US (United States) Code. Title 42. Chapter 7: Social Security

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # The Public Health and Welfare

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REFERENCES IN TEXT

Parts A, B, and C of this subchapter, referred to in text, are

classified to sections 1395c et seq., 1395j et seq., and 1395w-21

et seq., respectively, of this title.

The Internal Revenue Code of 1986, referred to in subsec. (b)(6),

is classified generally to Title 26, Internal Revenue Code.

Section 222(a) of the Social Security Amendments of 1972,

referred to in subsec. (c)(4)(B), is section 222(a) of Pub. L.

92-603, Oct. 30, 1972, 86 Stat. 1329, which is set out as a note

under section 1395b-1 of this title.

Section 9104(a) of the Medicare and Medicaid Budget

Reconciliation Amendments of 1985, referred to in subsec.

(d)(2)(C)(i), is section 9104(a) of Pub. L. 99-272, which amended

subsec. (d)(5)(B) of this section.

Section 4621(a)(1) of the Balanced Budget Act of 1997, referred

to in subsec. (d)(2)(C)(i), is section 4621(a)(1) of Pub. L.

105-33, which amended subsec. (d)(5)(B)(ii) of this section.

Section 111 of the Medicare, Medicaid, and SCHIP Balanced Budget

Refinement Act of 1999, referred to in subsec. (d)(2)(C)(i), is

section 1000(a)(6) [title I, Sec. 111] of Pub. L. 106-113, which

amended this section and enacted provisions set out as a note under

this section.

Section 302 of the Medicare, Medicaid, and SCHIP Benefits

Improvement and Protection Act of 2000, referred to in subsec.

(d)(2)(C)(i), is section 1(a)(6) [title III, Sec. 302] of Pub. L.

106-554, which amended this section and enacted provisions set out

as a note under this section.

Section 6003(c) of the Omnibus Budget Reconciliation Act of 1989,

referred to in subsec. (d)(2)(C)(iv), is section 6003(c) of Pub. L.

101-239, which amended this section and enacted provisions set out

below.

Section 4002(b) of the Omnibus Budget Reconciliation Act of 1990,

referred to in subsec. (d)(2)(C)(iv), is section 4002(b) of Pub. L.

101-508, which amended this section and enacted provisions set out

below.

Section 303 of the Medicare, Medicaid, and SCHIP Benefits

Improvement and Protection Act of 2000, referred to in subsec.

(d)(2)(C)(iv), is section 1(a)(6) [title III, Sec. 303] of Pub. L.

106-554, which amended this section and enacted provisions set out

as notes under this section.

Section 9104 of the Medicare and Medicaid Budget Reconciliation

Amendments of 1985, referred to in subsec. (d)(3)(C)(ii), is

section 9104 of Pub. L. 99-272, which amended subsec. (d)(2)(C)(i),

(3)(C), (D)(i)(I), (ii)(I), and (5)(B) of this section.

Section 4003(a)(1) of the Omnibus Budget Reconciliation Act of

1987, referred to in subsec. (d)(3)(C)(ii), is section 4003(a)(1)

of Pub. L. 100-203, which amended subsec. (d)(5)(B)(ii) of this

section.

The Omnibus Budget Reconciliation Act of 1990, referred to in

subsec. (d)(3)(C)(ii), is Pub. L. 101-508, Nov. 5, 1990, 104 Stat.

1388. For complete classification of this Act to the Code, see

Tables.

Subsec. (e)(3)(B) of this section, referred to in subsec.

(d)(4)(C)(iv), was redesignated subsec. (e)(3) of this section by

section 4022(b)(1)(A)(ii) of Pub. L. 105-33.

The provisions of title 5 governing appointments in the

competitive service, referred to in subsec. (d)(10)(B)(i), are

classified generally to section 3301 et seq. of Title 5, Government

Organization and Employees.

Section 9304 of the Omnibus Budget Reconciliation Act of 1986,

referred to in subsec. (e)(1)(C)(ii), is section 9304 of Pub. L.

99-509, which enacted subsecs. (d)(9) and (e)(1)(C) of this section

and amended subsec. (d)(5)(C)(i)(I), (ii) of this section.

Part B of subchapter XI of this chapter, referred to in subsec.

(f)(2), is classified to section 1320c et seq. of this title.

Section 4628 of the Balanced Budget Act of 1997, referred to in

subsec. (h)(6)(C)(iii), is section 4628 of Pub. L. 105-33, which is

set out as a note below.

Section 4005(e) of the Omnibus Budget Reconciliation Act of 1987,

referred to in subsec. (i), is section 4005(e) of Pub. L. 100-203,

which is set out below.

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AMENDMENTS

2000 - Subsec. (b)(3)(B)(i)(XVI). Pub. L. 106-554, Sec. 1(a)(6)

[title III, Sec. 301(a)(1)], substituted "for hospitals in all

areas," for "minus 1.1 percentage points for hospitals (other than

sole community hospitals) in all areas, and the market basket

percentage increase for sole community hospitals,".

Subsec. (b)(3)(B)(i)(XVII). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 301(a)(2)(B)], struck out "and" at end.

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 301(a)(2)(A)],

which directed amendment of subcl. (XVII) by "striking 'minus 1.1

percentage points' and inserting 'minus 0.55 percentage points;

and", was executed as if an end quotation mark for the inserted

material followed "points", to reflect the probable intent of

Congress.

Subsec. (b)(3)(B)(i)(XVIII). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 301(a)(5)], added subcl. (XVIII). Former subcl. (XVIII)

redesignated (XIX).

Subsec. (b)(3)(B)(i)(XIX). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 301(a)(3), (4)], redesignated subcl. (XVIII) as (XIX) and

substituted "fiscal year 2004" for "fiscal year 2003".

Subsec. (b)(3)(H)(ii)(III). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 307(a)(1)(A)], inserted "subject to subparagraph (J),"

after "2002,".

Subsec. (b)(3)(I)(i). Pub. L. 106-554, Sec. 1(a)(6) [title II,

Sec. 213(a)(1)], in introductory provisions, substituted "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" for "that for its cost reporting period beginning during

1999 is paid on the basis of the target amount applicable to the

hospital under subparagraph (C) and that elects (in a form and

manner determined by the Secretary) this subparagraph to apply to

the hospital, there shall be substituted for such target amount".

Subsec. (b)(3)(I)(i)(I). Pub. L. 106-554, Sec. 1(a)(6) [title II,

Sec. 213(a)(2)], substituted "the amount otherwise applicable to

the hospital under subsection (d)(5)(D)(i) of this section

(referred to in this clause as the 'subsection (d)(5)(D)(i)

amount')" for "target amount otherwise applicable to the hospital

under subparagraph (C) (referred to in this clause as the

'subparagraph (C) target amount')".

Subsec. (b)(3)(I)(i)(II), (III). Pub. L. 106-554, Sec. 1(a)(6)

[title II, Sec. 213(a)(3)], substituted "subsection (d)(5)(D)(i)

amount" for "subparagraph (C) target amount".

Subsec. (b)(3)(J). Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec.

307(a)(1)(B)], added subpar. (J).

Subsec. (d)(1)(B)(v)(III). Pub. L. 106-554, Sec. 1(a)(4) [div. B,

title I, Sec. 152(a)], added subcl. (III).

Subsec. (d)(1)(E). Pub. L. 106-554, Sec. 1(a)(4) [div. B, title

I, Sec. 152(b)], substituted "For purposes of subclauses (II) and

(III) of subparagraph (B)(v)" for "For purposes of subparagraph

(B)(v)(II)".

Subsec. (d)(2)(C)(i). Pub. L. 106-554, Sec. 1(a)(6) [title III,

Sec. 302(c)], inserted "or of section 302 of the Medicare,

Medicaid, and SCHIP Benefits Improvement and Protection Act of

2000" after "Balanced Budget Refinement Act of 1999".

Subsec. (d)(2)(C)(iv). Pub. L. 106-554, Sec. 1(a)(6) [title III,

Sec. 303(c)], substituted "1989," for "1989 or" and inserted ", or

the enactment of section 303 of the Medicare, Medicaid, and SCHIP

Benefits Improvement and Protection Act of 2000" after "Omnibus

Budget Reconciliation Act of 1990".

Subsec. (d)(3)(A)(vi). Pub. L. 106-554, Sec. 1(a)(6) [title III,

Sec. 301(e)(1)], added cl. (vi).

Subsec. (d)(3)(E). Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec.

304(c)(2)], in third sentence, substituted "Not less often than

once every 3 years the Secretary (through such survey or otherwise)

shall measure" for "To the extent determined feasible by the

Secretary, such survey shall measure".

Subsec. (d)(4)(C)(i). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 533(b)(3)], substituted "technology (including a new medical

service or technology under paragraph (5)(K))," for "technology,".

Subsec. (d)(5)(B). Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec.

302(d)], realigned margins.

Subsec. (d)(5)(B)(ii)(V). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 302(a)(1)], struck out "and" at end.

Subsec. (d)(5)(B)(ii)(VI). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 302(a)(4)], added subcl. (VI). Former subcl. (VI)

redesignated (VII).

Subsec. (d)(5)(B)(ii)(VII). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 302(a)(2), (3)], redesignated subcl. (VI) as (VII) and

substituted "2002" for "2001".

Subsec. (d)(5)(F)(i). Pub. L. 106-554, Sec. 1(a)(6) [title III,

Sec. 303(d)(1)], struck out "and before October 1, 1997," before

"the Secretary shall provide" in introductory provisions.

Subsec. (d)(5)(F)(iv)(II). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(b)(5)(A)], inserted "or, for discharges occurring on

or after April 1, 2001, is equal to the percent determined in

accordance with clause (xiii)" after "5 percent".

Subsec. (d)(5)(F)(iv)(III). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(b)(3)(A)], inserted "or, for discharges occurring on

or after April 1, 2001, is equal to the percent determined in

accordance with clause (xii)" after "4 percent".

Subsec. (d)(5)(F)(iv)(IV). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(b)(4)], inserted "or, for discharges occurring on or

after April 1, 2001, the greater of the percentages determined

under clause (x) or (xi)" after "clause (viii)".

Subsec. (d)(5)(F)(iv)(V). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(b)(2)(A)], inserted "or, for discharges occurring on

or after April 1, 2001, is equal to the percent determined in

accordance with clause (xi)" after "clause (viii)".

Subsec. (d)(5)(F)(iv)(VI). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(b)(1)(A)], inserted "or, for discharges occurring on

or after April 1, 2001, is equal to the percent determined in

accordance with clause (x)" after "10 percent".

Subsec. (d)(5)(F)(v)(II). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(a)(1)], inserted "(or 15 percent, for discharges

occurring on or after April 1, 2001)" after "30 percent".

Subsec. (d)(5)(F)(v)(III). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(a)(2)], inserted "(or 15 percent, for discharges

occurring on or after April 1, 2001)" after "40 percent".

Subsec. (d)(5)(F)(v)(IV). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 211(a)(3)], inserted "(or 15 percent, for discharges

occurring on or after April 1, 2001)" after "45 percent".

Subsec. (d)(5)(F)(ix)(III). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 303(a)(1)], struck out "each of" after "during" and

inserted "and 2 percent, respectively" after "3 percent".

Subsec. (d)(5)(F)(ix)(IV). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 303(a)(2)], substituted "3 percent" for "4 percent".

Subsec. (d)(5)(F)(x). Pub. L. 106-554, Sec. 1(a)(6) [title II,

Sec. 211(b)(1)(B)], added cl. (x).

Subsec. (d)(5)(F)(xi). Pub. L. 106-554, Sec. 1(a)(6) [title II,

Sec. 211(b)(2)(B)], added cl. (xi).

Subsec. (d)(5)(F)(xii). Pub. L. 106-554, Sec. 1(a)(6) [title II,

Sec. 211(b)(3)(B)], added cl. (xii).

Subsec. (d)(5)(F)(xiii). Pub. L. 106-554, Sec. 1(a)(6) [title II,

Sec. 211(b)(5)(B)], added cl. (xiii).

Subsec. (d)(5)(G)(iv)(IV). Pub. L. 106-554, Sec. 1(a)(6) [title

II, Sec. 212(a)], inserted ", or two of the three most recently

audited cost reporting periods for which the Secretary has a

settled cost report," after "1987".

Subsec. (d)(5)(K), (L). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 533(b)(1)], added subpars. (K) and (L).

Subsec. (d)(10)(D)(v), (vi). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 304(a)], added cls. (v) and (vi).

Subsec. (h)(2)(D)(iii). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 511], in heading substituted "for" for "in fiscal year 2001 at

70 percent of" and in text inserted ", and for the cost reporting

period beginning during fiscal year 2002 shall not be less than 85

percent," after "70 percent".

Subsec. (j)(1)(A). Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec.

305(b)(1)(A)], inserted "other than a facility making an election

under subparagraph (F)" before "in a cost reporting period" in

introductory provisions.

Subsec. (j)(1)(B). Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec.

305(b)(1)(B)], inserted "or, in the case of a facility making an

election under subparagraph (F), for any cost reporting period

described in such subparagraph," after "2002,".

Subsec. (j)(1)(F). Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec.

305(b)(1)(C)], added subpar. (F).

Subsec. (j)(3)(B). Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec.

305(b)(2)], inserted "but not taking into account any payment

adjustment resulting from an election permitted under paragraph

(1)(F)" after "paragraphs (4) and (6)".

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 305(a)],

substituted "98 percent for fiscal year 2001 and 100 percent for

fiscal year 2002" for "98 percent".

Subsec. (l)(2)(C). Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec.

512(a)], substituted "the ratio of - " and cls. (i) and (ii) for

"the Secretary's estimate of the ratio of the amount of payments

made under section 1395x(v) of this title 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 total of such amounts for all hospitals for such cost reporting

periods."

1999 - Subsec. (b)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(15)(A)], inserted a comma after "paragraph (2)" in

concluding provisions.

Subsec. (b)(2)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 122(1)], substituted "Except as provided in subparagraph (E),

in addition to" for "In addition to".

Subsec. (b)(2)(E). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 122(2)], added subpar. (E).

Subsec. (b)(3)(B)(i)(XVI) to (XVIII). Pub. L. 106-113, Sec.

1000(a)(6) [title IV, Sec. 406], added subcls. (XVI) and (XVII),

redesignated former subcl. (XVII) as (XVIII), and struck out former

subcl. (XVI) which read as follows: "for each of fiscal years 2001

and 2002, the market basket percentage increase minus 1.1

percentage point for hospitals in all areas, and".

Subsec. (b)(3)(B)(ii)(VI). Pub. L. 106-113, Sec. 1000(a)(6)

[title III, Sec. 321(k)(15)(B)(i)], substituted comma for semicolon

at end.

Subsec. (b)(3)(B)(ii)(VII). Pub. L. 106-113, Sec. 1000(a)(6)

[title III, Sec. 321(k)(15)(B)(ii)], substituted "year," for

"year;".

Subsec. (b)(3)(C). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 405(1)], inserted "subject to subparagraph (I)," before "the

term 'target amount' means" in introductory provisions.

Subsec. (b)(3)(D). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 404(b)(1)(A)], substituted "and before October 1, 2006," for

"and before October 1, 2001," in introductory provisions.

Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec. 321(b)(2)],

substituted "and for discharges beginning on or after October 1,

1997, and before October 1, 2001," for "and for cost reporting

periods beginning on or after October 1, 1997, and before October

1, 2001," in introductory provisions.

Subsec. (b)(3)(D)(iv). Pub. L. 106-113, Sec. 1000(a)(6) [title

IV, Sec. 404(b)(1)(B)], substituted "fiscal year 2005" for "fiscal

year 2000".

Subsec. (b)(3)(H)(i) to (iii). Pub. L. 106-113, Sec. 1000(a)(6)

[title I, Sec. 121(a)], added cl. (i), redesignated former cl. (i)

as subcl. (I) of cl. (ii) and inserted ", as adjusted under clause

(iii)" after "fiscal year 1996", redesignated former cl. (ii) as

subcl. (II) of cl. (ii) and substituted "subclause (I)" for "clause

(i)" and "such subclause" for "such clause", added cl. (iii), and

redesignated former cl. (iii) as subcl. (III) of cl. (ii).

Subsec. (b)(3)(I). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 405(2)], added subpar. (I).

Subsec. (b)(4)(A)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(f)], struck out "or unit" after "(and in the case of

a hospital".

Subsec. (b)(7)(A)(i)(II). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(h)], inserted "(as estimated by the Secretary)" after

"median".

Subsec. (d)(2)(C)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 111(c)], inserted "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" after "Balanced Budget Act of 1997".

Subsec. (d)(5)(B)(ii)(V), (VI). Pub. L. 106-113, Sec. 1000(a)(6)

[title I, Sec. 111(a)], added subcl. (V), redesignated former

subcl. (V) as (VI), and substituted "2001" for "2000" in subcl.

(VI).

Subsec. (d)(5)(B)(v). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 407(b)(2)], inserted "(or, 130 percent of such number in the

case of a hospital located in a rural area)" after "may not exceed

the number".

Pub. L. 106-113, Sec. 1000(a)(6) [title IV, Sec. 407(a)(2)],

inserted at end "Rules similar to the rules of subsection

(h)(4)(F)(ii) of this section shall apply for purposes of this

clause."

Subsec. (d)(5)(F)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(16)], inserted a comma after "1986" in

introductory provisions.

Subsec. (d)(5)(F)(ix)(III). Pub. L. 106-113, Sec. 1000(a)(6)

[title I, Sec. 112(a)(1)], substituted "during each of fiscal years

2000 and 2001" for "during fiscal year 2000".

Subsec. (d)(5)(F)(ix)(IV). Pub. L. 106-113, Sec. 1000(a)(6)

[title I, Sec. 112(a)(2)-(4)], redesignated subcl. (V) as (IV),

substituted "reduced by 4 percent" for "reduced by 5 percent", and

struck out former subcl. (IV) which read as follows: "during fiscal

year 2001, such additional payment amount shall be reduced by 4

percent;".

Subsec. (d)(5)(F)(ix)(V), (VI). Pub. L. 106-113, Sec. 1000(a)(6)

[title I, Sec. 112(a)(3)], redesignated subcl. (VI) as (V). Former

subcl. (V) redesignated (IV).

Subsec. (d)(5)(G)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 404(a)(1)], substituted "October 1, 2006," for "October 1,

2001,".

Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec. 321(b)(1)(A)],

substituted "or discharges occurring on or after October 1, 1997,

and before October 1, 2001," for "or beginning on or after October

1, 1997, and before October 1, 2001,".

Subsec. (d)(5)(G)(ii)(II). Pub. L. 106-113, Sec. 1000(a)(6)

[title IV, Sec. 404(a)(2)], substituted "October 1, 2006," for

"October 1, 2001,".

Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec. 321(b)(1)(B)],

substituted "or discharges occurring on or after October 1, 1997,

and before October 1, 2001," for "or beginning on or after October

1, 1997, and before October 1, 2001,".

Subsec. (d)(8)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 402(a)], designated existing provisions as cl. (i),

substituted "described in clause (ii)" for "published in the

Federal Register on January 3, 1980", and added cl. (ii).

Subsec. (d)(8)(E). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 401(a)], added subpar. (E).

Subsec. (d)(9)(A)(ii). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(17)], inserted a comma after "1987" in

introductory provisions.

Subsec. (g)(1)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(e)], substituted "October 1, 2002," for "September 30,

2002," in last sentence.

Subsec. (h)(2)(D)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 311(a)(1), (b)(1)], inserted heading and substituted "a

subsequent clause" for "clause (ii)" and "the approved FTE resident

amount determined" for "the amount determined".

Subsec. (h)(2)(D)(ii). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 311(b)(2)], inserted heading and realigned margins.

Subsec. (h)(2)(D)(iii), (iv). Pub. L. 106-113, Sec. 1000(a)(6)

[title III, Sec. 311(a)(2)], added cls. (iii) and (iv).

Subsec. (h)(2)(E), (F). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 311(a)(3), (4)], added subpar. (E) and redesignated

former subpar. (E) as (F).

Subsec. (h)(3)(D)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 541(b)(1)], inserted ", subject to clause (iii)," after "shall

equal" in introductory provisions.

Subsec. (h)(3)(D)(iii), (iv). Pub. L. 106-113, Sec. 1000(a)(6)

[title V, Sec. 541(b)(2), (3)], added cl. (iii) and redesignated

former cl. (iii) as (iv).

Subsec. (h)(4)(F). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 407(a)(1)], designated existing provisions as cl. (i),

inserted heading, realigned margins, and added cl. (ii).

Subsec. (h)(4)(F)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title IV,

Sec. 407(b)(1)], inserted "(or, 130 percent of such number in the

case of a hospital located in a rural area)" after "may not exceed

the number".

Subsec. (h)(4)(H)(iv). Pub. L. 106-113, Sec. 1000(a)(6) [title

IV, Sec. 407(c)(1)], added cl. (iv).

Subsec. (h)(5)(F). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 312(a)(1)], substituted "Subject to subparagraph (G)(v), the

initial residency period" for "The initial residency period" in

concluding provisions.

Subsec. (h)(5)(G)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 312(a)(2)(A)], substituted "(iv), and (v)" for "and

(iv)".

Subsec. (h)(5)(G)(v). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 312(a)(2)(B)], added cl. (v).

Subsec. (j)(1)(D). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 125(a)(1)], struck out ", day of inpatient hospital services,

or other unit of payment defined by the Secretary" before period at

end.

Subsec. (j)(1)(E). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 125(a)(3)], added subpar. (E).

Subsec. (j)(2)(A)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 125(a)(2)], amended cl. (i) generally. Prior to amendment, cl.

(i) read as follows: "classes of patients of rehabilitation

facilities (each in this subsection referred to as a 'case mix

group'), based on such factors as the Secretary deems appropriate,

which may include impairment, age, related prior hospitalization,

comorbidities, and functional capability of the patient; and".

Subsec. (l). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

541(a)], added subsec. (l).

1997 - Subsec. (b)(1). Pub. L. 105-33, Sec. 4421(b)(1), inserted

"and other than a rehabilitation facility described in subsection

(j)(1) of this section" after "subsection (d)(1)(B) of this

section" in introductory provisions.

Pub. L. 105-33, Sec. 4415(b)(1), inserted "plus the amount, if

any, provided under paragraph (2)" before "except that in no case"

in concluding provisions.

Subsec. (b)(1)(A). Pub. L. 105-33, Sec. 4415(a), added cls. (i)

and (ii) and concluding provisions and struck out former cls. (i)

and (ii) and former concluding provisions which read as follows:

"(i) 50 percent of the amount by which the target amount

exceeds the amount of the operating costs, or

"(ii) 5 percent of the target amount,

whichever is less; or".

Subsec. (b)(1)(B). Pub. L. 105-33, Sec. 4415(c)(3), added subpar.

(B). Former subpar. (B) redesignated (C).

Subsec. (b)(1)(C). Pub. L. 105-33, Sec. 4415(c)(1), (2),

redesignated subpar. (B) as (C) and substituted "greater than 110

percent of the target amount" for "greater than the target amount"

and "exceed 110 percent of the target amount" for "exceed the

target amount".

Subsec. (b)(2). Pub. L. 105-33, Sec. 4415(b)(2), added par. (2).

Subsec. (b)(3)(A). Pub. L. 105-33, Secs. 4413(a)(1), 4416(2), in

introductory provisions, substituted "subparagraph (C) and

succeeding subparagraph," for "subparagraphs (C), (D), and (E),"

and inserted "and in paragraph (7)(A)(ii)," before "for purposes of

this subsection".

Subsec. (b)(3)(B)(i). Pub. L. 105-33, Sec. 4421(b)(2), inserted

"and subsection (j) of this section" after "For purposes of

subsection (d) of this section" in introductory provisions.

Subsec. (b)(3)(B)(i)(XIII) to (XVII). Pub. L. 105-33, Sec.

4401(a), added subcls. (XIII) to (XVII) and struck out former

subcl. (XIII) which read as follows: "for fiscal year 1998 and each

subsequent fiscal year, the market basket percentage increase for

hospitals in all areas."

Subsec. (b)(3)(B)(ii)(VI) to (VIII). Pub. L. 105-33, Sec.

4411(a)(1), added subcls. (VI) and (VII) and redesignated former

subcl. (VI) as (VIII).

Subsec. (b)(3)(B)(vi). Pub. L. 105-33, Sec. 4411(a)(2), added cl.

(vi).

Subsec. (b)(3)(D). Pub. L. 105-33, Sec. 4204(a)(2)(A),

substituted "September 30, 1994, and for cost reporting periods

beginning on or after October 1, 1997, and before October 1, 2001,"

for "September 30, 1994," in introductory provisions.

Subsec. (b)(3)(D)(iv). Pub. L. 105-33, Sec. 4204(a)(2)(B)-(D),

added cl. (iv).

Subsec. (b)(3)(F), (G). Pub. L. 105-33, Sec. 4413(a)(2), (b),

added subpars. (F) and (G).

Subsec. (b)(3)(H). Pub. L. 105-33, Sec. 4414, added subpar. (H).

Subsec. (b)(4)(A)(i). Pub. L. 105-33, Sec. 4419(a)(1), in first

sentence, substituted "The Secretary shall provide for an exception

and adjustment to (and in the case of a hospital or unit described

in subsection (d)(1)(B)(iii) of this section, may provide an

exemption from)" for "The Secretary shall provide for an exemption

from, or an exception and adjustment to,".

Subsec. (b)(4)(A)(ii). Pub. L. 105-33, Sec. 4411(b), inserted at

end "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."

Subsec. (b)(7). Pub. L. 105-33, Sec. 4416(1), added par. (7).

Subsec. (d)(1)(B). Pub. L. 105-33, Sec. 4417(a)(1), inserted at

end "A hospital that was classified by the Secretary on or before

September 30, 1995, as a hospital described in clause (iv) shall

continue to be so classified notwithstanding that it is located in

the same building as, or on the same campus as, another hospital."

Subsec. (d)(1)(B)(iv). Pub. L. 105-33, Sec. 4417(b)(1),

designated existing provisions as subcl. (I) and added subcl. (II).

Subsec. (d)(1)(B)(v). Pub. L. 105-33, Sec. 4418(a)(1), designated

existing provisions as subcl. (I), substituted ", or" for semicolon

at end, and added subcl. (II).

Subsec. (d)(1)(E). Pub. L. 105-33, Sec. 4418(a)(2), added subpar.

(E).

Subsec. (d)(2)(C)(i). Pub. L. 105-33, Sec. 4621(a)(2), inserted

at end "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,".

Subsec. (d)(5)(A)(ii). Pub. L. 105-33, Sec. 4405(c), substituted

"exceed the sum of the applicable DRG prospective payment rate plus

any amounts payable under subparagraphs (B) and (F)" for "exceed

the applicable DRG prospective payment rate".

Subsec. (d)(5)(B)(i)(I). Pub. L. 105-33, Sec. 4405(a), inserted

", for cases qualifying for additional payment under subparagraph

(A)(i)," before "the amount paid to the hospital".

Subsec. (d)(5)(B)(ii). Pub. L. 105-33, Sec. 4621(a)(1), amended

cl. (ii) generally. Prior to amendment, cl. (ii) read as follows:

"For purposes of clause (i)(II), the indirect teaching adjustment

factor for discharges occurring on or after October 1, 1988, is

equal to 1.89 G6* (((1 + r) to the nth power) G6-1), where 'r' is

the ratio of the hospital's full-time equivalent interns and

residents to beds and 'n' equals .405."

Subsec. (d)(5)(B)(iv). Pub. L. 105-33, Sec. 4621(b)(2), amended

cl. (iv) generally. Prior to amendment, cl. (iv) read as follows:

"In determining such adjustment, the Secretary shall continue to

count interns and residents assigned to outpatient services of the

hospital or providing services at any entity receiving a grant

under section 254c of this title that is under the ownership or

control of the hospital (if the hospital incurs all, or

substantially all, of the costs of the services furnished by such

interns and residents) as part of the calculation of the

full-time-equivalent number of interns and residents."

Subsec. (d)(5)(B)(v) to (viii). Pub. L. 105-33, Sec. 4621(b)(1),

added cls. (v) to (viii).

Subsec. (d)(5)(D)(iii)(III). Pub. L. 105-33, Sec. 4201(c)(4)(A),

inserted "as in effect on September 30, 1997" before period at end.

Subsec. (d)(5)(D)(v). Pub. L. 105-33, Sec. 4201(c)(4)(B),

inserted "as in effect on September 30, 1997" after "section

1395i-4(i)(1) of this title" and substituted "(as defined in

section 1395i-4(d) of this title)" for "(as defined in section

1395i-4(g) of this title)".

Subsec. (d)(5)(F)(i). Pub. L. 105-33, Sec. 4403(a)(1), inserted

"and before October 1, 1997" after "May 1, 1986" in introductory

provisions.

Subsec. (d)(5)(F)(ii). Pub. L. 105-33, Sec. 4403(a)(2),

substituted "Subject to clause (ix), the amount" for "The amount".

Subsec. (d)(5)(F)(ii)(I). Pub. L. 105-33, Sec. 4405(b), inserted

", for cases qualifying for additional payment under subparagraph

(A)(i)," before "the amount paid to the hospital".

Subsec. (d)(5)(F)(ix). Pub. L. 105-33, Sec. 4403(a)(3), added cl.

(ix).

Subsec. (d)(5)(G)(i), (ii)(II). Pub. L. 105-33, Sec. 4204(a)(1),

substituted "October 1, 1994, or beginning on or after October 1,

1997, and before October 1, 2001," for "October 1, 1994,".

Subsec. (d)(5)(I)(ii). Pub. L. 105-33, Sec. 4407(1), inserted

"not taking in account the effect of subparagraph (J)," after "in a

fiscal year,".

Subsec. (d)(5)(J). Pub. L. 105-33, Sec. 4407(2), added subpar.

(J).

Subsec. (d)(6). Pub. L. 105-33, Sec. 4644(a)(1), substituted

"August 1" for "September 1".

Subsec. (d)(9)(A). Pub. L. 105-33, Sec. 4406(1), struck out "in a

fiscal year beginning on or after October 1, 1987," after

"inpatient hospital discharges" in introductory provisions.

Subsec. (d)(9)(A)(i). Pub. L. 105-33, Sec. 4406(2), substituted

"for discharges beginning on or after October 1, 1997, 50 percent

(and for discharges between October 1, 1987, and September 30,

1997, 75 percent)" for "75 percent".

Subsec. (d)(9)(A)(ii). Pub. L. 105-33, Sec. 4406(3), substituted

"for discharges beginning in a fiscal year beginning on or after

October 1, 1997, 50 percent (and for discharges between October 1,

1987 and September 30, 1997, 25 percent)" for "25 percent".

Subsec. (d)(10)(C)(ii). Pub. L. 105-33, Sec. 4644(c)(1),

substituted "the first day of the 13-month period ending on

September 30 of the preceding fiscal year." for "the first day of

the preceding fiscal year."

Subsec. (d)(10)(D)(iii), (iv). Pub. L. 105-33, Sec. 4202(a),

added cl. (iii) and redesignated former cl. (iii) as (iv).

Subsec. (d)(11). Pub. L. 105-33, Sec. 4622, added par. (11).

Subsec. (e)(2). Pub. L. 105-33, Sec. 4022(b)(1)(A)(i), struck out

par. (2) which related to appointment, composition, and

responsibilities of the Prospective Payment Assessment Commission.

Subsec. (e)(3). Pub. L. 105-33, Sec. 4022(b)(1)(A)(ii),

redesignated subpar. (B) as par. (3) and struck out subpar. (A)

which read as follows: "The Commission, not later than the March 1

before the beginning of each fiscal year (beginning with fiscal

year 1986), shall report its recommendations to Congress on an

appropriate change factor which should be used for inpatient

hospital services for discharges in that fiscal year, together with

its general recommendations under paragraph (2)(B) regarding the

effectiveness and quality of health care delivery systems in the

United States."

Subsec. (e)(5)(A). Pub. L. 105-33, Sec. 4644(b)(1)(A),

substituted "April 1" for "May 1".

Subsec. (e)(5)(B). Pub. L. 105-33, Sec. 4644(b)(1)(B),

substituted "August 1" for "September 1".

Subsec. (e)(6). Pub. L. 105-33, Sec. 4022(b)(1)(A)(i), struck out

par. (6) which related to appointments, membership,

responsibilities, compensation, access to records and information,

audits, and appropriations concerning the Prospective Payment

Assessment Commission.

Subsec. (g)(1)(A). Pub. L. 105-33, Sec. 4402, inserted at end "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

September 30, 2002, reduce the rates described in clauses (i) and

(ii) by 2.1 percent."

Subsec. (g)(3)(B). Pub. L. 105-33, Sec. 4201(c)(1), substituted

"critical access" for "rural primary care".

Subsec. (g)(4). Pub. L. 105-33, Sec. 4412, added par. (4).

Subsec. (h)(3)(B). Pub. L. 105-33, Sec. 4625(b), inserted

concluding provisions.

Subsec. (h)(3)(D). Pub. L. 105-33, Sec. 4624, added subpar. (D).

Subsec. (h)(4)(F) to (H). Pub. L. 105-33, Sec. 4623, added

subpars. (F) to (H).

Subsec. (h)(5)(G). Pub. L. 105-33, Sec. 4627(a), substituted

"Subject to clauses (ii), (iii), and (iv)" for "Subject to clauses

(ii) and (iii)" in cl. (i) and added cl. (iv).

Subsec. (h)(6). Pub. L. 105-33, Sec. 4626(a), added par. (6).

Subsec. (j). Pub. L. 105-33, Sec. 4421(a), added subsec. (j).

Subsec. (k). Pub. L. 105-33, Sec. 4625(a), added subsec. (k).

1994 - Subsec. (a)(4). Pub. L. 103-432, Sec. 110(a), inserted

"(or, in the case of a hospital that is not a subsection (d)

hospital, during the 1 day)" after "3 days".

Subsec. (b)(3)(B)(iv)(II). Pub. L. 103-432, Sec. 105(b),

substituted "(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))" for

"(taking into account any portion of the 12-month cost reporting

period beginning during fiscal year 1993 that occurred during

fiscal year 1994)".

Subsec. (b)(3)(D). Pub. L. 103-432, Sec. 105(a)(2), substituted

"September 30, 1994" for "March 31, 1993" in introductory

provisions.

Subsec. (d)(3)(A)(iii). Pub. L. 103-432, Sec. 101(c), inserted at

end "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."

Subsec. (d)(5)(B)(ii). Pub. L. 103-432, Sec. 110(c), substituted

"October 1, 1988" for "May 1, 1986".

Subsec. (d)(5)(D)(iii)(III). Pub. L. 103-432, Sec.

102(b)(1)(B)(i), substituted "that is located in a rural area and

designated" for "that is designated".

Subsec. (d)(5)(D)(v). Pub. L. 103-432, Sec. 102(b)(1)(B)(ii),

substituted "in the case of a hospital located in a rural area and

designated" for "in the case of a hospital designated".

Subsec. (d)(5)(G)(ii)(I). Pub. L. 103-432, Sec. 105(a)(1),

substituted "the 36-month period beginning with the first day of

the cost reporting period that begins" for "the first 3 12-month

cost reporting periods that begin".

Subsec. (d)(5)(I). Pub. L. 103-432, Sec. 109, designated existing

provisions as cl. (i) and added cl. (ii).

Subsec. (d)(8)(C)(iv). Pub. L. 103-432, Sec. 101(b)(1)(A),

substituted "paragraph (10)" for "paragraph (1)".

Subsec. (d)(8)(C)(v). Pub. L. 103-432, Sec. 101(b)(1)(B), added

cl. (v).

Subsec. (d)(10)(C)(i)(II). Pub. L. 103-432, Sec. 101(b)(2)(A),

substituted "the factor used to adjust the DRG prospective payment

rate for area differences in hospital wage levels that applies" for

"the area wage index applicable".

Subsec. (d)(10)(D)(i)(I). Pub. L. 103-432, Sec. 101(a)(1),

inserted "(to the extent the Secretary determines appropriate)"

after "taking into account".

Subsec. (d)(10)(D)(ii), (iii). Pub. L. 103-432, Sec.

101(b)(2)(B), added cl. (ii) and redesignated former cl. (ii) as

(iii).

Subsec. (e)(6)(B). Pub. L. 103-432, Sec. 108, substituted "health

facility management, reimbursement of health facilities or other

providers of services which reflect the scope of the Commission's

responsibilities" for "hospital reimbursement, hospital financial

management".

Subsec. (h)(5)(E). Pub. L. 103-432, Sec. 153(a), inserted "or any

successor examination" after "Medical Sciences".

1993 - Subsec. (b)(3)(B)(i)(IX). Pub. L. 103-66, Sec.

13501(a)(1)(A), substituted "percentage increase minus 2.5

percentage points for hospitals" for "percentage increase for

hospitals" and "percentage increase minus 1.0 percentage point" for

"percentage increase plus 1.5 percentage points".

Subsec. (b)(3)(B)(i)(X). Pub. L. 103-66, Sec. 13501(a)(1)(B),

substituted "percentage increase minus 2.5 percentage points for

hospitals" for "percentage increase for hospitals" and struck out

"and" at end.

Subsec. (b)(3)(B)(i)(XI). Pub. L. 103-66, Sec. 13501(a)(1)(C),

struck out "and each subsequent fiscal year" after "1996", inserted

"minus 2.0 percentage points" after "percentage increase", and

substituted a comma for period at end.

Subsec. (b)(3)(B)(i)(XII), (XIII). Pub. L. 103-66, Sec.

13501(a)(1)(D), added subcls. (XII) and (XIII).

Subsec. (b)(3)(B)(ii). Pub. L. 103-66, Sec. 13501(a)(2)(B)(i),

struck out ", (C), (D)," after "subparagraphs (A)".

Subsec. (b)(3)(B)(ii)(III) to (VI). Pub. L. 103-66, Sec.

13502(a)(1), struck out "and" at end of subcl. (III), in subcl.

(IV), substituted "a subsequent fiscal year ending on or before

September 30, 1993," for "subsequent fiscal years" and a comma for

the period at end, and added subcls. (V) and (VI).

Subsec. (b)(3)(B)(iv). Pub. L. 103-66, Sec. 13501(a)(2)(A), added

cl. (iv).

Subsec. (b)(3)(B)(v). Pub. L. 103-66, Sec. 13502(a)(2), added cl.

(v).

Subsec. (b)(3)(C)(i)(II). Pub. L. 103-66, Sec.

13501(a)(2)(B)(ii), struck out "or" at end.

Subsec. (b)(3)(C)(ii). Pub. L. 103-66, Sec. 13501(a)(2)(B)(iii),

substituted "period beginning before fiscal year 1994, the target"

for "period, the target", "subparagraph (B)(iv)" for "subparagraph

(B)(ii)", and a comma for period at end.

Subsec. (b)(3)(C)(iii), (iv). Pub. L. 103-66, Sec.

13501(a)(2)(B)(iv), added cls. (iii) and (iv).

Subsec. (b)(3)(D)(ii). Pub. L. 103-66, Sec. 13501(a)(2)(B)(v),

substituted "period beginning before fiscal year 1994, the target"

for "period, the target", "subparagraph (B)(iv)" for "subparagraph

(B)(ii)", and ", and" for period at end.

Subsec. (b)(3)(D)(iii). Pub. L. 103-66, Sec. 13501(a)(2)(B)(vi),

added cl. (iii).

Subsec. (b)(4)(A). Pub. L. 103-66, Sec. 13502(b), designated

existing provisions as cl. (i) and added cl. (ii).

Subsec. (d)(1)(A)(iii). Pub. L. 103-66, Sec. 13501(f), amended

cl. (iii) generally. Prior to amendment, cl. (iii) read as follows:

"beginning on or after April 1, 1988, and ending on September 30,

1993,, the sum of (I) 85 percent of the national adjusted DRG

prospective payment rate determined under paragraph (3) for such

discharges, and (II) 15 percent of the regional adjusted DRG

prospective payment rate determined under such paragraph."

Subsec. (d)(5)(A)(i). Pub. L. 103-66, Sec. 13501(c)(1),

substituted "For discharges occurring during fiscal years ending on

or before September 30, 1997, the Secretary" for "The Secretary".

Subsec. (d)(5)(A)(ii). Pub. L. 103-66, Sec. 13501(c)(2),

substituted ", or, for discharges in fiscal years beginning on or

after October 1, 1994, exceed the applicable DRG prospective

payment rate plus a fixed dollar amount determined by the

Secretary." for period at end.

Subsec. (d)(5)(A)(iii). Pub. L. 103-66, Sec. 13501(c)(3),

substituted "shall (except as payments under clause (i) are

required to be reduced to take into account the requirements of

clause (v)) approximate" for "shall approximate".

Subsec. (d)(5)(A)(v), (vi). Pub. L. 103-66, Sec. 13501(c)(4),

added cls. (v) and (vi).

Subsec. (d)(5)(B)(iv). Pub. L. 103-66, Sec. 13506, inserted "or

providing services at any entity receiving a grant under section

254c of this title that is under the ownership or control of the

hospital (if the hospital incurs all, or substantially all, of the

costs of the services furnished by such interns and residents)"

after "the hospital".

Subsec. (d)(5)(G)(i). Pub. L. 103-66, Sec. 13501(e)(1)(A), which

directed amendment of subsec. (d)(5)(G) in clause (i) in the matter

preceding subclause (I), by striking "ending on or before March 31,

1993," and all that follows and inserting "before October 1, 1994,

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).", was executed by substituting the new language for

"ending on or before March 31, 1993, with respect to a subsection

(d) hospital which is a medicare-dependent, small rural 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)(D) of this section, or

"(II) the amount determined under paragraph (1)(A)(iii),

whichever results in the greater payment to the hospital." to

reflect the probable intent of Congress.

Subsec. (d)(5)(G)(ii) to (iv). Pub. L. 103-66, Sec.

13501(e)(1)(B), (C), added cl. (ii) and redesignated former cls.

(ii) and (iii) as (iii) and (iv), respectively.

Subsec. (d)(8)(C)(iv). Pub. L. 103-66, Sec. 13501(b)(1), added

cl. (iv).

Subsec. (g)(1)(A). Pub. L. 103-66, Sec. 13501(a)(3), inserted at

end "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 August 10, 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."

Subsec. (h)(2)(D). Pub. L. 103-66, Sec. 13563(a)(1), designated

existing provisions as cl. (i), substituted "Except as provided in

clause (ii), for each" for "For each", and added cl. (ii).

Subsec. (h)(5)(F). Pub. L. 103-66, Sec. 13563(b)(1)(A), struck

out "plus one year" after "board eligibility" in introductory

provisions.

Subsec. (h)(5)(F)(ii). Pub. L. 103-66, Sec. 13563(b)(1)(B),

inserted "or a preventive medicine residency or fellowship program"

after "fellowship program".

Subsec. (h)(5)(H), (I). Pub. L. 103-66, Sec. 13563(a)(2), added

subpar. (H) and redesignated former subpar. (H) as (I).

Subsec. (h)(5)(J). Pub. L. 103-66, Sec. 13563(c)(1), added

subpar. (J).

1990 - Subsec. (a)(4). Pub. L. 101-508, Sec. 4003(a), struck out

period at end of first sentence and inserted ", and includes the

costs of all services for which payment may be made under this

subchapter that are provided by the hospital (or by an entity

wholly owned or operated by the hospital) to the patient during the

3 days 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)."

Subsec. (b)(1)(B)(ii). Pub. L. 101-508, Sec. 4005(a)(1), added

cl. (ii) and struck out former cl. (ii) which read as follows: "in

the case of cost reporting periods beginning on or after October 1,

1982, and before October 1, 1984, 25 percent of the amount by which

the amount of the operating costs exceeds the target amount;".

Subsec. (b)(3)(B)(i)(V). Pub. L. 101-508, Sec. 4002(a)(1)(A),

struck out "and" after semicolon at end.

Subsec. (b)(3)(B)(i)(VI). Pub. L. 101-508, Sec. 4002(c)(1)(A),

substituted "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" for "in all areas".

Pub. L. 101-508, Sec. 4002(a)(1)(C), added subcl. (VI). Former

subcl. (VI) redesignated (IX).

Pub. L. 101-508, Sec. 4002(a)(1)(B)(i), substituted "1994" for

"1991".

Subsec. (b)(3)(B)(i)(VII). Pub. L. 101-508, Sec. 4002(c)(1)(B),

substituted "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" for "in all areas".

Pub. L. 101-508, Sec. 4002(a)(1)(C), added subcl. (VII).

Subsec. (b)(3)(B)(i)(VIII). Pub. L. 101-508, Sec. 4002(c)(1)(C),

substituted "in a large urban or other urban area, and the market

basket percentage increase minus 0.55 for hospitals located in a

rural area," for "in all areas, and".

