
(E) Temporary exception for certain severe
wound discharges from certain long-term care
hospitals.--
(i) In general.--In the case of a
discharge occurring prior to January 1,
2017, subparagraph (A)(i) shall not
apply (and payment shall be made to a
long-term care hospital without regard
to this paragraph) if such discharge--
(I) is from a long-term care
hospital that is--
(aa) identified by
the last sentence of
subsection (d)(1)(B);
and
(bb) located in a
rural area (as defined
in subsection
(d)(2)(D)) or treated
as being so located
pursuant to subsection
(d)(8)(E); and
(II) the individual
discharged has a severe wound.
(ii) Severe wound defined.--In this
subparagraph, the term ``severe wound''
means a stage 3 wound, stage 4 wound,
unstageable wound, non-healing surgical
wound, infected wound, fistula,
osteomyelitis, or wound with morbid
obesity, as identified in the claim
from the long-term care hospital.
(F) Temporary exception for certain spinal
cord specialty hospitals.--For discharges in
cost reporting periods beginning during fiscal
years 2018 and 2019, subparagraph (A)(i) shall
not apply (and payment shall be made to a long-
term care hospital without regard to this
paragraph) if such discharge is from a long-
term care hospital that meets each of the
following requirements:
(i) Not-for-profit.--The long-term
care hospital was a not-for-profit
long-term care hospital on June 1,
2014, as determined by cost report
data.
(ii) Primarily providing treatment
for catastrophic spinal cord or
acquired brain injuries or other
paralyzing neuromuscular conditions.--
Of the discharges in calendar year 2013
from the long-term care hospital for
which payment was made under this
section, at least 50 percent were
classified under MS-LTCH-DRGs 28, 29,
52, 57, 551, 573, and 963.
(iii) Significant out-of-state
admissions.--
(I) In general.--The long-
term care hospital discharged
inpatients (including both
individuals entitled to, or
enrolled for, benefits under
this title and individuals not
so entitled or enrolled) during
fiscal year 2014 who had been
admitted from at least 20 of
the 50 States, determined by
the States of residency of such
inpatients and based on such
data submitted by the hospital
to the Secretary as the
Secretary may require.
(II) Implementation.--
Notwithstanding any other
provision of law, the Secretary
may implement subclause (I) by
program instruction or
otherwise.
(III) Non-application of
paperwork reduction act.--
Chapter 35 of title 44, United
States Code, shall not apply to
data collected under this
clause.
(G) Additional temporary exception for
certain severe wound discharges from certain
long-term care hospitals.--
(i) In general.--For a discharge
occurring in a cost reporting period
beginning during fiscal year 2018,
subparagraph (A)(i) shall not apply
(and payment shall be made to a long-
term care hospital without regard to
this paragraph) if such discharge--
(I) is from a long-term care
hospital identified by the last
sentence of subsection
(d)(1)(B);
(II) is classified under MS-
LTCH-DRG 602, 603, 539, or 540;
and
(III) is with respect to an
individual treated by a long-
term care hospital for a severe
wound.
(ii) Severe wound defined.--In this
subparagraph, the term ``severe wound''
means a wound which is a stage 3 wound,
stage 4 wound, unstageable wound, non-
healing surgical wound, or fistula as
identified in the claim from the long-
term care hospital.
(iii) Wound defined.--In this
subparagraph, the term ``wound'' means
an injury involving division of tissue
or rupture of the integument or mucous
membrane with exposure to the external
environment.
(7) Treatment of high cost outlier payments.--
(A) Adjustment to the standard federal
payment rate for estimated high cost outlier
payments.--Under the system described in
paragraph (1), for fiscal years beginning on or
after October 1, 2017, the Secretary shall
reduce the standard Federal payment rate as if
the estimated aggregate amount of high cost
outlier payments for standard Federal payment
rate discharges for each such fiscal year would
be equal to 8 percent of estimated aggregate
payments for standard Federal payment rate
discharges for each such fiscal year.
(B) Limitation on high cost outlier payment
amounts.--Notwithstanding subparagraph (A), the
Secretary shall set the fixed loss amount for
high cost outlier payments such that the
estimated aggregate amount of high cost outlier
payments made for standard Federal payment rate
discharges for fiscal years beginning on or
after October 1, 2017, shall be equal to
99.6875 percent of 8 percent of estimated
aggregate payments for standard Federal payment
rate discharges for each such fiscal year.
(C) Waiver of budget neutrality.--Any
reduction in payments resulting from the
application of subparagraph (B) shall not be
taken into account in applying any budget
neutrality provision under such system.
(D) No effect on site neutral high cost
outlier payment rate.--This paragraph shall not
apply with respect to the computation of the
applicable site neutral payment rate under
paragraph (6).
(n) Incentives for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) In general.--Subject to the succeeding provisions
of this subsection, with respect to inpatient hospital
services furnished by an eligible hospital during a
payment year (as defined in paragraph (2)(G)), if the
eligible hospital is a meaningful EHR user (as
determined under paragraph (3)) for the EHR reporting
period with respect to such year, in addition to the
amount otherwise paid under this section, there also
shall be paid to the eligible hospital, from the
Federal Hospital Insurance Trust Fund established under
section 1817, an amount equal to the applicable amount
specified in paragraph (2)(A) for the hospital for such
payment year.
(2) Payment amount.--
(A) In general.--Subject to the succeeding
subparagraphs of this paragraph, the applicable
amount specified in this subparagraph for an
eligible hospital for a payment year is equal
to the product of the following:
(i) Initial amount.--The sum of--
(I) the base amount specified
in subparagraph (B); plus
(II) the discharge related
amount specified in
subparagraph (C) for a 12-month
period selected by the
Secretary with respect to such
payment year.
(ii) Medicare share.--The Medicare
share as specified in subparagraph (D)
for the eligible hospital for a period
selected by the Secretary with respect
to such payment year.
(iii) Transition factor.--The
transition factor specified in
subparagraph (E) for the eligible
hospital for the payment year.
(B) Base amount.--The base amount specified
in this subparagraph is $2,000,000.
(C) Discharge related amount.--The discharge
related amount specified in this subparagraph
for a 12-month period selected by the Secretary
shall be determined as the sum of the amount,
estimated based upon total discharges for the
eligible hospital (regardless of any source of
payment) for the period, for each discharge up
to the 23,000th discharge as follows:
(i) For the first through 1,149th
discharge, $0.
(ii) For the 1,150th through the
23,000th discharge, $200.
(iii) For any discharge greater than
the 23,000th, $0.
(D) Medicare share.--The Medicare share
specified under this subparagraph for an
eligible hospital for a period selected by the
Secretary for a payment year is equal to the
fraction--
(i) the numerator of which is the sum
(for such period and with respect to
the eligible hospital) of--
(I) the estimated number of
inpatient-bed-days (as
established by the Secretary)
which are attributable to
individuals with respect to
whom payment may be made under
part A; and
(II) the estimated number of
inpatient-bed-days (as so
established) which are
attributable to individuals who
are enrolled with a Medicare
Advantage organization under
part C; and
(ii) the denominator of which is the
product of--
(I) the estimated total
number of inpatient-bed-days
with respect to the eligible
hospital during such period;
and
(II) the estimated total
amount of the eligible
hospital's charges during such
period, not including any
charges that are attributable
to charity care (as such term
is used for purposes of
hospital cost reporting under
this title), divided by the
estimated total amount of the
hospital's charges during such
period.