Pub. L. 101-508, Sec. 4002(a)(1)(C), added subcl. (VIII).

Subsec. (b)(3)(B)(i)(IX). Pub. L. 101-508, Sec. 4002(c)(1)(E),

added subcl. (IX). Former subcl. (IX) redesignated (XI).

Pub. L. 101-508, Sec. 4002(c)(1)(D)(i), substituted "1996" for

"1994".

Pub. L. 101-508, Sec. 4002(a)(1)(B)(ii), redesignated subcl. (VI)

as (IX).

Subsec. (b)(3)(B)(i)(X). Pub. L. 101-508, Sec. 4002(c)(1)(E),

added subcl. (X).

Subsec. (b)(3)(B)(i)(XI). Pub. L. 101-508, Sec.

4002(c)(1)(D)(ii), redesignated subcl. (IX) as (XI).

Subsec. (b)(3)(B)(ii). Pub. L. 101-508, Sec. 4002(c)(2)(A)(i),

substituted "(A), (C), (D), and (E)," for "(A) and (E)," in

introductory provisions.

Subsec. (b)(3)(C)(ii), (D)(ii). Pub. L. 101-508, Sec.

4002(c)(2)(A)(ii), substituted "subparagraph (B)(ii)" for

"subparagraph (B)(i)".

Subsec. (b)(4)(A). Pub. L. 101-508, Sec. 4005(c)(1)(B), inserted

at end "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."

Subsec. (b)(4)(B), (C). Pub. L. 101-508, Sec. 4005(c)(2), added

subpar. (B) and redesignated former subpar. (B) as (C).

Subsec. (c)(4). Pub. L. 101-508, Sec. 4008(f)(1), substituted

"payments under the State system as compared to aggregate payments

which would have been made under the national system since" for

"rate of increase from" in last sentence.

Subsec. (d)(1)(A)(iii). Pub. L. 101-508, Sec. 4002(e)(1),

substituted "beginning on or after April 1, 1988, and ending on

September 30, 1993," for "beginning on or after October 1, 1987, is

equal to the national adjusted DRG prospective payment rate

determined under paragraph (3) for such discharges, or, 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 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 the period

beginning on April 1, 1988, and ending on October 20, 1990".

Pub. L. 101-508, Sec. 4002(c)(2)(B)(i), substituted "large urban

or other area" for "rural, large urban, or other urban area" in

text of cl. (iii)(II) as amended by Pub. L. 103-66, Sec. 13501(f).

See 1993 Amendment note above.

Pub. L. 101-403 substituted "October 20, 1990" for "September 30,

1990".

Subsec. (d)(2)(C)(iv). Pub. L. 101-508, Sec. 4002(b)(4)(B),

substituted "1989 or the enactment of section 4002(b) of the

Omnibus Budget Reconciliation Act of 1990." for "1989."

Pub. L. 101-508, Sec. 4002(b)(4)(A), struck out period at end and

inserted ", 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."

Pub. L. 101-508, Sec. 4002(b)(3)(A), struck out "and before

October 1, 1995," after "October 1, 1986,".

Subsec. (d)(3)(A)(ii). Pub. L. 101-508, Sec.

4002(c)(2)(B)(ii)(I), substituted "and ending on or before

September 30, 1994, the Secretary" for "the Secretary".

Subsec. (d)(3)(A)(iii) to (v). Pub. L. 101-508, Sec.

4002(c)(2)(B)(ii)(II), (III), added cls. (iii) and (iv) and

redesignated former cl. (iii) as (v).

Subsec. (d)(3)(B). Pub. L. 101-508, Sec. 4002(c)(2)(B)(iii),

substituted "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)." for "for

hospitals located in an urban area and for hospitals located in a

rural area by a proportion equal to the proportion (estimated by

the Secretary) of the amount of payments under this subsection

based on DRG prospective payment amounts which are additional

payments described in paragraph (5)(A) (relating to outlier

payments) for hospitals located in such respective area."

Subsec. (d)(3)(C)(ii). Pub. L. 101-508, Sec. 4002(b)(3)(B)(B),

substituted "occurring on or after October 1, 1986," through the

end of cl. (ii) for "occurring - " and subcls. (I) and (II) which

read as follows:

"(I) on or after October 1, 1986, and before October 1, 1995, 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) were applied for

discharges occurring during such period instead of the factor

described in clause (ii)(I) of that paragraph, and

"(II) on or after October 1, 1995, of an amount equal to the

estimated reduction in the payment amounts under paragraph (5)(B)

for those discharges that has 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."

Subsec. (d)(3)(D)(i). Pub. L. 101-508, Sec. 4002(c)(2)(B)(iv)(I),

which directed amendment of cl. (i) by substituting "a large urban

area" for "an urban area (or," and all that follows through

"area)," was executed by making the substitution for "an urban area

(or, for discharges occurring on or after April 1, 1988, in a large

urban area or other urban area)" to reflect the probable intent of

Congress.

Subsec. (d)(3)(D)(i)(I). Pub. L. 101-508, Sec.

4002(c)(2)(B)(iv)(II), substituted "a large urban area" for "an

urban area".

Subsec. (d)(3)(D)(ii). Pub. L. 101-508, Sec. 4002(c)(2)(B)(v),

substituted "other areas" for "a rural area" in introductory

provisions and in subcl. (I).

Subsec. (d)(4)(D). Pub. L. 101-508, Sec. 4002(g)(2)(A), struck

out subpar. (D) which read as follows: "The Commission (established

under subsection (e)(2) of this section) shall consult with and

make recommendations to the Secretary with respect to the need for

adjustments under subparagraph (C), based upon its evaluation of

scientific evidence with respect to new practices, including the

use of new technologies and treatment modalities. The Commission

shall report to the Congress with respect to its evaluation of any

adjustments made by the Secretary under subparagraph (C)."

Subsec. (d)(5)(B)(ii). Pub. L. 101-508, Sec. 4002(b)(3)(B)(A),

amended cl. (ii) generally. Prior to amendment, cl. (ii) read as

follows: "For purposes of clause (i)(II), the indirect teaching

adjustment factor for discharges occurring -

"(I) on or after May 1, 1986, and before October 1, 1995, is

equal to 1.89*((1+r)G5.405-1), or

"(II) on or after October 1, 1995, is equal to

1.43*((1+r)G5.5795-1),

where 'r' is the ratio of the hospital's full-time equivalent

interns and residents to beds."

Subsec. (d)(5)(D)(iii). Pub. L. 101-508, Sec. 4008(m)(2)(A),

substituted "For purposes of this subchapter, the term" for "The

term" at beginning.

Subsec. (d)(5)(F)(i). Pub. L. 101-508, Sec. 4002(b)(3)(A), struck

out "and before October 1, 1995," after "May 1, 1986,".

Subsec. (d)(5)(F)(iii). Pub. L. 101-508, Sec. 4002(b)(2),

substituted "35 percent" for "30 percent".

Subsec. (d)(5)(F)(vii)(I). Pub. L. 101-508, Sec. 4002(b)(1)(A),

substituted "greater than 20.2 - " and subdivs. (a) to (d) for

"greater than 20.2, (PG6-20.2)(.65)+5.62, or".

Subsec. (d)(5)(F)(vii)(II). Pub. L. 101-508, Sec. 4002(b)(1)(B),

substituted "hospital - " and subdivs. (a) to (c) for "hospital,

(PG6-15)(.6)+2.5,".

Subsec. (d)(8)(C)(i). Pub. L. 101-508, Sec. 4002(h)(1)(A)(i),

substituted "area, or by treating hospitals located in one urban

area as being located in another urban area - " for "area -

".

Subsec. (d)(8)(C)(i)(II). Pub. L. 101-508, Sec.

4002(h)(1)(A)(ii), amended subcl. (II) generally. Prior to

amendment, subcl. (II) read as follows: "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 each affected rural county were a

separate urban area)."

Subsec. (d)(8)(C)(ii) to (iv). Pub. L. 101-508, Sec.

4002(h)(1)(A)(iii), (iv), redesignated cls. (iii) and (iv) as (ii)

and (iii), respectively, and struck out former cl. (ii) which read

as follows: "If the application of subparagraph (B) or a decision

of the Medicare Geographic Classification Review Board or the

Secretary under paragraph (10), by reclassifying a county from a

rural to an urban area or by reclassifying an urban county from one

urban area to another urban area -

"(I) reduces the wage index for the urban area within which the

county or counties is reclassified by 1 percentage point or less

(as applied under this subsection), the Secretary, in calculating

such wage index under this subsection, shall exclude those

counties so reclassified, or

"(II) reduces the wage index for the urban area within which

the county or counties is reclassified 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 reclassified) and to hospitals located in the

counties so reclassified (as if each affected county were a

separate area)."

Subsec. (d)(8)(D). Pub. L. 101-508, Sec. 4002(c)(2)(B)(vi),

struck out "for hospitals located in an urban area" after

"determined under paragraph (3)" and struck out at end "The

Secretary shall make such adjustment in payments under this section

to hospitals located in rural areas as are necessary to assure that

the aggregate of payments to rural hospitals not affected by

subparagraphs (B) and (C) or a decision of the Medicare Geographic

Classification Review Board or the Secretary under paragraph (10)

are not changed as a result of the application of subparagraphs (B)

and (C) or a decision of the Medicare Geographic Classification

Review Board or the Secretary under paragraph (10)."

Subsec. (d)(10)(A). Pub. L. 101-508, Sec. 4002(h)(2)(B)(i),

substituted "Geographic" for "Geographical".

Subsec. (d)(10)(B)(i). Pub. L. 101-508, Sec. 4002(h)(2)(B)(ii),

substituted "representative" for "representatives" and struck out

"1 member shall be a member of the Prospective Payment Assessment

Commission, and at least" after "At least".

Subsec. (d)(10)(B)(ii). Pub. L. 101-508, Sec. 4002(h)(2)(B)(iii),

substituted "initial" for "all".

Subsec. (d)(10)(C)(iii)(II). Pub. L. 101-508, Sec.

4002(h)(2)(B)(iv), substituted "Appeal of decisions of the Board

shall be subject to the provisions of section 557b of title 5" for

"A decision of the Board shall be final unless the unsuccessful

applicant appeals such decision to the Secretary by not later than

15 days after the Board renders its decision. The Secretary in

considering the appeal of an applicant shall receive no new

evidence but shall consider the record as a whole as such record

appeared before the Board" and substituted "after the date on

which" for "after".

Subsec. (e)(2). Pub. L. 101-508, Sec. 4002(g)(1), designated

existing provisions as subpar. (A) and added subpars. (B) and (C).

Subsec. (e)(2)(A). Pub. L. 101-508, Sec. 4002(g)(2)(B),

substituted "The Commission" for "In addition to carrying out its

functions under subsection (d)(4)(D) of this section, the

Commission".

Subsec. (e)(3)(A). Pub. L. 101-508, Sec. 4002(g)(2)(C),

substituted "Congress" for "the Secretary" and inserted before

period at end ", together with its general recommendations under

paragraph (2)(B) regarding the effectiveness and quality of health

care delivery systems in the United States".

Subsec. (e)(4). Pub. L. 101-508, Sec. 4002(g)(2)(D), designated

existing provisions as subpar. (A) and added subpar. (B).

Subsec. (e)(5). Pub. L. 101-508, Sec. 4002(g)(2)(E), substituted

"recommendations" for "recommendation" in subpars. (A) and (B) and

inserted at end "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."

Subsec. (e)(6)(G). Pub. L. 101-508, Sec. 4002(g)(2)(F),

redesignated cls. (ii) and (iii) as (i) and (ii), respectively, and

struck out former cl. (i) which read as follows: "The Office shall

report annually to the Congress on the functioning and progress of

the Commission and on the status of the assessment of medical

procedures and services by the Commission."

Subsec. (g)(1)(A). Pub. L. 101-508, Sec. 4001(b), inserted at end

"Aggregate payments made under subsection (d) of this section 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 1395x(v) of this title)."

Subsec. (g)(3)(A)(v). Pub. L. 101-508, Sec. 4001(a), substituted

"September 30, 1991" for "September 30, 1990".

Subsec. (g)(3)(B). Pub. L. 101-508, Sec. 4001(c), substituted

"subsection (d)(5)(D)(iii) of this section or a rural primary care

hospital (as defined in section 1395x(mm)(1) of this title)" for

"subsection (d)(5)(D)(iii) of this section)".

1989 - Subsec. (a)(4). Pub. L. 101-239, Sec. 6011(a), struck out

"or," after "equity capital," and substituted "October 1, 1987), or

costs with respect to administering blood clotting factors to

individuals with hemophilia" for "October 1, 1987)".

Subsec. (b)(3)(A). Pub. L. 101-239, Sec. 6004(b)(1)(A),

substituted "(C), (D), and (E)" for "(C) and (D)" in introductory

provisions.

Pub. L. 101-239, Sec. 6003(f)(2)(i), substituted "subparagraphs

(C) and (D)" for "subparagraph (C)" in introductory provisions.

Pub. L. 101-239, Sec. 6003(e)(1)(B)(i), substituted "(A) Except

as provided in subparagraph (C), for purposes of this subsection"

for "(A) For purposes of this subsection" in introductory

provisions.

Subsec. (b)(3)(B)(i)(V), (VI). Pub. L. 101-239, Sec. 6003(a)(1),

added subcl. (V), redesignated former subcl. (V) as (VI), and

substituted "fiscal year 1991" for "fiscal year 1990" in subcl.

(VI).

Subsec. (b)(3)(B)(ii). Pub. L. 101-239, Sec. 6004(b)(1)(B),

substituted "For purposes of subparagraphs (A) and (E)" for "For

purposes of subparagraph (A)" in introductory provisions.

Subsec. (b)(3)(C). Pub. L. 101-239, Sec. 6003(e)(1)(B)(ii), added

subpar. (C).

Subsec. (b)(3)(D). Pub. L. 101-239, Sec. 6003(f)(2)(ii), added

subpar. (D).

Subsec. (b)(3)(E). Pub. L. 101-239, Sec. 6004(b)(1)(C), added

subpar. (E).

Subsec. (b)(4)(A). Pub. L. 101-239, Sec. 6015(a), substituted

"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" for

"deems appropriate,".

Subsec. (c)(4). Pub. L. 101-239, Sec. 6022, substituted "the

aggregate rate of increase from October 1, 1984, to the most recent

date for which annual data are available" for "the aggregate

payment or payments per inpatient admission or discharge during the

three cost reporting periods beginning on or after October 1, 1983,

after which such test, at the option of the Secretary, shall no

longer apply, and such State systems shall be treated in the same

manner as under other waivers" in second sentence.

Subsec. (d)(1)(B)(v). Pub. L. 101-239, Sec. 6004(a)(1), added cl.

(v).

Subsec. (d)(3)(E). Pub. L. 101-239, Sec. 6003(h)(6), substituted

"October 1, 1990, and October 1, 1993 (and at least every 12 months

thereafter)" for "October 1, 1990 (and at least every 36 months

thereafter)" and inserted at end "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."

Subsec. (d)(4)(C). Pub. L. 101-239, Sec. 6003(b), designated

existing provisions as cl. (i) and added cls. (ii) to (iv).

Subsec. (d)(5)(C). Pub. L. 101-239, Sec. 6003(e)(1)(A)(i), (ii),

(iv), (2)(B), redesignated former cl. (i)(I) as cl. (i),

redesignated former cl. (i)(II) as cl. (ii) and substituted "clause

(i)" for "subclause (I)" in three places, and redesignated former

cls. (ii), (iii), and (iv) as subpars. (D), (I), and (H),

respectively.

Subsec. (d)(5)(D). Pub. L. 101-239, Sec. 6003(e)(1)(A)(iv),

amended former subpar. (C)(ii) generally, redesignating it as

subpar. (D) and substituting cls. (i) to (iv) relating to payments

to sole community hospitals for cost reporting periods beginning on

or after Apr. 1, 1990, for former single paragraph relating to

payments to such hospitals for cost reporting periods beginning on

or after Oct. 1, 1984.

Subsec. (d)(5)(D)(iii)(III). Pub. L. 101-239, Sec. 6003(g)(2)(A),

added subcl. (III).

Subsec. (d)(5)(D)(v). Pub. L. 101-239, Sec. 6003(g)(2)(B), added

cl. (v).

Subsec. (d)(5)(E). Pub. L. 101-239, Sec. 6003(e)(1)(A)(iii),

redesignated subpar. (D) as (E).

Subsec. (d)(5)(F)(iii). Pub. L. 101-239, Sec. 6003(c)(3),

substituted "30 percent" for "25 percent".

Subsec. (d)(5)(F)(iv)(I). Pub. L. 101-239, Sec. 6003(c)(1)(A),

substituted "the applicable formula described in clause (vii)" for

"the following formula: (P-15)(.5)+2.5, where 'P' is the hospital's

disproportionate patient percentage (as defined in clause (vi))".

Subsec. (d)(5)(F)(iv)(III). Pub. L. 101-239, Sec.

6003(c)(2)(A)(ii), inserted "in subclause (IV) or (V) or" after

"described".

Subsec. (d)(5)(F)(iv)(IV) to (VI). Pub. L. 101-239, Sec.

6003(c)(2)(A)(i), (iii), (iv), added subcls. (IV) to (VI).

Subsec. (d)(5)(F)(v)(II) to (IV). Pub. L. 101-239, Sec.

6003(c)(2)(B), added subcl. (II), redesignated former subcls. (II)

and (III) as (III) and (IV), respectively, and substituted "area

and is not described in subclause (II)" for "area" in subcl. (IV).

Subsec. (d)(5)(F)(vii). Pub. L. 101-239, Sec. 6003(c)(1)(B),

added cl. (vii).

Subsec. (d)(5)(F)(viii). Pub. L. 101-239, Sec. 6003(c)(2)(C),

added cl. (viii).

Subsec. (d)(5)(G). Pub. L. 101-239, Sec. 6003(f)(1), added

subpar. (G).

Subsec. (d)(5)(H). Pub. L. 101-239, Sec. 6003(e)(1)(A)(i),

redesignated subpar. (C)(iv) as subpar. (H).

Subsec. (d)(5)(I). Pub. L. 101-239, Sec. 6004(a)(2), struck out

"(including exceptions and adjustments that may be appropriate with

respect to hospitals involved extensively in treatment for and

research on cancer)" after "deems appropriate".

Pub. L. 101-239, Sec. 6003(e)(1)(A)(ii), redesignated subpar.

(C)(iii) as subpar. (I).

Subsec. (d)(8)(C). Pub. L. 101-239, Sec. 6003(h)(3), amended

subpar. (C) generally. Prior to amendment, subpar. (C) read as

follows:

"(i) If the application of subparagraph (B) or a decision of the

Medicare Geographic Classification Review Board or the Secretary

under paragraph (10),, [sic] by treating hospitals located in a

rural county or counties as being located in an urban area, reduces

the wage index for that urban area (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 each affected rural county were a

separate urban area). If the application of subparagraph (B) or a

decision of the Medicare Geographic Classification Review Board or

the Secretary under paragraph (10),, [sic] by treating the

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.

"(ii) Clause (i) shall only apply to discharges occurring on or

after October 1, 1989, and before October 1, 1991."

Subsec. (d)(8)(C)(i). Pub. L. 101-239, Sec. 6003(h)(2),

substituted "subparagraph (B) or a decision of the Medicare

Geographic Classification Review Board or the Secretary under

paragraph (10)," for "subparagraph (B)" in two places.

Subsec. (d)(8)(C)(iv). Pub. L. 101-239, Sec. 6003(h)(4), added

cl. (iv).

Subsec. (d)(8)(D). Pub. L. 101-239, Sec. 6003(h)(2)(B),

substituted "(B) and (C) or a decision of the Medicare Geographic

Classification Review Board or the Secretary under paragraph (10)"

for "(B) and (C)" in three places.

Subsec. (d)(9)(B)(ii)(IV). Pub. L. 101-239, Sec. 6003(e)(2)(C),

substituted "subparagraph (D)(iii)" for "subparagraph (D)(v)".

Subsec. (d)(9)(D)(iii). Pub. L. 101-239, Sec. 6003(e)(2)(D)(ii),

redesignated cl. (v) as (iii). Former cl. (iii) redesignated (iv).

Subsec. (d)(9)(D)(iv). Pub. L. 101-239, Sec. 6003(e)(2)(D)(i),

(ii), redesignated former cl. (iii) as (iv), substituted

"Subparagraph (H)" for "Subparagraph (C)(iii)", and struck out

former cl. (iv) which read as follows: "Subparagraph (E) (relating

to payments for costs of certified registered nurse anesthetists)."

Subsec. (d)(9)(D)(v). Pub. L. 101-239, Sec. 6003(e)(2)(D)(iii),

redesignated cl. (v) as (iii).

Subsec. (d)(10). Pub. L. 101-239, Sec. 6003(h)(1), added par.

(10).

Subsec. (g)(3)(A)(iv). Pub. L. 101-234, Sec. 301(b)(3), (c)(3),

amended cl. (iv) identically, substituting "(as the case may be)"

for "(as the case may) be".

Subsec. (g)(3)(A)(v). Pub. L. 101-239, Sec. 6002, added cl. (v).

Subsec. (g)(3)(B). Pub. L. 101-239, Sec. 6003(e)(2)(E),

substituted "subsection (d)(5)(D)(iii)" for "subsection

(d)(5)(C)(ii)".

Subsec. (i). Pub. L. 101-239, Sec. 6003(g)(4), added subsec. (i).

1988 - Subsec. (b)(3)(B)(i)(III). Pub. L. 100-485, Sec.

608(d)(18)(A), substituted "for hospitals" for "for for hospitals"

before "located in other urban areas".

Pub. L. 100-360, Sec. 411(b)(1)(A), substituted "for hospitals

located in other urban areas" for "other hospitals".

Subsec. (b)(3)(B)(i)(IV). Pub. L. 100-485, Sec. 608(d)(18)(A),

substituted "for hospitals" for "for for hospitals" before "located

in other urban areas".

Pub. L. 100-360, Sec. 411(b)(1)(A), (B), substituted "percentage

points" for "percent" in three places and "for hospitals located in

other urban areas" for "other hospitals".

Subsec. (b)(3)(B)(i)(V). Pub. L. 100-360, Sec. 411(b)(1)(C),

inserted "increase" after "market basket percentage".

Subsec. (d)(1)(A)(iii). Pub. L. 100-360, Sec. 411(b)(1)(G),

substituted "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 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 "if

greater".

Subsec. (d)(2)(C)(i). Pub. L. 100-647, Sec. 1018(r)(1), struck

out Pub. L. 99-514, Sec. 1895(b)(1), (2). Previously, Pub. L.

99-509, Sec. 9307(c)(1)(A), struck out Pub. L. 99-514, Sec.

1895(b)(1)(A). See 1986 Amendment note below.

Subsec. (d)(2)(C)(iv). Pub. L. 100-647, Sec. 8401, substituted

"1995" for "1990".

Pub. L. 100-647, Sec. 1018(r)(1), struck out Pub. L. 99-514, Sec.

1895(b)(1), (2). Previously, Pub. L. 99-509, Sec. 9307(c)(1)(B)(i),

as amended by Pub. L. 100-203, Sec. 4009(j)(6)(A), struck out Pub.

L. 99-514, Sec. 1895(b)(2)(A). See 1986 Amendment note below.

Subsec. (d)(2)(D). Pub. L. 100-360, Sec. 411(b)(1)(D),

substituted "the publications described in subsection (e)(5) of

this section" for "the publication described in subsection

(e)(5)(B) of this section" in second sentence.

Pub. L. 100-360, Sec. 411(b)(1)(H)(i), struck out at end "For

purposes of payment under this subsection, a hospital is considered

to be located in an urban area or large urban area, respectively,

if the hospital is paid under this subsection at the rate for

hospitals located in such an area."

Subsec. (d)(3)(A). Pub. L. 100-647, Sec. 1018(r)(1), struck out

Pub. L. 99-514, Sec. 1895(b)(1), (2). Previously, Pub. L. 99-509,

Sec. 9307(c)(1)(A), struck out Pub. L. 99-514, Sec. 1895(b)(1)(B).

See 1986 Amendment note below.

Subsec. (d)(3)(A)(i). Pub. L. 100-360, Sec. 411(b)(1)(E)(i), as

added by Pub. L. 100-485, Sec. 608(d)(18)(B), substituted

"occurring" for "occuring" in first sentence.

Pub. L. 100-360, Sec. 411(b)(1)(E)(ii), formerly Sec.

411(b)(1)(E), as redesignated by Pub. L. 100-485, Sec.

608(d)(18)(B), made technical correction to Pub. L. 100-203, Sec.

4002(c)(1)(B)(iii), see 1987 Amendment note below.

Subsec. (d)(3)(A)(ii). Pub. L. 100-360, Sec. 411(b)(1)(F),

substituted "in other urban areas" for "in urban areas".

Subsec. (d)(3)(C)(ii). Pub. L. 100-647, Sec. 1018(r)(1), struck

out Pub. L. 99-514, Sec. 1895(b)(1), (2). Previously, Pub. L.

99-509, Sec. 9307(c)(1)(A), struck out Pub. L. 99-514, Sec.

1895(b)(1)(C). See 1986 Amendment note below.

Subsec. (d)(3)(C)(ii)(I), (II). Pub. L. 100-647, Sec. 8401,

substituted "1995" for "1990".

Subsec. (d)(3)(C)(iii). Pub. L. 100-647, Sec. 1018(r)(1), struck

out Pub. L. 99-514, Sec. 1895(b)(1), (2). Previously, Pub. L.

99-509, Sec. 9307(c)(1)(B)(i), as amended by Pub. L. 100-203, Sec.

4009(j)(6)(A), struck out Pub. L. 99-514, Sec. 1895(b)(2)(B). See

1986 Amendment note below.

Subsec. (d)(5)(B)(ii)(I), (II). Pub. L. 100-647, Sec. 8401,

substituted "1995" for "1990".

Subsec. (d)(5)(F)(i). Pub. L. 100-647, Sec. 8401, substituted

"1995" for "1990".

Subsec. (d)(5)(F)(vi)(I). Pub. L. 100-647, Sec. 1018(r)(1),

struck out Pub. L. 99-514, Sec. 1895(b)(1), (2). See 1986 Amendment

note below.

Subsec. (d)(8). Pub. L. 100-360, Sec. 411(b)(4)(C)(i), made

technical correction to directory language of Pub. L. 100-203, Sec.

4005(a)(1)(D), see 1987 Amendment note below.

Subsec. (d)(8)(B). Pub. L. 100-360, Sec. 411(b)(4)(A)(i),

substituted "For purposes of this subsection, the Secretary" for

"The Secretary".

Pub. L. 100-360, Sec. 411(b)(4)(A)(ii), substituted "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) published in

the Federal Register on January 3, 1980, 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)." for " -

"(i) the rural county would otherwise be considered part of an

urban area but for the fact that the rural county does not meet

the standard relating to the rate of commutation between the

rural county and the central county or counties of any adjacent

urban area; and

"(ii) either (I) the number of residents of the rural county

who commute for employment to the central county or counties of

any adjacent urban area is equal to at least 15 percent of the

number of residents of the rural county who are employed, or (II)

the sum of the number of residents of the rural county who

commute for employment to the central county or counties of any

adjacent urban area and the number of residents of any adjacent

urban area who commute for employment to the rural county is at

least equal to 20 percent of the number of residents of the rural

county who are employed."

Subsec. (d)(8)(C). Pub. L. 100-647, Sec. 8403(a)(2), added

subpar. (C). Former subpar. (C) redesignated (D).

Pub. L. 100-360, Sec. 411(b)(4)(B), substituted "standardized

amounts" for "standardized amount".

Subsec. (d)(8)(D). Pub. L. 100-647, Sec. 8403(a)(1), redesignated

former subpar. (C) as (D) and substituted "subparagraphs (B) and

(C)" for "subparagraph (B)" wherever appearing.

Subsec. (d)(9)(C)(iv). Pub. L. 100-360, Sec. 411(b)(3), added

Pub. L. 100-203, Sec. 4004(a)(2), see 1987 Amendment note below.

Subsec. (e)(6)(B). Pub. L. 100-360, Sec. 411(b)(8)(B), amended

Pub. L. 100-203, Sec. 4009(d)(1), see 1987 Amendment note below.

Subsec. (f)(1)(A). Pub. L. 100-360, Sec. 411(b)(6)(B), added Pub.

L. 100-203, Sec. 4007(b)(1)(A), (B), see 1987 Amendment note below.

Subsec. (f)(1)(B). Pub. L. 100-360, Sec. 411(b)(6)(B), added Pub.

L. 100-203, Sec. 4007(b)(1)(C), see 1987 Amendment note below.

Subsec. (g)(3)(A)(ii) to (iv). Pub. L. 100-360, Sec.

411(b)(5)(B), made technical amendment to Pub. L. 100-203, Sec.

4006(a), see 1987 Amendment note below.

Subsec. (g)(3)(A)(iv). Pub. L. 100-360, Sec. 411(b)(5)(A),

inserted "for payments attributable" after "15 percent".

1987 - Subsec. (a)(4). Pub. L. 100-203, Sec. 4009(j)(1), inserted

a comma after "educational activities".

Pub. L. 100-203, Sec. 4006(b)(2)(A), substituted "other

capital-related costs (as defined by the Secretary for periods

before October 1, 1987)" for "with respect to costs incurred in

cost reporting periods beginning prior to October 1 of 1987 (or of

such later year as the Secretary may, in his discretion, select),

other capital-related costs, as defined by the Secretary".

Subsec. (b)(3)(B)(i). Pub. L. 100-203, Sec. 4002(e)(1), struck

out "subparagraph (A) for 12-month cost reporting periods beginning

during a fiscal year and for purposes of" after "For purposes of".

Subsec. (b)(3)(B)(i)(II). Pub. L. 100-203, Sec. 4002(a), struck

out "and for fiscal year 1988, the market basket percentage

increase (as defined in clause (ii)) minus 2.0 percentage points,

and" after "1.15 percent,".

Subsec. (b)(3)(B)(i)(III) to (V). Pub. L. 100-203, Sec. 4002(a),

added subcls. (III) to (V) and struck out former subcl. (III) which

read "for fiscal year 1989 and subsequent fiscal years, the

percentage determined by the Secretary pursuant to subsection

(e)(4) of this section."

Subsec. (b)(3)(B)(ii), (iii). Pub. L. 100-203, Sec. 4002(e)(2),

(3), added cl. (ii), redesignated former cl. (ii) as (iii), and

substituted "For purposes of this subparagraph" for "For purposes

of clause (i)".

Subsec. (d)(1)(A)(iii). Pub. L. 100-203, Sec. 4002(d), inserted

before period at end ", or, if greater for discharges occurring

during the period beginning on April 1, 1988, and ending on

September 30, 1990, the sum of (I) 85 percent of the national

adjusted DRG prospective payment rate determined under paragraph

(3) for such discharges, and (II) 15 percent of the regional

adjusted DRG prospective payment rate determined under such

paragraph".

Subsec. (d)(2)(C)(iv). Pub. L. 100-203, Sec. 4009(j)(6)(A), made

technical amendment to Pub. L. 99-509, Sec. 9307(c)(1)(B). See 1986

Amendment note below.

Pub. L. 100-203, Sec. 4003(c), substituted "1990" for "1989".

Subsec. (d)(2)(D). Pub. L. 100-203, Sec. 4002(f)(1)(A), inserted

sentence at end providing that hospital is considered located in

urban area or large urban area, respectively, if it is paid under

this subsection at rate for hospitals located in such area.

Pub. L. 100-203, Sec. 4002(b), in second sentence inserted

definition of "large urban area".

Subsec. (d)(3). Pub. L. 100-203, Sec. 4002(c)(1)(A), substituted

"large urban, other urban, or rural areas" for "urban or rural

areas" in second sentence.

Subsec. (d)(3)(A)(i). Pub. L. 100-203, Sec. 4002(c)(1)(B), (C),

as amended by Pub. L. 100-360, Sec. 411(b)(1)(E)(ii), designated

existing provisions as cl. (i), substituted "For discharges

occuring [sic] in a fiscal year beginning before October 1, 1987,

the Secretary" for "The Secretary" and "the fiscal year involved"

for "each of fiscal years 1985, 1986, 1987, and 1988", struck out

", and adjusted for subsequent fiscal years in accordance with the

final determination of the Secretary under subsection (e)(4) of

this section, and adjusted to reflect the most recent case-mix data

available", and added cls. (ii) and (iii).

Subsec. (d)(3)(C)(ii). Pub. L. 100-203, Sec. 4003(c), substituted

"1990" for "1989" in subcls. (I) and (II).

Pub. L. 100-203, Sec. 4003(a)(2), inserted "and by section

4003(a)(1) of the Omnibus Budget Reconciliation Act of 1987" after

"Amendments of 1985" in subcls. (I) and (II).

Subsec. (d)(3)(C)(iii). Pub. L. 100-203, Sec. 4009(j)(6)(A), made

technical amendment to Pub. L. 99-509, Sec. 9307(c)(1)(B). See 1986

Amendment note below.

Subsec. (d)(3)(D)(i). Pub. L. 100-203, Sec. 4002(c)(1)(D),

inserted "(or, for discharges occurring on or after April 1, 1988,

in a large urban area or other urban area)" after first reference

to "urban area", and in subcl. (I) inserted "such" before "an urban

area".

Subsec. (d)(3)(E). Pub. L. 100-203, Sec. 4004(a)(1), formerly

Sec. 4004(a), as redesignated by Pub. L. 100-360, Sec. 411(b)(3),

inserted at end "Not later than October 1, 1990 (and at least every

36 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. To the extent determined feasible by the Secretary, such

survey 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."

Subsec. (d)(5)(B)(ii). Pub. L. 100-203, Sec. 4003(c), substituted

"1990" for "1989" in subcls. (I) and (II).

Pub. L. 100-203, Sec. 4003(a)(1), substituted "1.89" for "2" in

subcl. (I) and "1.43" for "1.5" in subcl. (II).

Subsec. (d)(5)(C)(i)(I). Pub. L. 100-203, Sec. 4005(d)(1)(A),

substituted "275" for "500".

Subsec. (d)(5)(C)(i)(II). Pub. L. 100-203, Sec. 4009(j)(2),

inserted "index" after "case mix" in two places.

Subsec. (d)(5)(C)(ii). Pub. L. 100-203, Sec. 4005(c)(1),

substituted "1990" for "1988" in second sentence and inserted after

second sentence "A subsection (d) hospital that meets the criteria

for classification as a sole community hospital and otherwise

qualifies for the adjustment authorized by the preceding sentence

may qualify for such an adjustment without regard to the formula by

which payments are determined for the hospital under paragraph

(1)(A)."

Subsec. (d)(5)(F)(i). Pub. L. 100-203, Sec. 4003(c), substituted

"1990" for "1989".

Subsec. (d)(5)(F)(i)(II). Pub. L. 100-203, Sec. 4009(j)(3)(A),

substituted "such net inpatient care revenues" for second reference

to "such revenues".

Subsec. (d)(5)(F)(iii). Pub. L. 100-203, Sec. 4003(b)(1),

substituted "25 percent" for "15 percent".

Subsec. (d)(5)(F)(iv)(I). Pub. L. 100-203, Sec. 4009(j)(3)(B),

substituted "clause (v)" for "subclause (III)".

Pub. L. 100-203, Sec. 4003(b)(2), struck out "the lesser of 15

percent, or" after "is equal to".

Subsec. (d)(5)(F)(vi)(I). Pub. L. 100-203, Sec. 4009(j)(6)(A),

made technical amendment to Pub. L. 99-509, Sec. 9307(c)(1)(B)(ii).

See 1986 Amendment note below.

Subsec. (d)(8). Pub. L. 100-203, Sec. 4005(a)(1), as amended by

Pub. L. 100-360, Sec. 411(b)(4)(C)(i), designated existing

provisions as subpar. (A), redesignated former subpar. (A) and cls.

(i) and (ii) as cl. (i) and subcls. (I) and (II), respectively,

redesignated former subpar. (B) and cls. (i) and (ii) as cl. (ii)

and subcl. (I) and (II), respectively, and added subpars. (B) and

(C).

Subsec. (d)(9)(A)(ii). Pub. L. 100-203, Sec. 4002(c)(2),

substituted "a large urban area," for "an urban area, and" in

subcl. (I), added subcl. (II), and redesignated former subcl. (II)

as (III).

Subsec. (d)(9)(B). Pub. L. 100-203, Sec. 4009(j)(4), realigned

margin of introductory provisions.

Subsec. (d)(9)(C)(iv). Pub. L. 100-203, Sec. 4004(a)(2), as added

by Pub. L. 100-360, Sec. 411(b)(3), inserted at end "The second and

third sentences of paragraph (3)(E) 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."

Subsec. (e)(3)(B). Pub. L. 100-203, Sec. 4002(f)(1)(B), struck

out "or determine" after "recommend".

Subsec. (e)(4). Pub. L. 100-203, Sec. 4002(f)(1)(C), substituted

"for each fiscal year (beginning with fiscal year 1988)" for "for

fiscal year 1988", struck out "and shall determine for each

subsequent fiscal year the percentage change which will apply for

purposes of this section as the applicable percentage increase

(otherwise described in subsection (b)(3)(B) of this section) for

discharges in that fiscal year, and" after "in that fiscal year",

and amended last sentence generally. Prior to amendment, last

sentence read as follows: "The percentage change shall be the same

for all subsection (d) hospitals and subsection (d) Puerto Rico

hospitals, but may be different from that for other hospitals (and

units not included as such hospitals) and may vary among such other

hospitals and units."

Subsec. (e)(5). Pub. L. 100-203, Sec. 4009(j)(6)(B), amended Pub.

L. 99-509, Sec. 9302(a)(2)(C). See 1986 Amendment note below.

Pub. L. 100-203, Sec. 4002(f)(1)(D), struck out "or

determination" after "recommendation" in subpars. (A) and (B).

Subsec. (e)(6)(B). Pub. L. 100-203, Sec. 4009(d)(1), as amended

by Pub. L. 100-360, Sec. 411(b)(8)(B), substituted "include

individuals with national recognition for their expertise in health

economics, hospital reimbursement, hospital financial management,

and other related fields, who provide a mix of different

professionals, broad geographic representation, and a balance

between urban and rural representatives" for "provide expertise and

experience in the provision and financing of health care", and

struck out last sentence which required Director to seek

nominations from wide range of groups, including specified types of

national organizations.

Subsec. (e)(6)(D). Pub. L. 100-203, Sec. 4083(b)(1), inserted at

end "For purposes of pay (other than pay of members of the

Commission) and employment benefits, rights, and privileges, all

personnel of the Commission shall be treated as if they were

employees of the United States Senate."

Subsec. (f)(1)(A). Pub. L. 100-203, Sec. 4007(b)(1)(A), (B), as

added by Pub. L. 100-360, Sec. 411(b)(6)(B), inserted subpar. (A)

designation and struck out ", for a period ending not earlier than

September 30, 1988," after "shall maintain".

Subsec. (f)(1)(B). Pub. L. 100-203, Sec. 4007(b)(1)(C), as added

by Pub. L. 100-360, Sec. 411(b)(6)(B), added subpar. (B).

Subsec. (f)(3). Pub. L. 100-93 amended par. (3) generally. Prior

to amendment, par. (3) read as follows: "The provisions of

paragraphs (2), (3), and (4) of section 1395y(d) of this title

shall apply to determinations under paragraph (2) of this

subsection in the same manner as they apply to determinations made

under section 1395y(d)(1) of this title."

Subsec. (g)(1). Pub. L. 100-203, Sec. 4006(b)(1), amended par.

(1) generally. Prior to amendment, par. (1) read as follows: "If

the Congress does not enact legislation, after April 20, 1983, and

before October 1, 1987, respecting the payment under this

subchapter for capital-related costs for inpatient hospital

services, no payment may be made under this subchapter for

capital-related costs of capital expenditures (as defined in

section 1320a-1(g) of this title and except as provided in section

1320a-1(j) of this title) for inpatient hospital services in a

State, which expenditures are obligated after September 30, 1987,

unless the State has an agreement with the Secretary under section

1320a-1(b) of this title and under the agreement the State has

recommended approval of the capital expenditures."

Subsec. (g)(3)(A)(ii) to (iv). Pub. L. 100-203, Sec. 4006(a), as

amended by Pub. L. 100-360, Sec. 411(b)(5)(B), substituted "on or

after October 1, 1987, and before January 1, 1988," for ", and", at

end of cl. (ii), added cls. (iii) and (iv), and struck out former

cl. (iii) which read as follows: "10 percent for payments

attributable to portions of cost reporting periods or discharges

(as the case may be) occurring during fiscal year 1989."

Subsec. (g)(3)(C). Pub. L. 100-203, Sec. 4006(b)(2)(B), struck

out subpar. (C) which read as follows: "If the Secretary provides,

under subsection (a)(4) of this section, for the inclusion of other

capital-related costs in operating costs of inpatient hospital

services, the Secretary shall provide -

"(i) notwithstanding any other provision of this subchapter,

for the continuation of payment under the reasonable cost

methodology described in section 1395x(v)(1) of this title with

respect to capital-related costs of any hospital that is such a

sole community hospital for cost reporting periods beginning

before October 1, 1990, and

"(ii) in the design of such payment system that the aggregate

payment amounts under this subchapter for such other

capital-related costs for payments attributable to portions of

cost reporting periods occurring during fiscal year 1988 and

fiscal year 1989 shall approximate the aggregate payment amount

under this subchapter that would have been made (taking into

account the provisions of subparagraphs (A) and (B)) during that

fiscal year but for the inclusion of such costs by the

Secretary."

Subsec. (h)(4)(C). Pub. L. 100-203, Sec. 4009(j)(5), substituted

"subparagraph (D)" for "subparagraph (E)".

1986 - Subsec. (a)(4). Pub. L. 99-509, Sec. 9320(g)(1), struck

out ", costs of anesthesia services provided by a certified

registered nurse anesthetist," after "approved educational

activities".

Pub. L. 99-509, Sec. 9303(c), substituted "October 1 of 1987 (or

of such later year as the Secretary may, in his discretion,

select)" for "October 1, 1987".

Pub. L. 99-349 substituted "1987" for "1986".

Pub. L. 99-272, Sec. 9107(a)(2), inserted "a return on equity

capital," after "anesthetist," and "other" before "capital-related

costs".

Subsec. (b)(3)(B). Pub. L. 99-272, Sec. 9101(b), amended subpar.

(B) generally. Prior to amendment, subpar. (B) read as follows:

"For purposes of subparagraph (A) and subsection (d) of this

section and except as provided in subsection (e) of this section,

the 'applicable percentage increase' for any 12-month cost

reporting period or fiscal year shall be equal to one-quarter of 1

percentage point plus the percentage, estimated by the Secretary

before the beginning of the period or year, by which the cost of

the mix of goods and services (including personnel costs but

excluding non-operating 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 such cost reporting 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. In determining a percentage change under subsection (e)(4) of

this section with respect to discharges occurring in any cost

reporting period or fiscal year beginning on or after October 1,

1985, and before October 1, 1986, the Secretary may not establish a

percentage increase which exceeds the applicable percentage

increase otherwise determined for that period or fiscal year under

the preceding sentence."

Subsec. (b)(3)(B)(i)(II). Pub. L. 99-509, Sec. 9302(a)(1),

amended subcl. (II) generally. Prior to amendment, subcl. (II) read

as follows: "for fiscal years 1987 and 1988, a percentage

determined by the Secretary pursuant to subsection (e)(4) of this

section, but not to exceed the market basket percentage increase

(as defined in clause (ii)), and".

Subsec. (b)(6). Pub. L. 99-514, Sec. 2, substituted "Internal

Revenue Code of 1986" for "Internal Revenue Code of 1954".

Subsec. (c)(7). Pub. L. 99-272, Sec. 9109(a), added par. (7).

Subsec. (d)(1)(A). Pub. L. 99-272, Sec. 9102(a), substituted

"1987" for "1986" in cls. (ii) and (iii).

Subsec. (d)(1)(C). Pub. L. 99-272, Sec. 9102(b), struck out ", or

discharges occurring" after "periods beginning" in introductory

provision, and "and" after "percent;" in cl. (ii), added cl. (iii),

redesignated former cl. (iii) as (iv), and in cl. (iv) substituted

"on or after October 1, 1986, and before October 1, 1987" for "on

or after October 1, 1985, and before October 1, 1986".

Subsec. (d)(1)(D). Pub. L. 99-272, Sec. 9102(c), struck out "cost

reporting periods beginning, or" before "discharges occurring" in

introductory provision, in cl. (i) substituted "1986" for "1985",

and in cl. (ii) substituted "1986" and "1987" for "1985" and

"1986", respectively.