Insofar as the Secretary determines that data
are not available on charity care necessary to
calculate the portion of the formula specified
in clause (ii)(II), the Secretary shall use
data on uncompensated care and may adjust such
data so as to be an appropriate proxy for
charity care including a downward adjustment to
eliminate bad debt data from uncompensated care
data. In the absence of the data necessary,
with respect to a hospital, for the Secretary
to compute the amount described in clause
(ii)(II), the amount under such clause shall be
deemed to be 1. In the absence of data, with
respect to a hospital, necessary to compute the
amount described in clause (i)(II), the amount
under such clause shall be deemed to be 0.
(E) Transition factor specified.--
(i) In general.--Subject to clause
(ii), the transition factor specified
in this subparagraph for an eligible
hospital for a payment year is as
follows:
(I) For the first payment
year for such hospital, 1.
(II) For the second payment
year for such hospital, \3/4\.
(III) For the third payment
year for such hospital, \1/2\.
(IV) For the fourth payment
year for such hospital, \1/4\.
(V) For any succeeding
payment year for such hospital,
0.
(ii) Phase down for eligible
hospitals first adopting ehr after
2013.--If the first payment year for an
eligible hospital is after 2013, then
the transition factor specified in this
subparagraph for a payment year for
such hospital is the same as the amount
specified in clause (i) for such
payment year for an eligible hospital
for which the first payment year is
2013. If the first payment year for an
eligible hospital is after 2015 then
the transition factor specified in this
subparagraph for such hospital and for
such year and any subsequent year shall
be 0.
(F) Form of payment.--The payment under this
subsection for a payment year may be in the
form of a single consolidated payment or in the
form of such periodic installments as the
Secretary may specify.
(G) Payment year defined.--
(i) In general.--For purposes of this
subsection, the term ``payment year''
means a fiscal year beginning with
fiscal year 2011.
(ii) First, second, etc. payment
year.--The term ``first payment year''
means, with respect to inpatient
hospital services furnished by an
eligible hospital, the first fiscal
year for which an incentive payment is
made for such services under this
subsection. The terms ``second payment
year'', ``third payment year'', and
``fourth payment year'' mean, with
respect to an eligible hospital, each
successive year immediately following
the first payment year for that
hospital.
(3) Meaningful ehr user.--
(A) In general.--For purposes of paragraph
(1), an eligible hospital shall be treated as a
meaningful EHR user for an EHR reporting period
for a payment year (or, for purposes of
subsection (b)(3)(B)(ix), for an EHR reporting
period under such subsection for a fiscal year)
if each of the following requirements are met:
(i) Meaningful use of certified ehr
technology.--The eligible hospital
demonstrates to the satisfaction of the
Secretary, in accordance with
subparagraph (C)(i), that during such
period the hospital is using certified
EHR technology in a meaningful manner.
(ii) Information exchange.--The
eligible hospital demonstrates to the
satisfaction of the Secretary, in
accordance with subparagraph (C)(i),
that during such period such certified
EHR technology is connected in a manner
that provides, in accordance with law
and standards applicable to the
exchange of information, for the
electronic exchange of health
information to improve the quality of
health care, such as promoting care
coordination, and the hospital
demonstrates (through a process
specified by the Secretary, such as the
use of an attestation) that the
hospital has not knowingly and
willfully taken action (such as to
disable functionality) to limit or
restrict the compatibility or
interoperability of the certified EHR
technology.
(iii) Reporting on measures using
ehr.--Subject to subparagraph (B)(ii)
and using such certified EHR
technology, the eligible hospital
submits information for such period, in
a form and manner specified by the
Secretary, on such clinical quality
measures and such other measures as
selected by the Secretary under
subparagraph (B)(i).
The Secretary shall seek to improve the use of
electronic health records and health care
quality over time.
(B) Reporting on measures.--
(i) Selection.--The Secretary shall
select measures for purposes of
subparagraph (A)(iii) but only
consistent with the following:
(I) The Secretary shall
provide preference to clinical
quality measures that have been
selected for purposes of
applying subsection
(b)(3)(B)(viii) or that have
been endorsed by the entity
with a contract with the
Secretary under section
1890(a).
(II) Prior to any measure
(other than a clinical quality
measure that has been selected
for purposes of applying
subsection (b)(3)(B)(viii))
being selected under this
subparagraph, the Secretary
shall publish in the Federal
Register such measure and
provide for a period of public
comment on such measure.
(ii) Limitations.--The Secretary may
not require the electronic reporting of
information on clinical quality
measures under subparagraph (A)(iii)
unless the Secretary has the capacity
to accept the information
electronically, which may be on a pilot
basis.
(iii) Coordination of reporting of
information.--In selecting such
measures, and in establishing the form
and manner for reporting measures under
subparagraph (A)(iii), the Secretary
shall seek to avoid redundant or
duplicative reporting with reporting
otherwise required, including reporting
under subsection (b)(3)(B)(viii).
(C) Demonstration of meaningful use of
certified ehr technology and information
exchange.--
(i) In general.--An eligible hospital
may satisfy the demonstration
requirement of clauses (i) and (ii) of
subparagraph (A) through means
specified by the Secretary, which may
include--
(I) an attestation;
(II) the submission of claims
with appropriate coding (such
as a code indicating that
inpatient care was documented
using certified EHR
technology);
(III) a survey response;
(IV) reporting under
subparagraph (A)(iii); and
(V) other means specified by
the Secretary.
(ii) Use of part d data.--
Notwithstanding sections 1860D-
15(d)(2)(B) and 1860D-15(f)(2), the
Secretary may use data regarding drug
claims submitted for purposes of
section 1860D-15 that are necessary for
purposes of subparagraph (A).
(4) Application.--
(A) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise, of--
(i) the methodology and standards for
determining payment amounts under this
subsection and payment adjustments
under subsection (b)(3)(B)(ix),
including selection of periods under
paragraph (2) for determining, and
making estimates or using proxies of,
discharges under paragraph (2)(C) and
inpatient-bed-days, hospital charges,
charity charges, and Medicare share
under paragraph (2)(D);
(ii) the methodology and standards
for determining a meaningful EHR user
under paragraph (3), including
selection of measures under paragraph
(3)(B), specification of the means of
demonstrating meaningful EHR use under
paragraph (3)(C), and the hardship
exception under subsection
(b)(3)(B)(ix)(II); and
(iii) the specification of EHR
reporting periods under paragraph
(6)(B) and the selection of the form of
payment under paragraph (2)(F).
(B) Posting on website.--The Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services, in an easily
understandable format, a list of the names of
the eligible hospitals that are meaningful EHR
users under this subsection or subsection
(b)(3)(B)(ix) (and a list of the names of
critical access hospitals to which paragraph
(3) or (4) of section 1814(l) applies), and
other relevant data as determined appropriate
by the Secretary. The Secretary shall ensure
that an eligible hospital (or critical access
hospital) has the opportunity to review the
other relevant data that are to be made public
with respect to the hospital (or critical
access hospital) prior to such data being made
public.
(5) Certified ehr technology defined.--The term
``certified EHR technology'' has the meaning given such
term in section 1848(o)(4).