Subsec. (d)(2)(C)(i). Pub. L. 99-509, Sec. 9307(c)(1)(A), struck

out Pub. L. 99-514, Sec. 1895(b)(1)(A), which had directed the

striking out of "(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)" after "medical education costs".

Pub. L. 99-272, Sec. 9104(b)(1), inserted "(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)" after "medical education

costs".

Subsec. (d)(2)(C)(iv). Pub. L. 99-509, Sec. 9306(c), substituted

"1989" for "1988".

Pub. L. 99-509, Sec. 9307(c)(1)(B)(i), as amended by Pub. L.

100-203, Sec. 4009(j)(6)(A), struck out Pub. L. 99-514, Sec.

1895(b)(2)(A), which had directed that cl. (iv) was to be struck

out.

Pub. L. 99-272, Sec. 9105(b), added cl. (iv).

Subsec. (d)(3)(A). Pub. L. 99-509, Sec. 9302(a)(2)(A), (c),

substituted "1986, 1987, and 1988" for "and 1986" and inserted

provisions relating to the computation of urban and rural averages

with respect to discharges occurring on or after October 1, 1987.

Pub. L. 99-509, Sec. 9307(c)(1)(A), struck out Pub. L. 99-514,

Sec. 1895(b)(1)(B), which had directed insertion of "If the formula

under paragraph (5)(B) for determining payments for the indirect

costs of medical education is changed for any fiscal year, the

Secretary shall readjust the standardized amounts previously

determined for each hospital to take into account the changes in

that formula."

Pub. L. 99-272, Sec. 9101(c)(1), substituted "for each of fiscal

years 1985 and 1986" for "for fiscal year 1985".

Subsec. (d)(3)(B). Pub. L. 99-509, Sec. 9302(b)(1), inserted "for

hospitals located in an urban area and for hospitals located in a

rural area" after "subparagraph (A)", and inserted before the

period "for hospitals located in such respective area".

Subsec. (d)(3)(C). Pub. L. 99-272, Sec. 9104(b)(2), designated

existing provision as cl. (i), substituted "For discharges

occurring in fiscal year 1985, the Secretary" for "The Secretary",

and added cl. (ii).

Subsec. (d)(3)(C)(ii). Pub. L. 99-509, Sec. 9306(c), substituted

"1989" for "1988" in subcls. (I) and (II).

Pub. L. 99-509, Sec. 9307(c)(1)(A), struck out Pub. L. 99-514,

Sec. 1895(b)(1)(C), which had directed a general amendment of cl.

(ii) to read as follows: "The Secretary shall further reduce each

of the average standardized amounts by a proportion equal to the

proportion (estimated by the Secretary) of the amount of payments

under this subsection based on DRG prospective payment amounts

which is the difference between -

"(I) the sum of the additional payment amounts under paragraph

(5)(B) (relating to indirect costs of medical education) if the

indirect teaching adjustment factor were equal to 1.159r (as 'r'

is defined in paragraph (5)(B)(ii)), and

"(II) that sum using the factor specified in paragraph

(5)(B)(ii)(II)."

Subsec. (d)(3)(C)(iii). Pub. L. 99-509, Sec. 9307(c)(1)(B)(i), as

amended by Pub. L. 100-203, Sec. 4009(j)(6)(A), struck out Pub. L.

99-514, Sec. 1895(b)(2)(B), which had added cl. (iii) reading as

follows: "The Secretary shall further reduce each of the average

standardized amounts by reducing the standardized amount for each

hospital (as previously determined without regard to this clause)

by a proportion equal to the proportion (established by the

Secretary) of the amount of payments under this subsection based on

DRG prospective payment amounts which are additional payments

described in paragraph (5)(F) (relating to disproportionate share

payments) for subsection (d) hospitals."

Subsec. (d)(3)(D)(i)(I), (ii)(I). Pub. L. 99-272, Sec.

9104(b)(3), inserted "or reduced" after "(B), and adjusted".

Subsec. (d)(4)(C). Pub. L. 99-509, Sec. 9302(e)(1), substituted

"in fiscal year 1988 and at least annually" for "in fiscal year

1986 and at least every four fiscal years".

Subsec. (d)(5)(B). Pub. L. 99-272, Sec. 9104(a), amended subpar.

(B) generally. Prior to amendment, subpar. (B) read as follows:

"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) of this section, except that in the computation

under this subparagraph the Secretary shall use an educational

adjustment factor equal to twice the factor provided under such

regulations. 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."

Subsec. (d)(5)(B)(ii). Pub. L. 99-509, Sec. 9306(c), substituted

"1989" for "1988" in subcls. (I) and (II).

Subsec. (d)(5)(C)(i). Pub. L. 99-509, Sec. 9302(d)(1)(A),

designated existing provisions as subcl. (I) and added subcl. (II).

Pub. L. 99-272, Sec. 9106(a), inserted "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" before the period in second sentence.

Pub. L. 99-272, Sec. 9105(c), struck out ", 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 subchapter" after "in rural areas)".

Subsec. (d)(5)(C)(i)(I). Pub. L. 99-509, Sec. 9304(b)(1),

inserted "(other than under paragraph (9))" after "established

under this subsection" in first sentence.

Subsec. (d)(5)(C)(ii). Pub. L. 99-509, Sec. 9304(b)(2), inserted

"(other than under paragraph (9))" after "this subsection" in

second and third sentences.

Pub. L. 99-509, Sec. 9302(e)(4), substituted "1988" for "1986".

Pub. L. 99-272, Sec. 9111(a), inserted provision authorizing the

Secretary to adjust amount of payments to sole community hospitals

that realize a significant increase in operating costs in a cost

reporting period attributable to addition of new inpatient

facilities or services.

Subsec. (d)(5)(E). Pub. L. 99-509, Sec. 9320(g)(2), struck out

subpar. (E) which read as follows: "The Secretary shall provide for

an additional payment amount for any subsection (d) hospital equal

to the reasonable costs incurred by such hospital for anesthesia

services provided by a certified registered nurse anesthetist.

Payment under this subparagraph shall be the only payment made to

such hospital with respect to such services."

Subsec. (d)(5)(F). Pub. L. 99-272, Sec. 9105(a), added subpar.

(F).

Subsec. (d)(5)(F)(i). Pub. L. 99-509, Sec. 9306(c), substituted

"1989" for "1988".

Subsec. (d)(5)(F)(iv)(I). Pub. L. 99-509, Sec. 9306(b)(1),

inserted "or is described in the second sentence of subclause

(III)" after "100 or more beds".

Subsec. (d)(5)(F)(iv)(III). Pub. L. 99-509, Sec. 9306(b)(2),

inserted "and is not described in the second sentence of clause

(v)" after "rural area".

Subsec. (d)(5)(F)(v). Pub. L. 99-509, Sec. 9306(a), inserted at

end "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."

Subsec. (d)(5)(F)(vi)(I). Pub. L. 99-514, Sec. 1895(b)(2)(A),

formerly Sec. 1895(b)(2)(C), as amended by Pub. L. 99-509, Sec.

9307(c)(1)(B)(ii), as amended by Pub. L. 100-203, Sec.

4009(j)(6)(A), which directed the substitution of "supplemental"

for "supplementary" and "period" for "fiscal year", was repealed by

Pub. L. 100-647, Sec. 1018(r)(1).

Subsec. (d)(9). Pub. L. 99-509, Sec. 9304(a), added par. (9).

Subsec. (e)(1)(C). Pub. L. 99-509, Sec. 9304(c), added subpar.

(C).

Subsec. (e)(3). Pub. L. 99-509, Sec. 9302(e)(3), designated

existing provisions as subpar. (A) and added subpar. (B).

Pub. L. 99-272, Sec. 9101(c)(2), struck out "(instead of the

applicable percentage increase described in subsection (b)(3)(B) of

this section)" after "should be used".

Subsec. (e)(3)(A). Pub. L. 99-509, Sec. 9321(e)(2)(A),

substituted "March" for "April".

Subsec. (e)(4). Pub. L. 99-509, Sec. 9302(a)(2)(B), (e)(2),

substituted "recommend for fiscal year 1988 an appropriate change

factor for inpatient hospital services for discharges in that

fiscal year and shall determine for each subsequent fiscal year"

for "determine for each fiscal year (beginning with fiscal year

1987) and inserted at end "The percentage change shall be the same

for all subsection (d) hospitals and subsection (d) Puerto Rico

hospitals, but may be different from that for other hospitals (and

units not included as such hospitals) and may vary among such other

hospitals and units."

Pub. L. 99-272, Sec. 9101(c)(3), substituted "fiscal year 1987"

for "fiscal year 1986".

Subsec. (e)(5). Pub. L. 99-509, Sec. 9302(a)(2)(C), as amended by

Pub. L. 100-203, Sec. 4009(j)(6)(B), inserted "recommendation or"

before "determination" in subpars. (A) and (B).

Subsec. (e)(5)(A). Pub. L. 99-509, Sec. 9321(e)(2)(B),

substituted "May" for "June".

Subsec. (e)(6)(A). Pub. L. 99-272, Sec. 9127(a), substituted "17

individuals" for "15 individuals".

Subsec. (g)(1). Pub. L. 99-349 substituted "1987" for "1986" in

two places.

Subsec. (g)(2). Pub. L. 99-272, Sec. 9107(a)(1), designated

existing provision as subpar. (A), inserted "the applicable

percentage (described in subparagraph (B)) of", and added subpar.

(B).

Subsec. (g)(2)(B). Pub. L. 99-514, Sec. 1895(b)(3), realigned

margins of subpar. (B).

Subsec. (g)(3). Pub. L. 99-509, Sec. 9303(a), added par. (3).

Subsec. (g)(3)(A). Pub. L. 99-509, Sec. 9303(b), inserted "and a

subsection (d) Puerto Rico hospital" after "subsection (d)

hospital".

Subsec. (h). Pub. L. 99-272, Sec. 9202(a), added subsec. (h).

Subsec. (h)(2)(C). Pub. L. 99-514, Sec. 1895(b)(9)(A),

substituted "subparagraph (B)" for "paragraph (B)".

Subsec. (h)(4)(D). Pub. L. 99-514, Sec. 1895(b)(9)(B), (C),

redesignated subpar. (E) as (D) and in cl. (ii) inserted "but

before July 1, 1987,".

Subsec. (h)(4)(E). Pub. L. 99-509, Sec. 9314(a), added subpar.

(E).

Pub. L. 99-514, Sec. 1895(b)(9)(C), redesignated former subpar.

(E) as (D).

Subsec. (h)(5)(B). Pub. L. 99-514, Sec. 1895(b)(9)(D),

substituted "The" for "As used in this paragraph, the".

1984 - Subsec. (a)(2)(B). Pub. L. 98-369, Sec. 2354(b)(42),

substituted "disproportionate" for "disportionate".

Subsec. (a)(4). Pub. L. 98-369, Sec. 2312(b), temporarily

inserted ", costs of anesthesia services provided by a certified

registered nurse anesthetist" after "approved educational

activities". See Effective and Termination Dates of 1984 Amendments

note below.

Subsec. (b)(3)(A)(ii). Pub. L. 98-369, Sec. 2354(b)(43), inserted

"of" after "in the case".

Subsec. (b)(3)(B). Pub. L. 8-369, Sec. 2310(a), substituted

"one-quarter of 1 percentage point" for "1 percentage point" and

inserted provision that in determining the percentage change under

subsec. (e) of this section with respect to discharges occurring in

any cost reporting period or fiscal year beginning on or after Oct.

1, 1985, and before Oct. 1, 1986, the Secretary may not establish a

percentage increase which exceeds the applicable percentage

increase otherwise determined for that period or fiscal year under

the preceding sentence.

Subsec. (c)(4)(A). Pub. L. 98-369, Sec. 2315(a), substituted

"(D), and (E)" for "and (D)".

Subsec. (d)(2)(D). Pub. L. 98-369, Sec. 2315(b), struck out

"Standard" before "Metropolitan" in provision following cl. (ii).

Pub. L. 98-369, Sec. 2311(b), inserted provision for determining

the region a hospital located in a Metropolitan Statistical Area

would be deemed to be located.

Subsec. (d)(3)(D)(i)(I). Pub. L. 8-369, Sec. 2354(b)(44),

substituted "(C))" for "(C),".

Subsec. (d)(5)(B). Pub. L. 98-369, Sec. 2307(b)(1), inserted

provision that in determining such adjustment the Secretary not

distinguish between those interns and residents who are employees

of a hospital and those who furnish services to a hospital but are

not employees of such hospital.

Subsec. (d)(5)(C)(i). Pub. L. 98-617 substituted "August 17,

1984" for "30 days after July 18, 1984" before "for implementation

by".

Pub. L. 98-369, Sec. 2311(a), inserted provisions permitting a

hospital classified as a rural hospital to appeal to the Secretary

for reclassification as a rural referral center on the basis of

criteria established and published by the Secretary and requiring

the Secretary to make a final determination with respect to such

appeal within 60 days after the date the appeal was submitted.

Subsec. (d)(5)(E). Pub. L. 98-369, Sec. 2312(a), temporarily

added subpar. (E). See Effective and Termination Dates of 1984

Amendments note below.

Subsec. (d)(8). Pub. L. 8-369, Sec. 2311(c), added par. (8).

Subsec. (e)(2). Pub. L. 98-369, Sec. 2313(a), inserted "(without

regard to the provisions of title 5 governing appointments in the

competitive service)" after "appointed by the Director".

Subsec. (e)(5). Pub. L. 98-369, Sec. 2315(c)(1), struck out "for

public comment" after "have published" in provisions preceding

subpar. (A).

Subsec. (e)(5)(A). Pub. L. 98-369, Sec. 2315(c)(2), inserted "for

public comment" after "that fiscal year".

Subsec. (e)(6)(C). Pub. L. 98-369, Sec. 2313(b)(3), inserted

provision that section 10(a)(1) of the Federal Advisory Committee

Act not apply to any portion of a Commission meeting if the

Commission, by majority vote, determines such portion of such

meeting should be closed.

Subsec. (e)(6)(C)(i). Pub. L. 98-369, Sec. 2313(b)(1), amended

cl. (i) generally, substituting provision authorizing the

Commission to employ and fix the compensation of an Executive

Director, subject to the approval of the Director of the Office,

and such other personnel, not to exceed 25, as necessary, without

regard to the provisions of title 5 governing appointment in the

competitive service, for provision authorizing the Commission to

employ and fix the compensation of such personnel, not to exceed

25, as may be necessary to carry out its duties.

Subsec. (e)(6)(C)(iii). Pub. L. 98-369, Sec. 2313(b)(2), inserted

"(without regard to section 5 of title 41)" after "Commission".

Subsec. (e)(6)(D). Pub. L. 98-369, Sec. 2313(b)(4), inserted

provision relating to payment of physician comparability allowance

in the same manner as provided under section 5948 of title 5 and

providing that for such purpose subsec. (i) of such section apply

to the Commission in the same manner as it applies to the Tennessee

Valley Authority.

Subsec. (e)(6)(J). Pub. L. 98-369, Sec. 2313(d), added subpar.

(J).

1983 - Subsec. (a)(1)(D). Pub. L. 98-21, Sec. 601(a)(1), added

subpar. (D).

Subsec. (a)(4). Pub. L. 98-21, Sec. 601(a)(2), inserted provision

that term "operating costs of inpatient hospital services" does not

include costs of approved educational activities, or, with respect

to costs incurred in cost reporting periods beginning prior to Oct.

1, 1986, capital-related costs, as defined by the Secretary.

Pub. L. 97-448, Sec. 309(b)(13), substituted "as such costs are

determined" for "and such costs are determined".

Subsec. (b)(1). Pub. L. 98-21, Sec. 601(b)(1), (2), in provisions

preceding subpar. (A), substituted "Notwithstanding section

1395f(b) of this title but subject to the provisions of section

1395e of this title" for "Notwithstanding sections 1395f(b) of this

title, but subject to the provisions of sections 1395e of this

title" and inserted "(other than a subsection (d) hospital, as

defined in subsection (d)(1)(B) of this section)".

Pub. L. 98-21, Sec. 601(b)(3), inserted "(other than on the basis

of a DRG prospective payment rate determined under subsection (d)

of this section)" in provisions following subpar. (B).

Pub. L. 97-448, Sec. 309(b)(14), substituted "section 1395f(b)"

for "sections 1395f(b)" in provisions preceding subpar. (A).

Subsec. (b)(2). Pub. L. 98-21, Sec. 601(b)(4), struck out par.

(2) which provided that par. (1) would not apply to cost reporting

periods of hospitals beginning on or after Oct. 1, 1985.

Subsec. (b)(3)(B). Pub. L. 98-21, Sec. 601(b)(5)-(8), inserted

"and subsection (d) of this section and except as provided in

subsection (e) of this section" after "subparagraph (A)", inserted

"or fiscal year" after "cost reporting period" each place it

appears, inserted "before the beginning of the period or year"

after "estimated by the Secretary", and substituted "will exceed"

for "exceeds".

Subsec. (b)(6). Pub. L. 98-21, Sec. 601(b)(9), added par. (6) and

repealed a prior par. (6) which directed the Secretary to provide

for an adjustment under this paragraph in the amount of payment

otherwise provided a hospital under this subsection in the case of

a hospital which, as of Aug. 15, 1982, was subject to FICA taxes

and which was not subject to such taxes for part or all of a cost

reporting period beginning on or after Oct. 1, 1982, that in making

such adjustment for a cost reporting period the Secretary was to

estimate the amount of the operating costs of inpatient hospital

services that would have resulted if the hospital was subject to

the FICA taxes during that period, that in making such estimate the

Secretary was to reduce the amount of such FICA taxes that would

have been paid (but not below zero) by the amount of costs which

the hospital demonstrated to the satisfaction of the Secretary were

incurred in the period for pensions, health, and other fringe

benefits for employees (and former employees and family members)

comparable to, and in lieu of, the benefits provided under

subchapter II of this chapter and this subchapter, that if a

hospital's operating costs of inpatient hospital services estimated

under subparagraph (B) was greater than the hospital's operating

costs of inpatient hospital services determined without regard to

this paragraph for a cost reporting period, then the Secretary was

to reduce the amount otherwise paid the hospital (respecting

operating costs of inpatient hospital services) under this title

(taking into account any limitation under subsection (a) of this

section) for the period by the amount by which (i) the amount that

would have been paid the hospital if (I) the amount of the

operating costs of inpatient hospital services estimated under

subparagraph (B) were treated as the amount of the operating costs

of inpatient hospital services and (II) subsection (a) of this

section did not apply to the determination, exceeded (ii) the

amount that would otherwise have been paid the hospital if

subsection (a) of this section (and this paragraph) did not apply,

except that, in making such determination for cost reporting

periods beginning on or after Oct. 1, 1984, clause (ii) of

paragraph (1)(B) was to continue to apply.

Subsec. (b)(6)(C). Pub. L. 97-448, Sec. 309(b)(15), substituted

"under this subchapter (taking into account any limitation under

subsection (a) of this section)" for "under this subsection" in

provisions preceding cl. (i).

Subsec. (c)(1). Pub. L. 98-21, Sec. 601(c)(1), added subpars. (D)

and (E) and provisions following subpar. (E).

Subsec. (c)(3)(A). Pub. L. 98-21, Sec. 601(c)(2)(A), substituted

"meets the requirements of subparagraphs (A), (D), and (E) of

paragraph (1) and, if applicable, the requirements of paragraph

(5)," for "meets the requirement of paragraph (1)(A)".

Subsec. (c)(3)(B). Pub. L. 98-21, Sec. 601(c)(2)(B), inserted

"(or, if applicable, in paragraph (5))".

Subsec. (c)(4) to (6). Pub. L. 98-21, Sec. 601(c)(3), added pars.

(4) to (6).

Subsec. (d). Pub. L. 98-21, Sec. 601(d)(2), (e), added subsec.

(d) and redesignated former subsec. (d), relating to the

elimination of lesser-of-cost-or-charges provisions, as subsec. (j)

of section 1814 of act Aug. 14, 1935, which is classified to

subsec. (j) of section 1395f of this title.

Subsecs. (e) to (g). Pub. L. 98-21, Sec. 601(e), added subsecs.

(e) to (g).

1982 - Subsec. (d). Pub. L. 97-248, Sec. 110, added subsec. (d).

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(6) [title II, Sec. 212(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-485, provided that: "The amendment made

by this section [amending this section] shall apply with respect to

cost reporting periods beginning on or after April 1, 2001."

Pub. L. 106-554, Sec. 1(a)(6) [title II, Sec. 213(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-486, provided that: "The amendments

made by this section [amending this section] shall take effect as

if included in the enactment of section 405 of BBRA [Pub. L.

106-113, Sec. 1000(a)(6) [title IV, Sec. 405]] (113 Stat.

1501A-372)."

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 301(e)(2)], Dec.

21, 2000, 114 Stat. 2763, 2763A-492, provided that: "The amendment

made by paragraph (1) [amending this section] shall apply to

discharges occurring on or after October 1, 2001."

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 303(d)(2)], Dec.

21, 2000, 114 Stat. 2763, 2763A-494, provided that: "The amendment

made by paragraph (1) [amending this section] is effective as if

included in the enactment of BBA [Pub. L. 105-33]."

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 305(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-496, provided that: "The amendments

made by this section [amending this section] take effect as if

included in the enactment of BBA [Pub. L. 105-33]."

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 512(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-534, provided that: "The amendment made

by subsection (a) [amending this section] shall apply to portions

of cost reporting periods occurring on or after January 1, 2001."

EFFECTIVE DATE OF 1999 AMENDMENT

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 121(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-330, provided that: "The

amendments made by subsection (a) [amending this section] apply to

cost reporting periods beginning on or after October 1, 1999."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 125(c)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-333, provided that: "The

amendments made by subsection (a) [amending this section] are

effective as if included in the enactment of section 4421(a) of BBA

[the Balanced Budget Act of 1997, Pub. L. 105-33]."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec.

312(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A-365, provided that:

"The amendments made by subsection (a) [amending this section]

apply on and after July 1, 2000, to residency programs that began

before, on, or after the date of the enactment of this Act [Nov.

29, 1999]."

Amendment by section 1000(a)(6) [title III, Sec. 321(b), (e),

(f), (h), (k)(15)-(17)] of Pub. L. 106-113 effective as if included

in the enactment of the Balanced Budget Act of 1997, Pub. L.

105-33, except as otherwise provided, see section 1000(a)(6) [title

III, Sec. 321(m)] of Pub. L. 106-113, set out as a note under

section 1395d of this title.

Amendment by section 1000(a)(6) [title IV, Sec. 401(a)] of Pub.

L. 106-113 effective Jan. 1, 2000, see section 1000(a)(6) [title

IV, Sec. 401(c)] of Pub. L. 106-113, set out as a note under

section 1395i-4 of this title.

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec. 402(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-370, provided that: "The

amendments made by subsection (a) [amending this section] apply

with respect to discharges occurring during cost reporting periods

beginning on or after October 1, 1999."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec.

407(a)(3)], Nov. 29, 1999, 113 Stat. 1536, 1501A-373, provided

that:

"(A) DGME. - The amendments made by paragraph (1) [amending this

section] apply to cost reporting periods that begin on or after the

date of the enactment of this Act [Nov. 29, 1999].

"(B) IME. - The amendment made by paragraph (2) [amending this

section] applies to discharges occurring in cost reporting periods

that begin on or after such date of enactment."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec.

407(b)(3)], Nov. 29, 1999, 113 Stat. 1536, 1501A-374, provided

that:

"(A) DGME. - The amendment made by paragraph (1) [amending this

section] applies to cost reporting periods beginning on or after

April 1, 2000.

"(B) IME. - The amendment made by paragraph (2) [amending this

section] applies to discharges occurring on or after April 1,

2000."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec.

407(c)(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A-374, provided

that: "The amendment made by paragraph (1) [amending this section]

applies with respect to -

"(A) payments to hospitals under section 1886(h) of the Social

Security Act (42 U.S.C. 1395ww(h)) for cost reporting periods

beginning on or after April 1, 2000; and

"(B) payments to hospitals under section 1886(d)(5)(B)(v) of

such Act (42 U.S.C. 1395ww(d)(5)(B)(v)) for discharges occurring

on or after April 1, 2000."

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by section 4022(b) of Pub. L. 105-33 effective Nov. 1,

1997, the date of termination of the Prospective Payment Assessment

Commission and the Physician Payment Review Commission, see section

4022(c)(2) of Pub. L. 105-33, set out as an Effective Date;

Transition; Transfer of Functions note under section 1395b-6 of

this title.

Amendment by section 4201(c)(1), (4) of Pub. L. 105-33 applicable

to services furnished on or after Oct. 1, 1997, see section 4201(d)

of Pub. L. 105-33, set out as a note under section 1395f of this

title.

Section 4204(b) of Pub. L. 105-33 provided that: "The amendments

made by subsection (a) [amending this section and provisions set

out as a note below] shall apply with respect to discharges

occurring on or after October 1, 1997."

Section 4405(d) of Pub. L. 105-33 provided that: "The amendments

made by this section [amending this section] apply to discharges

occurring after September 30, 1997."

Section 4415(e) of Pub. L. 105-33 provided that: "The amendments

made by subsections (a) and (c) [amending this section] shall apply

with respect to cost reporting periods beginning on or after

October 1, 1997."

Section 4417(a)(2) of Pub. L. 105-33 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to discharges occurring on or after October 1, 1995."

Section 4417(b)(2) of Pub. L. 105-33 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to cost reporting periods beginning on or after the date of the

enactment of this Act [Aug. 5, 1997]."

Section 4419(a)(2) of Pub. L. 105-33 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to hospitals or units that first qualify as a hospital or unit

described in section 1886(d)(1)(B) (42 U.S.C. 1395ww(d)(1)(B)) for

cost reporting periods beginning on or after October 1, 1997."

Section 4421(c) of Pub. L. 105-33 provided that: "The amendments

made by this section [amending this section] shall apply to cost

reporting periods beginning on or after October 1, 2000, except

that the Secretary of Health and Human Services may require the

submission of data under section 1886(j)(2)(D) of the Social

Security Act [subsec. (j)(2)(D) of this section] (as added by

subsection (a)) on and after the date of the enactment of this

section [Aug. 5, 1997]."

Section 4627(b) of Pub. L. 105-33 provided that: "The amendments

made by subsection (a) [amending this section] apply to combined

medical residency training programs in effect for residency years

beginning on or after July 1, 1997."

EFFECTIVE DATE OF 1994 AMENDMENT

Section 101(a)(2) of Pub. L. 103-432 provided that: "The

amendment made by paragraph (1) [amending this section] shall take

effect as if included in the enactment of OBRA-1989 [Pub. L.

101-239]."

Section 153(b) of Pub. L. 103-432 provided that: "The amendment

made by subsection (a) [amending this section] shall apply as if

included in the enactment of the Consolidated Omnibus Budget

Reconciliation Act of 1985 (Public Law 99-272)."

EFFECTIVE DATE OF 1993 AMENDMENT

Section 13501(b)(3) of Pub. L. 103-66 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to discharges occurring on or after October 1, 1991."

Section 13563(b)(2) of Pub. L. 103-66 provided that: "The

amendments made by paragraphs (1)(A) and (1)(B) [amending this

section] shall take effect on July 1, 1995, and the date of the

enactment of this Act [Aug. 10, 1993], respectively."

Section 13563(c)(2) of Pub. L. 103-66 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to payments under section 1886(h) of the Social Security Act

[subsec. (h) of this section] for cost reporting periods beginning

on or after October 1, 1992."

EFFECTIVE DATE OF 1990 AMENDMENT

Section 4002(a)(2) of Pub. L. 101-508 provided that: "The

amendments made by paragraph (1) [amending this section] shall

apply to payments for discharges occurring on or after January 1,

1991."

Section 4002(b)(5) of Pub. L. 101-508 provided that: "The

amendments made by paragraphs (1), (3), and (4)(B) [amending this

section] shall apply to discharges occurring on or after January 1,

1991, the amendment made by paragraph (2) [amending this section]

shall apply to discharges occurring on or after October 1, 1991,

and the amendment made by paragraph (4)(A) [amending this section]

shall take effect as if included in the enactment of the Omnibus

Budget Reconciliation Act of 1989 [Pub. L. 101-239]."

Section 4002(c)(3) of Pub. L. 101-508 provided that: "The

amendments made by paragraph (1) and paragraph (2)(A) [amending

this section] shall apply to payments for discharges occurring on

or after January 1, 1991, and the amendments made by paragraph

(2)(B) [amending this section] shall take effect October 1, 1994."

Section 4002(e)(4)[(3)] of Pub. L. 101-508 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to discharges occurring on or after October 1, 1990."

Section 4002(g)(5) of Pub. L. 101-508 provided that: "The

amendments made by this subsection [amending this section and

section 1395w-1 of this title] shall take effect on the date of the

enactment of this Act [Nov. 5, 1990]."

Section 4002(h)(1)(B) of Pub. L. 101-508 provided that: "The

amendments made by subparagraph (A) [amending this section] shall

apply to discharges occurring on or after January 1, 1991."

Section 4003(b) of Pub. L. 101-508 provided that: "The amendment

made by subsection (a) [amending this section] shall apply -

"(1) in the case of any services provided during the day

immediately preceding the date of a patient's admission (without

regard to whether the services are related to the admission), to

services furnished on or after the date of the enactment of this

Act [Nov. 5, 1990] and before October 1, 1991;

"(2) in the case of diagnostic services (including clinical

diagnostic laboratory tests), to services furnished on or after

January 1, 1991; and

"(3) in the case of any other services, to services furnished

on or after October 1, 1991."

Section 4005(a)(2) of Pub. L. 101-508 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to cost reporting periods beginning on or after October 1, 1991."

Section 4005(c)(4) of Pub. L. 101-508 provided that: "The

amendments made by paragraph (1) [amending this section and section

1395h of this title] shall take effect on the date of the enactment

of this Act [Nov. 5, 1990], and the amendments made by paragraph

(2) [amending this section] shall take effect as if included in the

enactment of the Omnibus Budget Reconciliation Act of 1989 [Pub. L.

101-239]."

Section 4008(f)(2) of Pub. L. 101-508 provided that: "The

amendment made by paragraph (1) [amending this section] shall take

effect as if included in the enactment of the Omnibus Budget

Reconciliation Act of 1989 [Pub. L. 101-239]."

EFFECTIVE DATE OF 1989 AMENDMENT

Section 6003(a)(2) of Pub. L. 101-239 provided that: "The

amendments made by paragraph (1) [amending this section] shall

apply to payments for discharges occurring on or after January 1,

1990."

Section 6003(c)(4) of Pub. L. 101-239 provided that: "The

amendments made by this subsection [amending this section] shall

apply with respect to discharges occurring on or after April 1,

1990."

Section 6003(h)(7) of Pub. L. 101-239 provided that: "The

amendments made by paragraphs (3) and (4) [amending this section]

shall apply to discharges occurring on or after April 1, 1990."

Section 6004(a)(3) of Pub. L. 101-239 provided that: "The

amendments made by this subsection [amending this section] shall

apply with respect to cost reporting periods beginning on or after

October 1, 1989, except that -

"(A) in the case of a hospital classified by the Secretary of

Health and Human Services as a hospital involved extensively in

treatment for or research on cancer under section 1886(d)(5)(I)

of the Social Security Act [subsec. (d)(5)(I) of this section]

(as redesignated by section 6003(e)(1)(A)) after the date of the

enactment of this Act [Dec. 19, 1989], such amendments shall

apply with respect to cost reporting periods beginning on or

after the date of such classification,

"(B) in the case of a hospital that is not described in

subparagraph (A), such amendments shall apply with respect to

portions of cost reporting periods or discharges occurring during

and after fiscal year 1987 for purposes of section 1886(g) of the

Social Security Act [subsec. (g) of this section], and

"(C) such amendments shall take effect 30 days after the date

of the enactment of this Act for purposes of determining the

eligibility of a hospital to receive periodic interim payments

under section 1815(e)(2) of the Social Security Act [section

1395g(e)(2) of this title]."

Section 6004(b)(2) of Pub. L. 101-239 provided that: "The

amendments made by paragraph (1) [amending this section] shall

apply with respect to cost reporting periods beginning on or after

April 1, 1989."

Section 6011(d) of Pub. L. 101-239, as amended by Pub. L. 103-66,

title XIII, Sec. 13505, Aug. 10, 1993, 107 Stat. 579; Pub. L.

105-33, title IV, Sec. 4452, Aug. 5, 1997, 111 Stat. 425, provided

that: "The amendments made by subsection (a) [amending this

section] shall apply with respect to items furnished 6 months after

the date of enactment of this Act [Dec. 19, 1989] and on or before

September 30, 1994, and on or after October 1, 1997."

[Section 13505 of Pub. L. 103-66 provided in part that the

amendment made by that section to section 6011(d) of Pub. L.

101-239, set out above, is effective as if included in the

enactment of Pub. L. 101-239.]

Section 6015(c) of Pub. L. 101-239 provided that: "The amendment

made by subsection (a) [amending this section] shall become

effective with respect to cost reporting periods beginning on or

after April 1, 1990."

EFFECTIVE DATE OF 1988 AMENDMENTS

Amendment by section 1018(r)(1) of Pub. L. 100-647 effective,

except as otherwise provided, as if included in the provision of

the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment

relates, see section 1019(a) of Pub. L. 100-647, set out as a note

under section 1 of Title 26, Internal Revenue Code.

Amendment by Pub. L. 100-485 effective as if included in the

enactment of the Medicare Catastrophic Coverage Act of 1988, Pub.

L. 100-360, see section 608(g)(1) of Pub. L. 100-485, set out as a

note under section 704 of this title.

Except as specifically provided in section 411 of Pub. L.

100-360, amendment by Pub. L. 100-360, as it relates to a provision

in the Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-203,

effective as if included in the enactment of that provision in Pub.

L. 100-203, see section 411(a) of Pub. L. 100-360, set out as a

Reference to OBRA; Effective Date note under section 106 of Title

1, General Provisions.

EFFECTIVE DATE OF 1987 AMENDMENTS

Section 4002(g) of Pub. L. 100-203, as amended by Pub. L.

100-360, title IV, Sec. 411(b)(1)(I), July 1, 1988, 102 Stat. 769,

provided that:

"(1) PPS hospitals, drg portion of payment. - In the case of a

subsection (d) hospital (as defined in paragraph (6)) -

"(A) the amendments made by subsections (a) and (c) [amending

this section] shall apply to payments made under section

1886(d)(1)(A)(iii) of the Social Security Act [subsec.

(d)(1)(A)(iii) of this section] on the basis of discharges

occurring on or after April 1, 1988, and

"(B) for discharges occurring on or after October 1, 1988, the

applicable percentage increase (described in section

1886(b)(3)(B) of such Act [subsec. (b)(3)(B) of this section])

for discharges occurring during fiscal year 1987 is deemed to

have been such percentage increase as amended by subsection (a).

"(2) PPS sole community hospitals, hospital specific portion of

payment. - In the case of a subsection (d) hospital which receives

payments made under section 1886(d)(1)(A) of the Social Security

Act [subsec. (d)(1)(A) of this section] because it is a sole

community hospital -

"(A) the amendment made by subsections (a) and (c) [amending

this section] shall apply to payments under section

1886(d)(1)(A)(ii)(I) of the Social Security Act made on the basis

of discharges occurring during a cost reporting period of a

hospital, for the hospital's cost reporting period beginning on

or after October 1, 1987;

"(B) notwithstanding subparagraph (A), for cost reporting

period beginning during fiscal year 1988, the applicable

percentage increase (as defined in section 1886(b)(3)(B) of such

Act [subsec. (b)(3)(B) of this section]) for the -

"(i) first 51 days of the cost reporting period shall be 0

percent,

"(ii) next 132 days of such period shall be 2.7 percent, and

"(iii) remainder of such period of the cost reporting period

shall be the applicable percentage increase (as so defined, as

amended by subsection (a)); and

"(C) for cost reporting periods beginning on or after October

1, 1988, the applicable percentage increase (as so defined) with

respect to the previous cost reporting period shall be deemed to

have been the applicable percentage increase (as so defined, as

amended by subsection (a)).

"(3) PPS-exempt hospitals. - In the case of a hospital that is

not a subsection (d) hospital -

"(A) the amendments made by subsection (e) [amending this

section] shall apply to cost reporting periods beginning on or

after October 1, 1987;

"(B) notwithstanding subparagraph (A), for the hospital's cost

reporting period beginning during fiscal year 1988, payment under

title XVIII of the Social Security Act [this subchapter] shall be

made as though the applicable percentage increase described in

section 1886(b)(3)(B) of such Act [subsec. (b)(3)(B) of this

section] were equal to the product of 2.7 percent and the ratio

of 315 to 366; and

"(C) for cost reporting periods beginning on or after October

1, 1988, the applicable percentage increase (as so defined) with

respect to the cost reporting period beginning during fiscal year

1988 shall be deemed to have been 2.7 percent.

"(4) Definition, regional floor, and technical and conforming

amendments. - The amendments made by subsections (b) and (d) and

paragraphs (1) and (2) of subsection (f) [amending this section and

provisions set out as a note below] shall take effect on the date

of the enactment of this Act [Dec. 22, 1987].

"(5) Transition for large urban area rates. - In computing the

average standardized amount for hospitals located in a large urban

area or other urban area under section 1886(d)(3)(A)(ii) of the

Social Security Act [subsec. (d)(3)(A)(ii) of this section] (as

amended by subsection (c)) for fiscal year 1988, the reference to

'the respective average standardized amount computed for the

previous fiscal year under this subparagraph' is deemed a reference

to the average standardized amount computed for hospitals located

in an urban area for the 51-day period beginning on October 1,

1987.

"(6) Definition. - In this subsection, the term 'subsection (d)

hospital' has the meaning given such term in section 1886(d)(1)(B)

of the Social Security Act [subsec. (d)(1)(B) of this section]."

Section 4003(e) of Pub. L. 100-203 provided that: "The amendments

made by this section [amending this section] shall apply to

payments for discharges occurring on or after October 1, 1988."

Section 4005(a)(3) of Pub. L. 100-203, as amended by Pub. L.

100-360, title IV, Sec. 411(b)(4)(C)(ii), July 1, 1988, 102 Stat.

770, provided that: "This subsection [amending this section] shall

apply to discharges occurring on or after October 1, 1988."

Section 4005(c)(2)(A) of Pub. L. 100-203 provided that: "The

amendments made by paragraph (1) [amending this section] shall

apply to cost reporting periods beginning on or after October 1,

1987[.]"

Section 4005(d)(1)(B) of Pub. L. 100-203 provided that: "The

amendment made by subparagraph (A) [amending this section] shall

apply to discharges occurring on or after April 1, 1988."

Section 4006(b)(3) of Pub. L. 100-203 provided that: "The

amendment made by paragraph (1) [amending this section] shall take

effect on October 1, 1987. The amendments made by paragraph (2)

[amending this section] shall apply to cost reporting periods

beginning on or after October 1, 1987."

Section 4007(b)(2) of Pub. L. 100-203, as amended by Pub. L.

100-360, title IV, Sec. 411(b)(6)(B), July 1, 1988, 102 Stat. 770,

provided that: "The amendment made by paragraph (1)(C) [amending

this section] shall apply to hospital cost reporting periods

beginning on or after October 1, 1989."

Section 4009(d)(2) of Pub. L. 100-203 provided that: "The

amendments made by paragraph (1) [amending this section] shall

apply to appointments made after the date of the enactment of this

Act [Dec. 22, 1987]."

Section 4009(j)(6) of Pub. L. 100-203 provided that the amendment

made by that section is effective as if included in the enactment

of Pub. L. 99-509.

Section 4083(b)(2) of Pub. L. 100-203 provided that: "The

amendments made by paragraph (1) [amending this section] shall take

effect on the date of the enactment of this Act [Dec. 22, 1987]."

Amendment by Pub. L. 100-93 effective at end of fourteen-day

period beginning Aug. 18, 1987, and inapplicable to administrative

proceedings commenced before end of such period, see section 15(a)

of Pub. L. 100-93, set out as a note under section 1320a-7 of this

title.

EFFECTIVE DATE OF 1986 AMENDMENTS

Section 1895(b)(1)(D) of Pub. L. 99-514, which provided for

applicability of amendments to this section by section 1895(b)(1)

of Pub. L. 99-514 to discharges occurring on or after Oct. 1, 1986,

with certain exceptions, was repealed by Pub. L. 99-509, title IX,

Sec. 9307(c)(1)(A), Oct. 21, 1986, 100 Stat. 1995, and by Pub. L.

100-647, title I, Sec. 1018(r)(1), Nov. 10, 1988, 102 Stat. 3586.

Section 1895(b)(2)(B), formerly Sec. 1895(b)(2)(D), of Pub. L.

99-514, as amended by Pub. L. 99-509, title IX, Sec.

9307(c)(1)(B)(iii), as amended by Pub. L. 100-203, title IV, Sec.

4009(j)(6)(A), Dec. 22, 1987, 101 Stat. 1330-59, which provided for

applicability of amendments to this section by section

1895(b)(2)(A) of Pub. L. 99-514 to discharges occurring on or after

May 1, 1986, was repealed by Pub. L. 100-647, title I, Sec.

1018(r)(1), Nov. 10, 1988, 102 Stat. 3586.

Amendment by section 1895(b)(3), (9) of Pub. L. 99-514 effective,

except as otherwise provided, as if included in enactment of the

Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L.

99-272, see section 1895(e) of Pub. L. 99-514, set out as a note

under section 162 of Title 26, Internal Revenue Code.

Section 9302(a)(3) of Pub. L. 99-509 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to cost reporting periods beginning on or after October 1, 1986

and, for purposes of section 1886(d) of the Social Security Act

[subsec. (d) of this section], for cost reporting periods beginning

and discharges occurring on or after October 1, 1986."

Section 9302(b)(2) of Pub. L. 99-509 provided that: "The

amendments made by paragraph (1) [amending this section] shall

apply to discharges occurring on or after October 1, 1986."

Section 9302(d)(1)(B) of Pub. L. 99-509 provided that:

"(i) Subject to clause (ii), the amendments made by subparagraph

(A) [amending this section] shall apply to payments for discharges

occurring on or after October 1, 1986.

"(ii) An appeal for classification of a rural hospital as a

regional referral center, pursuant to the amendments made by

subparagraph (A), which is filed before January 1, 1987, and which

is approved shall be effective with respect to discharges occurring

on or after October 1, 1986."

Section 9303(b) of Pub. L. 99-509 provided that the amendment

made by such section 9303(b) is effective for cost reporting

periods beginning and discharges occurring (as the case may be) on

or after Oct. 1, 1987.

Section 9304(d) of Pub. L. 99-509 provided that: "The amendments

made by this section [amending this section] shall apply to

discharges occurring on or after October 1, 1987."

Section 9306(d) of Pub. L. 99-509 provided that: "The amendments

made by subsections (a) and (b) [amending this section] shall apply

to discharges occurring on or after October 1, 1986."

Section 9307(c)(1) of Pub. L. 99-509 provided that the amendment

made by such section 9307(c)(1) is effective as if included in the

enactment of the Tax Reform Act of 1986 (Pub. L. 99-514), if

H.Con.Res. 395, 99th Congress, 2d Session, is not adopted.

H.Con.Res. 395 was not adopted.

Section 9314(b) of Pub. L. 99-509 provided that: "The amendments

made by subsection (a) [amending this section] shall apply to

payments for approved residency training programs as of July 1,

1987."

Amendment by section 9320(g) of Pub. L. 99-509 applicable to

services furnished on or after Jan. 1, 1989, with exceptions for

hospitals located in rural areas which meet certain requirements

related to certified registered nurse anesthetists, see section

9320(i), (k) of Pub. L. 99-509, as amended, set out as notes under

section 1395k of this title.

Section 9321(e)(3)(B) of Pub. L. 99-509 provided that: "The

amendments made by paragraph (2) [amending this section] shall take

effect beginning with fiscal year 1989."

Section 9101(d) of Pub. L. 99-272 provided that: "The amendment

made by subsection (a) [amending section 5(c) of Pub. L. 99-107,

set out below] shall take effect on March 15, 1986, and the

amendments made by subsection (c) [amending this section] shall

take effect on the date of the enactment of this Act [Apr. 7,

1986]."

Section 9101(e) of Pub. L. 99-272 provided that:

"(1) PPS hospitals, drg portion of payment. - In the case of a

subsection (d) hospital (as defined in paragraph (4)) -

"(A) the amendment made by subsection (b) [amending this

section] shall apply to payments made under section 1886(d)(1)(A)

of such Act [subsec. (d)(1)(A) of this section] made on the basis

of discharges occurring on or after May 1, 1986; and

"(B) for discharges occurring on or after October 1, 1986, the

applicable percentage increase (described in section

1886(b)(3)(B) [subsec. (b)(3)(B) of this section]) for discharges

occurring during fiscal year 1986 shall be deemed to have been

1/2 percent.