(6) Definitions.--For purposes of this subsection:
(A) EHR reporting period.--The term ``EHR
reporting period'' means, with respect to a
payment year, any period (or periods) as
specified by the Secretary.
(B) Eligible hospital.--The term ``eligible
hospital'' means a hospital that is a
subsection (d) hospital or a subsection (d)
Puerto Rico hospital.
(o) Hospital Value-Based Purchasing Program.--
(1) Establishment.--
(A) In general.--Subject to the succeeding
provisions of this subsection, the Secretary
shall establish a hospital value-based
purchasing program (in this subsection referred
to as the ``Program'') under which value-based
incentive payments are made in a fiscal year to
hospitals that meet the performance standards
under paragraph (3) for the performance period
for such fiscal year (as established under
paragraph (4)).
(B) Program to begin in fiscal year 2013.--
The Program shall apply to payments for
discharges occurring on or after October 1,
2012.
(C) Applicability of program to hospitals.--
(i) In general.--For purposes of this
subsection, subject to clause (ii), the
term ``hospital'' means a subsection
(d) hospital (as defined in subsection
(d)(1)(B)).
(ii) Exclusions.--The term
``hospital'' shall not include, with
respect to a fiscal year, a hospital--
(I) that is subject to the
payment reduction under
subsection (b)(3)(B)(viii)(I)
for such fiscal year;
(II) for which, during the
performance period for such
fiscal year, the Secretary has
cited deficiencies that pose
immediate jeopardy to the
health or safety of patients;
(III) for which there are not
a minimum number (as determined
by the Secretary) of measures
that apply to the hospital for
the performance period for such
fiscal year; or
(IV) for which there are not
a minimum number (as determined
by the Secretary) of cases for
the measures that apply to the
hospital for the performance
period for such fiscal year.
(iii) Independent analysis.--For
purposes of determining the minimum
numbers under subclauses (III) and (IV)
of clause (ii), the Secretary shall
have conducted an independent analysis
of what numbers are appropriate.
(iv) Exemption.--In the case of a
hospital that is paid under section
1814(b)(3), the Secretary may exempt
such hospital from the application of
this subsection if the State which is
paid under such section submits an
annual report to the Secretary
describing how a similar program in the
State for a participating hospital or
hospitals achieves or surpasses the
measured results in terms of patient
health outcomes and cost savings
established under this subsection.
(2) Measures.--
(A) In general.--The Secretary shall select
measures, other than measures of readmissions,
for purposes of the Program. Such measures
shall be selected from the measures specified
under subsection (b)(3)(B)(viii).
(B) Requirements.--
(i) For fiscal year 2013.--For value-
based incentive payments made with
respect to discharges occurring during
fiscal year 2013, the Secretary shall
ensure the following:
(I) Conditions or
procedures.--Measures are
selected under subparagraph (A)
that cover at least the
following 5 specific conditions
or procedures:
(aa) Acute myocardial
infarction (AMI).
(bb) Heart failure.
(cc) Pneumonia.
(dd) Surgeries, as
measured by the
Surgical Care
Improvement Project
(formerly referred to
as ``Surgical Infection
Prevention'' for
discharges occurring
before July 2006).
(ee) Healthcare-
associated infections,
as measured by the
prevention metrics and
targets established in
the HHS Action Plan to
Prevent Healthcare-
Associated Infections
(or any successor plan)
of the Department of
Health and Human
Services.
(II) HCAHPS.--Measures
selected under subparagraph (A)
shall be related to the
Hospital Consumer Assessment of
Healthcare Providers and
Systems survey (HCAHPS).
(ii) Inclusion of efficiency
measures.--For value-based incentive
payments made with respect to
discharges occurring during fiscal year
2014 or a subsequent fiscal year, the
Secretary shall ensure that measures
selected under subparagraph (A) include
efficiency measures, including measures
of ``Medicare spending per
beneficiary''. Such measures shall be
adjusted for factors such as age, sex,
race, severity of illness, and other
factors that the Secretary determines
appropriate.
(iii) HCAHPS pain questions.--The
Secretary may not include under
subparagraph (A) a measure that is
based on the questions appearing on the
Hospital Consumer Assessment of
Healthcare Providers and Systems survey
in 2018 or 2019 about communication by
hospital staff with an individual about
the individual's pain.
(C) Limitations.--
(i) Time requirement for prior
reporting and notice.--The Secretary
may not select a measure under
subparagraph (A) for use under the
Program with respect to a performance
period for a fiscal year (as
established under paragraph (4)) unless
such measure has been specified under
subsection (b)(3)(B)(viii) and included
on the Hospital Compare Internet
website for at least 1 year prior to
the beginning of such performance
period.
(ii) Measure not applicable unless
hospital furnishes services appropriate
to the measure.--A measure selected
under subparagraph (A) shall not apply
to a hospital if such hospital does not
furnish services appropriate to such
measure.
(D) Replacing measures.--Subclause (VI) of
subsection (b)(3)(B)(viii) shall apply to
measures selected under subparagraph (A) in the
same manner as such subclause applies to
measures selected under such subsection.
(3) Performance standards.--
(A) Establishment.--The Secretary shall
establish performance standards with respect to
measures selected under paragraph (2) for a
performance period for a fiscal year (as
established under paragraph (4)).
(B) Achievement and improvement.--The
performance standards established under
subparagraph (A) shall include levels of
achievement and improvement.
(C) Timing.--The Secretary shall establish
and announce the performance standards under
subparagraph (A) not later than 60 days prior
to the beginning of the performance period for
the fiscal year involved.
(D) Considerations in establishing
standards.--In establishing performance
standards with respect to measures under this
paragraph, the Secretary shall take into
account appropriate factors, such as--
(i) practical experience with the
measures involved, including whether a
significant proportion of hospitals
failed to meet the performance standard
during previous performance periods;
(ii) historical performance
standards;
(iii) improvement rates; and
(iv) the opportunity for continued
improvement.
(4) Performance period.--For purposes of the Program,
the Secretary shall establish the performance period
for a fiscal year. Such performance period shall begin
and end prior to the beginning of such fiscal year.
(5) Hospital performance score.--
(A) In general.--Subject to subparagraph (B),
the Secretary shall develop a methodology for
assessing the total performance of each
hospital based on performance standards with
respect to the measures selected under
paragraph (2) for a performance period (as
established under paragraph (4)). Using such
methodology, the Secretary shall provide for an
assessment (in this subsection referred to as
the ``hospital performance score'') for each
hospital for each performance period.
(B) Application.--
(i) Appropriate distribution.--The
Secretary shall ensure that the
application of the methodology
developed under subparagraph (A)
results in an appropriate distribution
of value-based incentive payments under
paragraph (6) among hospitals achieving
different levels of hospital
performance scores, with hospitals
achieving the highest hospital
performance scores receiving the
largest value-based incentive payments.
(ii) Higher of achievement or
improvement.--The methodology developed
under subparagraph (A) shall provide
that the hospital performance score is
determined using the higher of its
achievement or improvement score for
each measure.
(iii) Weights.--The methodology
developed under subparagraph (A) shall
provide for the assignment of weights
for categories of measures as the
Secretary determines appropriate.
(iv) No minimum performance
standard.--The Secretary shall not set
a minimum performance standard in
determining the hospital performance
score for any hospital.
(v) Reflection of measures applicable
to the hospital.--The hospital
performance score for a hospital shall
reflect the measures that apply to the
hospital.
(6) Calculation of value-based incentive payments.--
(A) In general.--In the case of a hospital
that the Secretary determines meets (or
exceeds) the performance standards under
paragraph (3) for the performance period for a
fiscal year (as established under paragraph
(4)), the Secretary shall increase the base
operating DRG payment amount (as defined in
paragraph (7)(D)), as determined after
application of paragraph (7)(B)(i), for a
hospital for each discharge occurring in such
fiscal year by the value-based incentive
payment amount.
(B) Value-based incentive payment amount.--
The value-based incentive payment amount for
each discharge of a hospital in a fiscal year
shall be equal to the product of--
(i) the base operating DRG payment
amount (as defined in paragraph (7)(D))
for the discharge for the hospital for
such fiscal year; and
(ii) the value-based incentive
payment percentage specified under
subparagraph (C) for the hospital for
such fiscal year.
(C) Value-based incentive payment
percentage.--
(i) In general.--The Secretary shall
specify a value-based incentive payment
percentage for a hospital for a fiscal
year.
(ii) Requirements.--In specifying the
value-based incentive payment
percentage for each hospital for a
fiscal year under clause (i), the
Secretary shall ensure that--
(I) such percentage is based
on the hospital performance
score of the hospital under
paragraph (5); and
(II) the total amount of
value-based incentive payments
under this paragraph to all
hospitals in such fiscal year
is equal to the total amount
available for value-based
incentive payments for such
fiscal year under paragraph
(7)(A), as estimated by the
Secretary.
(7) Funding for value-based incentive payments.--
(A) Amount.--The total amount available for
value-based incentive payments under paragraph
(6) for all hospitals for a fiscal year shall
be equal to the total amount of reduced
payments for all hospitals under subparagraph
(B) for such fiscal year, as estimated by the
Secretary.
(B) Adjustment to payments.--
(i) In general.--The Secretary shall
reduce the base operating DRG payment
amount (as defined in subparagraph (D))
for a hospital for each discharge in a
fiscal year (beginning with fiscal year
2013) by an amount equal to the
applicable percent (as defined in
subparagraph (C)) of the base operating
DRG payment amount for the discharge
for the hospital for such fiscal year.
The Secretary shall make such
reductions for all hospitals in the
fiscal year involved, regardless of
whether or not the hospital has been
determined by the Secretary to have
earned a value-based incentive payment
under paragraph (6) for such fiscal
year.
(ii) No effect on other payments.--
Payments described in items (aa) and
(bb) of subparagraph (D)(i)(II) for a
hospital shall be determined as if this
subsection had not been enacted.
(C) Applicable percent defined.--For purposes
of subparagraph (B), the term ``applicable
percent'' means--
(i) with respect to fiscal year 2013,
1.0 percent;
(ii) with respect to fiscal year
2014, 1.25 percent;
(iii) with respect to fiscal year
2015, 1.5 percent;
(iv) with respect to fiscal year
2016, 1.75 percent; and
(v) with respect to fiscal year 2017
and succeeding fiscal years, 2 percent.
(D) Base operating drg payment amount
defined.--
(i) In general.--Except as provided
in clause (ii), in this subsection, the
term ``base operating DRG payment
amount'' means, with respect to a
hospital for a fiscal year--
(I) the payment amount that
would otherwise be made under
subsection (d) (determined
without regard to subsection
(q)) for a discharge if this
subsection did not apply;
reduced by
(II) any portion of such
payment amount that is
attributable to--
(aa) payments under
paragraphs (5)(A),
(5)(B), (5)(F), and
(12) of subsection (d);
and
(bb) such other
payments under
subsection (d)
determined appropriate
by the Secretary.
(ii) Special rules for certain
hospitals.--
(I) Sole community hospitals
and medicare-dependent, small
rural hospitals.--In the case
of a medicare-dependent, small
rural hospital (with respect to
discharges occurring during
fiscal year 2012 and 2013) or a
sole community hospital, in
applying subparagraph (A)(i),
the payment amount that would
otherwise be made under
subsection (d) shall be
determined without regard to
subparagraphs (I) and (L) of
subsection (b)(3) and
subparagraphs (D) and (G) of
subsection (d)(5).
(II) Hospitals paid under
section 1814.--In the case of a
hospital that is paid under
section 1814(b)(3), the term
``base operating DRG payment
amount'' means the payment
amount under such section.
(8) Announcement of net result of adjustments.--Under
the Program, the Secretary shall, not later than 60
days prior to the fiscal year involved, inform each
hospital of the adjustments to payments to the hospital
for discharges occurring in such fiscal year under
paragraphs (6) and (7)(B)(i).
(9) No effect in subsequent fiscal years.--The value-
based incentive payment under paragraph (6) and the
payment reduction under paragraph (7)(B)(i) shall each
apply only with respect to the fiscal year involved,
and the Secretary shall not take into account such
value-based incentive payment or payment reduction in
making payments to a hospital under this section in a
subsequent fiscal year.
(10) Public reporting.--
(A) Hospital specific information.--
(i) In general.--The Secretary shall
make information available to the
public regarding the performance of
individual hospitals under the Program,
including--
(I) the performance of the
hospital with respect to each
measure that applies to the
hospital;
(II) the performance of the
hospital with respect to each
condition or procedure; and
(III) the hospital
performance score assessing the
total performance of the
hospital.
(ii) Opportunity to review and submit
corrections.--The Secretary shall
ensure that a hospital has the
opportunity to review, and submit
corrections for, the information to be
made public with respect to the
hospital under clause (i) prior to such
information being made public.
(iii) Website.--Such information
shall be posted on the Hospital Compare
Internet website in an easily
understandable format.
(B) Aggregate information.--The Secretary
shall periodically post on the Hospital Compare
Internet website aggregate information on the
Program, including--
(i) the number of hospitals receiving
value-based incentive payments under
paragraph (6) and the range and total
amount of such value-based incentive
payments; and
(ii) the number of hospitals
receiving less than the maximum value-
based incentive payment available to
the hospital for the fiscal year
involved and the range and amount of
such payments.
(11) Implementation.--
(A) Appeals.--The Secretary shall establish a
process by which hospitals may appeal the
calculation of a hospital's performance
assessment with respect to the performance
standards established under paragraph (3)(A)
and the hospital performance score under
paragraph (5). The Secretary shall ensure that
such process provides for resolution of such
appeals in a timely manner.
(B) Limitation on review.--Except as provided
in subparagraph (A), there shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
following:
(i) The methodology used to determine
the amount of the value-based incentive
payment under paragraph (6) and the
determination of such amount.
(ii) The determination of the amount
of funding available for such value-
based incentive payments under
paragraph (7)(A) and the payment
reduction under paragraph (7)(B)(i).
(iii) The establishment of the
performance standards under paragraph
(3) and the performance period under
paragraph (4).
(iv) The measures specified under
subsection (b)(3)(B)(viii) and the
measures selected under paragraph (2).
(v) The methodology developed under
paragraph (5) that is used to calculate
hospital performance scores and the
calculation of such scores.
(vi) The validation methodology
specified in subsection
(b)(3)(B)(viii)(XI).
(C) Consultation with small hospitals.--The
Secretary shall consult with small rural and
urban hospitals on the application of the
Program to such hospitals.