"(2) PPS hospitals, hospital specific portion of payment. - In

the case of a subsection (d) hospital -

"(A) the amendment made by subsection (b) [amending this

section] shall apply to payments under section 1886(d)(1)(A) of

the Social Security Act [subsec. (d)(1)(A) of this section] made

on the basis of discharges occurring during a cost reporting

period of a hospital, for the hospital's cost reporting periods

beginning on or after October 1, 1985;

"(B) notwithstanding subparagraph (A), for the cost reporting

period beginning during fiscal year 1986, the applicable

percentage increase (as defined in section 1886(b)(3)(B) of such

Act [subsec. (b)(3)(B) of this section]) for the -

"(i) first 7 months of the cost reporting period shall be 0

percent, and

"(ii) for the remaining 5 months of the cost reporting period

shall be 1/2 percent; and

"(C) for cost reporting periods beginning on or after October

1, 1986, the applicable percentage increase (as so defined) with

respect to the previous cost reporting period shall be deemed to

have been 1/2 percent.

"(3) PPS-exempt hospitals. - In the case of a hospital that is

not a subsection (d) hospital -

"(A) the amendment made by subsection (b) [amending this

section] shall apply to cost reporting periods beginning on or

after October 1, 1985;

"(B) notwithstanding subparagraph (A), for the hospital's cost

reporting period beginning during fiscal year 1986, payment under

title XVIII of the Social Security Act [this subchapter] shall be

made as though the applicable percentage increase described in

section 1886(b)(3)(B) [subsec. (b)(3)(B) of this section] were

equal to 5/24 of 1 percent; and

"(C) for cost reporting periods beginning on or after October

1, 1986, the applicable percentage increase (as so defined) with

respect to the cost reporting period beginning during fiscal year

1986 shall be deemed to have been 1/2 percent.

"(4) Definition. - In this subsection, the term 'subsection (d)

hospital' has the meaning given such term in section 1886(d)(1)(B)

of the Social Security Act [subsec. (d)(1)(B) of this section]."

Section 9102(d) of Pub. L. 99-272 provided that:

"(1) Delay in final transition. - The amendment made by

subsection (a) [amending this section] shall take effect on the

date of the enactment of this Act [Apr. 7, 1986]."

"(2) Change in hospital specific percentage. - The amendments

made by subsection (b) [amending this section] shall apply -

"(A) to cost reporting periods beginning on or after October 1,

1985, but

"(B) notwithstanding subparagraph (A), for a hospital's cost

reporting period beginning during fiscal year 1986, for purposes

of section 1886(d)(1)(A) of the Social Security Act [subsec.

(d)(1)(A) of this section] -

"(i) during the first 7 months of the period the 'target

percentage' is 50 percent and the 'DRG percentage' is 50

percent, and

"(ii) during the remaining 5 months of the period the 'target

percentage' is 45 percent and the 'DRG percentage' is 55

percent.

"(3) Change in blended rate. - The amendments made by subsection

(c) [amending this section] shall apply to discharges occurring on

or after May 1, 1986.

"(4) Exception. -

"(A) Notwithstanding any other provision of this subsection,

the amendments made by this section [amending this section] shall

not apply to payments with respect to the operating costs of

inpatient hospital services (as defined in section 1886(a)(4) of

the Social Security Act [subsec. (a)(4) of this section]) of a

subsection (d) hospital (as defined in section 1886(d)(1)(B) of

such Act [subsec. (d)(1)(B) of this section]) located in the

State of Oregon.

"(B) Notwithstanding any other provision of law, for a cost

reporting period beginning during fiscal year 1986 of a

subsection (d) hospital to which the amendments made by this

section [amending this section] do not apply, for purposes of

section 1886(d)(1)(A) of of [sic] Social Security Act [subsec.

(d)(1)(A) of this section] -

"(i) during the first 7 months of the period the 'target

percentage' is 50 percent and the 'DRG percentage' is 50

percent, and

"(ii) during the remaining 5 months of the period the 'target

percentage' is 25 percent and the 'DRG percentage' is 75

percent.

"(C) Notwithstanding any other provision of law, for purposes

of section 1886(d)(1)(D) of such Act [subsec. (d)(1)(D) of this

section], the applicable combined adjusted DRG prospective

payment rate for a subsection (d) hospital to which the

amendments made by this section [amending this section] do not

apply is, for discharges occurring on or after October 1, 1985,

and before May 1, 1986, 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 for

such discharges."

Section 9104(c) of Pub. L. 99-272 provided that:

"(1) Except as provided in paragraph (2), the amendments made by

this section [amending this section] shall apply to discharges

occurring on or after May 1, 1986.

"(2) The amendments made by this section shall not first be

applied to discharges occurring as of a date unless, for discharges

occurring on that date, the amendments made by section 9105

[amending this section] are also being applied."

Section 9105(e) of Pub. L. 99-272 provided that: "The amendments

made by this section [amending this section] shall apply to

discharges occurring on or after May 1, 1986."

Section 9106(b) of Pub. L. 99-272 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to cost

reporting periods beginning on or after January 1, 1986."

Section 9107(c)(1) of Pub. L. 99-272 provided that: "The

amendments made by subsection (a) [amending this section] shall

apply to hospital cost reporting periods beginning on or after

October 1, 1986."

Section 9109(b) of Pub. L. 99-272 provided that: "The amendment

made by subsection (a) [amending this section] shall take effect on

the date of the enactment of this Act [Apr. 7, 1986]."

Section 9111(b) of Pub. L. 99-272 provided that: "The amendment

made by this section [amending this section] shall apply to

payments for cost reporting periods beginning on or after October

1, 1983, and before October 1, 1989."

Section 9202(b) of Pub. L. 99-272 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

hospital cost reporting periods beginning on or after July 1,

1985."

EFFECTIVE AND TERMINATION DATES OF 1984 AMENDMENTS

Amendment by Pub. L. 98-617 effective as if originally included

in the Deficit Reduction Act of 1984, Pub. L. 98-369, see section

3(c) of Pub. L. 98-617, set out as a note under section 1395f of

this title.

Section 2307(b)(2) of Pub. L. 98-369 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to cost reporting periods beginning on or after October 1, 1984."

Section 2310(b) of Pub. L. 98-369 provided that: "The amendments

made by this section [amending this section] shall apply to cost

reporting periods beginning in, and discharges occurring in, fiscal

year 1985 and thereafter."

Section 2311(d) of Pub. L. 98-369 provided that:

"(1) Except as provided in paragraph (2), the amendments made by

subsections (b) and (c) [amending this section] shall be effective

with respect to cost reporting periods beginning on or after

October 1, 1983, and the amendment made by subsection (a) [amending

this section] shall be effective with respect to cost reporting

periods beginning on or after October 1, 1984.

"(2) The amendment made by subsection (b) [amending this section]

shall not apply so as to reduce any payment under section 1886(d)

of the Social Security Act [subsec. (d) of this section] to a

hospital the region of which is deemed to be changed pursuant to

such amendment for discharges occurring in any cost reporting

period beginning before October 1, 1984."

Section 2312(c) of Pub. L. 98-369, as amended by Pub. L. 99-509,

title IX, Sec. 9320(a), Oct. 21, 1986, 100 Stat. 2013; Pub. L.

100-360, title IV, Sec. 411(p), July 1, 1988, as added by Pub. L.

100-485, title VI, Sec. 608(d)(29), Oct. 13, 1988, 102 Stat. 2424,

provided that: "The amendments made by subsections (a) and (b)

[amending this section] shall apply to cost reporting periods

beginning on or after October 1, 1984, and before January 1, 1989.

In the case of a cost reporting period that begins before January

1, 1989, but ends after such date, additional payments under the

amendment made by subsection (a) shall be proportionately reduced

to reflect the portion of the period occurring after such date."

Amendment by section 2313(a), (b), (d) of Pub. L. 98-369

effective July 18, 1984, see section 2313(e) of Pub. L. 98-369, set

out as an Effective Date of 1984 Amendment note under section 1395y

of this title.

Section 2315(g) of Pub. L. 98-369 provided that: "The amendments

made by this section [amending this section and sections 1395i-2

and 1395cc of this title and enacting and amending provisions set

out as notes under this section] shall be effective as though they

had been included in the enactment of the Social Security

Amendments of 1983 (Public Law 98-21)."

Amendment by section 2354(b)(42)-(44) of Pub. L. 98-369 effective

July 18, 1984, but not to be construed as changing or affecting any

right, liability, status, or interpretation which existed (under

the provisions of law involved) before that date, see section

2354(e)(1) of Pub. L. 98-369, set out as an Effective Date of 1984

Amendment note under section 1320a-1 of this title.

EFFECTIVE DATE OF 1983 AMENDMENTS

Section 601(b)(9) of Pub. L. 98-21 provided that the repeal of

subsec. (b)(6) of this section is effective with respect to cost

reporting periods beginning on or after October 1, 1982, and that

the enactment of a new subsec. (b)(6) of this section is effective

with respect to cost reporting periods beginning on or after

October 1, 1983.

Section 604 of title VI of Pub. L. 98-21, as amended by Pub. L.

98-369, div. B, title III, Sec. 2315(f)(1), July 18, 1984, 98 Stat.

1080, provided that:

"(a)(1) Except as provided in section 602(l) [amending section

1395cc of this title] and in paragraph (2), the amendments made by

the preceding provisions of this title [amending this section and

sections 1320c-2, 1395f, 1395n, 1395x, 1395y, 1395cc, 1395mm,

1395oo, 1395rr, and 1395xx of this title] apply to items and

services furnished by or under arrangements with a hospital

beginning with its first cost reporting period that begins on or

after October 1, 1983. A change in a hospital's cost reporting

period that has been made after November 1982 shall be recognized

for purposes of this section only if the Secretary finds good cause

for that change.

"(2) Section 1866(a)(1)(F) of the Social Security Act [section

1395cc(a)(1)(F) of this title] (as added by section 602(f)(1)(C) of

this title), section 1862(a)(14) [section 1395y(a)(14) of this

title] (as added by section 602(e)(3) of this title) and sections

1886(a)(1)(G) and (H) of such Act [probably should be section

1866(a)(1)(G) and (H) which is classified to section

1395cc(a)(1)(G) and (H) of this title] (as added by section

602(f)(1)(C) of this title) take effect on October 1, 1983.

"(b) The Secretary shall make an appropriate reduction in the

payment amount under section 1886(d) of the Social Security Act

[subsec. (d) of this section] (as amended by this title) for any

discharge, if the admission has occurred before a hospital's first

cost reporting period that begins after September 1983, to take

into account amounts payable under title XVIII of that Act [this

subchapter] (as in effect before the date of the enactment of this

Act [Apr. 20, 1983]) for items and services furnished before that

period.

"(c)(1) The Secretary shall cause to be published in the Federal

Register a notice of the interim final DRG prospective payment

rates established under subsection (d) of section 1886 of the

Social Security Act [subsec. (d) of this section] (as amended by

this title) no later than September 1, 1983, and allow for a period

of public comment thereon. Payment on the basis of prospective

rates shall become effective on October 1, 1983, without the

necessity for consideration of comments received, but the Secretary

shall, by notice published in the Federal Register, affirm or

modify the amounts by December 31, 1983, after considering those

comments.

"(2) A modification under paragraph (1) that reduces a

prospective payment rate shall apply only to discharges occurring

after 30 days after the date the notice of the modification is

published in the Federal Register.

"(3) Rules to implement the amendments made by this title

[amending this section and sections 1320a-1, 1320c-2, 1395f,

1395i-2, 1395n, 1395r, 1395v, 1395w, 1395x, 1395y, 1395cc, 1395mm,

1395oo, 1395rr, and 1395xx of this title, enacting provisions set

out as notes under sections 1395r and 1395x of this title, and

amending provisions set out as a note under section 1395x of this

title] shall be established in accordance with the procedure

described in this subsection."

Amendment by Pub. L. 97-448 effective as if originally included

as a part of this section as this section was added by the Tax

Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, see

section 309(c)(2) of Pub. L. 97-448, set out as a note under

section 426-1 of this title.

EFFECTIVE DATE

Section 101(b)(1) of Pub. L. 97-248 provided that: "The

amendments made by subsection (a) [enacting this section and

amending section 1395x of this title] shall apply to cost reporting

periods beginning on or after October 1, 1982."

REGULATIONS

Section 4003(c) of Pub. L. 101-508 provided that: "The Secretary

of Health and Human Services shall issue such regulations (on an

interim or other basis) as may be necessary to implement this

section [amending this section and enacting provisions set out as a

note above]."

Section 2315(f)(2) of Pub. L. 98-369 provided that:

"Notwithstanding section 604(c) of the Social Security Amendments

of 1983 [section 604(c) of Pub. L. 98-21, set out above], the

Secretary of Health and Human Services shall cause to be published

in the Federal Register proposed regulations to carry out

subsection (c) of section 1886 of the Social Security Act [subsec.

(c) of this section] not later than July 1, 1984, and allow for a

period of 45 days for public comment thereon. After consideration

of the comments received, the Secretary shall cause to be published

in the Federal Register final regulations to carry out such

subsection not later than October 1, 1984."

Section 101(b)(2)(A) of Pub. L. 97-248 provided that: "The

Secretary of Health and Human Services shall first issue such final

regulations (whether on an interim or other basis) before October

1, 1982, as may be necessary to implement such amendments

[amendments by section 101(a) of Pub. L. 97-248, enacting this

section and amending section 1395x of this title] on a timely

basis. If such regulations are promulgated on an interim final

basis, the Secretary shall take such steps as may be necessary to

provide opportunity for public comment, and appropriate revision

based thereon, so as to provide that such regulations are not on an

interim basis later than March 31, 1983."

-TRANS-

TRANSFER OF FUNCTIONS

Prospective Payment Assessment Commission (ProPAC) was terminated

and its assets and staff transferred to the Medicare Payment

Advisory Commission (MedPAC) by section 4022(c)(2), (3) of Pub. L.

105-33, set out as a note under section 1395b-6 of this title.

Section 4022(c)(2), (3) further provided that MedPAC was to be

responsible for preparation and submission of reports required by

law to be submitted by ProPAC, and that, for that purpose, any

reference in law to ProPAC was to be deemed, after the appointment

of MedPAC, to refer to MedPAC.

-MISC2-

SPECIAL RULES FOR PAYMENT FOR FISCAL YEAR 2001

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 301(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-491, provided that: "Notwithstanding

the amendment made by subsection (a) [amending this section], for

purposes of making payments for fiscal year 2001 for inpatient

hospital services furnished by subsection (d) hospitals (as defined

in section 1886(d)(1)(B) of the Social Security Act (42 U.S.C.

1395ww(d)(1)(B))[)], the 'applicable percentage increase' referred

to in section 1886(b)(3)(B)(i) of such Act (42 U.S.C.

1395ww(b)(3)(B)(i)) -

"(1) for discharges occurring on or after October 1, 2000, and

before April 1, 2001, shall be determined in accordance with

subclause (XVI) of such section as in effect on the day before

the date of the enactment of this Act [Dec. 21, 2000]; and

"(2) for discharges occurring on or after April 1, 2001, and

before October 1, 2001, shall be equal to -

"(A) the market basket percentage increase plus 1.1

percentage points for hospitals (other than sole community

hospitals) in all areas; and

"(B) the market basket percentage increase for sole community

hospitals."

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 302(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-493, provided that: "Notwithstanding

paragraph (5)(B)(ii)(V) of section 1886(d) of the Social Security

Act (42 U.S.C. 1395ww(d)(5)(B)(ii)(V)), for purposes of making

payments for subsection (d) hospitals (as defined in paragraph

(1)(B) of such section) with indirect costs of medical education,

the indirect teaching adjustment factor referred to in paragraph

(5)(B)(ii) of such section shall be determined, for discharges

occurring on or after April 1, 2001, and before October 1, 2001, as

if 'c' in paragraph (5)(B)(ii)(V) of such section equalled 1.66

rather than 1.54."

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 303(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-493, provided that: "Notwithstanding

the amendment made by subsection (a)(1) [amending this section],

for purposes of making disproportionate share payments for

subsection (d) hospitals (as defined in section 1886(d)(1)(B) of

the Social Security Act (42 U.S.C. 1395ww(d)(1)(B))[)] for fiscal

year 2001, the additional payment amount otherwise determined under

clause (ii) of section 1886(d)(5)(F) of the Social Security Act (42

U.S.C. 1395ww(d)(5)(F)) -

"(1) for discharges occurring on or after October 1, 2000, and

before April 1, 2001, shall be adjusted as provided by clause

(ix)(III) of such section as in effect on the day before the date

of the enactment of this Act [Dec. 21, 2000]; and

"(2) for discharges occurring on or after April 1, 2001, and

before October 1, 2001, shall, instead of being reduced by 3

percent as provided by clause (ix)(III) of such section as in

effect after the date of the enactment of this Act, be reduced by

1 percent."

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 547(a)], Dec. 21,

2000, 114 Stat. 2763, 2763A-553, provided that:

"(a) Inpatient Hospital Services. - The payment increase provided

under the following sections shall not apply to discharges

occurring after fiscal year 2001 and shall not be taken into

account in calculating the payment amounts applicable for

discharges occurring after such fiscal year:

"(1) Section 301(b)(2)(A) [set out as a note above] (relating

to acute care hospital payment update).

"(2) Section 302(b) [set out as a note above] (relating to IME

percentage adjustment).

"(3) Section 303(b)(2) [set out as a note above] (relating to

DSH payments)."

CONSIDERATION OF PRICE OF BLOOD AND BLOOD PRODUCTS IN MARKET BASKET

INDEX

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 301(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-491, provided that: "The Secretary of

Health and Human Services shall, when next (after the date of the

enactment of this Act [Dec. 21, 2000]) rebasing and revising the

hospital market basket index (as defined in section

1886(b)(3)(B)(iii) of the Social Security Act (42 U.S.C.

1395ww(b)(3)(B)(iii))), consider the prices of blood and blood

products purchased by hospitals and determine whether those prices

are adequately reflected in such index."

MEDPAC STUDY AND REPORT REGARDING CERTAIN HOSPITAL COSTS

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 301(d)], Dec. 21,

2000, 114 Stat. 2763, 2763A-491, provided that:

"(1) Study. - The Medicare Payment Advisory Commission shall

conduct a study on -

"(A) any increased costs incurred by subsection (d) hospitals

(as defined in paragraph (1)(B) of section 1886(d) of the Social

Security Act (42 U.S.C. 1395ww(d))) in providing inpatient

hospital services to medicare beneficiaries under title XVIII of

such Act [this subchapter] during the period beginning on October

1, 1983, and ending on September 30, 1999, that were attributable

to -

"(i) complying with new blood safety measure requirements;

and

"(ii) providing such services using new technologies;

"(B) the extent to which the prospective payment system for

such services under such section provides adequate and timely

recognition of such increased costs;

"(C) the prospects for (and to the extent practicable, the

magnitude of) cost increases that hospitals will incur in

providing such services that are attributable to complying with

new blood safety measure requirements and providing such services

using new technologies during the 10 years after the date of the

enactment of this Act [Dec. 21, 2000]; and

"(D) the feasibility and advisability of establishing

mechanisms under such payment system to provide for more timely

and accurate recognition of such cost increases in the future.

"(2) Consultation. - In conducting the study under this

subsection, the Commission shall consult with representatives of

the blood community, including -

"(A) hospitals;

"(B) organizations involved in the collection, processing, and

delivery of blood; and

"(C) organizations involved in the development of new blood

safety technologies.

"(3) Report. - Not later than 1 year after the date of the

enactment of this Act [Dec. 21, 2000], the Commission shall submit

to Congress a report on the study conducted under paragraph (1)

together with such recommendations for legislation and

administrative action as the Commission determines appropriate."

PROCESS TO PERMIT STATEWIDE WAGE INDEX CALCULATION AND APPLICATION

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 304(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-494, provided that:

"(1) In general. - The Secretary of Health and Human Services

shall establish a process (based on the voluntary process utilized

by the Secretary of Health and Human Services under section 1848 of

the Social Security Act (42 U.S.C. 1395w-4) for purposes of

computing and applying a statewide geographic adjustment factor)

under which an appropriate statewide entity may apply to have all

the geographic areas in a State treated as a single geographic area

for purposes of computing and applying the area wage index under

section 1886(d)(3)(E) of such Act (42 U.S.C. 1395ww(d)(3)(E)). Such

process shall be established by October 1, 2001, for

reclassifications beginning in fiscal year 2003.

"(2) Prohibition on individual hospital reclassification. -

Notwithstanding any other provision of law, if the Secretary

applies a statewide geographic wage index under paragraph (1) with

respect to a State, any application submitted by a hospital in that

State under section 1886(d)(10) of the Social Security Act (42

U.S.C. 1395ww(d)(10)) for geographic reclassification shall not be

considered."

COLLECTION OF INFORMATION ON OCCUPATIONAL MIX

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 304(c)(1)], Dec.

21, 2000, 114 Stat. 2763, 2763A-495, provided that: "The Secretary

of Health and Human Services shall provide for the collection of

data every 3 years on occupational mix for employees of each

subsection (d) hospital (as defined in section 1886(d)(1)(D) of the

Social Security Act (42 U.S.C. 1395ww(d)(1)(D))) in the provision

of inpatient hospital services, in order to construct an

occupational mix adjustment in the hospital area wage index applied

under section 1886(d)(3)(E) of such Act (42 U.S.C.

1395ww(d)(3)(E))."

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 304(c)(3)], Dec.

21, 2000, 114 Stat. 2763, 2763A-495, provided that: "By not later

than September 30, 2003, for application beginning October 1, 2004,

the Secretary shall first complete -

"(A) the collection of data under paragraph (1) [set out

above]; and

"(B) the measurement under the third sentence of section

1886(d)(3)(E) [subsection (d)(3)(E) of this section], as amended

by paragraph (2)."

PAYMENT FOR INPATIENT SERVICES OF PSYCHIATRIC HOSPITALS

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 306], Dec. 21,

2000, 114 Stat. 2763, 2763A-496, provided that: "With respect to

hospitals described in clause (i) of section 1886(d)(1)(B) of the

Social Security Act (42 U.S.C. 1395ww(d)(1)(B)) and psychiatric

units described in the matter following clause (v) of such section,

in making incentive payments to such hospitals under section

1886(b)(1)(A) of such Act (42 U.S.C. 1395ww(b)(1)(A)) for cost

reporting periods beginning on or after October 1, 2000, and before

October 1, 2001, the Secretary of Health and Human Services, in

clause (ii) of such section, shall substitute '3 percent' for '2

percent'."

EXPEDITING RECOGNITION OF NEW TECHNOLOGIES INTO INPATIENT PPS

CODING SYSTEM

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 533(a)], Dec. 21,

2000, 114 Stat. 2763, 2763A-548, provided that:

"(1) Report. - Not later than April 1, 2001, the Secretary of

Health and Human Services shall submit to Congress a report on

methods of expeditiously incorporating new medical services and

technologies into the clinical coding system used with respect to

payment for inpatient hospital services furnished under the

medicare program under title XVIII of the Social Security Act [this

subchapter], together with a detailed description of the

Secretary's preferred methods to achieve this purpose.

"(2) Implementation. - Not later than October 1, 2001, the

Secretary shall implement the preferred methods described in the

report transmitted pursuant to paragraph (1)."

CONSULTATION PRIOR TO RULEMAKING

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 533(b)(2)], Dec. 21,

2000, 114 Stat. 2763, 2763A-549, provided that: "The Secretary of

Health and Human Services shall consult with groups representing

hospitals, physicians, and manufacturers of new medical

technologies before publishing the notice of proposed rulemaking

required by section 1886(d)(5)(K)(i) of the Social Security Act

[subsection (d)(5)(K)(i) of this section] (as added by paragraph

(1))."

SPECIAL PAYMENTS TO MAINTAIN 6.5 PERCENT IME PAYMENT FOR FISCAL

YEAR 2000

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 111(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-329, provided that:

"(1) Additional payment. - In addition to payments made to each

subsection (d) hospital (as defined in section 1886(d)(1)(B) of the

Social Security Act (42 U.S.C. 1395ww(d)(1)(B)) under section

1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B))) which

receives payment for the direct costs of medical education for

discharges occurring in fiscal year 2000, the Secretary of Health

and Human Services shall make one or more payments to each such

hospital in an amount which, as estimated by the Secretary, is

equal in the aggregate to the difference between the amount of

payments to the hospital under such section for such discharges and

the amount of payments that would have been paid under such section

for such discharges if 'c' in clause (ii)(IV) of such section

equalled 1.6 rather than 1.47. Additional payments made under this

subsection shall be made applying the same structure as applies to

payments made under section 1886(d)(5)(B) of such Act.

"(2) No effect on other payments or determinations. - In making

such additional payments, the Secretary shall not change payments,

determinations, or budget neutrality adjustments made for such

period under section 1886(d) of such Act (42 U.S.C. 1395ww(d))."

DATA COLLECTION

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 112(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-330, provided that:

"(1) In general. - The Secretary of Health and Human Services

shall require any subsection (d) hospital (as defined in section

1886(d)(1)(B) of the Social Security Act (42 U.S.C.

1395ww(d)(1)(B))) to submit to the Secretary, in the cost reports

submitted to the Secretary by such hospital for discharges

occurring during a fiscal year, data on the costs incurred by the

hospital for providing inpatient and outpatient hospital services

for which the hospital is not compensated, including non-medicare

bad debt, charity care, and charges for medicaid and indigent care.

"(2) Effective date. - The Secretary shall require the submission

of the data described in paragraph (1) in cost reports for cost

reporting periods beginning on or after October 1, 2001."

PER DISCHARGE PROSPECTIVE PAYMENT SYSTEM FOR LONG-TERM CARE

HOSPITALS

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 307(a)(2)], Dec.

21, 2000, 114 Stat. 2763, 2763A-496, provided that: "The amendments

made by subsection (a) [amending this section] and by section 122

of BBRA [Pub. L. 106-113, Sec. 1000(a)(6) [title I, Sec. 122],

amending this section] (113 Stat. 1501A-331) shall not be taken

into account in the development and implementation of the

prospective payment system under section 123 of BBRA [Pub. L.

106-113, Sec. 1000(a)(6) [title I, Sec. 123], set out as a note

below] (113 Stat. 1501A-331)."

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 307(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-496, provided that:

"(1) Modification of requirement. - In developing the prospective

payment system for payment for inpatient hospital services provided

in long-term care hospitals described in section 1886(d)(1)(B)(iv)

of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)) under

the medicare program under title XVIII of such Act [this

subchapter] required under section 123 of BBRA [Pub. L. 106-113,

Sec. 1000(a)(6) [title I, Sec. 123], set out as a note below], the

Secretary of Health and Human Services shall examine the

feasibility and the impact of basing payment under such a system on

the use of existing (or refined) hospital diagnosis-related groups

(DRGs) that have been modified to account for different resource

use of long-term care hospital patients as well as the use of the

most recently available hospital discharge data. The Secretary

shall examine and may provide for appropriate adjustments to the

long-term hospital payment system, including adjustments to DRG

weights, area wage adjustments, geographic reclassification,

outliers, updates, and a disproportionate share adjustment

consistent with section 1886(d)(5)(F) of the Social Security Act

(42 U.S.C. 1395ww(d)(5)(F)).

"(2) Default implementation of system based on existing drg

methodology. - If the Secretary is unable to implement the

prospective payment system under section 123 of the BBRA by October

1, 2002, the Secretary shall implement a prospective payment system

for such hospitals that bases payment under such a system using

existing hospital diagnosis-related groups (DRGs), modified where

feasible to account for resource use of long-term care hospital

patients using the most recently available hospital discharge data

for such services furnished on or after that date."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 123],

Nov. 29, 1999, 113 Stat. 1536, 1501A-331, provided that:

"(a) Development of System. -

"(1) In general. - The Secretary of Health and Human Services

shall develop a per discharge prospective payment system for

payment for inpatient hospital services of long-term care

hospitals described in section 1886(d)(1)(B)(iv) of the Social

Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)) under the medicare

program. Such system shall include an adequate patient

classification system that is based on diagnosis-related groups

(DRGs) and that reflects the differences in patient resource use

and costs, and shall maintain budget neutrality.

"(2) Collection of data and evaluation. - In developing the

system described in paragraph (1), the Secretary may require such

long-term care hospitals to submit such information to the

Secretary as the Secretary may require to develop the system.

"(b) Report. - Not later than October 1, 2001, the Secretary

shall submit to the appropriate committees of Congress a report

that includes a description of the system developed under

subsection (a)(1).

"(c) Implementation of Prospective Payment System. -

Notwithstanding section 1886(b)(3) of the Social Security Act (42

U.S.C. 1395ww(b)(3)), the Secretary shall provide, for cost

reporting periods beginning on or after October 1, 2002, for

payments for inpatient hospital services furnished by long-term

care hospitals under title XVIII of the Social Security Act (42

U.S.C. 1395 et seq.) in accordance with the system described in

subsection (a)."

PER DIEM PROSPECTIVE PAYMENT SYSTEM FOR PSYCHIATRIC HOSPITALS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 124],

Nov. 29, 1999, 113 Stat. 1536, 1501A-332, provided that:

"(a) Development of System. -

"(1) In general. - The Secretary of Health and Human Services

shall develop a per diem prospective payment system for payment

for inpatient hospital services of psychiatric hospitals and

units (as defined in paragraph (3)) under the medicare program.

Such system shall include an adequate patient classification

system that reflects the differences in patient resource use and

costs among such hospitals and shall maintain budget neutrality.

"(2) Collection of data and evaluation. - In developing the

system described in paragraph (1), the Secretary may require such

psychiatric hospitals and units to submit such information to the

Secretary as the Secretary may require to develop the system.

"(3) Definition. - In this section, the term 'psychiatric

hospitals and units' means a psychiatric hospital described in

clause (i) of section 1886(d)(1)(B) of the Social Security Act

(42 U.S.C. 1395ww(d)(1)(B)) and psychiatric units described in

the matter following clause (v) of such section.

"(b) Report. - Not later than October 1, 2001, the Secretary

shall submit to the appropriate committees of Congress a report

that includes a description of the system developed under

subsection (a)(1).

"(c) Implementation of Prospective Payment System. -

Notwithstanding section 1886(b)(3) of the Social Security Act (42

U.S.C. 1395ww(b)(3)), the Secretary shall provide, for cost

reporting periods beginning on or after October 1, 2002, for

payments for inpatient hospital services furnished by psychiatric

hospitals and units under title XVIII of the Social Security Act

(42 U.S.C. 1395 et seq.) in accordance with the prospective payment

system established by the Secretary under this section in a budget

neutral manner."

STUDY ON IMPACT OF IMPLEMENTATION OF PROSPECTIVE PAYMENT SYSTEM

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 125(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-333, provided that:

"(1) Study. - The Secretary of Health and Human Services shall

conduct a study of the impact on utilization and beneficiary access

to services of the implementation of the medicare prospective

payment system for inpatient hospital services or rehabilitation

facilities under section 1886(j) of the Social Security Act (42

U.S.C. 1395ww(j)).

"(2) Report. - Not later than 3 years after the date such system

is first implemented, the Secretary shall submit to Congress a

report on such study."

MEDPAC STUDY ON MEDICARE PAYMENT FOR NONPHYSICIAN HEALTH

PROFESSIONAL CLINICAL TRAINING IN HOSPITALS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 141],

Nov. 29, 1999, 113 Stat. 1536, 1501A-334, provided that:

"(a) In General. - The Medicare Payment Advisory Commission shall

conduct a study of medicare payment policy with respect to

professional clinical training of different classes of nonphysician

health care professionals (such as nurses, nurse practitioners,

allied health professionals, physician assistants, and

psychologists) and the basis for any differences in treatment among

such classes.

"(b) Report. - Not later than 18 months after the date of the

enactment of this Act [Nov. 29, 1999], the Commission shall submit

a report to Congress on the study conducted under subsection (a)."

NOT COUNTING AGAINST NUMERICAL LIMITATION CERTAIN INTERNS AND

RESIDENTS TRANSFERRED FROM A VA RESIDENCY PROGRAM THAT LOSES

ACCREDITATION

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec. 407(d)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-374, provided that:

"(1) In general. - Any applicable resident described in paragraph

(2) shall not be taken into account in applying any limitation

regarding the number of residents or interns for which payment may

be made under section 1886 of the Social Security Act (42 U.S.C.

1395ww).

"(2) Applicable resident described. - An applicable resident

described in this paragraph is a resident or intern who -

"(A) participated in graduate medical education at a facility

of the Department of Veterans Affairs;

"(B) was subsequently transferred on or after January 1, 1997,

and before July 31, 1998, to a hospital that was not a Department

of Veterans Affairs facility; and

"(C) was transferred because the approved medical residency

program in which the resident or intern participated would lose

accreditation by the Accreditation Council on Graduate Medical

Education if such program continued to train residents at the

Department of Veterans Affairs facility.

"(3) Effective date. -

"(A) In general. - Paragraph (1) applies as if included in the

enactment of BBA [the Balanced Budget Act of 1997, Pub. L.

105-33].

"(B) Retroactive payments. - If the Secretary of Health and

Human Services determines that a hospital operating an approved

medical residency program is owed payments as a result of

enactment of this subsection, the Secretary shall make such

payments not later than 60 days after the date of the enactment

of this Act [Nov. 29, 1999]."

GAO STUDY ON GEOGRAPHIC RECLASSIFICATION

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec. 410],

Nov. 29, 1999, 113 Stat. 1536, 1501A-376, provided that:

"(a) In General. - The Comptroller General of the United States

shall conduct a study of the current laws and regulations for

geographic reclassification of hospitals to determine whether such

reclassification is appropriate for purposes of applying wage

indices under the medicare program and whether such

reclassification results in more accurate payments for all

hospitals. Such study shall examine data on the number of hospitals

that are reclassified and their reclassified status in determining

payments under the medicare program. The study shall evaluate -

"(1) the magnitude of the effect of geographic reclassification

on rural hospitals that are not reclassified;

"(2) whether the current thresholds used in geographic

reclassification reclassify hospitals to the appropriate labor

markets;

"(3) the effect of eliminating geographic reclassification

through use of the occupational mix data;

"(4) the group reclassification policy;

"(5) changes in the number of reclassifications and the

compositions of the groups;

"(6) the effect of State-specific budget neutrality compared to

national budget neutrality; and

"(7) whether there are sufficient controls over the

intermediary evaluation of the wage data reported by hospitals.

"(b) Report. - Not later than 18 months after the date of the

enactment of this Act [Nov. 29, 1999], the Comptroller General of

the United States shall submit to Congress a report on the study

conducted under subsection (a)."

CONTINUING TREATMENT OF PREVIOUSLY DESIGNATED CENTERS

Section 4202(b) of Pub. L. 105-33 provided that:

"(1) In general. - Any hospital classified as a rural referral

center by the Secretary of Health and Human Services under section

1886(d)(5)(C) of the Social Security Act [subsec. (d)(5)(C) of this

section] for fiscal year 1991 shall be classified as such a rural

referral center for fiscal year 1998 and each subsequent fiscal

year.

"(2) Budget neutrality. - The provisions of section 1886(d)(8)(D)

of the Social Security Act [subsec. (d)(8)(D) of this section]

shall apply to reclassifications made pursuant to paragraph (1) in

the same manner as such provisions apply to a reclassification

under section 1886(d)(10) of such Act [subsec. (d)(10) of this

section]."

HOSPITAL GEOGRAPHIC RECLASSIFICATION PERMITTED FOR PURPOSES OF

DISPROPORTIONATE SHARE PAYMENT ADJUSTMENTS

Section 4203 of Pub. L. 105-33 provided that:

"(a) In General. - For the period described in subsection (c),

the Medicare Geographic Classification Review Board shall consider

the application under section 1886(d)(10)(C)(i) of the Social

Security Act (42 U.S.C. 1395ww(d)(10)(C)(i)) of a hospital

described in 1886(d)(1)(B) of such Act (42 U.S.C. 1395ww(d)(1)(B))

to change the hospital's geographic classification for purposes of

determining for a fiscal year eligibility for and amount of

additional payment amounts under section 1886(d)(5)(F) of such Act

(42 U.S.C. 1395ww(d)(5)(F)).

"(b) Applicable Guidelines. - The Medicare Geographic

Classification Review Board shall apply the guidelines established

for reclassification under subclause (I) of section

1886(d)(10)(C)(i) of such Act to reclassification by reason of

subsection (a) until the Secretary of Health and Human Services

promulgates separate guidelines for such reclassification.

"(c) Period Described. - The period described in this subsection

is the period beginning on the date of the enactment of this Act

[Aug. 5, 1997] and ending 30 months after such date."

TEMPORARY RELIEF FOR CERTAIN NON-TEACHING, NON-DSH HOSPITALS

Pub. L. 105-33, title IV, Sec. 4401(b), Aug. 5, 1997, 111 Stat.

397, as amended by Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title

III, Sec. 321(d)], Nov. 29, 1999, 113 Stat. 1536, 1501A-366,

provided that:

"(1) In general. - In the case of a hospital described in

paragraph (2) for its cost reporting period -

"(A) beginning in fiscal year 1998 the amount of payment made

to the hospital under section 1886(d) of the Social Security Act

[subsec. (d) of this section] for discharges occurring during

such fiscal year only shall be increased as though the applicable

percentage increase (otherwise applicable to discharges occurring

during fiscal year 1998 under section 1886(b)(3)(B)(i)(XIII) of

the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XIII))) had

been increased by 0.5 percentage points; and

"(B) beginning in fiscal year 1999 the amount of payment made

to the hospital under section 1886(d) of the Social Security Act

for discharges occurring during such fiscal year only shall be

increased as though the applicable percentage increase (otherwise

applicable to discharges occurring during fiscal year 1999 under

section 1886(b)(3)(B)(i)(XIV) of the Social Security Act (42

U.S.C. 1395ww(b)(3)(B)(i)(XIV))) had been increased by 0.3

percentage points.

Subparagraph (A) shall not apply in computing the increase under

subparagraph (B) and neither subparagraph shall affect payment for

discharges for any hospital occurring during a fiscal year after

fiscal year 1999. Payment increases under this subsection for

discharges occurring during a fiscal year are subject to settlement

after the close of the fiscal year.

"(2) Hospitals covered. - A hospital described in this paragraph

for a cost reporting period is a hospital -

"(A) that is described in paragraph (3) for such period;

"(B) that is located in a State in which the amount of the

aggregate payments under section 1886(d) of such Act [subsec. (d)

of this section] for hospitals located in the State and described

in paragraph (3) for their cost reporting periods beginning

during fiscal year 1995 is less than the aggregate allowable

operating costs of inpatient hospital services (as defined in

section 1886(a)(4) of such Act) for all such hospitals in such

State with respect to such cost reporting periods; and

"(C) with respect to which the payments under section 1886(d)

of such Act (42 U.S.C. 1395ww(d)) for discharges occurring in the

cost reporting period involved, as estimated by the Secretary, is

less than the allowable operating costs of inpatient hospital

services (as defined in section 1886(a)(4) of such Act (42 U.S.C.

1395ww(a)(4))[)] for such hospital for such period, as estimated

by the Secretary.

"(3) Non-teaching, non-DSH hospitals described. - A hospital

described in this paragraph for a cost reporting period is a

subsection (d) hospital (as defined in section 1886(d)(1)(B) of

such Act (42 U.S.C. 1395ww(d)(1)(B))) that -

"(A) is not receiving any additional payment amount described

in section 1886(d)(5)(F) of such Act (42 U.S.C. 1395ww(d)(5)(F))

for discharges occurring during the period;

"(B) is not receiving any additional payment under section

1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B)) or a

payment under section 1886(h) of such Act (42 U.S.C. 1395ww(h))

for discharges occurring during the period; and

"(C) does not qualify for payment under section 1886(d)(5)(G)

of such Act (42 U.S.C. 1395ww(d)(5)(G)) for the period."

FORMULA FOR ADDITIONAL PAYMENT AMOUNTS; REPORT

Section 4403(b), (c) of Pub. L. 105-33 provided that:

"(b) Report on New Payment Formula. -

"(1) Report. - Not later than 1 year after the date of the

enactment of this Act [Aug. 5, 1997], the Secretary of Health and

Human Services shall submit to the Committee on Ways and Means of

the House of Representatives and the Committee on Finance of the

Senate a report that contains a formula for determining

additional payment amounts to hospitals under section

1886(d)(5)(F) of the Social Security Act (42 U.S.C.

1395ww(d)(5)(F)).

"(2) Factors in Determination of Formula. - In determining such

formula the Secretary shall -

"(A) establish a single threshold for costs incurred by

hospitals in serving low-income patients, and

"(B) consider the costs described in paragraph (3).

"(3) The costs described in this paragraph are as follows:

"(A) The costs incurred by the hospital during a period (as

determined by the Secretary) of furnishing hospital services to

individuals who are entitled to benefits under part A of title

XVIII of the Social Security Act [part A of this subchapter]

and who receive supplemental security income benefits under

title XVI of such Act [subchapter XVI of this chapter]

(excluding any supplementation of those benefits by a State

under section 1616 of such Act (42 U.S.C. 1382e)).

"(B) The costs incurred by the hospital during a period (as

so determined) of furnishing hospital services to individuals

who receive medical assistance under the State plan under title

XIX of such Act [subchapter XIX of this chapter] and are not

entitled to benefits under part A of title XVIII of such Act

[part A of this subchapter] (including individuals enrolled in

a managed care organization (as defined in section

1903(m)(1)(A) of such Act (42 U.S.C. 1396b(m)(1)(A)) or any

other managed care plan under such title and individuals who

receive medical assistance under such title pursuant to a

waiver approved by the Secretary under section 1115 of such Act

(42 U.S.C. 1315)).

"(c) Data Collection. - In developing the formula described in

subsection (b), the Secretary of Health and Human Services may

require any subsection (d) hospital (as defined in section

1886(d)(1)(B) of the Social Security Act (42 U.S.C.

1395ww(d)(1)(B))) receiving additional payments by reason of

section 1886(d)(5)(F) of such Act (42 U.S.C. 1395ww(d)(5)(F)) to

submit to the Secretary any information that the Secretary

determines is necessary to develop such formula."

GEOGRAPHIC RECLASSIFICATION FOR CERTAIN DISPROPORTIONATELY LARGE

HOSPITALS

Section 4409 of Pub. L. 105-33 provided that:

"(a) New Guidelines for Reclassification. - Notwithstanding the

guidelines published under section 1886(d)(10)(D)(i)(I) of the

Social Security Act (42 U.S.C. 1395ww(d)(10)(D)(i)(I)), the

Secretary of Health and Human Services shall publish and use

alternative guidelines under which a hospital described in

subsection (b) qualifies for geographic reclassification under such

section for a fiscal year beginning with fiscal year 1998.

"(b) Hospitals Covered. - A hospital described in this subsection

is a hospital that demonstrates that -

"(1) the average hourly wage paid by the hospital is not less

than 108 percent of the average hourly wage paid by all other

hospitals located in the Metropolitan Statistical Area (or the

New England County Metropolitan Area) in which the hospital is

located;

"(2) not less than 40 percent of the adjusted uninflated wages

paid by all hospitals located in such Area is attributable to

wages paid by the hospital; and

"(3) the hospital submitted an application requesting

reclassification for purposes of wage index under section

1886(d)(10)(C) of such Act (42 U.S.C. 1395ww(d)(10)(C)) in each

of fiscal years 1992 through 1997 and that such request was

approved for each of such fiscal years."

FLOOR ON AREA WAGE INDEX

Section 4410 of Pub. L. 105-33 provided that:

"(a) In General. - For purposes of section 1886(d)(3)(E) of the

Social Security Act (42 U.S.C. 1395ww(d)(3)(E)) for discharges

occurring on or after October 1, 1997, the area wage index

applicable under such section to any hospital which is not located

in a rural area (as defined in section 1886(d)(2)(D) of such Act

(42 U.S.C. 1395ww(d)(2)(D))[)] may not be less than the area wage

index applicable under such section to hospitals located in rural

areas in the State in which the hospital is located.

"(b) Implementation. - The Secretary of Health and Human Services

shall adjust the area wage index referred to in subsection (a) for

hospitals not described in such subsection in a manner which

assures that the aggregate payments made under section 1886(d) of

the Social Security Act (42 U.S.C. 1395ww(d)) in a fiscal year for

the operating costs of inpatient hospital services are not greater

or less than those which would have been made in the year if this

section did not apply.