(12) Promulgation of regulations.--The Secretary
shall promulgate regulations to carry out the Program,
including the selection of measures under paragraph
(2), the methodology developed under paragraph (5) that
is used to calculate hospital performance scores, and
the methodology used to determine the amount of value-
based incentive payments under paragraph (6).
(p) Adjustment to Hospital Payments for Hospital Acquired
Conditions.--
(1) In general.--In order to provide an incentive for
applicable hospitals to reduce hospital acquired
conditions under this title, with respect to discharges
from an applicable hospital occurring during fiscal
year 2015 or a subsequent fiscal year, the amount of
payment under this section or section 1814(b)(3), as
applicable, for such discharges during the fiscal year
shall be equal to 99 percent of the amount of payment
that would otherwise apply to such discharges under
this section or section 1814(b)(3) (determined after
the application of subsections (o) and (q) and section
1814(l)(4) but without regard to this subsection).
(2) Applicable hospitals.--
(A) In general.--For purposes of this
subsection, the term ``applicable hospital''
means a subsection (d) hospital that meets the
criteria described in subparagraph (B).
(B) Criteria described.--
(i) In general.--The criteria
described in this subparagraph, with
respect to a subsection (d) hospital,
is that the subsection (d) hospital is
in the top quartile of all subsection
(d) hospitals, relative to the national
average, of hospital acquired
conditions during the applicable
period, as determined by the Secretary.
(ii) Risk adjustment.--In carrying
out clause (i), the Secretary shall
establish and apply an appropriate risk
adjustment methodology.
(C) Exemption.--In the case of a hospital
that is paid under section 1814(b)(3), the
Secretary may exempt such hospital from the
application of this subsection if the State
which is paid under such section submits an
annual report to the Secretary describing how a
similar program in the State for a
participating hospital or hospitals achieves or
surpasses the measured results in terms of
patient health outcomes and cost savings
established under this subsection.
(3) Hospital acquired conditions.--For purposes of
this subsection, the term ``hospital acquired
condition'' means a condition identified for purposes
of subsection (d)(4)(D)(iv) and any other condition
determined appropriate by the Secretary that an
individual acquires during a stay in an applicable
hospital, as determined by the Secretary.
(4) Applicable period.--In this subsection, the term
``applicable period'' means, with respect to a fiscal
year, a period specified by the Secretary.
(5) Reporting to hospitals.--Prior to fiscal year
2015 and each subsequent fiscal year, the Secretary
shall provide confidential reports to applicable
hospitals with respect to hospital acquired conditions
of the applicable hospital during the applicable
period.
(6) Reporting hospital specific information.--
(A) In general.--The Secretary shall make
information available to the public regarding
hospital acquired conditions of each applicable
hospital.
(B) Opportunity to review and submit
corrections.--The Secretary shall ensure that
an applicable hospital has the opportunity to
review, and submit corrections for, the
information to be made public with respect to
the hospital under subparagraph (A) prior to
such information being made public.
(C) Website.--Such information shall be
posted on the Hospital Compare Internet website
in an easily understandable format.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) The criteria described in paragraph
(2)(A).
(B) The specification of hospital acquired
conditions under paragraph (3).
(C) The specification of the applicable
period under paragraph (4).
(D) The provision of reports to applicable
hospitals under paragraph (5) and the
information made available to the public under
paragraph (6).
(q) Hospital Readmissions Reduction Program.--
(1) In general.--With respect to payment for
discharges from an applicable hospital (as defined in
paragraph (5)(C)) occurring during a fiscal year
beginning on or after October 1, 2012, in order to
account for excess readmissions in the hospital, the
Secretary shall make payments (in addition to the
payments described in paragraph (2)(A)(ii)) for such a
discharge to such hospital under subsection (d) (or
section 1814(b)(3), as the case may be) in an amount
equal to the product of--
(A) the base operating DRG payment amount (as
defined in paragraph (2)) for the discharge;
and
(B) the adjustment factor (described in
paragraph (3)(A)) for the hospital for the
fiscal year.
(2) Base operating drg payment amount defined.--
(A) In general.--Except as provided in
subparagraph (B), in this subsection, the term
``base operating DRG payment amount'' means,
with respect to a hospital for a fiscal year--
(i) the payment amount that would
otherwise be made under subsection (d)
(determined without regard to
subsection (o)) for a discharge if this
subsection did not apply; reduced by
(ii) any portion of such payment
amount that is attributable to payments
under paragraphs (5)(A), (5)(B),
(5)(F), and (12) of subsection (d).
(B) Special rules for certain hospitals.--
(i) Sole community hospitals and
medicare-dependent, small rural
hospitals.--In the case of a medicare-
dependent, small rural hospital (with
respect to discharges occurring during
fiscal years 2012 and 2013) or a sole
community hospital, in applying
subparagraph (A)(i), the payment amount
that would otherwise be made under
subsection (d) shall be determined
without regard to subparagraphs (I) and
(L) of subsection (b)(3) and
subparagraphs (D) and (G) of subsection
(d)(5).
(ii) Hospitals paid under section
1814.--In the case of a hospital that
is paid under section 1814(b)(3), the
Secretary may exempt such hospitals
provided that States paid under such
section submit an annual report to the
Secretary describing how a similar
program in the State for a
participating hospital or hospitals
achieves or surpasses the measured
results in terms of patient health
outcomes and cost savings established
herein with respect to this section.
(3) Adjustment factor.--
(A) In general.--For purposes of paragraph
(1), subject to subparagraph (D), the
adjustment factor under this paragraph for an
applicable hospital for a fiscal year is equal
to the greater of--
(i) the ratio described in
subparagraph (B) for the hospital for
the applicable period (as defined in
paragraph (5)(D)) for such fiscal year;
or
(ii) the floor adjustment factor
specified in subparagraph (C).
(B) Ratio.--The ratio described in this
subparagraph for a hospital for an applicable
period is equal to 1 minus the ratio of--
(i) the aggregate payments for excess
readmissions (as defined in paragraph
(4)(A)) with respect to an applicable
hospital for the applicable period; and
(ii) the aggregate payments for all
discharges (as defined in paragraph
(4)(B)) with respect to such applicable
hospital for such applicable period.
(C) Floor adjustment factor.--For purposes of
subparagraph (A), the floor adjustment factor
specified in this subparagraph for--
(i) fiscal year 2013 is 0.99;
(ii) fiscal year 2014 is 0.98; or
(iii) fiscal year 2015 and subsequent
fiscal years is 0.97.
(D) Transitional adjustment for dual
eligibles.--
(i) In general.--In determining a
hospital's adjustment factor under this
paragraph for purposes of making
payments for discharges occurring
during and after fiscal year 2019, and
before the application of clause (i) of
subparagraph (E), the Secretary shall
assign hospitals to groups (as defined
by the Secretary under clause (ii)) and
apply the applicable provisions of this
subsection using a methodology in a
manner that allows for separate
comparison of hospitals within each
such group, as determined by the
Secretary.
(ii) Defining groups.--For purposes
of this subparagraph, the Secretary
shall define groups of hospitals, based
on their overall proportion, of the
inpatients who are entitled to, or
enrolled for, benefits under part A,
and who are full-benefit dual eligible
individuals (as defined in section
1935(c)(6)). In defining groups, the
Secretary shall consult the Medicare
Payment Advisory Commission and may
consider the analysis done by such
Commission in preparing the portion of
its report submitted to Congress in
June 2013 relating to readmissions.