"(c) Exclusion of Certain Wages. - In the case of a hospital that

is owned by a municipality and that was reclassified as an urban

hospital under section 1886(d)(10) of the Social Security Act

[subsec. (d)(10) of this section] for fiscal year 1996, in

calculating the hospital's average hourly wage for purposes of

geographic reclassification under such section for fiscal year

1998, the Secretary of Health and Human Services shall exclude the

general service wages and hours of personnel associated with a

skilled nursing facility that is owned by the hospital of the same

municipality and that is physically separated from the hospital to

the extent that such wages and hours of such personnel are not

shared with the hospital and are separately documented. A hospital

that applied for and was denied reclassification as an urban

hospital for fiscal year 1998, but that would have received

reclassification had the exclusion required by this section been

applied to it, shall be reclassified as an urban hospital for

fiscal year 1998."

REPORT ON EFFECT OF AMENDMENTS BY PUB. L. 105-33, SEC. 4415, ON

PSYCHIATRIC HOSPITALS

Section 4415(d) of Pub. L. 105-33 provided that: "Not later than

October 1, 1999, the Secretary of Health and Human Services shall

submit to the Committee on Ways and Means of the House of

Representatives and the Committee on Finance of the Senate a report

that describes the effect of the amendments to section 1886(b)(1)

of the Social Security Act (42 U.S.C. 1395ww(b)(1)), made under

this section, on psychiatric hospitals (as defined in section

1886(d)(1)(B)(i) of such Act (42 U.S.C. 1395ww(d)(1)(B)(i)) that

have approved medical residency training programs under title XVIII

of such Act (42 U.S.C. 1395 et seq.))."

TREATMENT OF CERTAIN CANCER HOSPITALS; PAYMENT

Pub. L. 106-554, Sec. 1(a)(4) [div. B, title I, Sec. 152(c)],

Dec. 21, 2000, 114 Stat. 2763, 2763A-252, provided that:

"(1) Application to cost reporting periods. - Any classification

by reason of section 1886(d)(1)(B)(v)(III) of the Social Security

Act [subsec. (d)(1)(B)(v)(III) of this section] (as added by

subsection (a)) shall apply to 12-month cost reporting periods

beginning on or after July 1, 1999.

"(2) Base year. - Notwithstanding the provisions of section

1886(b)(3)(E) of such Act (42 U.S.C. 1395ww(b)(3)(E)) or other

provisions to the contrary, the base cost reporting period for

purposes of determining the target amount for any hospital

classified by reason of section 1886(d)(1)(B)(v)(III) of such Act

[subsec. (d)(1)(B)(v)(III) of this section] (as added by subsection

(a)) shall be the 12-month cost reporting period beginning on July

1, 1995.

"(3) Deadline for payments. - Any payments owed to a hospital by

reason of this subsection shall be made expeditiously, but in no

event later than 1 year after the date of the enactment of this Act

[Dec. 21, 2000]."

Section 4418(b) of Pub. L. 105-33 provided that:

"(1) Application to cost reporting periods. - Any classification

by reason of section 1886(d)(1)(B)(v)(II) of the Social Security

Act (42 U.S.C. 1395ww(d)(1)(B)(v)(II)) (as added by subsection (a))

shall apply to all cost reporting periods beginning on or after

January 1, 1991.

"(2) Base year. - Notwithstanding the provisions of section

1886(b)(3)(E) of such Act (42 U.S.C. 1395ww(b)(3)(E)) or other

provisions to the contrary, the base cost reporting period for

purposes of determining the target amount for any hospital

classified by reason of section 1886(d)(1)(B)(v)(II) of such Act

shall be either -

"(A) the hospital's cost reporting period beginning during

fiscal year 1990, or

"(B) pursuant to an election under 1886(b)(3)(G) of such Act

(42 U.S.C. 1395ww(b)(3)(G)), as added in section 4413(b), the

period provided for under such section.

"(3) Deadline for payments. - Any payments owed to a hospital by

reason of this subsection shall be made expeditiously, but in no

event later than 1 year after the date of the enactment of this Act

[Aug. 5, 1997]."

REPORT ON EXCEPTIONS

Section 4419(b) of Pub. L. 105-33 provided that: "The Secretary

of Health and Human Services shall publish annually in the Federal

Register a report describing the total amount of payments made to

hospitals by reason of section 1886(b)(4) of the Social Security

Act (42 U.S.C. 1395ww(b)(4)), as amended by subsection (a), ending

during the previous fiscal year."

DEVELOPMENT OF PROPOSAL ON PAYMENTS FOR LONG-TERM CARE HOSPITALS

Section 4422 of Pub. L. 105-33 provided that:

"(a) In General. -

"(1) Legislative proposal. - The Secretary of Health and Human

Services shall develop a legislative proposal for establishing a

case-mix adjusted prospective payment system for payment of

long-term care hospitals described in section 1886(d)(1)(B)(iv)

of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)) under

the medicare program. Such system shall include an adequate

patient classification system that reflects the differences in

patient resource use and costs among such hospitals.

"(2) Collection of data and evaluation. - In developing the

legislative proposal described in paragraph (1), the Secretary -

"(A) may require such long-term care hospitals to submit such

information to the Secretary as the Secretary may require to

develop the proposal; and

"(B) shall consider several payment methodologies, including

the feasibility of expanding the current diagnosis-related

groups and prospective payment system established under section

1886(d) of the Social Security Act [subsec. (d) of this

section] to apply to payments under the medicare program to

long-term care hospitals.

"(b) Report. - Not later than October 1, 1999, the Secretary

shall submit to the appropriate committees of Congress a report

that includes the legislative proposal developed under subsection

(a)(1)."

DISSEMINATION OF INFORMATION ON HIGH PER DISCHARGE RELATIVE VALUES

FOR IN-HOSPITAL PHYSICIANS' SERVICES

Section 4506 of title IV of Pub. L. 105-33 provided that:

"(a) Determination and Notice Concerning Hospital-Specific Per

Discharge Relative Values. -

"(1) In general. - For 1999 and 2001 the Secretary of Health

and Human Services shall determine for each hospital -

"(A) the hospital-specific per discharge relative value under

subsection (b); and

"(B) whether the hospital-specific relative value is

projected to be excessive (as determined based on such value

represented as a percentage of the median of hospital-specific

per discharge relative values determined under subsection (b)).

"(2) Notice to subset of medical staffs; evaluation of

responses. - The Secretary shall notify the medical executive

committee of a subset of the hospitals identified under paragraph

(1)(B) as having an excessive hospital-specific relative value,

of the determinations made with respect to the medical staff

under paragraph (1). The Secretary shall evaluate the responses

of the hospitals so notified with the responses of other

hospitals so identified that were not so notified.

"(b) Determination of Hospital-Specific Per Discharge Relative

Values. -

"(1) In general. - For purposes of this section, the

hospital-specific per discharge relative value for the medical

staff of a hospital (other than a teaching hospital) for a year

shall be equal to the average per discharge relative value (as

determined under section 1848(c)(2) of the Social Security Act

(42 U.S.C. 1395w-4(c)(2))[)] for physicians' services furnished

to inpatients of the hospital by the hospital's medical staff

(excluding interns and residents) during the second year

preceding that calendar year, adjusted for variations in case-mix

among hospitals and disproportionate share status and teaching

status among hospitals (as determined by the Secretary under

paragraph (3)).

"(2) Special rule for teaching hospitals. - The

hospital-specific relative value projected for a teaching

hospital in a year shall be equal to the sum of -

"(A) the average per discharge relative value (as determined

under section 1848(c)(2) of such Act [section 1395w-4(c)(2) of

this title]) for physicians' services furnished to inpatients

of the hospital by the hospital's medical staff (excluding

interns and residents) during the second year preceding that

calendar year, and

"(B) the equivalent per discharge relative value (as

determined under such section) for physicians' services

furnished to inpatients of the hospital by interns and

residents of the hospital during the second year preceding that

calendar year, adjusted for variations in case-mix among

hospitals, and in disproportionate share status and teaching

status among hospitals (as determined by the Secretary under

paragraph (3)).

The Secretary shall determine the equivalent relative value unit

per discharge for interns and residents based on the best

available data and may make such adjustment in the aggregate.

"(3) Adjustment for teaching and disproportionate share

hospitals. - The Secretary shall adjust the allowable per

discharge relative values otherwise determined under this

subsection to take into account the needs of teaching hospitals

and hospitals receiving additional payments under subparagraphs

(F) and (G) of section 1886(d)(5) of the Social Security Act (42

U.S.C. 1395ww(d)(5)). The adjustment for teaching status or

disproportionate share shall not be less than zero.

"(c) Definitions. - For purposes of this section:

"(1) Hospital. - The term 'hospital' means a subsection (d)

hospital as defined in section 1886(d) of the Social Security Act

(42 U.S.C. 1395ww(d)).

"(2) Medical staff. - An individual furnishing a physician's

service is considered to be on the medical staff of a hospital -

"(A) if (in accordance with requirements for hospitals

established by the Joint Commission on Accreditation of Health

Organizations) -

"(i) the individual is subject to bylaws, rules, and

regulations established by the hospital to provide a

framework for the self-governance of medical staff

activities,

"(ii) subject to the bylaws, rules, and regulations, the

individual has clinical privileges granted by the hospital's

governing body, and

"(iii) under the clinical privileges, the individual may

provide physicians' services independently within the scope

of the individual's clinical privileges, or

"(B) if the physician provides at least one service to an

individual entitled to benefits under this title in that

hospital.

"(3) Physicians' services. - The term 'physicians' services'

means the services described in section 1848(j)(3) of the Social

Security Act (42 U.S.C. 1395w-4(j)(3)).

"(4) Rural area; urban area. - The terms 'rural area' and

'urban area' have the meaning given those terms under section

1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D)).

"(5) Secretary. - The term 'Secretary' means the Secretary of

Health and Human Services.

"(6) Teaching hospital. - The term 'teaching hospital' means a

hospital which has a teaching program approved as specified in

section 1861(b)(6) of the Social Security Act (42 U.S.C.

1395x(b)(6))."

INCENTIVE PAYMENTS UNDER PLANS FOR VOLUNTARY REDUCTION IN NUMBER OF

RESIDENTS; RELATION TO DEMONSTRATION PROJECTS AND AUTHORITY;

REGULATIONS

Section 4626(b), (c) of Pub. L. 105-33 provided that:

"(b) Relation to Demonstration Projects and Authority. -

"(1) Section 1886(h)(6) of the Social Security Act [subsec.

(h)(6) of this section], added by subsection (a), other than

subparagraph (F)(ii) thereof, shall not apply to any residency

training program with respect to which a demonstration project

described in paragraph (3) has been approved by the Health Care

Financing Administration as of May 27, 1997.

"(2) Effective May 27, 1997, the Secretary of Health and Human

Services is not authorized to approve any demonstration project

described in paragraph (3) for any residency training year

beginning before July 1, 2006.

"(3) A demonstration project described in this paragraph is a

project that primarily provides for additional payments under

title XVIII of the Social Security Act [this subchapter] in

connection with a reduction in the number of residents in a

medical residency training program.

"(c) Interim, Final Regulations. - In order to carry out the

amendment made by subsection (a) in a timely manner, the Secretary

of Health and Human Services may first promulgate regulations, that

take effect on an interim basis, after notice and pending

opportunity for public comment, by not later than 6 months after

the date of the enactment of this Act [Aug. 5, 1997]."

DEMONSTRATION PROJECT ON USE OF CONSORTIA

Section 4628 of Pub. L. 105-33 provided that:

"(a) In General. - The Secretary of Health and Human Services (in

this section referred to as the 'Secretary') shall establish a

demonstration project under which, instead of making payments to

teaching hospitals pursuant to section 1886(h) of the Social

Security Act [subsec. (h) of this section], the Secretary shall

make payments under this section to each consortium that meets the

requirements of subsection (b) and that applies to be included

under the project.

"(b) Qualifying Consortia. - For purposes of subsection (a), a

consortium meets the requirements of this subsection if the

consortium is in compliance with the following:

"(1) The consortium consists of a teaching hospital with one or

more approved medical residency training programs and one or more

of the following entities:

"(A) A school of allopathic medicine or osteopathic medicine.

"(B) Another teaching hospital, which may be a children's

hospital.

"(C) A Federally qualified health center.

"(D) A medical group practice.

"(E) A managed care entity.

"(F) An entity furnishing outpatient services.

"(G) Such other entity as the Secretary determines to be

appropriate.

"(2) The members of the consortium have agreed to participate

in the programs of graduate medical education that are operated

by the entities in the consortium.

"(3) With respect to the receipt by the consortium of payments

made pursuant to this section, the members of the consortium have

agreed on a method for allocating the payments among the members.

"(4) The consortium meets such additional requirements as the

Secretary may establish.

"(c) Amount and Source of Payment. - The total of payments to a

qualifying consortium for a fiscal year pursuant to subsection (a)

shall not exceed the amount that would have been paid under section

1886(h) or (k) of the Social Security Act [subsecs. (h), (k) of

this section] for the teaching hospital (or hospitals) in the

consortium. Such payments shall be made in such proportion from

each of the trust funds established under title XVIII of such Act

[this subchapter] as the Secretary specifies."

RECOMMENDATIONS ON LONG-TERM POLICIES REGARDING TEACHING HOSPITALS

AND GRADUATE MEDICAL EDUCATION

Section 4629 of Pub. L. 105-33 provided that:

"(a) In General. - The Medicare Payment Advisory Commission

(established under section 1805 of the Social Security Act [section

1395b-6 of this title] and in this section referred to as the

'Commission') shall examine and develop recommendations on whether

and to what extent medicare payment policies and other Federal

policies regarding teaching hospitals and graduate medical

education should be changed. Such recommendations shall include

recommendations regarding each of the following:

"(1) Possible methodologies for making payments for graduate

medical education and the selection of entities to receive such

payments. Matters considered under this paragraph shall include -

"(A) issues regarding children's hospitals and approved

medical residency training programs in pediatrics, and

"(B) whether and to what extent payments are being made (or

should be made) for training in the nursing and other allied

health professions.

"(2) Federal policies regarding international medical

graduates.

"(3) The dependence of schools of medicine on service-generated

income.

"(4) Whether and to what extent the needs of the United States

regarding the supply of physicians, in the aggregate and in

different specialties, will change during the 10-year period

beginning on October 1, 1997, and whether and to what extent any

such changes will have significant financial effects on teaching

hospitals.

"(5) Methods for promoting an appropriate number, mix, and

geographical distribution of health professionals.

"(b) Consultation. - In conducting the study under subsection

(a), the Commission shall consult with the Council on Graduate

Medical Education and individuals with expertise in the area of

graduate medical education, including -

"(1) deans from allopathic and osteopathic schools of medicine;

"(2) chief executive officers (or equivalent administrative

heads) from academic health centers, integrated health care

systems, approved medical residency training programs, and

teaching hospitals that sponsor approved medical residency

training programs;

"(3) chairs of departments or divisions from allopathic and

osteopathic schools of medicine, schools of dentistry, and

approved medical residency training programs in oral surgery;

"(4) individuals with leadership experience from representative

fields of non-physician health professionals;

"(5) individuals with substantial experience in the study of

issues regarding the composition of the health care workforce of

the United States; and

"(6) individuals with expertise in health care payment

policies.

"(c) Report. - Not later than 2 years after the date of the

enactment of this Act [Aug. 5, 1997], the Commission shall submit

to the Congress a report providing its recommendations under this

section and the reasons and justifications for such

recommendations."

STUDY OF HOSPITAL OVERHEAD AND SUPERVISORY PHYSICIAN COMPONENTS OF

DIRECT MEDICAL EDUCATION COSTS

Section 4630 of Pub. L. 105-33 provided that:

"(a) In General. - The Secretary of Health and Human Services

shall conduct a study with respect to -

"(1) variations among hospitals in the hospital overhead and

supervisory physician components of their direct medical

education costs taken into account under section 1886(h) of the

Social Security Act [subsec. (h) of this section], and

"(2) the reasons for such variations.

"(b) Report. - Not later than 1 year after the date of the

enactment of this Act [Aug. 5, 1997], the Secretary shall report

the results of the study conducted under subsection (a) to the

appropriate committees of Congress, including recommendations for

legislation reducing variations described in subsection (a) that

the Secretary finds inappropriate."

DRG PROSPECTIVE PAYMENT RATE METHODOLOGY; TRANSITION RULE FOR

FISCAL YEAR 1998

Section 4644(a)(2) of Pub. L. 105-33 provided that: "With respect

to the publication in the Federal Register of the DRG prospective

payment rate methodology under such section for fiscal year 1998,

the term '60 days' in section 801(a)(3)(A) and section 802(a) of

title 5, United States Code, is deemed to be a reference to '30

days'."

HOSPITAL PAYMENT UPDATES; TRANSITION RULE FOR FISCAL YEAR 1998

Section 4644(b)(2) of Pub. L. 105-33 provided that: "With respect

to the publication in the Federal Register of the appropriate

change factor for inpatient hospital services for discharges in

fiscal year 1998 under section 1886(e)(5)(B) (42 U.S.C.

1395ww(e)(5)(B)), the term '60 days' in section 801(a)(3)(A) and

section 802(a) of title 5, United States Code, is deemed to be a

reference to '30 days'."

GEOGRAPHICAL RECLASSIFICATION; SPECIAL RULE FOR APPLICATIONS

RECEIVED IN FISCAL YEAR 1997

Section 4644(c)(2) of Pub. L. 105-33 provided that: "In the case

of an application for a change in geographic classification under

such section [subsec. (d)(10)(C)(ii) of this section] for fiscal

year 1999, the Secretary of Health and Human Services shall shorten

the deadlines under such section so as to permit completion of a

final decision by the Secretary by June 15, 1998."

NO STANDARDIZED AMOUNT ADJUSTMENTS FOR FISCAL YEARS 1992 OR 1993

Section 13501(b)(2) of Pub. L. 103-66 provided that: "The

Secretary of Health and Human Services shall not revise the fiscal

year 1992 or fiscal year 1993 standardized amounts pursuant to

subsections (d)(3)(B) and (d)(8)(D) of section 1886 of the Social

Security Act [subsec. (d)(3)(B) and (d)(8)(D) of this section] to

account for the amendment made by paragraph (1) [amending this

section]."

EXTENSION OF REGIONAL REFERRAL CENTER CLASSIFICATIONS THROUGH

FISCAL YEAR 1994; RECLASSIFICATION

Section 13501(d) of Pub. L. 103-66 provided that:

"(1) Extension of classification through fiscal year 1994. - Any

hospital that is classified as a regional referral center under

section 1886(d)(5)(C) of the Social Security Act [subsec. (d)(5)(C)

of this section] as of September 30, 1992, shall continue to be so

classified for cost reporting periods beginning during fiscal year

1993 or fiscal year 1994, unless the area in which the hospital is

located is redesignated as a Metropolitan Statistical Area by the

Office of Management and Budget for such a fiscal year.

"(2) Permitting hospitals to decline reclassification. - If any

hospital fails to qualify as a rural referral center under section

1886(d)(5)(C) of the Social Security Act as a result of a decision

by the Medicare Geographic Classification Review Board under

section 1886(d)(10) of such Act to reclassify the hospital as being

located in an urban area for fiscal year 1993 or fiscal year 1994,

the Secretary of Health and Human Services shall -

"(A) notify such hospital of such failure to qualify,

"(B) provide an opportunity for such hospital to decline such

reclassification, and

"(C) if the hospital -

"(i) declines such reclassification, administer the Social

Security Act [this chapter] (other than section 1886(d)(8)(D))

for such fiscal year as if the decision by the Review Board had

not occurred, or

"(ii) fails to decline such reclassification, administer the

Social Security Act without regard to paragraph (1).

"(3) Requiring lump-sum retroactive payment for hospitals losing

classification. -

"(A) In general. - In the case of a hospital described in

paragraph (1), the Secretary of Health and Human Services shall

make a lump-sum payment to the hospital equal to the difference

between the aggregate payment made to the hospital under section

1886 of such Act (excluding outlier payments under subsection

(d)(5)(A) of such section) during the period of applicability

described in subparagraph (B) and the aggregate payment that

would have been made to the hospital under such section if,

during the period of applicability, the hospital was classified a

regional referral center under section 1886(d)(5)(C) of such Act.

"(B) Period of applicability. - In subparagraph (A), the

'period of applicability' is the period that begins on October 1,

1992, and ends on the date of the enactment of this Act [Aug. 10,

1993]."

HOSPITALS DECLINING URBAN AREA RECLASSIFICATIONS; RETROACTIVE

PAYMENTS

Pub. L. 103-66, title XIII, Sec. 13501(e)(2), (3), Aug. 10, 1993,

107 Stat. 576, as amended by Pub. L. 105-33, title IV, Sec.

4204(a)(3), Aug. 5, 1997, 111 Stat. 376; Pub. L. 106-113, div. B,

Sec. 1000(a)(6) [title IV, Sec. 404(b)(2)], Nov. 29, 1999, 113

Stat. 1536, 1501A-372, provided that:

"(2) Permitting hospitals to decline reclassification. - If any

hospital fails to qualify as a medicare-dependent, small rural

hospital under section 1886(d)(5)(G)(i) of the Social Security Act

[subsec. (d)(5)(G)(i) of this section] as a result of a decision by

the Medicare Geographic Classification Review Board under section

1886(d)(10) of such Act to reclassify the hospital as being located

in an urban area for fiscal year 1993, fiscal year 1994, fiscal

year 1998, fiscal year 1999, or fiscal year 2000 through fiscal

year 2005, the Secretary of Health and Human Services shall -

"(A) notify such hospital of such failure to qualify,

"(B) provide an opportunity for such hospital to decline such

reclassification, and

"(C) if the hospital declines such reclassification, administer

the Social Security Act [this chapter] (other than section

1886(d)(8)(D)) for such fiscal year as if the decision by the

Review Board had not occurred.

"(3) Requiring lump-sum retroactive payment. -

"(A) In general. - In the case of a hospital treated as a

medicare-dependent, small rural hospital under section

1886(d)(5)(G) of the Social Security Act, the Secretary of Health

and Human Services shall make a lump-sum payment to the hospital

equal to the difference between the aggregate payment made to the

hospital under section 1886 of such Act (excluding outlier

payments under subsection (d)(5)(A) of such section) during the

period of applicability described in subparagraph (B) and the

aggregate payment that would have been made to the hospital under

such section if, during the period of applicability, section

1886(d)(5)(G) of such Act had been applied as if the amendments

made by paragraph (1) [amending this section] had been in effect.

"(B) Period of applicability. - In subparagraph (A), the

'period of applicability' is, with respect to a hospital, the

period that begins on the first day of the hospital's first

12-month cost reporting period that begins after April 1, 1992,

and ends on the date of the enactment of this Act [Aug. 10,

1993]."

ADJUSTMENT IN GME BASE-YEAR COSTS OF FEDERAL INSURANCE

CONTRIBUTIONS ACT

Section 13563(d) of Pub. L. 103-66 provided that:

"(1) In general. - In determining the amount of payment to be

made under section 1886(h) of the Social Security Act [subsec. (h)

of this section] in the case of a hospital described in paragraph

(2) for cost reporting periods beginning on or after October 1,

1992, the Secretary of Health and Human Services shall redetermine

the approved FTE resident amount to reflect the amount that would

have been paid the hospital if, during the hospital's base cost

reporting period, the hospital had been liable for FICA taxes or

for contributions to the retirement system of a State, a political

subdivision of a State, or an instrumentality of such a State or

political subdivision with respect to interns and residents in its

medical residency training program.

"(2) Hospitals affected. - A hospital described in this paragraph

is a hospital that did not pay FICA taxes with respect to interns

and residents in its medical residency training program during the

hospital's base cost reporting period, but is required to pay FICA

taxes or make contributions to a retirement system described in

paragraph (1) with respect to such interns and residents because of

the amendments made by section 11332(b) of OBRA-1990 [Pub. L.

101-508, amending section 3121 of Title 26, Internal Revenue Code].

"(3) Definitions. - In this subsection:

"(A) The 'base cost reporting period' for a hospital is the

hospital's cost reporting period that began during fiscal year

1984.

"(B) The term 'FICA taxes' means, with respect to a hospital,

the taxes under section 3111 of the Internal Revenue Code of 1986

[26 U.S.C. 3111]."

DETERMINATION OF AREA WAGE INDEX FOR DISCHARGES OCCURRING JANUARY

1, 1991 TO OCTOBER 1, 1993

Section 4002(d)(1) of Pub. L. 101-508 provided that:

"(A) For purposes of section 1886(d)(3)(E) of the Social Security

Act [subsec. (d)(3)(E) of this section] for discharges occurring on

or after January 1, 1991, and before October 1, 1993, the Secretary

of Health and Human Services shall apply an area wage index

determined using the survey of the 1988 wages and wage-related

costs of hospitals in the United States conducted under such

section.

"(B) The Secretary shall apply the wage index described in

subparagraph (A) without regard to a previous survey of wages and

wage-related costs."

STUDY AND REPORT ON RELATIONSHIP BETWEEN NON-WAGE-RELATED INPUT

PRICES AND ADJUSTED AVERAGE STANDARDIZED AMOUNTS

Section 4002(e)(2) of Pub. L. 101-508 directed Secretary of

Health and Human Services to collect sufficient data on the input

prices associated with the non-wage-related portion of the adjusted

average standardized amounts established under subsec. (d)(3) of

this section to identify extent to which variations in such amounts

among hospitals located in different geographic areas are

attributable to differences in such prices, and, not later than

June 1, 1993, submit a report to Congress analyzing such data, with

such report to include recommendations regarding a methodology for

adjusting such average standardized amounts to reflect such

variations.

DEADLINE FOR SUBMISSION OF APPLICATIONS TO GEOGRAPHIC

CLASSIFICATION REVIEW BOARD

Section 4002(h)(2)(A) of Pub. L. 101-508 provided that: "For

purposes of determining whether a hospital requesting a change in

geographic classification for fiscal year 1992 under section

1886(d)(10) of the Social Security Act [subsec. (d)(10) of this

section] has met the deadline described in subparagraph (C)(ii) of

such section, an application submitted under such subparagraph

shall be considered to have been submitted by the first day of the

preceding fiscal year if it is submitted within 60 days of the date

of publication of the guidelines described in subparagraph (D)(i)

of such section."

PAYMENTS FOR MEDICAL EDUCATION COSTS

Section 4004 of Pub. L. 101-508 provided that:

"(a) Hospital Graduate Medical Education Recoupment. -

"(1) In general. - The Secretary of Health and Human Services

may not, before October 1, 1991, recoup payments from a hospital

because of alleged overpayments to such hospital under part A of

title XVIII of the Social Security Act [part A of this

subchapter] due to a determination that the amount of payments

made for graduate medical education programs exceeds the amount

allowable under section 1886(h) [subsec. (h) of this section].

"(2) Cap on annual amount of recoupment. - With respect to

overpayments to a hospital described in paragraph (1), the

Secretary may not recoup more than 25 percent of the amount of

such overpayments from the hospital during a fiscal year.

"(3) Effective date. - Paragraphs (1) and (2) shall take effect

October 1, 1990.

"(b) University Hospital Nursing Education. -

"(1) In general. - The reasonable costs incurred by a hospital

(or by an educational institution related to the hospital by

common ownership or control) during a cost reporting period for

clinical training (as defined by the Secretary) conducted on the

premises of the hospital under approved nursing and allied health

education programs that are not operated by the hospital shall be

allowable as reasonable costs under part A of title XVIII of the

Social Security Act and reimbursed under such part on a

pass-through basis.

"(2) Conditions for reimbursement. - The reasonable costs

incurred by a hospital during a cost reporting period shall be

reimbursable pursuant to paragraph (1) only if -

"(A) the hospital claimed and was reimbursed for such costs

during the most recent cost reporting period that ended on or

before October 1, 1989;

"(B) the proportion of the hospital's total allowable costs

that is attributable to the clinical training costs of the

approved program, and allowable under (b)(1) during the cost

reporting period does not exceed the proportion of total

allowable costs that were attributable to the clinical training

costs during the cost reporting period described in

subparagraph (A);

"(C) the hospital receives a benefit for the support it

furnishes to such program through the provision of clinical

services by nursing or allied health students participating in

such program; and

"(D) the costs incurred by the hospital for such program do

not exceed the costs that would be incurred by the hospital if

it operated the program itself.

"(3) Prohibition against recoupment of costs by secretary. -

"(A) In general. - The Secretary of Health and Human Services

may not recoup payments from (or otherwise reduce or adjust

payments under part A of title XVIII of the Social Security Act

to) a hospital because of alleged overpayments to such hospital

under such title due to a determination that costs which were

reported by the hospital on its medicare cost reports for cost

reporting periods beginning on or after October 1, 1983, and

before October 1, 1990, relating to approved nursing and allied

health education programs did not meet the requirements for

allowable nursing and allied health education costs (as

developed by the Secretary pursuant to section 1861(v) of such

Act [section 1395x(v) of this title]).

"(B) Refund of amounts recouped. - If, prior to the date of

the enactment of this Act [Nov. 5, 1990], the Secretary has

recouped payments from (or otherwise reduced or adjusted

payments under part A of title XVIII of the Social Security Act

to) a hospital because of overpayments described in

subparagraph (A), the Secretary shall refund the amount

recouped, reduced, or adjusted from the hospital.

"(4) Special audit to determine costs. - In determining the

amount of costs incurred by, claimed by, and reimbursed to, a

hospital for purposes of this subsection, the Secretary shall

conduct a special audit (or use such other appropriate mechanism)

to ensure the accuracy of such past claims and payments.

"(5) Effective date. - Except as provided in paragraph (3), the

provisions of this subsection shall apply to cost reporting

periods beginning on or after October 1, 1990."

Section 4159 of Pub. L. 101-508 provided that:

"(a) Hospital Graduate Medical Education Recoupment. -

"(1) In general. - The Secretary of Health and Human Services

may not, before October 1, 1991, recoup payments from a hospital

because of alleged overpayments to such hospital under part B of

title XVIII of the Social Security Act [part B of this

subchapter] due to a determination that the amount of payments

made for graduate medical education programs exceeds the amount

allowable under section 1886(h) [subsec. (h) of this section].

"(2) Cap on annual amount of recoupment. - With respect to

overpayments to a hospital described in paragraph (1), the

Secretary may not recoup more than 25 percent of the amount of

such overpayments from the hospital during a fiscal year.

"(3) Effective date. - Paragraphs (1) and (2) shall take effect

October 1, 1990.

"(b) University Hospital Nursing Education. -

"(1) In general. - The reasonable costs incurred by a hospital

(or by an educational institution related to the hospital by

common ownership or control) during a cost reporting period for

clinical training (as defined by the Secretary) conducted on the

premises of the hospital under approved nursing and allied health

education programs that are not operated by the hospital shall be

allowable as reasonable costs under part B of title XVIII of the

Social Security Act and reimbursed under such part on a

pass-through basis.

"(2) Conditions for reimbursement. - The reasonable costs

incurred by a hospital during a cost reporting period shall be

reimbursable pursuant to paragraph (1) only if -

"(A) the hospital claimed and was reimbursed for such costs

during the most recent cost reporting period that ended on or

before October 1, 1989;

"(B) the proportion of the hospital's total allowable costs

that is attributable to the clinical training costs of the

approved program, and allowable under (b)(1) during the cost

reporting period does not exceed the proportion of total

allowable costs that were attributable to clinical training

costs during the cost reporting period described in

subparagraph (A);

"(C) the hospital receives a benefit for the support it

furnishes to such program through the provision of clinical

services by nursing or allied health students participating in

such program; and

"(D) the costs incurred by the hospital for such program do

not exceed the costs that would be incurred by the hospital if

it operated the program itself.

"(3) Prohibition against recoupment of costs by secretary. -

"(A) In general. - The Secretary of Health and Human Services

may not recoup payments from (or otherwise reduce or adjust

payments under part B of title XVIII of the Social Security Act

to) a hospital because of alleged overpayments to such hospital

under such title due to a determination that costs which were

reported by the hospital on its medicare cost reports for cost

reporting periods beginning on or after October 1, 1983, and

before October 1, 1990, relating to approved nursing and allied

health education programs did not meet the requirements for

allowable nursing and allied health education costs (as

developed by the Secretary pursuant to section 1861(v) of such

Act [section 1395x(v) of this title]).

"(B) Refund of amounts recouped. - If, prior to the date of

the enactment of this Act [Nov. 5, 1990], the Secretary has

recouped payments from (or otherwise reduced or adjusted

payments under part B of title XVIII of the Social Security Act

to) a hospital because of overpayments described in

subparagraph (A), the Secretary shall refund the amount

recouped, reduced, or adjusted from the hospital.

"(4) Special audit to determine costs. - In determining the

amount of costs incurred by, claimed by, and reimbursed to, a

hospital for purposes of this subsection, the Secretary shall

conduct a special audit (or use such other appropriate mechanism)

to ensure the accuracy of such past claims and payments.

"(5) Effective Date. - Except as provided in paragraph (3), the

provisions of this subsection shall apply to cost reporting

periods beginning on or after October 1, 1990."

DEVELOPMENT OF NATIONAL PROSPECTIVE PAYMENT RATES FOR CURRENT

NON-PPS HOSPITALS

Section 4005(b) of Pub. L. 101-508 provided that:

"(1) Development of proposal. - The Secretary of Health and Human

Services shall develop a proposal to modify the current system

under which hospitals that are not subsection (d) hospitals (as

defined in section 1886(d)(1)(B) of the Social Security Act

[subsec. (d)(1)(B) of this section]) receive payment for the

operating and capital-related costs of inpatient hospital services

under part A [part A of this subchapter] of the medicare program or

a proposal to replace such system with a system under which such

payments would be made on the basis of nationally-determined

average standardized amounts. In developing any proposal under this

paragraph to replace the current system with a prospective payment

system, the Secretary shall -

"(A) take into consideration the need to provide for

appropriate limits on increases in expenditures under the

medicare program;

"(B) provide for adjustments to prospectively determined rates

to account for changes in a hospital's case mix, severity of

illness of patients, volume of cases, and the development of new

technologies and standards of medical practice;

"(C) take into consideration the need to increase the payment

otherwise made under such system in the case of services provided

to patients whose length of stay or costs of treatment greatly

exceed the length of stay or cost of treatment provided for under

the applicable prospectively determined payment rate;

"(D) take into consideration the need to adjust payments under

the system to take into account factors such as a

disproportionate share of low-income patients, costs related to

graduate medical education programs, differences in wages and

wage-related costs among hospitals located in various geographic

areas, and other factors the Secretary considers appropriate; and

"(E) provide for the appropriate allocation of operating and

capital-related costs of hospitals not subject to the new

prospective payment system and distinct units of such hospitals

that would be paid under such system.

"(2) Reports. - (A) By not later than April 1, 1992, the

Secretary shall submit the proposal developed under paragraph (1)

to the Committee on Finance of the Senate and the Committee on Ways

and Means of the House of Representatives.

"(B) By not later than June 1, 1992, the Prospective Payment

Assessment Commission shall submit an analysis of and comments on

the proposal developed under paragraph (1) to the Committee on

Finance of the Senate and the Committee on Ways and Means of the

House of Representatives."

GUIDANCE TO INTERMEDIARIES AND HOSPITALS

Section 4005(c)(3) of Pub. L. 101-508 provided that: "The

Administrator of the Health Care Financing Administration shall

provide guidance to agencies and organizations performing functions

pursuant to section 1816 of the Social Security Act [section 1395h

of this title] and to hospitals that are not subsection (d)

hospitals (as defined in section 1886(d)(1)(B) of such Act [subsec.

(d)(1)(B) of this section]) to assist such agencies, organizations,

and hospitals in filing complete applications with the

Administrator for exemptions, exceptions, and adjustments under

section 1886(b)(4)(A) of such Act."

FREEZE IN PAYMENTS UNDER PART A OF THIS SUBCHAPTER THROUGH DECEMBER

31, 1990

Section 4007 of Pub. L. 101-508 provided that:

"(a) In General. - Notwithstanding any other provision of law,

for purposes of determining the amount of payment for items or

services under part A of title XVIII of the Social Security Act

[part A of this subchapter] (including payments under section 1886

of such Act [this section] attributable to or allocated under such

part) during the period described in subsection (b):

"(1) The market basket percentage increase (described in

section 1886(b)(3)(B)(iii) of the Social Security Act) shall be

deemed to be 0 for discharges occurring during such period.

"(2) The percentage increase or decrease in the medical care

expenditure category of the consumer price index applicable under

section 1814(i)(2)(B) of such Act [section 1395f(i)(2)(B) of this

title] shall be deemed to be 0.

"(3) The area wage index applicable to a subsection (d)

hospital under section 1886(d)(3)(E) of such Act shall be deemed

to be the area wage index applicable to such hospital as of

September 30, 1990.

"(4) The percentage change in the consumer price index

applicable under section 1886(h)(2)(D) of such Act shall be

deemed to be 0.

"(b) Description of Period. - The period referred to in

subsection (a) is the period beginning on October 21, 1990, and

ending on December 31, 1990."

REVIEW OF HOSPITAL REGULATIONS WITH RESPECT TO RURAL HOSPITALS

Section 4008(l) of Pub. L. 101-508 provided that:

"(1) In general. - The Secretary of Health and Human Services

shall review the requirements applicable under title XVIII of the

Social Security Act [this subchapter] to determine which

requirements could be made less administratively and economically

burdensome (without diminishing the quality of care) for hospitals

defined in section 1886(d)(1)(B) of such Act [subsec. (d)(1)(B) of

this section] that are located in a rural area (as defined in

section 1886(d)(2)(D) of such Act). Such review shall specifically

include standards related to staffing requirements.

"(2) Report. - The Secretary of Health and Human Services shall

report to Congress by April 1, 1992, on the results of the review

conducted under subsection (a), and include conclusions on which

regulations, if any, should be modified with respect to hospitals

described in subsection (a)."

PROHIBITION ON COST SAVINGS POLICIES BEFORE BEGINNING OF FISCAL

YEAR

Section 4207(b)(1), formerly 4027(b)(1), of Pub. L. 101-508, as

renumbered and amended by Pub. L. 103-432, title I, Sec. 160(d)(4),

(5)(C), Oct. 31, 1994, 108 Stat. 4444, provided that:

"Notwithstanding any other provision of law, the Secretary of

Health and Human Services may not issue any proposed or final

regulation, instruction, or other policy which is estimated by the

Secretary to result in a net reduction in expenditures under title

XVIII of the Social Security Act [this subchapter] in a fiscal year

(beginning with fiscal year 1991 and ending with fiscal year 1993,

or, if later, the last fiscal year for which there is a maximum

deficit amount specified under section 601(a)(1) of the

Congressional Budget and Impoundment Control Act of 1974 [2 U.S.C.

665(a)(1)]) of more than $50,000,000, except as follows:

"(A) The Secretary may issue such a proposed regulation,

instruction, or other policy with respect to the fiscal year

before the May 15 preceding the beginning of the fiscal year.

"(B) The Secretary may issue such a final regulation,

instruction, or other policy with respect to the fiscal year on

or after October 15 of the fiscal year.

"(C) The Secretary may, at any time, issue such a proposed or

final regulation, instruction, or other policy with respect to

the fiscal year if required to implement specific provisions

under statute."

PROHIBITION OF PAYMENT CYCLE CHANGES

Section 4207(b)(2), formerly 4027(b)(2), of Pub. L. 101-508, as

renumbered by Pub. L. 103-432, title I, Sec. 160(d)(4), Oct. 31,

1994, 108 Stat. 4444, provided that: "Notwithstanding any other

provision of law, the Secretary of Health and Human Services is not

authorized to issue, after the date of the enactment of this Act

[Nov. 5, 1990], any final regulation, instruction, or other policy

change which is primarily intended to have the effect of slowing

down or speeding up claims processing, or delaying payment of

claims, under title XVIII of the Social Security Act [this

subchapter]."

EXTENSION OF AREA WAGE INDEX

Section 115(a) of Pub. L. 101-403 provided that: "For purposes of

determining the amount of payment made to a hospital under part A

of title XVIII of the Social Security Act [part A of this

subchapter] for the operating costs of inpatient hospital services

for discharges occurring on or after October 1, 1990, and on or

before October 20, 1990, the Secretary of Health and Human

Services, in adjusting such amount under section 1886(d)(3)(E) of

such Act [subsec. (d)(3)(E) of this section] to reflect the

relative hospital wage level in the geographic area of the hospital

compared to the national average hospital wage index, shall apply

the area wage index applicable to such hospital as of September 30,

1990."

ADJUSTMENTS RESULTING FROM EXTENSIONS OF REGIONAL FLOOR ON

STANDARDIZED AMOUNTS

Section 115(b)(2) of Pub. L. 101-403 provided that: "The

Secretary of Health and Human Services shall make any adjustments

resulting from the amendment made by paragraph (1) [amending this

section] in the amount of the payments made to hospitals under

section 1886(d) of the Social Security Act [subsec. (d) of this

section] in a fiscal year for the operating costs of inpatient

hospital services in a manner that ensures that the aggregate

payments under such section are not greater or less than those that

would have been made in the year without such adjustments."

INDEXING OF FUTURE APPLICABLE PERCENTAGE INCREASES

Section 6003(a)(3) of Pub. L. 101-239 provided that: "For

discharges occurring on or after October 1, 1990, the applicable

percentage increase (described in section 1886(b)(3)(B) of the

Social Security Act [subsec. (b)(3)(B) of this section]) for

discharges occurring during fiscal year 1990 is deemed to have been

such percentage increase as amended by paragraph (1)."

CONTINUATION OF SOLE COMMUNITY HOSPITAL DESIGNATION FOR CURRENT

SOLE COMMUNITY HOSPITALS

Section 6003(e)(3) of Pub. L. 101-239 provided that: "Any

hospital classified as a sole community hospital under section

1886(d)(5)(C)(ii) of the Social Security Act [subsec. (d)(5)(C)(ii)

of this section] on the date of the enactment of this Act [Dec. 19,

1989] that will no longer be classified as a sole community

hospital after such date as a result of the amendments made by

paragraph (1) [amending this section] shall continue to be

classified as a sole community hospital for purposes of section

1886(d)(5)(D) of such Act [subsec. (d)(5)(D) of this section]."

ADDITIONAL PAYMENT RESULTING FROM CORRECTIONS OF ERRONEOUSLY

DETERMINED WAGE INDEX

Section 6003(h)(5) of Pub. L. 101-239 provided that:

"(A) In general. - If the Secretary of Health and Human Services

(hereinafter referred to as the 'Secretary') discovers an error

with respect to the determination, adjustment, or computation of

the area wage index described in section 1886(d)(3)(E) of the

Social Security Act [subsec. (d)(3)(E) of this section] and

subsequently corrects such error, the Secretary shall make an

additional payment under title XVIII of such Act [this subchapter]

to a hospital affected by such error for inpatient hospital

discharges occurring during the period when the erroneously

determined, adjusted, or computed wage index was in effect.

"(B) Conditions for additional payment. - A hospital is eligible

for an additional payment under subparagraph (A) only if -

"(i) the error resulted from the submission of erroneous data,

except that a hospital is not eligible for such additional

payment if it submitted such erroneous data;

"(ii) the error was made with respect to the survey of the 1984

wages and wage-related costs of hospitals in the United States

conducted under section 1886(d)(3)(E) of the Social Security Act;

and

"(iii) the correction of the error resulted in an adjustment to

the area wage index of not less than 3 percentage points.

"(C) Period of applicability. - A hospital may not receive an

additional payment under subparagraph (A) for discharges occurring

after October 1, 1990."

LEGISLATIVE PROPOSAL ELIMINATING SEPARATE AVERAGE STANDARDIZED

AMOUNTS

Pub. L. 101-239, title VI, Sec. 6003(i), Dec. 19, 1989, 103 Stat.

2158, directed Secretary of Health and Human Services to design a

legislative proposal eliminating the system of determining separate

average standardized amounts for subsection (d) hospitals

classified as being located in large urban, other urban, or rural

areas, prior to repeal by Pub. L. 105-362, title VI, Sec.

601(b)(4), Nov. 10, 1998, 112 Stat. 3286.

DETERMINATION AND RECOMMENDATIONS OF PAYMENTS FOR COSTS OF

ADMINISTERING BLOOD CLOTTING FACTORS TO INDIVIDUALS WITH HEMOPHILIA

Section 6011(b), (c) of Pub. L. 101-239 provided that:

"(b) Determining Payment Amount. - The Secretary of Health and

Human Services shall determine the amount of payment made to

hospitals under part A of title XVIII of the Social Security Act

[part A of this subchapter] for the costs of administering blood

clotting factors to individuals with hemophilia by multiplying a

predetermined price per unit of blood clotting factor (determined

in consultation with the Prospective Payment Assessment Commission)

by the number of units provided to the individual.

"(c) Recommendations on Payments. - The Prospective Payment

Assessment Commission and the Health Care Financing Administration

shall develop recommendations with respect to payments to hospitals

under part A of title XVIII of the Social Security Act for the

costs of administering blood clotting factors to individuals with

hemophilia, and shall submit such recommendations to Congress not

later than 18 months after the date of enactment of this Act [Dec.

19, 1989]."

PUBLICATION OF INSTRUCTIONS RELATING TO EXCEPTIONS AND ADJUSTMENTS

IN TARGET AMOUNTS

Section 6015(b) of Pub. L. 101-239 provided that: "By not later

than 180 days after the date of enactment of this Act [Dec. 19,

1989], the Secretary of Health and Human Services shall publish

instructions specifying the application process to be used in

providing exceptions and adjustments under section 1886(b)(4)(A) of

the Social Security Act [subsec. (b)(4)(A) of this section]."

DELAY IN RECOUPMENT OF CERTAIN NURSING AND ALLIED EDUCATION COSTS

Section 6205(b) of Pub. L. 101-239 provided that:

"(1) The Secretary of Health and Human Services (in this

subsection referred to as the 'Secretary') shall not, before

October 1, 1990, recoup from, or otherwise reduce or adjust

payments under title XVIII of the Social Security Act [this

subchapter] to, hospitals because of alleged overpayments to such

hospitals under such title due to a determination that costs which

were reported by a hospital on its medicare cost reports relating

to approved nursing and allied health education programs were

allowable costs and are included in the definition of 'operating

costs of inpatient hospital services' pursuant to section

1886(a)(4) of such Act [subsec. (a)(4) of this section], so that no

pass-through of such costs was permitted under that section.

"(2)(A) Before July 1, 1990, the Secretary shall issue

regulations respecting payment of costs described in paragraph (1).

"(B) In issuing such regulations -

"(i) the Secretary shall allow a comment period of not less

than 60 days,

"(ii) the Secretary shall consult with the Prospective Payment

Assessment Commission, and

"(iii) any final rule shall not be effective prior to October

1, 1990, or 30 days after publication of the final rule in the

Federal Register, whichever is later.

"(C) Such regulations shall specify -

"(i) the relationship required between an approved nursing or

allied health education program and a hospital for the program's

costs to be attributed to the hospital;

"(ii) the types of costs related to nursing or allied health

education programs that are allowable by medicare;

"(iii) the distinction between costs of approved educational

activities as recognized under section 1886(a)(3) of the Social

Security Act [subsec. (a)(3) of this section] and educational

costs treated as operating costs of inpatient hospital services;

and

"(iv) the treatment of other funding sources for the program."

INNER-CITY HOSPITAL TRIAGE DEMONSTRATION PROJECT

Section 6217 of Pub. L. 101-239, as amended by Pub. L. 101-508,

title IV, Sec. 4207(k)(5), formerly Sec. 4027(k)(5), Nov. 5, 1990,

104 Stat. 1388-125, renumbered Pub. L. 103-432, title I, Sec.

160(d)(4), Oct. 31, 1994, 108 Stat. 4444, provided that:

"(a) Establishment. - The Secretary of Health and Human Services

shall establish a demonstration project in a public hospital that

is located in a large urban area and that has established a triage

system, under which the Secretary shall make payments out of the

Federal Hospital Insurance Trust Fund and the Federal Supplementary

Medical Insurance Trust Fund (in such proportions as the Secretary

determines to be appropriate in a year) for 3 years to reimburse

the hospital for the reasonable costs of operating the system,

including costs -

"(1) to train hospital personnel to operate and participate in

the system; and

"(2) to provide services to patients who might otherwise be

denied appropriate and prompt care.

"(b) Limitations on Payment. - (1) The Secretary may not make

payment under the demonstration project established under

subsection (a) for costs that the Secretary determines are not

reasonable.

"(2) The amount of payment made under the demonstration project

during a single year may not exceed $500,000."

TRANSITION ADJUSTMENTS TO TARGET AMOUNTS FOR INPATIENT HOSPITAL

SERVICES

Section 101(c)(2)(B) of title I of Pub. L. 101-234 provided that:

"The Secretary of Health and Human Services shall make an

appropriate adjustment to the target amount established under

section 1886(b)(3)(A) of the Social Security Act [subsec. (b)(3)(A)

of this section] in the case of inpatient hospital services

provided to an inpatient whose stay began before January 1, 1990,

in order to take into account the target amount that would have

applied but for the amendments made by this title [see Tables for

classification]."

ELECTION OF PERSONNEL POLICY FOR PROPAC EMPLOYEES

Section 8405 of Pub. L. 100-647 provided that: "With respect to

employees of the Prospective Payment Assessment Commission hired

before December 22, 1987, such employees shall have the option to

elect within 60 days of the date of enactment of this Act [Nov. 10,

1988] to be covered under either the personnel policy in effect

with respect to such employees before December 22, 1987, or under

the employees coverage provided under the last sentence of section

1886(e)(6)(D) of the Social Security Act [subsec. (e)(6)(D) of this

section]."

ADJUSTMENTS IN PAYMENTS FOR INPATIENT HOSPITAL SERVICES

Section 104(c) of Pub. L. 100-360, as amended by Pub. L. 100-485,

title VI, Sec. 608(d)(3)(C)-(E), Oct. 13, 1988, 102 Stat. 2413;

Pub. L. 101-234, title I, Sec. 101(c)(1), (2)(A), Dec. 13, 1989,

103 Stat. 1980, provided that:

"(1) PPS hospitals. - In adjusting DRG prospective payment rates

under section 1886(d) of the Social Security Act [subsec. (d) of

this section], outlier cutoff points under section 1886(d)(5)(A) of

such Act, and weighting factors under section 1886(d)(4) of such

Act for discharges occurring on or after October 1, 1988, and

before January 1, 1990, the Secretary of Health and Human Services

shall, to the extent appropriate, take into consideration the

reductions in payments to hospitals by (or on behalf of) medicare

beneficiaries resulting from the elimination of a day limitation on

medicare inpatient hospital services (under the amendments made by

section 101 [amending section 1395d of this title]).

"(2) PPS-exempt hospitals. - In adjusting target amounts under

section 1886(b)(3) of the Social Security Act [subsec. (b)(3) of

this section] for portions of cost reporting periods occurring on

or after January 1, 1989, and before January 1, 1990, the Secretary

shall, on a hospital-specific basis, take into consideration the

reductions in payments to hospitals by (or on behalf of) medicare

beneficiaries resulting from the elimination of a day limitation on

medicare inpatient hospital services (under the amendments made by

section 101 [amending section 1395d of this title]), without regard

to whether such a hospital is paid on the basis described in

subparagraph (A) or (B) of section 1886(b)(1) of such Act, without

regard to whether any of such beneficiaries exhausted medicare

inpatient hospital insurance benefits before January 1, 1989."

[Amendment of section 104(c) of Pub. L. 100-360, set out above,

by section 101(c)(1), (2)(A) of Pub. L. 101-234 effective as if

included in enactment of Pub. L. 100-360, see section 101(d) of

Pub. L. 101-234, set out as a note under section 1395c of this

title].

PROPAC STUDY

Section 203(c)(2) of Pub. L. 100-360 directed Prospective Payment

Assessment Commission to conduct a study, and make recommendations

to Congress and Secretary of Health and Human Services by not later

than Mar. 1, 1991, concerning appropriate adjustment to payment

amounts provided under subsec. (d) of this section for inpatient

hospital services to account for reduced costs to hospitals

resulting from amendments made by section 203 of Pub. L. 100-360,

amending sections 1320c-3, 1395h, 1395k to 1395n, 1395w-2, 1395x,

1395z, and 1395aa of this title, prior to repeal by Pub. L.

101-234, title II, Sec. 201(a), Dec. 13, 1989, 103 Stat. 1981.

CLINIC HOSPITAL WAGE INDICES

Section 4004(b) of Pub. L. 100-203 provided that: "In calculating

the wage index under section 1886(d) of the Social Security Act

[subsec. (d) of this section] for purposes of making payment

adjustments after September 30, 1988, as required under paragraphs

(2)(H) and (3)(E) of such section, in the case of any institution

which received the waiver specified in section 602(k) of the Social

Security Amendments of 1983 [section 602(k) of Pub. L. 98-21, set

out as a note under section 1395y of this title], the Secretary of

Health and Human Services shall include wage costs paid to related

organization employees directly involved in the delivery and

administration of care provided by the related organization to

hospital inpatients. For purposes of the preceding sentence, the

term 'wage costs' does not include costs of overhead or home office

administrative salaries or any costs that are not incurred in the

hospital's Metropolitan Statistical Area."

LIMITATION ON AMOUNTS PAID IN FISCAL YEARS 1988 AND 1989

Section 4005(c)(2)(B) of Pub. L. 100-203 provided that: "The

Secretary of Health and Human Services shall take appropriate steps

to ensure that the total amount paid in a fiscal year under title

XVIII of the Social Security Act [this subchapter] by reason of the

amendment made by paragraph (1)(B) [amending this section] does not

exceed $5,000,000 in the case of fiscal year 1988 and $10,000,000

for fiscal year 1989."

STUDY OF CRITERIA FOR CLASSIFICATION OF HOSPITALS AS RURAL REFERRAL

CENTERS; REPORT

Section 4005(d)(2) of Pub. L. 100-203 directed Secretary of

Health and Human Services to provide for a study of the criteria

used for the classification of hospitals as rural referral centers,

and report to Congress, by not later than Mar. 1, 1989, on the

study and on recommendations for the criteria that should be

applied for the classification of hospitals as rural referral

centers for cost reporting periods beginning on or after Oct. 1,

1989.

GRANT PROGRAM FOR RURAL HEALTH CARE TRANSITION

Section 4005(e) of Pub. L. 100-203, as amended by Pub. L.

101-239, title VI, Sec. 6003(g)(1)(B)(i), Dec. 19, 1989, 103 Stat.

2150; Pub. L. 103-432, title I, Sec. 103(a)(1), (b), (c), Oct. 31,

1994, 108 Stat. 4404, 4405, provided that:

"(1) The Administrator of the Health Care Financing

Administration, in consultation with the Assistant Secretary for

Health (or a designee), shall establish a program of grants to

assist eligible small rural hospitals and their communities in the

planning and implementation of projects to modify the type and

extent of services such hospitals provide in order to adjust for

one or more of the following factors:

"(A) Changes in clinical practice patterns.

"(B) Changes in service populations.

"(C) Declining demand for acute-care inpatient hospital

capacity.

"(D) Declining ability to provide appropriate staffing for

inpatient hospitals.

"(E) Increasing demand for ambulatory and emergency services.

"(F) Increasing demand for appropriate integration of community

health services.

"(G) The need for adequate access (including appropriate

transportation) to emergency care and inpatient care in areas in

which a significant number of underutilized hospital beds are

being eliminated.

"(H) The Administrator shall submit a final report on the

program to the Congress not later than 180 days after all

projects receiving a grant under the program are completed.

Each demonstration project under this subsection shall demonstrate

methods of strengthening the financial and managerial capability of

the hospital involved to provide necessary services. Such methods

may include programs of cooperation with other health care

providers, of diversification in services furnished (including the

provision of home health services), of physician recruitment, and

of improved management systems. Grants under this paragraph may be

used to provide instruction and consultation (and such other

services as the Administrator determines appropriate) via

telecommunications to physicians in such rural areas (within the

meaning of section 1886(d)(2)(D) of the Social Security Act

[subsec. (d)(2)(D) of this section]) as are designated either class

1 or class 2 health manpower shortage areas under section

332(a)(1)(A) of the Public Health Service Act [section

254e(a)(1)(A) of this title].

"(2) For purposes of this subsection, the term 'eligible small

rural hospital' means any rural primary care hospital designated by

the Secretary under section 1820(i)(2) of the Social Security Act

[section 1395i-4(i)(2) of this title], or any non-Federal,

short-term general acute care hospital that -

"(A) is located in a rural area (as determined in accordance

with subsection (d)),

"(B) has less than 100 beds, and

"(C) is not for profit.

"(3)(A) Any eligible small rural hospital that desires to modify

the type or extent of health care services that it provides in

order to adjust for one or more of the factors specified in

paragraph (1) may submit an application to the Administrator and a

copy of such application to the Governor of the State in which it

is located. The application shall specify the nature of the project

proposed by the hospital, the data and information on which the

project is based, and a timetable (of not more than 24 months) for

completion of the project. The application shall be submitted on or

before a date specified by the Administrator and shall be in such

form as the Administrator may require.

"(B) The Governor shall transmit to the Administrator, within a

reasonable time after receiving a copy of an application pursuant

to subparagraph (A), any comments with respect to the application

that the Governor deems appropriate.

"(C) The Governor of a State may designate an appropriate State

agency to receive and comment on applications submitted under

subparagraph (A).

"(4) A hospital shall be considered to be located in a rural area

for purposes of this subsection if it is treated as being located

in a rural area for purposes of section 1886(d)(3)(D) of the Social

Security Act [subsec. (d)(3)(D) of this section].

"(5) In determining which hospitals making application under

paragraph (3) will receive grants under this subsection, the

Administrator shall take into account -

"(A) any comments received under paragraph (3)(B) with respect

to a proposed project;

"(B) the effect that the project will have on -

"(i) reducing expenditures from the Federal Hospital

Insurance Trust Fund,

"(ii) improving the access of medicare beneficiaries to

health care of a reasonable quality;

"(C) the extent to which the proposal of the hospital, using

appropriate data, demonstrates an understanding of -

"(i) the primary market or service area of the hospital, and

"(ii) the health care needs of the elderly and disabled that

are not currently being met by providers in such market or

area, and

"(D) the degree of coordination that may be expected between

the proposed project and -

"(i) other local or regional health care providers, and

"(ii) community and government leaders,

as evidenced by the availability of support for the project (in

cash or in kind) and other relevant factors.

"(6) A grant to a hospital under this subsection may not exceed

$50,000 a year and may not exceed a term of 3 years.

"(7)(A) Except as provided in subparagraphs (B) and (C), a

hospital receiving a grant under this subsection may use the grant

for any of expenses incurred in planning and implementing the

project with respect to which the grant is made.

"(B) A hospital receiving a grant under this subsection for a

project may not use the grant to retire debt incurred with respect

to any capital expenditure made prior to the date on which the

project is initiated.

"(C) Not more than one-third of any grant made under this

subsection may be expended for capital-related costs (as defined by

the Secretary for purposes of section 1886(a)(4) of the Social

Security Act [subsec. (a)(4) of this section]) of the project,

except that this limitation shall not apply with respect to a grant

used for the purposes described in subparagraph (D).

"(D) A hospital may use a grant received under this subsection to

develop a plan for converting itself to a rural primary care

hospital (as described in section 1820 of the Social Security Act

[section 1395i-4 of this title]) or to develop a rural health

network (as defined in section 1820(g) of such Act) in the State in

which it is located if the State is receiving a grant under section

1820(a)(1).

"(8)(A) A hospital receiving a grant under this section [amending

this section and section 1395tt of this title and enacting

provisions set out as notes under this section and section 1395tt

of this title] shall furnish the Administrator with such

information as the Administrator may require to evaluate the

project with respect to which the grant is made and to ensure that

the grant is expended for the purposes for which it was made.

"(B) The Administrator shall report to the Congress at least once

every 12 months on the program of grants established under this

subsection. The report shall assess the functioning and status of

the program, shall evaluate the progress made toward achieving the

purposes of the program, and shall include any recommendations the

Secretary may deem appropriate with respect to the program. In

preparing the report, the Secretary shall solicit and include the

comments and recommendations of private and public entities with an

interest in rural health care.

"(C) The Administrator shall submit a final report on the program

to the Congress not later than 180 days after all projects

receiving a grant under the program are completed.

"(9) For purposes of carrying out the program of grants under

this subsection, there are authorized to be appropriated from the

Federal Hospital Insurance Trust Fund $15,000,000 for fiscal year

1989, $25,000,000 for each of the fiscal years 1990, 1991, and 1992

and $30,000,000 for each of fiscal years 1993 through 1997."

[For termination, effective May 15, 2000, of provisions of law

requiring submittal to Congress of any annual, semiannual, or other

regular periodic report listed in House Document No. 103-7 (in

which item 6 on page 100 identifies a reporting provision which, as

subsequently amended, is contained in section 4005(e)(8)(B) of Pub.

L. 100-203, set out above), see section 3003 of Pub. L. 104-66, as

amended, set out as a note under section 1113 of Title 31, Money

and Finance.]

[Section 103(a)(2) of Pub. L. 103-432 provided that: "The

amendment made by paragraph (1) [amending section 4005(e)(2) of

Pub. L. 100-203, set out above] shall apply to grants made on or

after October 1, 1994."]

[Pub. L. 103-432, Sec. 103(c), which directed amendment of

section 4008(e)(8)(B) of Pub. L. 100-203, was executed by amending

section 4005(e)(8)(B) of Pub. L. 100-203, set out above, to reflect

the probable intent of Congress.]

[Section 6003(g)(1)(B)(ii) of Pub. L. 101-239 provided that: "The

amendments made by clause (i) [amending section 4005(e) of Pub. L.

100-203, set out above] shall apply with respect to applications

for grants under the Rural Health Care Transition Grant Program

described in section 4005(e) of the Omnibus Budget Reconciliation

Act of 1987 [Pub. L. 100-203] submitted on or after October 1,

1989, except that the amendments made by subclauses (V) and (VII)

of such clause shall take effect on the date of the enactment of

this Act [Dec. 19, 1989]."]

REPORTING HOSPITAL INFORMATION

Section 4007 of Pub. L. 100-203, as amended by Pub. L. 100-360,

title IV, Sec. 411(b)(6), July 1, 1988, 102 Stat. 770; Pub. L.

100-485, title VI, Sec. 608(d)(18)(D), Oct. 13, 1988, 102 Stat.

2419, provided that:

"(a) Development of Data Base. - The Secretary of Health and

Human Services (in this section referred to as the 'Secretary')

shall develop and place into effect not later than June 1, 1989, a

data base of the operating costs of inpatient hospital services

with respect to all hospitals under title XVIII of the Social

Security Act [42 U.S.C. 1395 et seq.], which data base shall be

updated at least once every quarter (and maintained for the

12-month period preceding any such update). The data base under

this subsection may include data from preliminary cost reports (but

the Secretary shall make available an updated analysis of the

differences between preliminary and settled cost reports).

"(b) [Amended subsec. (f) of this section and enacted provisions

set out as an Effective Date of 1987 Amendment note above.]

"(c) Demonstration Project. -

"(1) The Secretary of Health and Human Services shall provide

for a demonstration project to develop, and determine the costs

and benefits of establishing a uniform system for the reporting

by medicare participating hospitals of balance sheet and

information described in paragraph (2). In conducting the

project, the Secretary shall require hospitals in at least 2

States, one of which maintains a uniform hospital reporting

system, to report such information based on standard information

established by the Secretary.

"(2) The information described in this paragraph is as follows:

"(A) Hospital discharges (classified by class of primary

payer).

"(B) Patient days (classified by class of primary payer).

"(C) Licensed beds, staffed beds, and occupancy.

"(D) Inpatient charges and revenues (classified by class of

primary payer).

"(E) Outpatient charges and revenues (classified by class of

primary payer).

"(F) Inpatient and outpatient hospital expenses (by

cost-center classified for operating and capital).

"(G) Reasonable costs.

"(H) Other income.

"(I) Bad debt and charity care.

"(J) Capital acquisitions.

"(K) Capital assets.

The Secretary shall develop a definition of 'outpatient visit'

for purposes of reporting hospital information.

"(3) The Secretary shall develop the system under subsection

(c) in a manner so as -

"(A) to facilitate the submittal of the information in the

report in an electronic form, and

"(B) to be compatible with the needs of the medicare

prospective payment system.

"(4) The Secretary shall prepare and submit, to the Prospective

Payment Assessment Commission, the Comptroller General, the

Committee on Ways and Means of the House of Representatives, and

the Committee on Finance of the Senate, by not later than 45 days

after the end of each calendar quarter, data collected under the

system.

"(5) In paragraph (2):

"(A) The term 'bad debt and charity care' has such meaning as

the Secretary establishes.

"(B) The term 'class' means, with respect to payers at least,

the programs under this title XVIII of the Social Security Act

[this subchapter], a State plan approved under title XIX of

such Act [subchapter XIX of this chapter], other third

party-payers, and other persons (including self-paying

individuals).

"(6) The Secretary shall set aside at least a total of

$3,000,000 for fiscal years 1988, 1989, and 1990 from existing

research funds or from operations funds to develop the format,

according to paragraph (1) and for data collection and analysis,

but total funds shall not exceed $15,000,000.

"(7) The Comptroller General shall analyze the adequacy of the

existing system for reporting of hospital information and the

costs and benefits of data reporting under the demonstration

system and will recommend improvements in hospital data

collection and in analysis and display of data in support of

policy making.

"(d) Consultation. - The Secretary shall consult representatives

of the hospital industry in carrying out the provisions of this

section."

HOSPITAL OUTLIER PAYMENTS AND POLICY

Section 4008(d) of Pub. L. 100-203, as amended by Pub. L.

100-360, title IV, Sec. 411(b)(7), July 1, 1988, 102 Stat. 771,

provided that:

"(1) Increase in outlier payments for burn center drgs. -

"(A) In general. - For discharges classified in

diagnosis-related groups relating to burn cases and occurring on

or after April 1, 1988, and before October 1, 1989, the marginal

cost of care permitted by the Secretary of Health and Human

Services under section 1886(d)(5)(A)(iii) of the Social Security

Act [subsec. (d)(5)(A)(iii) of this section] shall be 90 percent

of the appropriate per diem cost of care or 90 percent of the

cost for cost outliers.

"(B) Budget neutrality. - Subparagraph (A) shall be implemented

in a manner that ensures that total payments under section

1886(d) of the Social Security Act are not increased or decreased

by reason of the adjustments required by such subparagraph.

"(2) Limitation on changes in outlier regulations. -

"(A) In general. - Notwithstanding any other provision of law,

except as required to implement specific provisions required

under statute, the Secretary of Health and Human Services is not

authorized to issue in final form, after the date of the

enactment of this Act [Dec. 22, 1987] and before September 1,

1988, any final regulation which changes the method of payment

for outlier cases under section 1886(d)(5)(A) of the Social

Security Act [subsec. (d)(5)(A) of this section].

"(B) Propac report. - The chairman of the Prospective Payment

Assessment Commission shall report to the Congress and the

Secretary of Health and Human Services, by not later than June 1,

1988, on the method of payment for outlier cases under such

section and providing more adequate and appropriate payments with

respect to burn outlier cases.

"(3) Report on outlier payments. - The Secretary of Health and

Human Services shall include in the annual report submitted to the

Congress pursuant to section 1875(b) of the Social Security Act

[section 1395ll(b) of this title] a comparison with respect to

hospitals located in an urban area and hospitals located in a rural

area in the amount of reductions under section 1886(d)(3)(B) of the

Social Security Act [subsec. (d)(3)(B) of this section] and

additional payments under section 1886(d)(5)(A) of such Act."

PROPAC STUDIES AND REPORTS

Section 4009(h) of Pub. L. 100-203 provided that:

"(1) Propac reports on study of drg rates for hospitals in rural

and urban areas. - The Prospective Payment Assessment Commission

shall evaluate the study conducted by the Secretary of Health and

Human Services pursuant to section 603(a)(2)(C)(i) of the Social

Security Amendments of 1983 [section 603(a)(2)(C)(i) of Pub. L.

98-21, set out below] (relating to the feasibility, impact, and

desirability of eliminating or phasing out separate urban and rural

DRG prospective payment rates) and report its conclusions and

recommendations to the Congress not later than March 1, 1988.

"(2) Propac report on separate urban payment rates. - The

Prospective Payment Assessment Commission shall evaluate the

desirability of maintaining separate DRG prospective payment rates

for hospitals located in large urban areas (as defined in section

1886(d)(2)(D)) of the Social Security Act [subsec. (d)(2)(D) of

this section]) and in other urban areas, and shall report to

Congress on such evaluation not later than January 1, 1989.

"(3) Report on adjustment for non-labor costs. - The Prospective

Payment Assessment Commission shall perform an analysis to

determine the feasibility and appropriateness of adjusting the

non-wage-related portion of the adjusted average standardized

amounts under section 1886(d)(3) of the Social Security Act

[subsec. (d)(3) of this section] based on area differences in

hospitals' costs (other than wage-related costs) and input prices.

The Commission shall report to the Congress on such analysis by not

later than October 1, 1989."

SPECIAL RULE FOR URBAN AREAS IN NEW ENGLAND

Section 4009(i) of Pub. L. 100-203, as amended by Pub. L.

100-360, title IV, Sec. 411(b)(8)(C), July 1, 1988, 102 Stat. 772,

provided that: "In the case of urban areas in New England, the

Secretary of Health and Human Services shall apply the second

sentence of section 1886(d)(2)(D) of the Social Security Act

[subsec. (d)(2)(D) of this section], as amended by section 4002(b)

of this subtitle, as though 970,000 were substituted for

1,000,000."

RURAL HEALTH MEDICAL EDUCATION DEMONSTRATION PROJECT

Section 4038 of Pub. L. 100-203, as amended by Pub. L. 101-239,

title VI, Sec. 6216, Dec. 19, 1989, 103 Stat. 2253, provided that:

"(a) In General. - The Secretary of Health and Human Services (in

this section referred to as the 'Secretary') shall enter into

agreements with 10 sponsoring hospitals submitting applications

under this subsection to conduct demonstration projects to assist

resident physicians in developing field clinical experience in

rural areas.

"(b) Nature of Project. - Under a demonstration project conducted

under subsection (a), a sponsoring hospital entering into an

agreement with the Secretary under such subsection shall enter into

arrangements with a small rural hospital to provide to such rural

hospital, for a period of one to three months of training,

physicians (in such number as the agreement under subsection (a)

may provide) who have completed one year of residency training.

"(c) Selection. - (1) In selecting from among applications

submitted under subsection (a), the Secretary shall ensure that

four small rural hospitals located in different counties

participate in the demonstration project and that -

"(A) two of such hospitals are located in rural counties of

more than 2,700 square miles (one of which is east of the

Mississippi River and one of which is west of such river); and

"(B) two of such hospitals are located in rural counties with

(as determined by the Secretary) a severe shortage of physicians

(one of which is east of the Mississippi River and one of which

is west of such river).

"(2) The provisions of paragraph (1) shall not apply with respect

to applications submitted as a result of amendments made by section

6216 of the Omnibus Budget Reconciliation Act of 1989 [Pub. L.

101-239, amending this note].

"(d) Clarification of Payment. - For purposes of section 1886 of

the Social Security Act [this section] -

"(1) with respect to subsection (d)(5)(B) of such section, any

resident physician participating in the project under subsection

(a) for any part of a year shall be treated as if he or she were

working at the appropriate sponsoring hospital with an agreement

under subsection (a) on September 1 of such year (and shall not

be treated as if working at the small rural hospital); and

"(2) with respect to subsection (h) of such section, the

payment amount permitted under such subsection for a sponsoring

hospital with an agreement under subsection (a) shall be

increased (for the duration of the project only) by an amount

equal to the amount of any direct graduate medical education

costs (as defined in paragraph (5) of such subsection (h))

incurred by such hospital in supervising the education and

training activities under a project under subsection (a).

"(e) Duration of Project. - Each demonstration project under

subsection (a) shall be commenced not later than six months after

the date of enactment of this Act [Dec. 22, 1987] (or the date of

the enactment of the Omnibus Budget Reconciliation Act of 1989

[Dec. 19, 1989], in the case of a project conducted as a result of

the amendments made by section 6216 of such Act [Pub. L. 101-239,

amending this note]) and shall be conducted for a period of three

years.

"(f) Definition. - In this section, the term 'sponsoring

hospital' means a hospital that receives payments under sections

1886(d)(5)(B) and 1886(h) of the Social Security Act [subsecs.

(d)(5)(B) and (h) of this section]."

PROHIBITION ON POLICY BY SECRETARY OF HEALTH AND HUMAN SERVICES TO

REDUCE EXPENDITURES IN FISCAL YEARS 1989, 1990, AND 1991

Section 4039(d) of Pub. L. 100-203, as amended by Pub. L.

100-360, title IV, Sec. 426(e), July 1, 1988, 102 Stat. 814; Pub.

L. 101-239, title VI, Sec. 6207(b), Dec. 19, 1989, 103 Stat. 2245,

provided that: "Notwithstanding any other provision of law, except

as required to implement specific provisions required under

statute, the Secretary of Health and Human Services is not

authorized to issue in final form, after the date of the enactment

of this Act [Dec. 22, 1987] and before October 15, 1990, any

regulation, instruction, or other policy which is estimated by the

Secretary to result in a net reduction in expenditures under title

XVIII of the Social Security Act [this subchapter] in fiscal year

1989 or in fiscal year 1990 or in fiscal year 1991 of more than

$50,000,000."

TEMPORARY EXTENSION OF PAYMENT POLICIES FOR INPATIENT HOSPITAL

SERVICES

Pub. L. 100-119, title I, Sec. 107(a)(1), Sept. 29, 1987, 101

Stat. 782, as amended by Pub. L. 100-203, title IV, Sec.

4002(f)(2), Dec. 22, 1987, 101 Stat. 1330-45, provided that:

"Notwithstanding any other provision of law, with respect to

payment for inpatient hospital services under section 1886 of the

Social Security Act [this section]:

"(A) Temporary freeze in pps hospital rates. - For purposes of

subsection (d) of such section for discharges occurring during

the period beginning on October 1, 1987, and ending on November

20, 1987 (in this paragraph referred to as the 'extension

period'), the applicable percentage increase under subsection

(b)(3)(B) of such section with respect to fiscal year 1988 is

deemed to be 0 percent.

"(B) Temporary freeze in payment basis. -

"(i) Extension of blended drg rate. - For purposes of

subsection (d)(1) of such section, the 'applicable combined

adjusted DRG prospective payment rate' for discharges occurring

-

"(I) during the extension period is the rate specified in

subsection (d)(1)(D)(ii) of such section, or

"(II) after such period is the national adjusted

prospective payment rate determined under subsection (d)(3)

of such section.

"(ii) Extension of hospital-specific payment. - For the first

51 days of a hospital cost reporting period beginning during

fiscal year 1988, payment shall be made under clause (ii)

(rather than clause (iii)) of subsection (d)(1)(A) of such

section (subject to clause (i) of this subparagraph), the

target percentage and DRG percentage shall be those specified

in subsection (d)(1)(C)(iv) of such section, and the applicable

percentage increase in a hospital's target amount shall be

deemed to be 0 percent.

"(C) Temporary freeze in amounts of payment for capital. - For

payments attributable to portions of cost reporting periods

occurring during the extension period, the percent specified in

subsection (g)(3)(A)(ii) of such section is deemed to be 3.5

percent.

"(D) Temporary freeze in return on equity reductions. - For the

first 51 days of a cost reporting period beginning during fiscal

year 1988, subsection (g)(2) of such section shall be applied as

though the applicable percentage were 75 percent.

"(E) Temporary freeze in payments rates for pps-exempt

hospitals. - For purposes of payment under subsection (b) of such

section for cost reporting periods beginning during fiscal year

1988, with respect to the first 51 days of such a period the

applicable percentage increase under paragraph (3)(B) of such

subsection is deemed to be 0 percent."

[Section 4002(f)(2) of Pub. L. 100-203 provided that the

amendment of section 107(a)(1) of Pub. L. 100-119, set out above,

by section 4002(f)(2) of Pub. L. 100-203 is effective as of Sept.

29, 1987.]

FREEZING CERTAIN CHANGES IN MEDICARE PAYMENT REGULATIONS AND

POLICIES

Pub. L. 100-119, title I, Sec. 107(b), Sept. 29, 1987, 101 Stat.

783, provided that:

"(1) In general. - Notwithstanding any other provision of law,

the Secretary of Health and Human Services is not authorized to

issue after September 18, 1987, and before November 21, 1987 -

"(A) any final regulation that changes the policy with respect

to payment under title XVIII of the Social Security Act [this

subchapter] to providers of service for reasonable costs relating

to unrecovered costs associated with unpaid deductible and

coinsurance amounts incurred under such title;

"(B) any final regulation, instruction, or other policy change

which is primarily intended to have the effect of slowing down

claims processing, or delaying payment of claims, under such

title; or

"(C) any final regulation that changes the policy under such

title with respect to payment for a return on equity capital for

outpatient hospital services.

The final regulation of the Health Care Financing Administration

published on September 1, 1987 (52 Federal Register 32920) and

relating to changes to the return on equity capital provisions for

outpatient hospital services is void and of no effect.

"(2) Other cost savings policies. - Notwithstanding any other

provision of law, except as required to implement specific

provisions required under statute, the Secretary of Health and

Human Services is not authorized to issue in final form, after

September 18, 1987, and before November 21, 1987, any regulation,

instruction, or other policy which is estimated by the Secretary to

result in a net reduction in expenditures under title XVIII of the

Social Security Act in fiscal year 1988 of more than $50,000,000.

Any regulation, instruction, or policy which is issued in violation

of this paragraph is void and of no effect.

"(3) Exception. - Paragraphs (1) and (2) shall not be construed

to apply to any regulation, instruction, or policy required to

implement the amendment made by section 9311(a) of the Omnibus

Budget Reconciliation Act of 1986 [section 9311(a) of Pub. L.

99-509, which amended section 1395g of this title] (relating to

periodic interim payments)."

MAINTAINING CURRENT OUTLIER POLICY IN FISCAL YEAR 1987

Section 9302(b)(3) of Pub. L. 99-509 provided that: "For payments

made under section 1886(d) of the Social Security Act [subsec. (d)

of this section] for discharges occurring in fiscal year 1987 -

"(A) the proportions under paragraph (3)(B) for hospitals

located in urban and rural areas shall be established at such

levels as produce the same total dollar reduction under such

paragraph as if this section had not been enacted; and

"(B) the thresholds and standards used for making additional

payments under paragraph (5) of such section shall be the same as

those in effect as of October 1, 1986."

EXTENSION OF REGIONAL REFERRAL CENTER CLASSIFICATION

Section 6003(d) of Pub. L. 101-239 provided that: "Any hospital

that is classified as a regional referral center under section

1886(d)(5)(C) of the Social Security Act [subsec. (d)(5)(C) of this

section] as of September 30, 1989, including a hospital so

classified as a result of section 9302(d)(2) of the Omnibus Budget

Reconciliation Act of 1986 [Pub. L. 99-509, set out below], shall

continue to be classified as a regional referral center for cost

reporting periods beginning on or after October 1, 1989, and before

October 1, 1992."

Section 9302(d)(2) of Pub. L. 99-509 provided that: "Any hospital

that is classified as a regional referral center under section

1886(d)(5)(C)(i) of the Social Security Act [subsec. (d)(5)(C)(i)

of this section] on the date of the enactment of this Act [Oct. 21,

1986] shall continue to be classified as a regional referral center

for cost reporting periods beginning on or after October 1, 1986,

and before October 1, 1989."

BUDGET-NEUTRAL IMPLEMENTATION

Section 9302(d)(3) of Pub. L. 99-509 provided that: "Paragraph

(2) [set out as a note above] and the amendment made by paragraph

(1)(A) [amending this section] shall be implemented in a manner

that ensures that total payments under section 1886 of the Social

Security Act [this section] are not increased or decreased by

reason of the classifications required by such paragraph or

amendment."

PROMULGATION OF NEW RATE

Section 9302(f) of Pub. L. 99-509 provided that: "The Secretary

of Health and Human Services shall provide, within 30 days after

the date of the enactment of this Act [Oct. 21, 1986], for the

publication of the payments rates that will apply under section

1886 of the Social Security Act [this section], for discharges

occurring on or after October 1, 1986, taking into account the

amendments made by this section [amending this section], without

regard to the provisions of chapter 5 of title 5, United States

Code."

MISCELLANEOUS ACCOUNTING PROVISION

Section 9307(d) of Pub. L. 99-509, as amended by Pub. L. 100-203,

title IV, Sec. 4008(e), Dec. 22, 1987, 101 Stat. 1330-56, provided

that: "Notwithstanding any other provision of law, for purposes of

section 1886(d)(1)(A) of the Social Security Act [subsec. (d)(1)(A)

of this section], in the case of a hospital that -

"(1) had a cost reporting period beginning on September 28, 29,

or 30 of 1985,

"(2) is located in a State in which inpatient hospital services

were paid in fiscal year 1985 pursuant to a Statewide

demonstration project under section 402 of the Social Security

Amendments of 1967 [section 402 of Pub. L. 90-248, enacting

section 1395b-1 of this title and amending section 1395ll of this

title] and section 222 of the Social Security Amendments of 1972

[section 222 of Pub. L. 92-603, amending sections 1395b-1 and

1395ll of this title and enacting provisions set out as a note

under section 1395b-1 of this title], and

"(3) elects, by notice to the Secretary of Health and Human

Services by not later than April 1, 1988, to have this subsection

apply,

during the first 7 months of such cost reporting period the 'target

percentage' shall be 75 percent and the 'DRG percentage' shall be

25 percent, and during the remaining 5 months of such period the

'target percentage' and the 'DRG percentage' shall each be 50

percent."

[Section 4008(e) of Pub. L. 100-203 provided that the amendment

of section 9307(d) of Pub. L. 99-509, set out above, by section

4008(e) of Pub. L. 100-203 is effective as if included in the

enactment of Pub. L. 99-509.]

TREATMENT OF CAPITAL-RELATED REGULATIONS

Section 9321(c) of Pub. L. 99-509, as amended by Pub. L. 100-119,

title I, Sec. 107(a)(2), Sept. 29, 1987, 101 Stat. 783; Pub. L.

100-203, title IV, Sec. 4009(j)(6)(D), (F), Dec. 22, 1987, 101

Stat. 1330-59, provided that:

"(1) Prohibition of issuance of final regulations on

capital-related costs as part of payment for operating costs before

november 21, 1987. - Notwithstanding any other provision of law

(except as provided in paragraph (3)), the Secretary of Health and

Human Services may not issue, in final form, after September 1,

1986, and before November 21, 1987, any regulation that changes the

methodology for computing the amount of payment for capital-related

costs (as defined in paragraph (4)) for inpatient hospital services

under part A of title XVIII of the Social Security Act [part A of

this subchapter]. Any regulation published in violation of the

previous sentence is void and of no effect.

"(2) Not including capital-related regulations in budget

baseline. - Any reference in law to a regulation issued in final

form or proposed by the Health Care Financing Administration

pursuant to sections 1886(b)(3)(B), 1886(d)(3)(A), and 1886(e)(4)

of the Social Security Act [subsecs. (b)(3)(B), (d)(3)(A), and

(e)(4) of this section] shall not include any regulation issued or

proposed with respect to capital-related costs (as defined in

paragraph (4)).

"(3) Exception. - Paragraph (1) shall not apply to any regulation

issued for the sole purpose of implementing section 1861(v)(1)(O)

and 1886(g)(2) of the Social Security Act [section 1395x(v)(1)(O)

of this title and subsec. (g)(2) of this section] and section

1886(g)(3)(A) and (B) of the Social Security Act [subsec. (g)(3)(A)

and (B) of this section] (as amended by section 9303(a) of this

Act).

"(4) Capital-related costs defined. - In this subsection, the

term 'capital-related costs' means those capital-related costs that

are specifically excluded, under the second sentence of section

1886(a)(4) of the Social Security Act [subsec. (a)(4) of this

section], from the term 'operating costs of inpatient hospital

services' (as defined in that section) for cost reporting periods

beginning prior to October 1, 1987."

LIMITATION ON AUTHORITY TO ISSUE CERTAIN FINAL REGULATIONS AND

INSTRUCTIONS RELATING TO HOSPITALS OR PHYSICIANS

Section 9321(d) of Pub. L. 99-509 provided that: "Notwithstanding

any other provision of law, except as required to implement

specific provisions required under statute and except as provided

under subsection (c) [set out above] with respect to a regulation

described in that subsection, the Secretary of Health and Human

Services is not authorized to issue in final form after the date of

the enactment of this Act [Oct. 21, 1986] and before September 1,

1987, any regulation, instruction, or other policy which is

estimated by the Secretary to result in a net reduction in

expenditures under title XVIII of the Social Security Act [this

subchapter] in fiscal year 1988 of more than $50,000,000, and which

relates to hospitals or physicians."

STUDY OF METHODOLOGY FOR AREA WAGE ADJUSTMENT FOR CENTRAL CITIES;

REPORT TO CONGRESS

Section 9103(b) of Pub. L. 99-272 provided that:

"(1) The Secretary of Health and Human Services, in consultation

with the Prospective Payment Assessment Commission, shall collect

information and shall develop one or more methodologies to permit

the adjustment of the wage indices used for purposes of sections

1886(d)(2)(C)(ii), 1886(d)(2)(H), and 1886(d)(3)(E) of the Social

Security Act [subsec. (d)(2)(C)(ii), (H), and (3)(E) of this

section], in order to more accurately reflect hospital labor

markets, by taking into account variations in wages and

wage-related costs between the central city portion of urban areas

and other parts of urban areas.

"(2) The Secretary shall report to Congress on the information

collected and the methodologies developed under paragraph (1) not

later than May 1, 1987. The report shall include a recommendation

as to the feasibility and desirability of implementing such

methodologies."

CONTINUATION OF MEDICARE REIMBURSEMENT WAIVERS FOR CERTAIN

HOSPITALS PARTICIPATING IN REGIONAL HOSPITAL REIMBURSEMENT

DEMONSTRATIONS

Section 9108 of Pub. L. 99-272 provided that:

"(a) Continuation of Waivers. - A hospital reimbursement control

system which, on January 1, 1985, was carrying out a demonstration

under a contract which had been approved by the Secretary of Health

and Human Services pursuant to section 222(a) of the Social

Security Amendments of 1972 [section 222(a) of Pub. L. 92-603, set

out as a note under section 1395b-1 of this title], or under

section 402 of the Social Security Amendments of 1967 (as amended

by section 222(b) of the Social Security Amendments of 1972)

[section 1395b-1 of this title], shall be deemed to meet the

requirements of section 1886(c)(1)(A) of the Social Security Act

[subsec. (c)(1)(A) of this section] if such system applies -

"(1) to substantially all non-Federal acute care hospitals (as

defined by the Secretary) in the geographic area served by such

system on January 1, 1985, and

"(2) to the review of at least 75 percent of -

"(A) all revenues or expenses in such geographic area for

inpatient hospital services, and

"(B) revenues or expenses in such geographic area for

inpatient hospital services provided under the State's plan

approved under title XIX [subchapter XIX of this chapter].

"(b) Approval. - In the case of a hospital cost control system

described in subsection (a), the requirements of section 1886(c) of

the Social Security Act [subsec. (c) of this section] which apply

to States shall instead apply to such system and, for such

purposes, any reference to a State is deemed a reference to such

system.

"(c) Effective Date. - This section shall become effective on the

date of the enactment of this Act [Apr. 7, 1986]."

INFORMATION ON IMPACT OF PPS PAYMENTS ON HOSPITALS

Section 9114 of Pub. L. 99-272 provided that:

"(a) Disclosure of Information. - The Secretary of Health and

Human Services shall make available to the Prospective Payment

Assessment Commission, the Congressional Budget Office, the

Comptroller General, and the Congressional Research Service the

most current information on the payments being made under section

1886 of the Social Security Act [this section] to individual

hospitals. Such information shall be made available in a manner

that permits examination of the impact of such section on

hospitals.

"(b) Confidentiality. - Information disclosed under subsection

(a) shall be treated as confidential and shall not be subject to

further disclosure in a manner that permits the identification of

individual hospitals."

SPECIAL RULES FOR IMPLEMENTATION OF HOSPITAL REIMBURSEMENT

Section 9115 of Pub. L. 99-272 provided that:

"(a) Waiver of Paperwork Reduction. - Chapter 35 of title 44,

United States Code, shall not apply to information required for

purposes of carrying out this subpart and implementing the

amendments made by this subpart [subpart A (Secs. 9101-9115) of

part 1 of subtitle A of title IX of Pub. L. 99-272, see Tables for

classification].

"(b) Use of Interim Final Regulations. - The Secretary of Health

and Human Services shall issue such regulations (on an interim or

other basis) as may be necessary to implement this subpart and the

amendments made by this subpart."

APPOINTMENT OF ADDITIONAL MEMBERS TO PROSPECTIVE PAYMENT ASSESSMENT

COMMISSION

Section 9127(b) of Pub. L. 99-272, as amended by Pub. L. 99-514,

title XVIII, Sec. 1895(b)(8), Oct. 22, 1986, 100 Stat. 2933,

provided that: "The Director of the Congressional Office of

Technology Assessment shall appoint the two additional members of

the Prospective Payment Assessment Commission, as required by the

amendment made by subsection (a) [amending this section], no later

than 60 days after the date of the enactment of this Act [Apr. 7,

1986], for terms of three years, except that the Director may

provide initially for such terms as will insure that (on a

continuing basis) the terms of no more than eight members will

expire in any one year."