(iii) Minimizing reporting burden on
hospitals.--In carrying out this
subparagraph, the Secretary shall not
impose any additional reporting
requirements on hospitals.
(iv) Budget neutral design
methodology.--The Secretary shall
design the methodology to implement
this subparagraph so that the estimated
total amount of reductions in payments
under this subsection equals the
estimated total amount of reductions in
payments that would otherwise occur
under this subsection if this
subparagraph did not apply.
(E) Changes in risk adjustment.--
(i) Consideration of recommendations
in impact reports.--The Secretary may
take into account the studies conducted
and the recommendations made by the
Secretary under section 2(d)(1) of the
IMPACT Act of 2014 (Public Law 113-185;
42 U.S.C. 1395lll note) with respect to
the application under this subsection
of risk adjustment methodologies.
Nothing in this clause shall be
construed as precluding consideration
of the use of groupings of hospitals.
(ii) Consideration of exclusion of
patient cases based on v or other
appropriate codes.--In promulgating
regulations to carry out this
subsection with respect to discharges
occurring after fiscal year 2018, the
Secretary may consider the use of V or
other ICD-related codes for removal of
a readmission. The Secretary may
consider modifying measures under this
subsection to incorporate V or other
ICD-related codes at the same time as
other changes are being made under this
subparagraph.
(iii) Removal of certain
readmissions.--In promulgating
regulations to carry out this
subsection, with respect to discharges
occurring after fiscal year 2018, the
Secretary may consider removal as a
readmission of an admission that is
classified within one or more of the
following: transplants, end-stage renal
disease, burns, trauma, psychosis, or
substance abuse. The Secretary may
consider modifying measures under this
subsection to remove readmissions at
the same time as other changes are
being made under this subparagraph.
(4) Aggregate payments, excess readmission ratio
defined.--For purposes of this subsection:
(A) Aggregate payments for excess
readmissions.--The term ``aggregate payments
for excess readmissions'' means, for a hospital
for an applicable period, the sum, for
applicable conditions (as defined in paragraph
(5)(A)), of the product, for each applicable
condition, of--
(i) the base operating DRG payment
amount for such hospital for such
applicable period for such condition;
(ii) the number of admissions for
such condition for such hospital for
such applicable period; and
(iii) the excess readmissions ratio
(as defined in subparagraph (C)) for
such hospital for such applicable
period minus 1.
(B) Aggregate payments for all discharges.--
The term ``aggregate payments for all
discharges'' means, for a hospital for an
applicable period, the sum of the base
operating DRG payment amounts for all
discharges for all conditions from such
hospital for such applicable period.
(C) Excess readmission ratio.--
(i) In general.--Subject to clause
(ii), the term ``excess readmissions
ratio'' means, with respect to an
applicable condition for a hospital for
an applicable period, the ratio (but
not less than 1.0) of--
(I) the risk adjusted
readmissions based on actual
readmissions, as determined
consistent with a readmission
measure methodology that has
been endorsed under paragraph
(5)(A)(ii)(I), for an
applicable hospital for such
condition with respect to such
applicable period; to
(II) the risk adjusted
expected readmissions (as
determined consistent with such
a methodology) for such
hospital for such condition
with respect to such applicable
period.
(ii) Exclusion of certain
readmissions.--For purposes of clause
(i), with respect to a hospital, excess
readmissions shall not include
readmissions for an applicable
condition for which there are fewer
than a minimum number (as determined by
the Secretary) of discharges for such
applicable condition for the applicable
period and such hospital.
(5) Definitions.--For purposes of this subsection:
(A) Applicable condition.--The term
``applicable condition'' means, subject to
subparagraph (B), a condition or procedure
selected by the Secretary among conditions and
procedures for which--
(i) readmissions (as defined in
subparagraph (E)) that represent
conditions or procedures that are high
volume or high expenditures under this
title (or other criteria specified by
the Secretary); and
(ii) measures of such readmissions--
(I) have been endorsed by the
entity with a contract under
section 1890(a); and
(II) such endorsed measures
have exclusions for
readmissions that are unrelated
to the prior discharge (such as
a planned readmission or
transfer to another applicable
hospital).
(B) Expansion of applicable conditions.--
Beginning with fiscal year 2015, the Secretary
shall, to the extent practicable, expand the
applicable conditions beyond the 3 conditions
for which measures have been endorsed as
described in subparagraph (A)(ii)(I) as of the
date of the enactment of this subsection to the
additional 4 conditions that have been
identified by the Medicare Payment Advisory
Commission in its report to Congress in June
2007 and to other conditions and procedures as
determined appropriate by the Secretary. In
expanding such applicable conditions, the
Secretary shall seek the endorsement described
in subparagraph (A)(ii)(I) but may apply such
measures without such an endorsement in the
case of a specified area or medical topic
determined appropriate by the Secretary for
which a feasible and practical measure has not
been endorsed by the entity with a contract
under section 1890(a) as long as due
consideration is given to measures that have
been endorsed or adopted by a consensus
organization identified by the Secretary.
(C) Applicable hospital.--The term
``applicable hospital'' means a subsection (d)
hospital or a hospital that is paid under
section 1814(b)(3), as the case may be.
(D) Applicable period.--The term ``applicable
period'' means, with respect to a fiscal year,
such period as the Secretary shall specify.
(E) Readmission.--The term ``readmission''
means, in the case of an individual who is
discharged from an applicable hospital, the
admission of the individual to the same or
another applicable hospital within a time
period specified by the Secretary from the date
of such discharge. Insofar as the discharge
relates to an applicable condition for which
there is an endorsed measure described in
subparagraph (A)(ii)(I), such time period (such
as 30 days) shall be consistent with the time
period specified for such measure.
(6) Reporting hospital specific information.--
(A) In general.--The Secretary shall make
information available to the public regarding
readmission rates of each subsection (d)
hospital under the program.
(B) Opportunity to review and submit
corrections.--The Secretary shall ensure that a
subsection (d) hospital has the opportunity to
review, and submit corrections for, the
information to be made public with respect to
the hospital under subparagraph (A) prior to
such information being made public.
(C) Website.--Such information shall be
posted on the Hospital Compare Internet website
in an easily understandable format.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) The determination of base operating DRG
payment amounts.
(B) The methodology for determining the
adjustment factor under paragraph (3),
including excess readmissions ratio under
paragraph (4)(C), aggregate payments for excess
readmissions under paragraph (4)(A), and
aggregate payments for all discharges under
paragraph (4)(B), and applicable periods and
applicable conditions under paragraph (5).
(C) The measures of readmissions as described
in paragraph (5)(A)(ii).
(8) Readmission rates for all patients.--
(A) Calculation of readmission.--The
Secretary shall calculate readmission rates for
all patients (as defined in subparagraph (D))
for a specified hospital (as defined in
subparagraph (D)(ii)) for an applicable
condition (as defined in paragraph (5)(B)) and
other conditions deemed appropriate by the
Secretary for an applicable period (as defined
in paragraph (5)(D)) in the same manner as used
to calculate such readmission rates for
hospitals with respect to this title and posted
on the CMS Hospital Compare website.
(B) Posting of hospital specific all patient
readmission rates.--The Secretary shall make
information on all patient readmission rates
calculated under subparagraph (A) available on
the CMS Hospital Compare website in a form and
manner determined appropriate by the Secretary.
The Secretary may also make other information
determined appropriate by the Secretary
available on such website.
(C) Hospital submission of all patient
data.--
(i) Except as provided for in clause
(ii), each specified hospital (as
defined in subparagraph (D)(ii)) shall
submit to the Secretary, in a form,
manner and time specified by the
Secretary, data and information
determined necessary by the Secretary
for the Secretary to calculate the all
patient readmission rates described in
subparagraph (A).
(ii) Instead of a specified hospital
submitting to the Secretary the data
and information described in clause
(i), such data and information may be
submitted to the Secretary, on behalf
of such a specified hospital, by a
state or an entity determined
appropriate by the Secretary.
(D) Definitions.--For purposes of this
paragraph:
(i) The term ``all patients'' means
patients who are treated on an
inpatient basis and discharged from a
specified hospital (as defined in
clause (ii)).
(ii) The term ``specified hospital''
means a subsection (d) hospital,
hospitals described in clauses (i)
through (v) of subsection (d)(1)(B)
and, as determined feasible and
appropriate by the Secretary, other
hospitals not otherwise described in
this subparagraph.
(r) Adjustments to Medicare DSH Payments.--
(1) Empirically justified dsh payments.--For fiscal
year 2014 and each subsequent fiscal year, instead of
the amount of disproportionate share hospital payment
that would otherwise be made under subsection (d)(5)(F)
to a subsection (d) hospital for the fiscal year, the
Secretary shall pay to the subsection (d) hospital 25
percent of such amount (which represents the
empirically justified amount for such payment, as
determined by the Medicare Payment Advisory Commission
in its March 2007 Report to the Congress).
(2) Additional payment.--In addition to the payment
made to a subsection (d) hospital under paragraph (1),
for fiscal year 2014 and each subsequent fiscal year,
the Secretary shall pay to such subsection (d)
hospitals an additional amount equal to the product of
the following factors:
(A) Factor one.--A factor equal to the
difference between--
(i) the aggregate amount of payments
that would be made to subsection (d)
hospitals under subsection (d)(5)(F) if
this subsection did not apply for such
fiscal year (as estimated by the
Secretary); and
(ii) the aggregate amount of payments
that are made to subsection (d)
hospitals under paragraph (1) for such
fiscal year (as so estimated).
(B) Factor two.--
(i) Fiscal years 2014, 2015, 2016,
and 2017.--For each of fiscal years
2014, 2015, 2016, and 2017, a factor
equal to 1 minus the percent change in
the percent of individuals under the
age of 65 who are uninsured, as
determined by comparing the percent of
such individuals--
(I) who are uninsured in
2013, the last year before
coverage expansion under the
Patient Protection and
Affordable Care Act (as
calculated by the Secretary
based on the most recent
estimates available from the
Director of the Congressional
Budget Office before a vote in
either House on the Health Care
and Education Reconciliation
Act of 2010 that, if determined
in the affirmative, would clear
such Act for enrollment); and
(II) who are uninsured in the
most recent period for which
data is available (as so
calculated),
minus 0.1 percentage points for fiscal
year 2014 and minus 0.2 percentage
points for each of fiscal years 2015,
2016, and 2017.
(ii) 2018 and subsequent years.--For
fiscal year 2018 and each subsequent
fiscal year, a factor equal to 1 minus
the percent change in the percent of
individuals who are uninsured, as
determined by comparing the percent of
individuals--
(I) who are uninsured in 2013
(as estimated by the Secretary,
based on data from the Census
Bureau or other sources the
Secretary determines
appropriate, and certified by
the Chief Actuary of the
Centers for Medicare & Medicaid
Services); and
(II) who are uninsured in the
most recent period for which
data is available (as so
estimated and certified),
minus 0.2 percentage points for each of
fiscal years 2018 and 2019.
(C) Factor three.--A factor equal to the
percent, for each subsection (d) hospital, that
represents the quotient of--
(i) the amount of uncompensated care
for such hospital for a period selected
by the Secretary (as estimated by the
Secretary, based on appropriate data
(including, in the case where the
Secretary determines that alternative
data is available which is a better
proxy for the costs of subsection (d)
hospitals for treating the uninsured,
the use of such alternative data)); and
(ii) the aggregate amount of
uncompensated care for all subsection
(d) hospitals that receive a payment
under this subsection for such period
(as so estimated, based on such data).
(3) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) Any estimate of the Secretary for
purposes of determining the factors described
in paragraph (2).
(B) Any period selected by the Secretary for
such purposes.
(s) Prospective Payment for Psychiatric Hospitals.--
(1) Reference to establishment and implementation of
system.--For provisions related to the establishment
and implementation of a prospective payment system for
payments under this title for inpatient hospital
services furnished by psychiatric hospitals (as
described in clause (i) of subsection (d)(1)(B)) and
psychiatric units (as described in the matter following
clause (v) of such subsection), see section 124 of the
Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999.
(2) Implementation for rate year beginning in 2010
and subsequent rate years.--
(A) In general.--In implementing the system
described in paragraph (1) for the rate year
beginning in 2010 and any subsequent rate year,
any update to a base rate for days during the
rate year for a psychiatric hospital or unit,
respectively, shall be reduced--
(i) for the rate year beginning in
2012 and each subsequent rate year, by
the productivity adjustment described
in section 1886(b)(3)(B)(xi)(II); and
(ii) for each of the rate years
beginning in 2010 through 2019, by the
other adjustment described in paragraph
(3).
(B) Special rule.--The application of this
paragraph may result in such update being less
than 0.0 for a rate year, and may result in
payment rates under the system described in
paragraph (1) for a rate year being less than
such payment rates for the preceding rate year.
(3) Other adjustment.--For purposes of paragraph
(2)(A)(ii), the other adjustment described in this
paragraph is--
(A) for each of the rate years beginning in
2010 and 2011, 0.25 percentage point;
(B) for each of the rate years beginning in
2012 and 2013, 0.1 percentage point;
(C) for the rate year beginning in 2014, 0.3
percentage point;
(D) for each of the rate years beginning in
2015 and 2016, 0.2 percentage point; and
(E) for each of the rate years beginning in
2017, 2018, and 2019, 0.75 percentage point.
(4) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--Under the system
described in paragraph (1), for rate
year 2014 and each subsequent rate
year, in the case of a psychiatric
hospital or psychiatric unit that does
not submit data to the Secretary in
accordance with subparagraph (C) with
respect to such a rate year, any annual
update to a standard Federal rate for
discharges for the hospital during the
rate year, and after application of
paragraph (2), shall be reduced by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in such
annual update being less than 0.0 for a
rate year, and may result in payment
rates under the system described in
paragraph (1) for a rate year being
less than such payment rates for the
preceding rate year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the rate year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
the system described in paragraph (1) for a
subsequent rate year.
(C) Submission of quality data.--For rate
year 2014 and each subsequent rate year, each
psychiatric hospital and psychiatric unit shall
submit to the Secretary data on quality
measures specified under subparagraph (D). Such
data shall be submitted in a form and manner,
and at a time, specified by the Secretary for
purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to rate year
2014.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
available to the public. Such procedures shall
ensure that a psychiatric hospital and a
psychiatric unit has the opportunity to review
the data that is to be made public with respect
to the hospital or unit prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in psychiatric
hospitals and psychiatric units on the Internet
website of the Centers for Medicare & Medicaid
Services.