STUDIES BY SECRETARY; GAO STUDY; REPORT ON UNIFORMITY OF APPROVED

FTE RESIDENT AMOUNTS; STUDY ON FOREIGN MEDICAL GRADUATES;

ESTABLISHING PHYSICIAN IDENTIFIER SYSTEM; PAPERWORK REDUCTION

Section 9202(c)-(h) of Pub. L. 99-272, as amended by Pub. L.

100-203, title IV, Sec. 4085(f), Dec. 22, 1987, 101 Stat. 1330-131;

Pub. L. 101-508, title IV, Sec. 4118(i)(2), Nov. 5, 1990, 104 Stat.

1388-70, provided that:

"(c) Studies by Secretary. - (1) The Secretary of Health and

Human Services shall conduct a study with respect to approved

educational activities relating to nursing and other health

professions for which reimbursement is made to hospitals under

title XVIII of the Social Security Act [this subchapter]. The study

shall address -

"(A) the types and numbers of such programs, and number of

students supported or trained under each program;

"(B) the fiscal and administrative relationships between the

hospitals involved and the schools with which the programs and

students are affiliated; and

"(C) the types and amounts of expenses of such programs for

which reimbursement is made, and the financial and other

contributions which accrue to the hospital as a consequence of

having such programs.

The Secretary shall report the results of such study to the

Committee on Finance of the Senate and the Committees on Ways and

Means and Energy and Commerce of the House of Representatives prior

to December 31, 1987.

"(2) The Secretary shall conduct a separate study of the

advisability of continuing or terminating the exception under

section 1886(h)(5)(F)(ii) of the Social Security Act [subsec.

(h)(5)(F)(ii) of this section] for geriatric residencies and

fellowships, and of expanding such exception to cover other

educational activities, particularly those which are necessary to

meet the projected health care needs of Medicare beneficiaries.

Such study shall also examine the adequacy of the supply of faculty

in the field of geriatrics. The Secretary shall report the results

of such study to the committees described in paragraph (1) prior to

July 1, 1990.

"(d) GAO Study. - (1) The Comptroller General shall conduct a

study of the variation in the amounts of payments made under title

XVIII of the Social Security Act [this subchapter] with respect to

patients in different teaching hospital settings and in the amounts

of such payments which are made with respect to patients who are

treated in teaching and nonteaching hospital settings. Such study

shall identify the components of such payments (including payments

with respect to inpatient hospital services, physicians' services,

and capital costs, and, in the case of teaching hospital patients,

payments with respect to direct and indirect teaching costs) and

shall account, to the extent feasible, for any variations in the

amounts of the payment components between teaching and nonteaching

settings and among different teaching settings.

"(2) In carrying out such study, the Comptroller General may

utilize a sample of hospital patients and any other data sources

which he deems appropriate, and shall, to the extent feasible,

control for differences in severity of illness levels, area wage

levels, levels of physician reasonable charges for like services

and procedures, and for other factors which could affect the

comparability of patients and of payments between teaching and

nonteaching settings and among teaching settings. The information

obtained in the study shall be coordinated with the information

obtained in conducting the study of teaching physicians' services

under section 2307(c) of the Deficit Reduction Act of 1984 [section

2307(c) of Pub. L. 98-369, set out as a note under section 1395u of

this title].

"(3) The Comptroller General shall report the results of the

study to the committees described in subsection (c)(1) prior to

December 31, 1987.

"(e) Report on Uniformity of Approved FTE Resident Amounts. - The

Secretary of Health and Human Services shall report to the

committees described in subsection (c)(1), not later than December

31, 1987, on whether section 1886(h) of the Social Security Act

[subsec. (h) of this section] should be revised to provide for

greater uniformity in the approved FTE resident amounts established

under paragraph (2) of that section, and, if so, how such revisions

should be implemented.

"(f) Study on Foreign Medical Graduates. - The Secretary of

Health and Human Services shall study, and report to the committees

described in subsection (c)(1), not later than December 31, 1987,

respecting the use of physicians who are foreign medical graduates

(within the meaning of section 1886(h)(5)(D) of the Social Security

Act [subsec. (h)(5)(D) of this section]) in the provision of health

care services (particularly inpatient and outpatient hospital

services) to medicare beneficiaries. Such study shall evaluate -

"(1) the types of services provided;

"(2) the cost of providing such services, relative to the cost

of other physicians providing the services or other approaches to

providing the services;

"(3) any deficiencies in the quality of the services provided,

and methods of assuring the quality of such services; and

"(4) the impact on costs of and access to services if medicare

payment for hospitals' costs of graduate medical education of

foreign medical graduates were phased out.

"[(g) Repealed. Pub. L. 101-508, title IV, Sec. 4118(i)(2), Nov.

5, 1990, 104 Stat. 1388-70.]

"(h) Paperwork Reduction. - Chapter 35 of title 44, United States

Code, shall not apply to information required for purposes of

carrying out this section and the amendments made by this section

[amending this section and section 1395x of this title and enacting

notes set out under this section and section 1395x of this title]."

SPECIAL TREATMENT OF STATES FORMERLY UNDER WAIVER

Section 9202(j) of Pub. L. 99-272, as amended by Pub. L. 99-514,

title XVIII, Sec. 1895(b)(10), Oct. 22, 1986, 100 Stat. 2933,

provided that: "In the case of a hospital in a State that has had a

waiver approved under section 1886(c) of the Social Security Act

[subsec. (c) of this section] or section 402 of the Social Security

Amendments of 1967 [section 1395b-1 of this title], for cost

reporting periods beginning on or after January 1, 1986, if the

waiver is terminated -

"(1) the Secretary of Health and Human Services shall permit

the hospital to change the method by which it allocates

administrative and general costs to the direct medical education

cost centers to the method specified in the medicare cost report;

"(2) the Secretary may make appropriate adjustments in the

regional adjusted DRG prospective payment rate (for the region in

which the State is located), based on the assumption that all

teaching hospitals in the State use the medicare cost report; and

"(3) the Secretary shall adjust the hospital-specific portion

of payment under section 1886(d) of such Act [subsec. (d) of this

section] for any such hospital that actually chooses to use the

medicare cost report.

The Secretary shall implement this subsection based on the best

available data."

MORATORIUM ON LABORATORY PAYMENT DEMONSTRATIONS; COOPERATION IN

STUDY; REPORT TO CONGRESS

Section 9204 of Pub. L. 99-272, as amended by Pub. L. 99-509,

title IX, Sec. 9339(e), Oct. 21, 1986, 100 Stat. 2037; Pub. L.

100-203, title IV, Sec. 4085(c), Dec. 22, 1987, 101 Stat. 1330-130;

Pub. L. 100-647, title VIII, Sec. 8426, Nov. 10, 1988, 102 Stat.

3803, provided that:

"(a) Moratorium. - Prior to January 1, 1990, the Secretary of

Health and Human Services shall not conduct any demonstration

projects relating to competitive bidding as a method of purchasing

laboratory services under title XVIII of the Social Security Act

[this subchapter]. The Secretary may contract for the design of,

and site selection for, such demonstration projects.

"(b) Cooperation in Study. - The Secretary of Health and Human

Services and the Comptroller General shall assist representatives

of clinical laboratories in the industry's conduct of a study to

determine whether methods exist which are better than competitive

bidding for purposes of utilizing competitive market forces in

setting payment levels for laboratory services under title XVIII of

the Social Security Act [this subchapter]. If such a study is

conducted by the clinical laboratory industry, the Secretary and

the Comptroller General shall comment on such study and submit such

comments and the study to the Senate Committee on Finance and the

House Committees on Ways and Means and Energy and Commerce."

MEDICARE HOSPITAL AND PHYSICIAN PAYMENT PROVISIONS; EXTENSION

PERIOD

Pub. L. 99-107, Sec. 5, Sept. 30, 1985, 99 Stat. 479, as amended

by Pub. L. 99-155, Sec. 2(d), Nov. 14, 1985, 99 Stat. 814; Pub. L.

99-181, Sec. 4, Dec. 13, 1985, 99 Stat. 1172; Pub. L. 99-189, Sec.

4, Dec. 18, 1985, 99 Stat. 1184; Pub. L. 99-201, Sec. 2, Dec. 23,

1985, 99 Stat. 1665; Pub. L. 99-272, title IX, Secs. 9101(a),

9301(a), Apr. 7, 1986, 100 Stat. 153, 184, provided that:

"(a) Maintaining Existing Hospital Payment Rates. -

Notwithstanding any other provision of law, the amount of payment

under section 1886 of the Social Security Act [this section] for

inpatient hospital services for discharges occurring (and cost

reporting periods beginning) during the extension period (as

defined in subsection (c)) shall be determined on the same basis as

the amount of payment for such services for a discharge occurring

on (or the cost reporting period beginning immediately on or

before) September 30, 1985.

"(b) Maintaining Existing Payment Rates for Physicians' Services.

- Notwithstanding any other provision of law, the amount of payment

under part B of title XVIII of the Social Security Act [part B of

this subchapter] for physicians' services which are furnished

during the extension period (as defined in subsection (c)) shall be

determined on the same basis as the amount of payment for such

services furnished on September 30, 1985, and the 15-month period,

referred to in section 1842(j)(1) of such Act [section 1395u(j)(1)

of this title], shall be deemed to include the extension period.

"(c) Extension Period Defined. -

"(1) Hospital payments. - For purposes of subsection (a), the

term 'extension period' means the period beginning on October 1,

1985, and ending on April 30, 1986.

"(2) Physician payments. - For purposes of subsection (b), the

term 'extension period' means the period beginning on October 1,

1985, and ending on April 30, 1986."

[Amendment of section 5 of Pub. L. 99-107, set out above, by

section 9101(a) of Pub. l. 99-272 effective Mar. 15, 1986, see

section 9101(d) of Pub. L. 99-272, set out above.]

DEFINITION OF HOSPITAL SERVING SIGNIFICANTLY DISPROPORTIONATE

NUMBER OF LOW-INCOME PATIENTS OR PATIENTS ENTITLED TO HOSPITAL

INSURANCE BENEFITS FOR AGED AND DISABLED; IDENTIFICATION

Section 2315(h) of Pub. L. 98-369 provided that: "The Secretary

of Health and Human Services shall, prior to December 31, 1984 -

"(1) develop and publish a definition of 'hospitals that serve

a significantly disproportionate number of patients who have low

income or are entitled to benefits under part A' of title XVIII

of the Social Security Act [part A of this subchapter] for

purposes of section 1886(d)(5)(C)(i) of that Act [subsec.

(d)(5)(C)(i) of this section], and

"(2) identify those hospitals which meet such definition, and

make such identity available to the Committee on Ways and Means

of the House of Representatives and the Committee on Finance of

the Senate."

PROSPECTIVE PAYMENT WAGE INDEX; STUDIES AND REPORTS TO CONGRESS

Section 2316 of Pub. L. 98-369, as amended by Pub. L. 99-272,

title IX, Sec. 9103(a)(1), Apr. 7, 1986, 100 Stat. 156, provided

that:

"(a) The Secretary of Health and Human Services, in consultation

with the Secretary of Labor, shall conduct a study to develop an

appropriate index for purposes of adjusting payment amounts under

section 1886(d) of the Social Security Act [subsec. (d) of this

section] to reflect area differences in average hospital wage

levels, as required under paragraphs (2)(H) and (3)(E) of such

section [subsec. (d)(2)(H) and (3)(E) of this section], taking into

account wage differences of full time and part time workers. The

Secretary of Health and Human Services shall report the results of

such study to the Congress not later than 30 days after the date of

the enactment of this Act [July 18, 1984], including any changes

which the Secretary determines to be necessary to provide for an

appropriate index.

"(b) The Secretary shall adjust the payment amounts for hospitals

for discharges occurring on or after May 1, 1986, to reflect the

changes the Secretary has promulgated in final regulations (on

September 3, 1985) relating to the hospital wage index under

section 1886(d)(3)(E) of the Social Security Act [subsec. (d)(3)(E)

of this section]. For discharges occurring after September 30,

1986, the Secretary shall provide for such periodic adjustments in

the appropriate wage index used under that section as may be

necessary, taking into account changes in the wage levels and

relative proportions of full-time and part-time workers.

"(c) The Secretary shall conduct a study and report to the

Congress on proposed criteria under which, in the case of a

hospital that demonstrates to the Secretary in a current fiscal

year that the adjustment being made under paragraph (2)(H) or

(3)(E) of section 1886(d) of the Social Security Act [subsec.

(d)(2)(H) or (3)(E) of this section] for that hospital's discharges

in that fiscal year does not accurately reflect the wage levels in

the labor market serving the hospital, the Secretary, to the extent

he deems appropriate, would modify such adjustment for that

hospital for discharges in the subsequent fiscal year to take into

account a difference in payment amounts in that current fiscal year

to the hospital that resulted from such inaccuracy."

[Section 9103(a)(2) of Pub. L. 99-272 provided that: "The

amendment made by paragraph (1) [amending this note] shall be

effective as if it had been included in the Deficit Reduction Act

of 1984 [Pub. L. 98-369]."]

DIFFERENT TREATMENT OF CAPITAL-PROJECTS-RELATED COSTS BEFORE AND

AFTER IMPLEMENTATION OF SYSTEM FOR INCLUDING SUCH COSTS UNDER

PROSPECTIVELY DETERMINED PAYMENT RATE

Section 601(a)(3) of Pub. L. 98-21 provided that: "It is the

intent of Congress that, in considering the implementation of a

system for including capital-related costs under a prospectively

determined payment rate for inpatient hospital services, costs

related to capital projects for which expenditures are obligated on

or after the effective date of the implementation of such a system,

may or may not be distinguished and treated differently from costs

of projects for which expenditures were obligated before such

date."

NEW ENGLAND HOSPITALS; CLASSIFICATION AS URBAN OR RURAL

Section 601(g) of Pub. L. 98-21 provided that: "In determining

whether a hospital is in an urban or rural area for purposes of

section 1886(d) of the Social Security Act [subsec. (d) of this

section], the Secretary of Health and Human Services shall classify

any hospital located in New England as being located in an urban

area if such hospital was classified as being located in an urban

area under the Standard Metropolitan Statistical Area system of

classification in effect in 1979."

REPORTS, EXPERIMENTS, AND DEMONSTRATION PROJECTS RELATED TO

INCLUSION IN PROSPECTIVE PAYMENT AMOUNTS OF INPATIENT HOSPITAL

SERVICE CAPITAL-RELATED COSTS

Section 603(a) of title VI of Pub. L. 98-21, as amended by Pub.

L. 98-369, div. B, title III, Sec. 2317, July 18, 1984, 98 Stat.

1081; Pub. L. 99-509, title IX, Sec. 9305(i)(1), Oct. 21, 1986, 100

Stat. 1993; Pub. L. 104-66, title I, Sec. 1061(d), Dec. 21, 1995,

109 Stat. 720, directed Secretary of Health and Human Services to

report to Congress within 18 months after Apr. 20, 1983, on

legislation by which capital-related costs associated with

inpatient hospital services could be included within the

prospective payment amounts computed under subsec. (d) of this

section, further provided that the Secretary was to study and

report to Congress on reimbursement of sole community hospitals

based on variations in occupancy, on coordination of an information

transfer between parts A and B of this subchapter, on treatment of

uncompensated care costs and adjustments appropriate for large

rural teaching hospitals, and on advisability of having hospitals

make cost-of-care information to certain patients, and further

provided that the Secretary was to study and report to Congress on

a method for including hospitals outside the 50 States and the

District of Columbia under a prospective payment system.

INAPPLICABILITY OF COORDINATION OF FEDERAL INFORMATION POLICY TO

THE COLLECTION OF INFORMATION

Section 101(b)(2)(B) of Pub. L. 97-248, as amended by Pub. L.

97-448, title III, Sec. 309(a)(1), Jan. 12, 1983, 96 Stat. 2408,

provided that: "Chapter 35 of title 44, United States Code, shall

not apply, until January 1, 1984, to collection of information and

information collection requests which the Secretary of Health and

Human Services determines to be necessary to carry out the

amendments made by this section [amendments by section 101(a) of

Pub. L. 97-248, enacting this section and amending section 1395x of

this title]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 256b, 256e, 1320a-7,

1320a-7a, 1395d, 1395e, 1395f, 1395g, 1395h, 1395i-4, 1395l, 1395m,

1395n, 1395w-21, 1395w-23, 1395x, 1395y, 1395cc, 1395mm, 1395nn,

1395oo, 1395rr, 1395tt, 1395xx, 1395yy, 1395eee, 1395fff, 1395ggg,

1396r-4, 1396u-2, 1397ee of this title; title 5 section 8904; title

8 sections 1182, 1369; title 10 section 1101; title 26 section 119.

-FOOTNOTE-

(!1) So in original. Probably should be followed by "percentage

point".

(!2) So in original.

(!3) So in original. The comma probably should not appear.

(!4) So in original. Probably should be "another".

(!5) See References in Text note below.

(!6) So in original. Probably should be followed by "and".

(!7) So in original. Probably should be section "557(b)".

(!8) So in original. Probably should be followed by a closing

parenthesis.

(!9) So in original. The word "and" probably should not appear.

(!10) So in original. Probably should be "a".

(!11) So in original. The comma probably should be a semicolon.

(!12) So in original. Probably should not be capitalized.

-End-

-CITE-

42 USC Sec. 1395xx 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395xx. Payment of provider-based physicians and payment under

certain percentage arrangements

-STATUTE-

(a) Criteria; amount of payments

(1) The Secretary shall by regulation determine criteria for

distinguishing those services (including inpatient and outpatient

services) rendered in hospitals or skilled nursing facilities -

(A) which constitute professional medical services, which are

personally rendered for an individual patient by a physician and

which contribute to the diagnosis or treatment of an individual

patient, and which may be reimbursed as physicians' services

under part B, and

(B) which constitute professional services which are rendered

for the general benefit to patients in a hospital or skilled

nursing facility and which may be reimbursed only on a reasonable

cost basis or on the bases described in section 1395ww of this

title.

(2)(A) For purposes of cost reimbursement, the Secretary shall

recognize as a reasonable cost of a hospital or skilled nursing

facility only that portion of the costs attributable to services

rendered by a physician in such hospital or facility which are

services described in paragraph (1)(B), apportioned on the basis of

the amount of time actually spent by such physician rendering such

services.

(B) In determining the amount of the payments which may be made

with respect to services described in paragraph (1)(B), after

apportioning costs as required by subparagraph (A), the Secretary

may not recognize as reasonable (in the efficient delivery of

health services) such portion of the provider's costs for such

services to the extent that such costs exceed the reasonable

compensation equivalent for such services. The reasonable

compensation equivalent for any service shall be established by the

Secretary in regulations.

(C) The Secretary may, upon a showing by a hospital or facility

that it is unable to recruit or maintain an adequate number of

physicians for the hospital or facility on account of the

reimbursement limits established under this subsection, grant

exceptions to such reimbursement limits as may be necessary to

allow such provider to provide a compensation level sufficient to

provide adequate physician services in such hospital or facility.

(b) Prohibition of recognition of payments under certain percentage

agreements

(1) Except as provided in paragraph (2), in the case of a

provider of services which is paid under this subchapter on a

reasonable cost basis, or other basis related to costs that are

reasonable, and which has entered into a contract for the purpose

of having services furnished for or on behalf of it, the Secretary

may not include any cost incurred by the provider under the

contract if the amount payable under the contract by the provider

for that cost is determined on the basis of a percentage (or other

proportion) of the provider's charges, revenues, or claim for

reimbursement.

(2) Paragraph (1) shall not apply -

(A) to services furnished by a physician and described in

subsection (a)(1)(B) of this section and covered by regulations

in effect under subsection (a) of this section, and

(B) under regulations established by the Secretary, where the

amount involved under the percentage contract is reasonable and

the contract -

(i) is a customary commercial business practice, or

(ii) provides incentives for the efficient and economical

operation of the provider of services.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1887, as added and

amended Pub. L. 97-248, title I, Secs. 108(a)[(1)], 109(a), Sept.

3, 1982, 96 Stat. 337, 338; Pub. L. 98-21, title VI, Sec. 602(j),

Apr. 20, 1983, 97 Stat. 165.)

-MISC1-

AMENDMENTS

1983 - Subsec. (a)(1)(B). Pub. L. 98-21 inserted "or on the bases

described in section 1395ww of this title".

1982 - Subsec. (b). Pub. L. 97-248, Sec. 109(a)(2), added subsec.

(b).

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 98-21 applicable to items and services

furnished by or under arrangement with a hospital beginning with

its first cost reporting period that begins on or after Oct. 1,

1983, any change in a hospital's cost reporting period made after

November 1982 to be recognized for such purposes only if the

Secretary finds good cause therefor, see section 604(a)(1) of Pub.

L. 98-21, set out as a note under section 1395ww of this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Section 109(c)(1), (2) of Pub. L. 97-248 provided that:

"(1) The amendments made by this section [amending this section

and section 1395x of this title] shall become effective on the date

of the enactment of this Act [Sept. 3, 1982], except that section

1887(b)(1) of the Social Security Act [subsec. (b)(1) of this

section] shall not apply before October 1, 1982, to services

furnished by a physician and described in section 1887(a)(1)(B) of

such Act [subsec. (a)(1)(B) of this section].

"(2) In the case of a contract with a provider of services

entered into prior to the date of the enactment of this Act [Sept.

3, 1982], the amendment made by subsection (a) [amending this

section] shall apply to payments under such contract (A) 30 days

after the first date (after such date of enactment) the provider of

services may unilaterally terminate the contract, or (B) one year

after the date of the enactment of this Act, whichever is earlier."

EFFECTIVE DATE OF REGULATIONS

Section 108(b), formerly Sec. 108(c), of Pub. L. 97-248, as

redesignated by Pub. L. 97-448, title III, Sec. 309(a)(3), Jan. 12,

1983, 96 Stat. 2408, provided that: "The Secretary of Health and

Human Services shall first promulgate regulations to carry out

section 1887(a) of the Social Security Act [subsec. (a) of this

section] not later than October 1, 1982. Such regulations shall

become effective on October 1, 1982, and shall be effective with

respect to cost reporting periods ending after September 30, 1982,

but in the case of any cost reporting period beginning before

October 1, 1982, any reduction in payments under title XVIII of the

Social Security Act [this subchapter] to a hospital or skilled

nursing facility resulting from such regulations shall be imposed

only in proportion to the part of the period which occurs after

September 30, 1982."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1395x of this title.

-End-

-CITE-

42 USC Sec. 1395yy 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395yy. Payment to skilled nursing facilities for routine

service costs

-STATUTE-

(a) Per diem limitations

The Secretary, in determining the amount of the payments which

may be made under this subchapter with respect to routine service

costs of extended care services shall not recognize as reasonable

(in the efficient delivery of health services) per diem costs of

such services to the extent that such per diem costs exceed the

following per diem limits, except as otherwise provided in this

section:

(1) With respect to freestanding skilled nursing facilities

located in urban areas, the limit shall be equal to 112 percent

of the mean per diem routine service costs for freestanding

skilled nursing facilities located in urban areas.

(2) With respect to freestanding skilled nursing facilities

located in rural areas, the limit shall be equal to 112 percent

of the mean per diem routine service costs for freestanding

skilled nursing facilities located in rural areas.

(3) With respect to hospital-based skilled nursing facilities

located in urban areas, the limit shall be equal to the sum of

the limit for freestanding skilled nursing facilities located in

urban areas, plus 50 percent of the amount by which 112 percent

of the mean per diem routine service costs for hospital-based

skilled nursing facilities located in urban areas exceeds the

limit for freestanding skilled nursing facilities located in

urban areas.

(4) With respect to hospital-based skilled nursing facilities

located in rural areas, the limit shall be equal to the sum of

the limit for freestanding skilled nursing facilities located in

rural areas, plus 50 percent of the amount by which 112 percent

of the mean per diem routine service costs for hospital-based

skilled nursing facilities located in rural areas exceeds the

limit for freestanding skilled nursing facilities located in

rural areas.

In applying this subsection the Secretary shall make appropriate

adjustments to the labor related portion of the costs based upon an

appropriate wage index, and shall, for cost reporting periods

beginning on or after October 1, 1992, on or after October 1, 1995,

and every 2 years thereafter, provide for an update to the per diem

cost limits described in this subsection, except that the limits

effective for cost reporting periods beginning on or after October

1, 1997, shall be based on the limits effective for cost reporting

periods beginning on or after October 1, 1996.

(b) Excess overhead allocations for hospital-based facilities

With respect to a hospital-based skilled nursing facility, the

Secretary may not recognize as reasonable the portion of the cost

differences between hospital-based and freestanding skilled nursing

facilities attributable to excess overhead allocations.

(c) Adjustments in limitations; publication of data

The Secretary may make adjustments in the limits set forth in

subsection (a) of this section with respect to any skilled nursing

facility to the extent the Secretary deems appropriate, based upon

case mix or circumstances beyond the control of the facility. The

Secretary shall publish the data and criteria to be used for

purposes of this subsection on an annual basis.

(d) Access to skilled nursing facilities

(1) Subject to subsection (e) of this section, any skilled

nursing facility may choose to be paid under this subsection on the

basis of a prospective payment for all routine service costs

(including the costs of services required to attain or maintain the

highest practicable physical, mental, and psychosocial well-being

of each resident eligible for benefits under this subchapter) and

capital-related costs of extended care services provided in a cost

reporting period if such facility had, in the preceding cost

reporting period, fewer than 1,500 patient days with respect to

which payments were made under this subchapter. Such prospective

payment shall be in lieu of payments which would otherwise be made

for routine service costs pursuant to section 1395x(v) of this

title and subsections (a) through (c) of this section and

capital-related costs pursuant to section 1395x(v) of this title.

This subsection shall not apply to a facility for any cost

reporting period immediately following a cost reporting period in

which such facility had 1,500 or more patient days with respect to

which payments were made under this subchapter, without regard to

whether payments were made under this subsection during such

preceding cost reporting period.

(2)(A) The amount of the payment under this section shall be

determined on a per diem basis.

(B) Subject to the limitations of subparagraph (C), for skilled

nursing facilities located -

(i) in an urban area, the amount shall be equal to 105 percent

of the mean of the per diem reasonable routine service and

capital-related costs of extended care services for skilled

nursing facilities in urban areas within the same region,

determined without regard to the limitations of subsection (a) of

this section and adjusted for different area wage levels, and

(ii) in a rural area the amount shall be equal to 105 percent

of the mean of the per diem reasonable routine service and

capital-related costs of extended care services for skilled

nursing facilities in rural areas within the same region,

determined without regard to the limitations of subsection (a) of

this section and adjusted for different area wage levels.

(C) The per diem amounts determined under subparagraph (B) shall

not exceed the limit on routine service costs determined under

subsection (a) of this section with respect to the facility,

adjusted to take into account average capital-related costs with

respect to the type and location of the facility.

(3) For purposes of this subsection, urban and rural areas shall

be determined in the same manner as for purposes of subsection (a)

of this section, and the term "region" shall have the same meaning

as under section 1395ww(d)(2)(D) of this title.

(4) The Secretary shall establish the prospective payment amounts

for cost reporting periods beginning in a fiscal year at least 90

days prior to the beginning of such fiscal year, on the basis of

the most recent data available for a 12-month period. A skilled

nursing facility must notify the Secretary of its intention to be

paid pursuant to this subsection for a cost reporting period no

later than 30 days before the beginning of that period.

(5) The Secretary shall provide for a simplified cost report to

be filed by facilities being paid pursuant to this subsection,

which shall require only the cost information necessary for

determining prospective payment amounts pursuant to paragraph (2)

and reasonable costs of ancillary services.

(6) In lieu of payment on a cost basis for ancillary services

provided by a facility which is being paid pursuant to this

subsection, the Secretary may pay for such ancillary services on a

reasonable charge basis if the Secretary determines that such

payment basis will provide an equitable level of reimbursement and

will ease the reporting burden of the facility.

(7) In computing the rates of payment to be made under this

subsection, there shall be taken into account the costs described

in the last sentence of section 1395x(v)(1)(E) of this title

(relating to compliance with nursing facility requirements and of

conducting nurse aide training and competency evaluation programs

and competency evaluation programs).

(e) Prospective payment

(1) Payment provision

Notwithstanding any other provision of this subchapter, subject

to paragraphs (7), (11), and (12), the amount of the payment for

all costs (as defined in paragraph (2)(B)) of covered skilled

nursing facility services (as defined in paragraph (2)(A)) for

each day of such services furnished -

(A) in a cost reporting period during the transition period

(as defined in paragraph (2)(E)), is equal to the sum of -

(i) the non-Federal percentage of the facility-specific per

diem rate (computed under paragraph (3)), and

(ii) the Federal percentage of the adjusted Federal per

diem rate (determined under paragraph (4)) applicable to the

facility; and

(B) after the transition period is equal to the adjusted

Federal per diem rate applicable to the facility.

(2) Definitions

For purposes of this subsection:

(A) Covered skilled nursing facility services

(i) In general

The term "covered skilled nursing facility services" -

(I) means post-hospital extended care services as defined

in section 1395x(i) of this title for which benefits are

provided under part A of this subchapter; and

(II) includes all items and services (other than items

and services described in clauses (ii) and (iii)) for which

payment may be made under part B of this subchapter and

which are furnished to an individual who is a resident of a

skilled nursing facility during the period in which the

individual is provided covered post-hospital extended care

services.

(ii) Services excluded

Services described in this clause are physicians' services,

services described by clauses (i) and (ii) of section

1395x(s)(2)(K) of this title, certified nurse-midwife

services, qualified psychologist services, services of a

certified registered nurse anesthetist, items and services

described in subparagraphs (F) and (O) of section 1395x(s)(2)

of this title, and, only with respect to services furnished

during 1998, the transportation costs of electrocardiogram

equipment for electrocardiogram test services (HCPCS Code

R0076). Services described in this clause do not include any

physical, occupational, or speech-language therapy services

regardless of whether or not the services are furnished by,

or under the supervision of, a physician or other health care

professional.

(iii) Exclusion of certain additional items and services

Items and services described in this clause are the

following:

(I) Ambulance services furnished to an individual in

conjunction with renal dialysis services described in

section 1395x(s)(2)(F) of this title.

(II) Chemotherapy items (identified as of July 1, 1999,

by HCPCS codes J9000-J9020; J9040-J9151; J9170-J9185;

J9200-J9201; J9206-J9208; J9211; J9230-J9245; and

J9265-J9600 (and as subsequently modified by the

Secretary)) and any additional chemotherapy items

identified by the Secretary.

(III) Chemotherapy administration services (identified as

of July 1, 1999, by HCPCS codes 36260-36262; 36489;

36530-36535; 36640; 36823; and 96405-96542 (and as

subsequently modified by the Secretary)) and any additional

chemotherapy administration services identified by the

Secretary.

(IV) Radioisotope services (identified as of July 1,

1999, by HCPCS codes 79030-79440 (and as subsequently

modified by the Secretary)) and any additional radioisotope

services identified by the Secretary.

(V) Customized prosthetic devices (commonly known as

artificial limbs or components of artificial limbs) under

the following HCPCS codes (as of July 1, 1999 (and as

subsequently modified by the Secretary)), and any

additional customized prosthetic devices identified by the

Secretary, if delivered to an inpatient for use during the

stay in the skilled nursing facility and intended to be

used by the individual after discharge from the facility:

L5050-L5340; L5500-L5611; L5613-L5986; L5988; L6050-L6370;

L6400-L6880; L6920-L7274; and L7362-7366.

(B) All costs

The term "all costs" means routine service costs, ancillary

costs, and capital-related costs of covered skilled nursing

facility services, but does not include costs associated with

approved educational activities.

(C) Non-Federal percentage; Federal percentage

For -

(i) the first cost reporting period (as defined in

subparagraph (D)) of a facility, the "non-Federal percentage"

is 75 percent and the "Federal percentage" is 25 percent;

(ii) the next cost reporting period of such facility, the

"non-Federal percentage" is 50 percent and the "Federal

percentage" is 50 percent; and

(iii) the subsequent cost reporting period of such

facility, the "non-Federal percentage" is 25 percent and the

"Federal percentage" is 75 percent.

(D) First cost reporting period

The term "first cost reporting period" means, with respect to

a skilled nursing facility, the first cost reporting period of

the facility beginning on or after July 1, 1998.

(E) Transition period

(i) In general

The term "transition period" means, with respect to a

skilled nursing facility, the 3 cost reporting periods of the

facility beginning with the first cost reporting period.

(ii) Treatment of new skilled nursing facilities

In the case of a skilled nursing facility that first

received payment for services under this subchapter on or

after October 1, 1995, payment for such services shall be

made under this subsection as if all services were furnished

after the transition period.

(3) Determination of facility specific per diem rates

The Secretary shall determine a facility-specific per diem rate

for each skilled nursing facility not described in paragraph

(2)(E)(ii) for a cost reporting period as follows:

(A) Determining base payments

The Secretary shall determine, on a per diem basis, the total

of -

(i) the allowable costs of extended care services for the

facility for cost reporting periods beginning in fiscal year

1995, including costs associated with facilities described in

subsection (d) of this section, with appropriate adjustments

(as determined by the Secretary) to non-settled cost reports

or, in the case of a facility participating in the Nursing

Home Case-Mix and Quality Demonstration (RUGS-III), the

RUGS-III rate received by the facility during the cost

reporting period beginning in 1997, and

(ii) an estimate of the amounts that would be payable under

part B of this subchapter (disregarding any applicable

deductibles, coinsurance, and copayments) for covered skilled

nursing facility services described in paragraph

(2)(A)(i)(II) furnished during the applicable cost reporting

period described in clause (i) to an individual who is a

resident of the facility, regardless of whether or not the

payment was made to the facility or to another entity.

In making appropriate adjustments under clause (i), the

Secretary shall take into account exceptions and shall take

into account exemptions but, with respect to exemptions, only

to the extent that routine costs do not exceed 150 percent of

the routine cost limits otherwise applicable but for the

exemption.

(B) Update to first cost reporting period

The Secretary shall update the amount determined under

subparagraph (A), for each cost reporting period after the

applicable cost reporting period described in subparagraph

(A)(i) and up to the first cost reporting period by a factor

equal to the skilled nursing facility market basket percentage

increase minus 1.0 percentage point.

(C) Updating to applicable cost reporting period

The Secretary shall update the amount determined under

subparagraph (B) for each cost reporting period beginning with

the first cost reporting period and up to and including the

cost reporting period involved by a factor equal to the

facility-specific update factor.

(D) Facility-specific update factor

For purposes of this paragraph, the "facility-specific update

factor" for cost reporting periods beginning during -

(i) during each of fiscal years 1998 and 1999, is equal to

the skilled nursing facility market basket percentage

increase for such fiscal year minus 1 percentage point, and

(ii) during each subsequent fiscal year is equal to the

skilled nursing facility market basket percentage increase

for such fiscal year.

(4) Federal per diem rate

(A) Determination of historical per diem for facilities

For each skilled nursing facility that received payments for

post-hospital extended care services during a cost reporting

period beginning in fiscal year 1995 and that was subject to

(and not exempted from) the per diem limits referred to in

paragraph (1) or (2) of subsection (a) of this section (and

facilities described in subsection (d) of this section), the

Secretary shall estimate, on a per diem basis for such cost

reporting period, the total of -

(i) the allowable costs of extended care services

(excluding exceptions payments) for the facility for cost

reporting periods beginning in 1995 with appropriate

adjustments (as determined by the Secretary) to non-settled

cost reports, and

(ii) an estimate of the amounts that would be payable under

part B of this subchapter (disregarding any applicable

deductibles, coinsurance, and copayments) for covered skilled

nursing facility services described in paragraph

(2)(A)(i)(II) furnished during such period to an individual

who is a resident of the facility, regardless of whether or

not the payment was made to the facility or to another

entity.

(B) Update to first fiscal year

The Secretary shall update the amount determined under

subparagraph (A), for each cost reporting period after the cost

reporting period described in subparagraph (A)(i) and up to the

first cost reporting period by a factor equal to the skilled

nursing facility market basket percentage increase reduced (on

an annualized basis) by 1 percentage point.

(C) Computation of standardized per diem rate

The Secretary shall standardize the amount updated under

subparagraph (B) for each facility by -

(i) adjusting for variations among facilities by area in

the average facility wage level per diem, and

(ii) adjusting for variations in case mix per diem among

facilities.

(D) Computation of weighted average per diem rates

(i) All facilities

The Secretary shall compute a weighted average per diem

rate for all facilities by computing an average of the

standardized amounts computed under subparagraph (C),

weighted for each facility by the number of days of extended

care services furnished during the cost reporting period

referred to in subparagraph (A).

(ii) Freestanding facilities

The Secretary shall compute a weighted average per diem

rate for freestanding facilities by computing an average of

the standardized amounts computed under subparagraph (C) only

for such facilities, weighted for each facility by the number

of days of extended care services furnished during the cost

reporting period referred to in subparagraph (A).

(iii) Separate computation

The Secretary may compute and apply such averages

separately for facilities located in urban and rural areas

(as defined in section 1395ww(d)(2)(D) of this title).

(E) Updating

(i) Initial period

For the initial period beginning on July 1, 1998, and

ending on September 30, 1999, the Secretary shall compute for

skilled nursing facilities an unadjusted Federal per diem

rate equal to the average of the weighted average per diem

rates computed under clauses (i) and (ii) of subparagraph

(D), increased by skilled nursing facility market basket

percentage change for such period minus 1 percentage point.

(ii) Subsequent fiscal years

The Secretary shall compute an unadjusted Federal per diem

rate equal to the Federal per diem rate computed under this

subparagraph -

(I) for fiscal year 2000, the rate computed for the

initial period described in clause (i), increased by the

skilled nursing facility market basket percentage change

for the initial period minus 1 percentage point;

(II) for fiscal year 2001, the rate computed for the

previous fiscal year increased by the skilled nursing

facility market basket percentage change for the fiscal

year;

(III) for each of fiscal years 2002 and 2003, the rate

computed for the previous fiscal year increased by the

skilled nursing facility market basket percentage change

for the fiscal year involved minus 0.5 percentage points;

and

(IV) for each subsequent fiscal year, the rate computed

for the previous fiscal year increased by the skilled

nursing facility market basket percentage change for the

fiscal year involved.

(F) Adjustment for case mix creep

Insofar as the Secretary determines that the adjustments

under subparagraph (G)(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 residents that do

not reflect real changes in case mix, the Secretary may adjust

unadjusted Federal per diem rates for subsequent fiscal years

so as to eliminate the effect of such coding or classification

changes.

(G) Determination of Federal rate

The Secretary shall compute for each skilled nursing facility

for each fiscal year (beginning with the initial period

described in subparagraph (E)(i)) an adjusted Federal per diem

rate equal to the unadjusted Federal per diem rate determined

under subparagraph (E), as adjusted under subparagraph (F), and

as further adjusted as follows:

(i) Adjustment for case mix

The Secretary shall provide for an appropriate adjustment

to account for case mix. Such adjustment shall be based on a

resident classification system, established by the Secretary,

that accounts for the relative resource utilization of

different patient types. The case mix adjustment shall be

based on resident assessment data and other data that the

Secretary considers appropriate.

(ii) Adjustment for geographic variations in labor costs

The Secretary shall adjust the portion of such per diem

rate attributable to wages and wage-related costs for the

area in which the facility is located compared to the

national average of such costs using an appropriate wage

index as determined by the Secretary. Such adjustment shall

be done in a manner that does not result in aggregate

payments under this subsection that are greater or less than

those that would otherwise be made if such adjustment had not

been made.

(iii) Adjustment for exclusion of certain additional items

and services

The Secretary shall provide for an appropriate proportional

reduction in payments so that beginning with fiscal year

2001, the aggregate amount of such reductions is equal to the

aggregate increase in payments attributable to the exclusion

effected under clause (iii) of paragraph (2)(A).

(H) Publication of information on per diem rates

The Secretary shall provide for publication in the Federal

Register, before May 1, 1998 (with respect to fiscal period

described in subparagraph (E)(i)) and before the August 1

preceding each succeeding fiscal year (with respect to that

succeeding fiscal year), of -

(i) the unadjusted Federal per diem rates to be applied to

days of covered skilled nursing facility services furnished

during the fiscal year,

(ii) the case mix classification system to be applied under

subparagraph (G)(i) with respect to such services during the

fiscal year, and

(iii) the factors to be applied in making the area wage

adjustment under subparagraph (G)(ii) with respect to such

services.

(5) Skilled nursing facility market basket index and percentage

For purposes of this subsection:

(A) Skilled nursing facility market basket index

The Secretary shall establish a skilled nursing facility

market basket index that reflects changes over time in the

prices of an appropriate mix of goods and services included in

covered skilled nursing facility services.

(B) Skilled nursing facility market basket percentage

The term "skilled nursing facility market basket percentage"

means, for a fiscal year or other annual period and as

calculated by the Secretary, the percentage change in the

skilled nursing facility market basket index (established under

subparagraph (A)) from the midpoint of the prior fiscal year

(or period) to the midpoint of the fiscal year (or other

period) involved.

(6) Submission of resident assessment data

A skilled nursing facility, or a facility described in

paragraph (7)(B), shall provide the Secretary, in a manner and

within the timeframes prescribed by the Secretary, the resident

assessment data necessary to develop and implement the rates

under this subsection. For purposes of meeting such requirement,

a skilled nursing facility, or a facility described in paragraph

(7), may submit the resident assessment data required under

section 1395i-3(b)(3) of this title, using the standard

instrument designated by the State under section 1395i-3(e)(5) of

this title.

(7) Treatment of medicare swing bed hospitals

(A) Transition

Subject to subparagraph (C), the Secretary shall determine an

appropriate manner in which to apply this subsection to the

facilities described in subparagraph (B) (other than critical

access hospitals), taking into account the purposes of this

subsection, and shall provide that at the end of the transition

period (as defined in paragraph (2)(E)) such facilities shall

be paid only under this subsection. Payment shall not be made

under this subsection to such facilities for cost reporting

periods beginning before such date (not earlier than July 1,

1999) as the Secretary specifies.

(B) Facilities described

The facilities described in this subparagraph are facilities

that have in effect an agreement described in section 1395tt of

this title.

(C) Exemption from PPS of swing-bed services furnished in

critical access hospitals

The prospective payment system established under this

subsection shall not apply to services furnished by a critical

access hospital pursuant to an agreement under section 1395tt

of this title.

(8) Limitation on review

There shall be no administrative or judicial review under

section 1395ff of this title, 1395oo of this title, or otherwise

of -

(A) the establishment of Federal per diem rates under

paragraph (4), including the computation of the standardized

per diem rates under paragraph (4)(C), adjustments and

corrections for case mix under paragraphs (4)(F) and (4)(G)(i),

adjustments for variations in labor-related costs under

paragraph (4)(G)(ii), and adjustments under paragraph

(4)(G)(iii);

(B) the establishment of facility specific rates before July

1, 1999 (except any determination of costs paid under part A of

this subchapter); and

(C) the establishment of transitional amounts under paragraph

(7).

(9) Payment for certain services

In the case of an item or service furnished to a resident of a

skilled nursing facility or a part of a facility that includes a

skilled nursing facility (as determined under regulations) for

which payment would (but for this paragraph) be made under part B

of this subchapter in an amount determined in accordance with

section 1395l(a)(2)(B) of this title, the amount of the payment

under such part shall be the amount provided under the fee

schedule for such item or service. In the case of an item or

service described in clause (iii) of paragraph (2)(A) that would

be payable under part A of this subchapter but for the exclusion

of such item or service under such clause, payment shall be made

for the item or service, in an amount otherwise determined under

part B of this subchapter for such item or service, from the

Federal Hospital Insurance Trust Fund under section 1395i of this

title (rather than from the Federal Supplementary Medical

Insurance Trust Fund under section 1395t of this title).

(10) Required coding

No payment may be made under part B of this subchapter for

items and services (other than services described in paragraph

(2)(A)(ii)) furnished to an individual who is a resident of a

skilled nursing facility or of a part of a facility that includes

a skilled nursing facility (as determined under regulations),

unless the claim for such payment includes a code (or codes)

under a uniform coding system specified by the Secretary that

identifies the items or services furnished.

(11) Permitting facilities to waive 3-year transition

Notwithstanding paragraph (1)(A), a facility may elect to have

the amount of the payment for all costs of covered skilled

nursing facility services for each day of such services furnished

in cost reporting periods beginning no earlier than 30 days

before the date of such election determined pursuant to paragraph

(1)(B).