(t) Relating Similar Inpatient and Outpatient Hospital
Services.--
(1) Development of hcpcs version of ms-drg codes.--
Not later than January 1, 2018, the Secretary shall
develop HCPCS versions for MS-DRGs that are similar to
the ICD-10-PCS for such MS-DRGs such that, to the
extent possible, the MS-DRG assignment shall be similar
for a claim coded with the HCPCS version as an
identical claim coded with a ICD-10-PCS code.
(2) Coverage of surgical ms-drgs.--In carrying out
paragraph (1), the Secretary shall develop HCPCS
versions of MS-DRG codes for not fewer than 10 surgical
MS-DRGs.
(3) Publication and dissemination of the hcpcs
versions of ms-drgs.--
(A) In general.--The Secretary shall develop
a HCPCS MS-DRG definitions manual and software
that is similar to the definitions manual and
software for ICD-10-PCS codes for such MS-DRGs.
The Secretary shall post the HCPCS MS-DRG
definitions manual and software on the Internet
website of the Centers for Medicare & Medicaid
Services. The HCPCS MS-DRG definitions manual
and software shall be in the public domain and
available for use and redistribution without
charge.
(B) Use of previous analysis done by
medpac.--In developing the HCPCS MS-DRG
definitions manual and software under
subparagraph (A), the Secretary shall consult
with the Medicare Payment Advisory Commission
and shall consider the analysis done by such
Commission in translating outpatient surgical
claims into inpatient surgical MS-DRGs in
preparing chapter 7 (relating to hospital
short-stay policy issues) of its ``Medicare and
the Health Care Delivery System'' report
submitted to Congress in June 2015.
(4) Definition and reference.--In this subsection:
(A) HCPCS.--The term ``HCPCS'' means, with
respect to hospital items and services, the
code under the Healthcare Common Procedure
Coding System (HCPCS) (or a successor code) for
such items and services.
(B) ICD-10-pcs.--The term ``ICD-10-PCS''
means the International Classification of
Diseases, 10th Revision, Procedure Coding
System, and includes any subsequent revision of
such International Classification of Diseases,
Procedure Coding System.
* * * * * * *
DISSENTING VIEWS
H.R. 3414, introduced by Representative Schneider (D-IL),
adds 1,000 full-time equivalent (FTE) graduate medical
education (GME) resident positions (or ``slots'') from fiscal
years 2022-2026 to hospitals that have either established or
will establish programs in addiction management, addiction
psychiatry or pain medicine, as determined by the Secretary.
The slots would have to be used for such programs or for
programs that are a prerequisite for such programs (such as
internal medicine).
Let there be no doubt that this Congress is dedicated to
eradicating the opioid epidemic. Each year, Congress has
continued to provide funds in each appropriations funding bill
towards addiction treatment. Last Congress passed, on a
bipartisan basis, H.R. 6, the SUPPORT Act. That bill
represented the single largest congressional effort against a
public health crisis.
Republicans want to continue working with our Democratic
colleagues on that effort, but H.R. 3414 seeks to expand the
massive GME program without attention to the geographic areas
that are most in need of addiction medicine services. H.R. 3414
also lacks necessary reforms to GME funding.
Two immediate reforms are needed: improving transparency
and targeting communities with the greatest need.
The manner in which taxpayer dollars are used to pay for
GME is disjointed, inefficient and opaque. The Government
Accountability Office (GAO) reported in March 2018, ``[The
Department of Health and Human Services (HHS)] lacks
comprehensive information on the total number and specialty
type of residents supported by all of the federal programs that
fund GME training. . . . [U]nless HHS collects more complete
and consistent information, it will be limited in its ability
to conduct comprehensive, ongoing evaluations of the federal
government's $14.5 billion annual investment in GME training''
(see GAO-18-240).
As the President's Fiscal Year 2020 Budget noted, ``Current
funding for Graduate Medical Education comes from multiple
fragmented funding streams, and HHS's GME financing system
ineffectively targets training to certain types of physicians
that are necessary for the Nation.'' Similarly, the American
Medical Association's (AMA) House of Delegates modified AMA
policy this year
to encourage [HHS] to coordinate with federal
agencies that fund GME training to identify and collect
information needed to effectively evaluate how
hospitals, health systems and health centers with
residency programs are utilizing these financial
resources to meet the nation's health care workforce
needs . . . [including] information on payment amounts
by the type of training programs supported, resident
training costs and revenue generation, output or
outcomes related to health workforce planning (i.e.,
percentage of primary care residents that went on to
practice in rural or medically underserved areas), and
measures related to resident competency and educational
quality offered by GME training programs.
According to GAO, CMS does not currently monitor program
performance for Medicare GME payments, whereas the Veterans
Affairs Department (VA) and the Health Resources and Services
Administration (HRSA) are required to do so for VA physician
GME programs, children's hospital GME payment programs, and
teaching health center GME programs. Finally, the Medicare
Payment Advisory Commission recommended Congress should
authorize the Secretary to establish a GME performance-based
incentive program with payments to institutions contingent on
reaching desired educational outcomes and standards (see MedPAC
June 2010 Report to Congress: chapter 4).
Moreover, rural communities are most likely to face
physician shortages. The bulk of GME federal spending and
residents is found in the northeast. A GAO study in March 2018
found that the northeast was the only region for which the
percentage of the GME spending was higher than the percentage
of GME residents in the region (see GAO-18-240). Another GAO
report found that in 2015, the largest percentage of residents
(about 30 percent) trained in the Northeast, which also had the
smallest percentage of the U.S. population (see GAO-17-411).
The same GAO report explained that 50 percent of residents are
in counties with just 18 percent of the population. Given the
fact that most residents establish their medical practice near
where they trained, it is unsurprising there is a shortage of
rural health care providers.
According to Becker's Hospital Review, 102 rural hospitals
closed between January 2010 and March 2019. According to CMS,
40% of rural hospitals are operating in the red.
If Congress assigns new GME slots, they should be better
targeted to these rural areas and areas that have been hit
hardest by the opioid epidemic in order to provide relief and
help care for those communities most in need.
Republicans offered two amendments to improve H.R. 3414.
The first, offered by Representative Ron Estes (R-KS), improves
transparency by creating additional reporting requirements for
hospitals receiving new GME slots under the underlying bill.
The second, offered by Representative Jason Smith (R-MO),
prioritizes the new GME slots to hospitals (1) located in areas
with the highest rates of mortality and addiction attributable
to opioid-use disorder; (2) located in rural areas; (3) that
train residents in rural areas; or (4) located in 1 of the 25
States with the lowest number of full-time equivalent residency
positions, with preference given to hospitals located in a
health professional shortage area.
Both commonsense amendments were rejected by Democrats and
not adopted. The first amendment, offered by Representative Ron
Estes (R-KS), failed by a roll call vote of 16 yeas to 24 nays.
The second amendment, offered Representative Jason Smith (R-
MO), failed by a roll call vote of 15 yeas to 22 nays.
Kevin Brady,
Republican Leader, Committee
on Ways and Means.
[all]