(12) Payment rule for certain facilities

(A) In general

In the case of a qualified acute skilled nursing facility

described in subparagraph (B), the per diem amount of payment

shall be determined by applying the non-Federal percentage and

Federal percentage specified in paragraph (2)(C)(ii).

(B) Facility described

For purposes of subparagraph (A), a qualified acute skilled

nursing facility is a facility that -

(i) was certified by the Secretary as a skilled nursing

facility eligible to furnish services under this subchapter

before July 1, 1992;

(ii) is a hospital-based facility; and

(iii) for the cost reporting period beginning in fiscal

year 1998, the facility had more than 60 percent of total

patient days comprised of patients who are described in

subparagraph (C).

(C) Description of patients

For purposes of subparagraph (B), a patient described in this

subparagraph is an individual who -

(i) is entitled to benefits under part A of this

subchapter; and

(ii) is immuno-compromised secondary to an infectious

disease, with specific diagnoses as specified by the

Secretary.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1888, as added Pub. L.

98-369, div. B, title III, Sec. 2319(b), July 18, 1984, 98 Stat.

1082; amended Pub. L. 99-272, title IX, Secs. 9126(a), (b),

9219(b)(1)(C), Apr. 7, 1986, 100 Stat. 168, 170, 182; Pub. L.

99-514, title XVIII, Sec. 1895(b)(7)(A), (B), Oct. 22, 1986, 100

Stat. 2933; Pub. L. 100-203, title IV, Sec. 4201(b)(2), Dec. 22,

1987, 101 Stat. 1330-174; Pub. L. 101-508, title IV, Sec.

4008(e)(2), (h)(2)(A)(ii), Nov. 5, 1990, 104 Stat. 1388-45,

1388-48; Pub. L. 103-66, title XIII, Sec. 13503(a)(2), (3)(A), Aug.

10, 1993, 107 Stat. 578; Pub. L. 105-33, title IV, Secs. 4431,

4432(a), (b)(3), (5)(H), 4511(a)(2)(E), Aug. 5, 1997, 111 Stat.

414, 421, 422, 442; Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title

I, Secs. 102(a), 103(a), (b), 104(a), 105(a), title III, Sec.

321(g)(1), (k)(18)], Nov. 29, 1999, 113 Stat. 1536, 1501A-325 to

1501A-327, 1501A-366, 1501A-368; Pub. L. 106-554, Sec. 1(a)(6)

[title II, Sec. 203(a), title III, Sec. 311(a)], Dec. 21, 2000, 114

Stat. 2763, 2763A-481, 2763A-497.)

-REFTEXT-

REFERENCES IN TEXT

Parts A and B of this subchapter, referred to in subsec. (e), are

classified to section 1395c et seq. and section 1395j et seq.,

respectively, of this title.

-MISC1-

AMENDMENTS

2000 - Subsec. (e)(4)(E)(ii)(II). Pub. L. 106-554, Sec. 1(a)(6)

[title III, Sec. 311(a)(3)], added subcl. (II). Former subcl. (II)

redesignated (III).

Subsec. (e)(4)(E)(ii)(III). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 311(a)(1), (2)], redesignated subcl. (II) as (III) and

substituted "each of fiscal years 2002 and 2003" for "each of

fiscal years 2001 and 2002" and "minus 0.5 percentage points" for

"minus 1 percentage point". Former subcl. (III) redesignated (IV).

Subsec. (e)(4)(E)(ii)(IV). Pub. L. 106-554, Sec. 1(a)(6) [title

III, Sec. 311(a)(1)], redesignated subcl. (III) as (IV).

Subsec. (e)(7). Pub. L. 106-554, Sec. 1(a)(6) [title II, Sec.

203(a)(1)], substituted "Treatment of" for "Transition for" in

heading.

Subsec. (e)(7)(A). Pub. L. 106-554, Sec. 1(a)(6) [title II, Sec.

203(a)(2), (3)], in heading substituted "Transition" for "In

general" and in text substituted "Subject to subparagraph (C), the"

for "The" and inserted "(other than critical access hospitals)"

after "facilities described in subparagraph (B)".

Subsec. (e)(7)(B). Pub. L. 106-554, Sec. 1(a)(6) [title II, Sec.

203(a)(4)], struck out ", for which payment is made for the

furnishing of extended care services on a reasonable cost basis

under section 1395f(l) of this title (as in effect on and after

such date)" before period at end.

Subsec. (e)(7)(C). Pub. L. 106-554, Sec. 1(a)(6) [title II, Sec.

203(a)(5)], added subpar. (C).

1999 - Subsec. (e)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 105(a)(1)], substituted "subject to paragraphs (7), (11), and

(12)" for "subject to paragraphs (7) and (11)" in introductory

provisions.

Pub. L. 106-113, Sec. 1000(a)(6) [title I, Sec. 102(a)(1)],

substituted "paragraphs (7) and (11)" for "paragraph (7)" in

introductory provisions.

Subsec. (e)(2)(A)(i)(II). Pub. L. 106-113, Sec. 1000(a)(6) [title

I, Sec. 103(a)(1)], substituted "items and services described in

clauses (ii) and (iii)" for "services described in clause (ii)".

Subsec. (e)(2)(A)(iii). Pub. L. 106-113, Sec. 1000(a)(6) [title

I, Sec. 103(a)(2)], added cl. (iii).

Subsec. (e)(3)(A)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 104(a)(1)(A)], inserted "or, in the case of a facility

participating in the Nursing Home Case-Mix and Quality

Demonstration (RUGS-III), the RUGS-III rate received by the

facility during the cost reporting period beginning in 1997" after

"to non-settled cost reports".

Subsec. (e)(3)(A)(ii). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 104(a)(1)(B)], substituted "furnished during the applicable

cost reporting period described in clause (i)" for "furnished

during such period".

Subsec. (e)(3)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 104(a)(2)], added subpar. (B) and struck out heading and text

of former subpar. (B). Text read as follows:

"(i) In general. - Subject to clause (ii), the Secretary shall

update the amount determined under subparagraph (A), for each cost

reporting period after the cost reporting period described in

subparagraph (A)(i) and up to the first cost reporting period by a

factor equal to the skilled nursing facility market basket

percentage increase minus 1 percentage point.

"(ii) Certain demonstration projects. - In the case of a facility

participating in the Nursing Home Case-Mix and Quality

Demonstration (RUGS-III), there shall be substituted for the amount

described in clause (i) the RUGS-III rate received by the facility

for 1997."

Subsec. (e)(4)(E)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(18)(A)], substituted "Federal" for "federal".

Subsec. (e)(4)(E)(ii). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(18)(B)], substituted "Federal" for "federal" in

two places in introductory provisions.

Subsec. (e)(4)(G)(iii). Pub. L. 106-113, Sec. 1000(a)(6) [title

I, Sec. 103(b)(1)], added cl. (iii).

Subsec. (e)(8)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title I,

Sec. 103(b)(2)], substituted "adjustments for variations in

labor-related costs under paragraph (4)(G)(ii), and adjustments

under paragraph (4)(G)(iii)" for "and adjustments for variations in

labor-related costs under paragraph (4)(G)(ii)".

Subsec. (e)(8)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(g)(1)], substituted "July 1, 1999" for "January 1, 1999,".

Subsec. (e)(9). Pub. L. 106-113, Sec. 1000(a)(6) [title I, Sec.

103(a)(3)], inserted at end "In the case of an item or service

described in clause (iii) of paragraph (2)(A) that would be payable

under part A of this subchapter but for the exclusion of such item

or service under such clause, payment shall be made for the item or

service, in an amount otherwise determined under part B of this

subchapter for such item or service, from the Federal Hospital

Insurance Trust Fund under section 1395i of this title (rather than

from the Federal Supplementary Medical Insurance Trust Fund under

section 1395t of this title)."

Subsec. (e)(11). Pub. L. 106-113, Sec. 1000(a)(6) [title I, Sec.

102(a)(2)], added par. (11).

Subsec. (e)(12). Pub. L. 106-113, Sec. 1000(a)(6) [title I, Sec.

105(a)(2), (b)], temporarily added par. (12).

1997 - Subsec. (a). Pub. L. 105-33, Sec. 4431, substituted

"described in this subsection, except that the limits effective for

cost reporting periods beginning on or after October 1, 1997, shall

be based on the limits effective for cost reporting periods

beginning on or after October 1, 1996." for "described in this

subsection" at end.

Subsec. (d)(1). Pub. L. 105-33, Sec. 4432(b)(5)(H), substituted

"Subject to subsection (e) of this section, any skilled nursing

facility" for "Any skilled nursing facility".

Subsec. (e). Pub. L. 105-33, Sec. 4432(a), added subsec. (e).

Subsec. (e)(2)(A)(ii). Pub. L. 105-33, Sec. 4511(a)(2)(E),

substituted "and (ii)" for "through (iii)".

Subsec. (e)(9), (10). Pub. L. 105-33, Sec. 4432(b)(3), added

pars. (9) and (10).

1993 - Subsec. (a). Pub. L. 103-66, Sec. 13503(a)(2), inserted ",

on or after October 1, 1995," after "October 1, 1992" in concluding

provisions.

Subsec. (b). Pub. L. 103-66, Sec. 13503(a)(3)(A), substituted

"Secretary may not recognize" for "Secretary shall recognize" and a

period for "(as determined by the Secretary) resulting from the

reimbursement principles under this subchapter, notwithstanding the

limits set forth in paragraph (3) or (4) of subsection (a) of this

section."

1990 - Subsec. (a). Pub. L. 101-508, Sec. 4008(e)(2), struck out

period at end and inserted ", and shall, for cost reporting periods

beginning on or after October 1, 1992 and every 2 years thereafter,

provide for an update to the per diem cost limits described in this

subsection".

Subsec. (d)(1). Pub. L. 101-508, Sec. 4008(h)(2)(A)(ii),

substituted "(including the costs of services required to attain or

maintain the highest practicable physical, mental, and psychosocial

well-being of each resident eligible for benefits under this

subchapter) and capital-related costs" for "(and capital-related

costs)".

1987 - Subsec. (d)(7). Pub. L. 100-203 added par. (7).

1986 - Subsec. (b). Pub. L. 99-272, Sec. 9219(b)(1)(C),

substituted "notwithstanding" for "nothwithstanding".

Subsec. (c). Pub. L. 99-272, Sec. 9126(b), inserted provision

requiring the Secretary to publish data and criteria to be used for

purposes of this subsection on an annual basis.

Subsec. (d). Pub. L. 99-272, Sec. 9126(a), added subsec. (d).

Subsec. (d)(1). Pub. L. 99-514, Sec. 1895(b)(7)(A), substituted

"cost reporting period" for "fiscal year" in five places.

Subsec. (d)(4). Pub. L. 99-514, Sec. 1895(b)(7)(B), substituted

"cost reporting periods beginning in a fiscal year" for "each

fiscal year" and "cost reporting period no later than 30 days

before the beginning of that period" for "fiscal year within 60

days after the Secretary establishes the final prospective payment

amounts for such fiscal year".

EFFECTIVE DATE OF 2000 AMENDMENT

Amendment by section 1(a)(6) [title II, Sec. 203(a)] of Pub. L.

106-554 applicable to cost reporting periods beginning on or after

Dec. 21, 2001, see section 1(a)(6) [title IV, Sec. 203(c)] of Pub.

L. 106-554, set out as a note under section 1395tt of this title.

EFFECTIVE DATE OF 1999 AMENDMENT

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 102(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-325, provided that: "The

amendments made by subsection (a) [amending this section] shall

apply to elections made on or after December 15, 1999, except that

no election shall be effective under such amendments for a cost

reporting period beginning before January 1, 2000."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 103(c)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-326, provided that: "The

amendments made by subsection (a) [amending this section] shall

apply to payments made for items and services furnished on or after

April 1, 2000."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 104(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-327, provided that: "The

amendments made by subsection (a) [amending this section] shall be

effective as if included in the enactment of section 4432(a) of BBA

[the Balanced Budget Act of 1997, Pub. L. 105-33].

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 105(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-328, provided that: "The

amendments made by subsection (a) [amending this section] shall

apply for the period beginning on the date on which the first cost

reporting period of the facility begins after the date of the

enactment of this Act [Nov. 29, 1999] and ending on September 30,

2001, and applies to skilled nursing facilities furnishing covered

skilled nursing facility services on the date of the enactment of

this Act for which payment is made under title XVIII of the Social

Security Act [this subchapter]."

Amendment by section 1000(a)(6) [title III, Sec. 321(g)(1),

(k)(18)] of Pub. L. 106-113 effective as if included in the

enactment of the Balanced Budget Act of 1997, Pub. L. 105-33,

except as otherwise provided, see section 1000(a)(6) [title III,

Sec. 321(m)] of Pub. L. 106-113, set out as a note under section

1395d of this title.

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by section 4432(a), (b)(3), (5)(H) of Pub. L. 105-33

effective for cost reporting periods beginning on or after July 1,

1998, except that amendment by section 4432(b) applicable to items

and services furnished on or after July 1, 1998, see section

4432(d) of Pub. L. 105-33, set out as a note under section 1395i-3

of this title.

Amendment by section 4511(a)(2)(E) of Pub. L. 105-33 applicable

with respect to services furnished and supplies provided on and

after Jan. 1, 1998, see section 4511(e) of Pub. L. 105-33, set out

as a note under section 1395k of this title.

EFFECTIVE DATE OF 1993 AMENDMENT

Section 13503(a)(3)(B) of Pub. L. 103-66 provided that: "The

amendments made by subparagraph (A) [amending this section] shall

apply to cost reporting periods beginning on or after October 1,

1993."

EFFECTIVE DATE OF 1990 AMENDMENT

Section 4008(e)(3) of Pub. L. 101-508 provided that: "The

amendments made by paragraphs (1) and (2) [amending this section

and provisions set out as a note below] shall take effect as if

included in the enactment of the Omnibus Budget Reconciliation Act

of 1989 [Pub. L. 101-239]."

Amendment by section 4008(h)(2)(A)(ii) of Pub. L. 101-508

effective as if included in the enactment of the Omnibus Budget

Reconciliation Act of 1987, Pub. L. 100-203, see section

4008(h)(2)(P) of Pub. L. 101-508, set out as a note under section

1395i-3 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by Pub. L. 100-203 applicable to services furnished on

or after Oct. 1, 1990, without regard to whether regulations

implementing such amendment are promulgated by such date, except as

otherwise specifically provided in section 1395i-3 of this title,

see section 4204(a) of Pub. L. 100-203, as amended, set out as an

Effective Date note under section 1395i-3 of this title.

EFFECTIVE DATE OF 1986 AMENDMENTS

Section 1895(b)(7)(D) of Pub. L. 99-514 provided that: "The

amendments made by subparagraphs (A) and (B) [amending this

section] apply to cost reporting periods beginning on or after

October 1, 1986."

Amendment by section 9219(b)(1)(C) of Pub. L. 99-272 effective as

if originally included in the Deficit Reduction Act of 1984, Pub.

L. 98-369, see section 9219(b)(1)(D) of Pub. L. 99-272, set out as

a note under section 1395u of this title.

Section 9126(d) of Pub. L. 99-272, as amended by Pub. L. 99-514,

title XVIII, Sec. 1895(b)(7)(C), Oct. 22, 1986, 100 Stat. 2933,

provided that:

"(1) The amendment made by subsection (a) [amending this section]

shall apply to cost reporting periods beginning on or after October

1, 1986.

"(2) The amendment made by subsection (b) [amending this section]

shall become effective on the date of the enactment of this Act

[Apr. 7, 1986]."

EFFECTIVE DATE

Section 2319(c) of Pub. L. 98-369 provided that: "The amendments

made by subsections (a) [amending section 1395x of this title] and

(b) [enacting this section] shall apply to cost reporting periods

beginning on or after July 1, 1984."

SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR 2001

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 311(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-497, provided that: "Notwithstanding

the amendments made by subsection (a) [amending this section], for

purposes of making payments for covered skilled nursing facility

services under section 1888(e) of the Social Security Act (42

U.S.C. 1395yy(e)) for fiscal year 2001, the Federal per diem rate

referred to in paragraph (4)(E)(ii) of such section -

"(1) for the period beginning on October 1, 2000, and ending on

March 31, 2001, shall be the rate determined in accordance with

the law as in effect on the day before the date of the enactment

of this Act [Dec. 21, 2000]; and

"(2) for the period beginning on April 1, 2001, and ending on

September 30, 2001, shall be the rate that would have been

determined under such section if 'plus 1 percentage point' had

been substituted for 'minus 1 percentage point' under subclause

(II) of such paragraph (as in effect on the day before the date

of the enactment of this Act)."

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 547(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-553, provided that: "The payment

increase provided under section 311(b)(2) [set out as a note above]

(relating to covered skilled nursing facility services) shall not

apply to services furnished after fiscal year 2001 and shall not be

taken into account in calculating the payment amounts applicable

for services furnished after such fiscal year."

GAO REPORT ON ADEQUACY OF SNF PAYMENT RATES

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 311(d)], Dec. 21,

2000, 114 Stat. 2763, 2763A-498, provided that: "Not later than

July 1, 2002, the Comptroller General of the United States shall

submit to Congress a report on the adequacy of medicare payment

rates to skilled nursing facilities and the extent to which

medicare contributes to the financial viability of such facilities.

Such report shall take into account the role of private payors,

medicaid, and case mix on the financial performance of these

facilities, and shall include an analysis (by specific RUG

classification) of the number and characteristics of such

facilities."

HCFA STUDY OF CLASSIFICATION SYSTEMS FOR SNF RESIDENTS

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 311(e)], Dec. 21,

2000, 114 Stat. 2763, 2763A-498, provided that:

"(1) Study. - The Secretary of Health and Human Services shall

conduct a study of the different systems for categorizing patients

in medicare skilled nursing facilities in a manner that accounts

for the relative resource utilization of different patient types.

"(2) Report. - Not later than January 1, 2005, the Secretary

shall submit to Congress a report on the study conducted under

subsection (a). Such report shall include such recommendations

regarding changes in law as may be appropriate."

GAO AUDIT OF NURSING STAFF RATIOS

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 312(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-498, provided that:

"(1) Audit. - The Comptroller General of the United States shall

conduct an audit of nursing staffing ratios in a representative

sample of medicare skilled nursing facilities. Such sample shall

cover selected States and shall include broad representation with

respect to size, ownership, location, and medicare volume. Such

audit shall include an examination of payroll records and medicaid

cost reports of individual facilities.

"(2) Report. - Not later than August 1, 2002, the Comptroller

General shall submit to Congress a report on the audits conducted

under paragraph (1). Such report shall include an assessment of the

impact of the increased payments under this subtitle [subtitle B,

Secs. 311-315, of title III of Sec. 1(a)(6) of Pub. L. 106-554,

amending this section and sections 1395u, 1395y, and 1395cc of this

title and enacting provisions set out as notes under this section

and section 1395u of this title] on increased nursing staff ratios

and shall make recommendations as to whether increased payments

under subsection (a) [114 Stat. 2763A-498] should be continued."

OVERSIGHT

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 313(d)], Dec. 21,

2000, 114 Stat. 2763, 2763A-499, provided that: "The Secretary of

Health and Human Services, through the Office of the Inspector

General in the Department of Health and Human Services or

otherwise, shall monitor payments made under part B of the title

XVIII of the Social Security Act [part B of this subchapter] for

items and services furnished to residents of skilled nursing

facilities during a time in which the residents are not being

provided medicare covered post-hospital extended care services to

ensure that there is not duplicate billing for services or

excessive services provided."

ESTABLISHMENT OF PROCESS FOR GEOGRAPHIC RECLASSIFICATION

Pub. L. 106-554, Sec. 1(a)(6) [title III, Sec. 315], Dec. 21,

2000, 114 Stat. 2763, 2763A-500, provided that:

"(a) In General. - The Secretary of Health and Human Services may

establish a procedure for the geographic reclassification of a

skilled nursing facility for purposes of payment for covered

skilled nursing facility services under the prospective payment

system established under section 1888(e) of the Social Security Act

(42 U.S.C. 1395yy(e)). Such procedure may be based upon the method

for geographic reclassifications for inpatient hospitals

established under section 1886(d)(10) of the Social Security Act

(42 U.S.C. 1395ww(d)(10)).

"(b) Requirement for Skilled Nursing Facility Wage Data. - In no

case may the Secretary implement the procedure under subsection (a)

before such time as the Secretary has collected data necessary to

establish an area wage index for skilled nursing facilities based

on wage data from such facilities."

REPORT TO CONGRESS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title I, Sec. 105(c)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-328, provided that: "Not later

than March 1, 2001, the Secretary of Health and Human Services

shall assess the resource use of patients of skilled nursing

facilities furnishing services under the medicare program who are

immuno-compromised secondary to an infectious disease, with

specific diagnoses as specified by the Secretary (under paragraph

(12)(C), as added by subsection (a), of section 1888(e) of the

Social Security Act (42 U.S.C. 1395yy(e))) to determine whether any

permanent adjustments are needed to the RUGs to take into account

the resource uses and costs of these patients."

MEDICAL REVIEW PROCESS

Section 4432(c) of Pub. L. 105-33 provided that: "In order to

ensure that medicare beneficiaries are furnished appropriate

services in skilled nursing facilities, the Secretary of Health and

Human Services shall establish and implement a thorough medical

review process to examine the effects of the amendments made by

this section [amending this section and sections 1395i-3, 1395k,

1395l, 1395u, 1395x, 1395y, 1395cc, and 1395tt of this title] on

the quality of covered skilled nursing facility services furnished

to medicare beneficiaries. In developing such a medical review

process, the Secretary shall place a particular emphasis on the

quality of non-routine covered services and physicians' services

for which payment is made under title XVIII of the Social Security

Act [this subchapter]."

CONSTRUCTION OF WAGE INDEX FOR SKILLED NURSING FACILITIES

Pub. L. 103-432, title I, Sec. 106(a), Oct. 31, 1994, 108 Stat.

4405, provided that: "Not later than 1 year after the date of the

enactment of this Act [Oct. 31, 1994], the Secretary of Health and

Human Services shall begin to collect data on employee compensation

and paid hours of employment in skilled nursing facilities for the

purpose of constructing a skilled nursing facility wage index

adjustment to the routine service cost limits required under

section 1888(a)(4) of the Social Security Act [subsec. (a)(4) of

this section]."

NO CHANGE IN LIMITS ON PER DIEM SERVICE COSTS FOR EXTENDED CARE

SERVICES FOR FISCAL YEARS 1994 AND 1995

Section 13503(a)(1) of Pub. L. 103-66 provided that: "The

Secretary of Health and Human Services may not provide for any

change in the limits on per diem routine service costs for extended

care services under section 1888 of the Social Security Act [this

section] for cost reporting periods beginning during fiscal years

1994 and 1995, except as may be necessary to take into account the

amendments made by paragraph (3)(A) [amending this section]. The

effect of the preceding sentence shall not be considered by the

Secretary in making adjustments pursuant to section 1888(c) of such

Act to the payment limits for such services during such fiscal

years."

NO CHANGE IN PROSPECTIVE PAYMENTS FOR SERVICES FURNISHED DURING

FISCAL YEARS 1994 AND 1995

Section 13503(b) of Pub. L. 103-66 provided that: "The Secretary

of Health and Human Services may not change the amount of any

prospective payment paid to a skilled nursing facility under

section 1888(d) of the Social Security Act [subsec. (d) of this

section] for services furnished during cost reporting periods

beginning during fiscal years 1994 and 1995, except as may be

necessary to take into account the amendment made by subsection

(c)(1)(A) [amending section 1395x of this title]."

PROSPECTIVE PAYMENT SYSTEM FOR SKILLED NURSING FACILITY SERVICES

Section 4008(k) of Pub. L. 101-508 provided that:

"(1) Development of proposal. - The Secretary of Health and Human

Services shall develop a proposal to modify the current system

under which skilled nursing facilities receive payment for extended

care services under part A [part A of this subchapter] of the

medicare program or a proposal to replace such system with a system

under which such payments would be made on the basis of

prospectively determined rates. In developing any proposal under

this paragraph to replace the current system with a prospective

payment system, the Secretary shall -

"(A) take into consideration the need to provide for

appropriate limits on increases in expenditures under the

medicare program without jeopardizing access to extended care

services for individuals unable to care for themselves;

"(B) provide for adjustments to prospectively determined rates

to account for changes in a facility's case mix, volume of cases,

and the development of new technologies and standards of medical

practice;

"(C) take into consideration the need to increase the payment

otherwise made under such system in the case of services provided

to patients whose length of stay or costs of treatment greatly

exceed the length of stay or cost of treatment provided for under

the applicable prospectively determined payment rate;

"(D) take into consideration the need to adjust payments under

the system to take into account factors such as a

disproportionate share of low-income patients, differences in

wages and wage-related costs among facilities located in various

geographic areas, and other factors the Secretary considers

appropriate; and

"(E) take into consideration the appropriateness of classifying

patients and payments upon functional disability, cognitive

impairment, and other patient characteristics.

"(2) Reports. - (A) By not later than April 1, 1991, the

Secretary (acting through the Administrator of the Health Care

Financing Administration) shall submit any research studies to be

used in developing the proposal under paragraph (1) to the

Committee on Finance of the Senate and the Committee on Ways and

Means of the House of Representatives.

"(B) By not later than September 1, 1991, the Secretary shall

submit the proposal developed under paragraph (1) to the Committee

on Finance of the Senate and the Committee on Ways and Means of the

House of Representatives.

"(C) By not later than March 1, 1992, the Prospective Payment

Assessment Commission shall submit an analysis of and comments on

the proposal developed under paragraph (1) to the Committee on

Finance of the Senate and the Committee on Ways and Means of the

House of Representatives."

USE OF MORE RECENT DATA REGARDING ROUTINE SERVICE COSTS OF SKILLED

NURSING FACILITIES

Pub. L. 101-239, title VI, Sec. 6024, Dec. 19, 1989, 103 Stat.

2167, as amended by Pub. L. 101-508, title IV, Sec. 4008(e)(1),

Nov. 5, 1990, 104 Stat. 1388-45, provided that: "The Secretary of

Health and Human Services shall determine mean per diem routine

service costs for freestanding and hospital based skilled nursing

facilities under section 1888(a) of the Social Security Act

[subsec. (a) of this section] for cost reporting periods beginning

on or after October 1, 1989, in accordance with regulations

published by the Secretary that require the use of cost reports

submitted by skilled nursing facilities for cost reporting periods

beginning not earlier than October 1, 1985. The Secretary shall

update such costs under such section for cost reporting periods

beginning on or after October 1, 1989, by using cost reports

submitted by skilled nursing facilities for cost reporting periods

ending not earlier than January 31, 1988, and not later than

December 31, 1988."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395i-3, 1395l, 1395u,

1395x, 1395y, 1395cc, 1395tt of this title.

-End-

-CITE-

42 USC Sec. 1395zz 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395zz. Repealed. Pub. L. 103-432, title I, Sec. 171(j)(3),

Oct. 31, 1994, 108 Stat. 4451

-MISC1-

Section, act Aug. 14, 1935, ch. 531, title XVIII, Sec. 1889, as

added Nov. 5, 1990, Pub. L. 101-508, title IV, Sec. 4361(a), 104

Stat. 1388-141, related to medicare and medigap information by

telephone.

A prior section 1395zz, act Aug. 14, 1935, ch. 531, title XVIII,

Sec. 1889, formerly Sec. 1833(f), as added Jan. 2, 1968, Pub. L.

90-248, title I, Sec. 132(b), 81 Stat. 850, and amended Oct. 30,

1972, Pub. L. 92-603, title II, Sec. 245(d), 86 Stat. 1424; Oct.

25, 1977, Pub. L. 95-142, Sec. 16(a), 91 Stat. 1200; renumbered

Sec. 1889 and amended July 18, 1984, Pub. L. 98-369, div. B, title

III, Sec. 2321(d), 98 Stat. 1084, provided for purchase of durable

medical equipment, covering (a) lease-purchase basis or rental and

determination by Secretary, (b) waiver of coinsurance amount in

purchase of used equipment, (c) reimbursement procedures, and (d)

encouragement of lease-purchase basis, prior to repeal by Pub. L.

100-203, title IV, Sec. 4062(d)(5), (e), Dec. 22, 1987, 101 Stat.

1330-109, applicable to covered items (other than oxygen and oxygen

equipment) furnished on or after Jan. 1, 1989, and to oxygen and

oxygen equipment furnished on or after June 1, 1989.

EFFECTIVE DATE OF REPEAL

Repeal effective as if included in the enactment of Pub. L.

101-508, see section 171(l) of Pub. L. 103-432, set out as an

Effective Date of 1994 Amendment note under section 1395ss of this

title.

-End-

-CITE-

42 USC Sec. 1395aaa 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395aaa. Transferred

-COD-

CODIFICATION

Section, act Aug. 14, 1935, ch. 531, title XVIII, Sec. 1890, as

added Aug. 18, 1987, Pub. L. 100-93, Sec. 10, 101 Stat. 696, which

related to limitation of liability of beneficiaries with respect to

services furnished by excluded individuals and entities, was

amended and transferred to section 1862(e)(2) of act Aug. 14, 1935,

by Pub. L. 100-360, title IV, Sec. 411(i)(4)(D)(ii), July 1, 1988,

102 Stat. 790, as amended by Pub. L. 100-485, title VI, Sec.

608(d)(24)(C)(ii), Oct. 13, 1988, 102 Stat. 2421, and is classified

to section 1395y(e)(2) of this title.

-End-

-CITE-

42 USC Sec. 1395bbb 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395bbb. Conditions of participation for home health agencies;

home health quality

-STATUTE-

(a) Conditions of participation; protection of individual rights;

notification of State entities; use of home health aides; medical

equipment; individual's plan of care; compliance with Federal,

State, and local laws and regulations

The conditions of participation that a home health agency is

required to meet under this subsection are as follows:

(1) The agency protects and promotes the rights of each

individual under its care, including each of the following

rights:

(A) The right to be fully informed in advance about the care

and treatment to be provided by the agency, to be fully

informed in advance of any changes in the care or treatment to

be provided by the agency that may affect the individual's

well-being, and (except with respect to an individual adjudged

incompetent) to participate in planning care and treatment or

changes in care or treatment.

(B) The right to voice grievances with respect to treatment

or care that is (or fails to be) furnished without

discrimination or reprisal for voicing grievances.

(C) The right to confidentiality of the clinical records

described in section 1395x(o)(3) of this title.

(D) The right to have one's property treated with respect.

(E) The right to be fully informed orally and in writing (in

advance of coming under the care of the agency) of -

(i) all items and services furnished by (or under

arrangements with) the agency for which payment may be made

under this subchapter,

(ii) the coverage available for such items and services

under this subchapter, subchapter XIX of this chapter, and

any other Federal program of which the agency is reasonably

aware,

(iii) any charges for items and services not covered under

this subchapter and any charges the individual may have to

pay with respect to items and services furnished by (or under

arrangements with) the agency, and

(iv) any changes in the charges or items and services

described in clause (i), (ii), or (iii).

(F) The right to be fully informed in writing (in advance of

coming under the care of the agency) of the individual's rights

and obligations under this subchapter.

(G) The right to be informed of the availability of the State

home health agency hot-line established under section 1395aa(a)

of this title.

(2) The agency notifies the State entity responsible for the

licensing or certification of the agency of a change in -

(A) the persons with an ownership or control interest (as

defined in section 1320a-3(a)(3) of this title) in the agency,

(B) the persons who are officers, directors, agents, or

managing employees (as defined in section 1320a-5(b) of this

title) of the agency, and

(C) the corporation, association, or other company

responsible for the management of the agency.

Such notice shall be given at the time of the change and shall

include the identity of each new person or company described in

the previous sentence.

(3)(A) The agency must not use as a home health aide (on a

full-time, temporary, per diem, or other basis), any individual

to provide items or services described in section 1395x(m) of

this title on or after January 1, 1990, unless the individual -

(i) has completed a training and competency evaluation

program, or a competency evaluation program, that meets the

minimum standards established by the Secretary under

subparagraph (D), and

(ii) is competent to provide such items and services.

For purposes of clause (i), an individual is not considered to

have completed a training and competency evaluation program, or a

competency evaluation program if, since the individual's most

recent completion of such a program, there has been a continuous

period of 24 consecutive months during none of which the

individual provided items and services described in section

1395x(m) of this title for compensation.

(B)(i) The agency must provide, with respect to individuals

used as a home health aide by the agency as of July 1, 1989, for

a competency evaluation program (as described in subparagraph

(A)(i)) and such preparation as may be necessary for the

individual to complete such a program by January 1, 1990.

(ii) The agency must provide such regular performance review

and regular in-service education as assures that individuals used

to provide items and services described in section 1395x(m) of

this title are competent to provide those items and services.

(C) The agency must not permit an individual, other than in a

training and competency evaluation program that meets the minimum

standards established by the Secretary under subparagraph (D), to

provide items or services of a type for which the individual has

not demonstrated competency.

(D)(i) The Secretary shall establish minimum standards for the

programs described in subparagraph (A) by not later than October

1, 1988.

(ii) Such standards shall include the content of the

curriculum, minimum hours of training, qualification of

instructors, and procedures for determination of competency.

(iii) Such standards may permit approval of programs offered by

or in home health agencies, as well as outside agencies

(including employee organizations), and of programs in effect on

December 22, 1987; except that they may not provide for the

approval of a program offered by or in a home health agency

which, within the previous 2 years -

(I) has been determined to be out of compliance with

subparagraph (A), (B), or (C);

(II) has been subject to an extended (or partial extended)

survey under subsection (c)(2)(D) of this section;

(III) has been assessed a civil money penalty described in

subsection (f)(2)(A)(i) of this section of not less than

$5,000; or

(IV) has been subject to the remedies described in subsection

(e)(1) of this section or in clauses (ii) or (iii) of

subsection (f)(2)(A) of this section.

(iv) Such standards shall permit a determination that an

individual who has completed (before July 1, 1989) a training and

competency evaluation program or a competency evaluation program

shall be deemed for purposes of subparagraph (A) to have

completed a program that is approved by the Secretary under the

standards established under this subparagraph if the Secretary

determines that, at the time the program was offered, the program

met such standards.

(E) In this paragraph, the term "home health aide" means any

individual who provides the items and services described in

section 1395x(m) of this title, but does not include an

individual -

(i) who is a licensed health professional (as defined in

subparagraph (F)), or

(ii) who volunteers to provide such services without monetary

compensation.

(F) In this paragraph, the term "licensed health professional"

means a physician, physician assistant, nurse practitioner,

physical, speech, or occupational therapist, physical or

occupational therapy assistant, registered professional nurse,

licensed practical nurse, or licensed or certified social worker.

(4) The agency includes an individual's plan of care required

under section 1395x(m) of this title as part of the clinical

records described in section 1395x(o)(3) of this title.

(5) The agency operates and provides services in compliance

with all applicable Federal, State, and local laws and

regulations (including the requirements of section 1320a-3 of

this title) and with accepted professional standards and

principles which apply to professionals providing items and

services in such an agency.

(6) The agency complies with the requirement of section

1395cc(f) of this title (relating to maintaining written policies

and procedures respecting advance directives).

(b) Duty of Secretary

It is the duty and responsibility of the Secretary to assure that

the conditions of participation and requirements specified in or

pursuant to section 1395x(o) of this title and subsection (a) of

this section and the enforcement of such conditions and

requirements are adequate to protect the health and safety of

individuals under the care of a home health agency and to promote

the effective and efficient use of public moneys.

(c) Surveys of home health agencies

(1) Any agreement entered into or renewed by the Secretary

pursuant to section 1395aa of this title relating to home health

agencies shall provide that the appropriate State or local agency

shall conduct, without any prior notice, a standard survey of each

home health agency. Any individual who notifies (or causes to be

notified) a home health agency of the time or date on which such a

survey is scheduled to be conducted is subject to a civil money

penalty of not to exceed $2,000. The provisions of section 1320a-7a

of this title (other than subsections (a) and (b)) shall apply to a

civil money penalty under this paragraph in the same manner as such

provisions apply to a penalty or proceeding under section 1320a-7a

of this title. The Secretary shall review each State's or local

agency's procedures for scheduling and conduct of standard surveys

to assure that the State or agency has taken all reasonable steps

to avoid giving notice of such a survey through the scheduling

procedures and the conduct of the surveys themselves.

(2)(A) Except as provided in subparagraph (B), each home health

agency shall be subject to a standard survey not later than 36

months after the date of the previous standard survey conducted

under this paragraph. The Secretary shall establish a frequency for

surveys of home health agencies within this 36-month interval

commensurate with the need to assure the delivery of quality home

health services.

(B) If not otherwise conducted under subparagraph (A), a standard

survey (or an abbreviated standard survey) of an agency -

(i) may be conducted within 2 months of any change of

ownership, administration, or management of the agency to

determine whether the change has resulted in any decline in the

quality of care furnished by the agency, and

(ii) shall be conducted within 2 months of when a significant

number of complaints have been reported with respect to the

agency to the Secretary, the State, the entity responsible for

the licensing of the agency, the State or local agency

responsible for maintaining a toll-free hotline and investigative

unit (under section 1395aa(a) of this title), or any other

appropriate Federal, State, or local agency.

(C) A standard survey conducted under this paragraph with respect

to a home health agency -

(i) shall include (to the extent practicable), for a case-mix

stratified sample of individuals furnished items or services by

the agency -

(I) visits to the homes of such individuals, but only with

the consent of such individuals, for the purpose of evaluating

(in accordance with a standardized reproducible assessment

instrument (or instruments) approved by the Secretary under

subsection (d) of this section) the extent to which the quality

and scope of items and services furnished by the agency

attained and maintained the highest practicable functional

capacity of each such individual as reflected in such

individual's written plan of care required under section

1395x(m) of this title and clinical records required under

section 1395x(o)(3) of this title; and

(II) a survey of the quality of care and services furnished

by the agency as measured by indicators of medical, nursing,

and rehabilitative care;

(ii) shall be based upon a protocol that is developed, tested,

and validated by the Secretary not later than January 1, 1989;

and

(iii) shall be conducted by an individual -

(I) who meets minimum qualifications established by the

Secretary not later than July 1, 1989,

(II) who is not serving (or has not served within the

previous 2 years) as a member of the staff of, or as a

consultant to, the home health agency surveyed respecting

compliance with the conditions of participation specified in or

pursuant to section 1395x(o) of this title or subsection (a) of

this section, and

(III) who has no personal or familial financial interest in

the home health agency surveyed.

(D) Each home health agency that is found, under a standard

survey, to have provided substandard care shall be subject to an

extended survey to review and identify the policies and procedures

which produced such substandard care and to determine whether the

agency has complied with the conditions of participation specified

in or pursuant to section 1395x(o) of this title or subsection (a)

of this section. Any other agency may, at the Secretary's or

State's discretion, be subject to such an extended survey (or a

partial extended survey). The extended survey shall be conducted

immediately after the standard survey (or, if not practical, not

later than 2 weeks after the date of completion of the standard

survey).

(E) Nothing in this paragraph shall be construed as requiring an

extended (or partial extended) survey as a prerequisite to imposing

a sanction against an agency under subsection (e) of this section

on the basis of the findings of a standard survey.

(d) Assessment process; reports to Congress

(1) Not later than January 1, 1989, the Secretary shall designate

an assessment instrument (or instruments) for use by an agency in

complying with subsection (c)(2)(C)(I) (!1) of this section.

(2)(A) Not later than January 1, 1992, the Secretary shall -

(i) evaluate the assessment process,

(ii) report to Congress on the results of such evaluation, and

(iii) based on such evaluation, make such modifications in the

assessment process as the Secretary determines are appropriate.

(B) The Secretary shall periodically update the evaluation

conducted under subparagraph (A), report the results of such update

to Congress, and, based on such update, make such modifications in

the assessment process as the Secretary determines are appropriate.

(3) The Secretary shall provide for the comprehensive training of

State and Federal surveyors in matters relating to the performance

of standard and extended surveys under this section, including the

use of any assessment instrument (or instruments) designated under

paragraph (1).

(e) Enforcement

(1) If the Secretary determines on the basis of a standard,

extended, or partial extended survey or otherwise, that a home

health agency that is certified for participation under this

subchapter is no longer in compliance with the requirements

specified in or pursuant to section 1395x(o) of this title or

subsection (a) of this section and determines that the deficiencies

involved immediately jeopardize the health and safety of the

individuals to whom the agency furnishes items and services, the

Secretary shall take immediate action to remove the jeopardy and

correct the deficiencies through the remedy specified in subsection

(f)(2)(A)(iii) of this section or terminate the certification of

the agency, and may provide, in addition, for 1 or more of the

other remedies described in subsection (f)(2)(A) of this section.

(2) If the Secretary determines on the basis of a standard,

extended, or partial extended survey or otherwise, that a home

health agency that is certified for participation under this

subchapter is no longer in compliance with the requirements

specified in or pursuant to section 1395x(o) of this title or

subsection (a) of this section and determines that the deficiencies

involved do not immediately jeopardize the health and safety of the

individuals to whom the agency furnishes items and services, the

Secretary may (for a period not to exceed 6 months) impose

intermediate sanctions developed pursuant to subsection (f) of this

section, in lieu of terminating the certification of the agency.

If, after such a period of intermediate sanctions, the agency is

still no longer in compliance with the requirements specified in or

pursuant to section 1395x(o) of this title or subsection (a) of

this section, the Secretary shall terminate the certification of

the agency.

(3) If the Secretary determines that a home health agency that is

certified for participation under this subchapter is in compliance

with the requirements specified in or pursuant to section 1395x(o)

of this title or subsection (a) of this section but, as of a

previous period, did not meet such requirements, the Secretary may

provide for a civil money penalty under subsection (f)(2)(A)(i) of

this section for the days in which it finds that the agency was not

in compliance with such requirements.

(4) The Secretary may continue payments under this subchapter

with respect to a home health agency not in compliance with the

requirements specified in or pursuant to section 1395x(o) of this

title or subsection (a) of this section over a period of not longer

than 6 months, if -

(A) the State or local survey agency finds that it is more

appropriate to take alternative action to assure compliance of

the agency with the requirements than to terminate the

certification of the agency,

(B) the agency has submitted a plan and timetable for

corrective action to the Secretary for approval and the Secretary

approves the plan of corrective action, and

(C) the agency agrees to repay to the Federal Government

payments received under this subparagraph if the corrective

action is not taken in accordance with the approved plan and

timetable.

The Secretary shall establish guidelines for approval of corrective

actions requested by home health agencies under this subparagraph.

(f) Intermediate sanctions

(1) The Secretary shall develop and implement, by not later than

April 1, 1989 -

(A) a range of intermediate sanctions to apply to home health

agencies under the conditions described in subsection (e) of this

section, and

(B) appropriate procedures for appealing determinations

relating to the imposition of such sanctions.

(2)(A) The intermediate sanctions developed under paragraph (1)

shall include -

(i) civil money penalties in an amount not to exceed $10,000

for each day of noncompliance,

(ii) suspension of all or part of the payments to which a home

health agency would otherwise be entitled under this subchapter

with respect to items and services furnished by a home health

agency on or after the date on which the Secretary determines

that intermediate sanctions should be imposed pursuant to

subsection (e)(2) of this section, and

(iii) the appointment of temporary management to oversee the

operation of the home health agency and to protect and assure the

health and safety of the individuals under the care of the agency

while improvements are made in order to bring the agency into

compliance with all the requirements specified in or pursuant to

section 1395x(o) of this title or subsection (a) of this section.

The provisions of section 1320a-7a of this title (other than

subsections (a) and (b)) shall apply to a civil money penalty under

clause (i) in the same manner as such provisions apply to a penalty

or proceeding under section 1320a-7a(a) of this title. The

temporary management under clause (iii) shall not be terminated

until the Secretary has determined that the agency has the

management capability to ensure continued compliance with all the

requirements referred to in that clause.

(B) The sanctions specified in subparagraph (A) are in addition

to sanctions otherwise available under State or Federal law and

shall not be construed as limiting other remedies, including any

remedy available to an individual at common law.

(C) A finding to suspend payment under subparagraph (A)(ii) shall

terminate when the Secretary finds that the home health agency is

in substantial compliance with all the requirements specified in or

pursuant to section 1395x(o) of this title and subsection (a) of

this section.

(3) The Secretary shall develop and implement, by not later than

April 1, 1989, specific procedures with respect to the conditions

under which each of the intermediate sanctions developed under

paragraph (1) is to be applied, including the amount of any fines

and the severity of each of these sanctions. Such procedures shall

be designed so as to minimize the time between identification of

deficiencies and imposition of these sanctions and shall provide

for the imposition of incrementally more severe fines for repeated

or uncorrected deficiencies.

(g) Payment on basis of location of service

A home health agency shall submit claims for payment for home

health services under this subchapter only on the basis of the

geographic location at which the service is furnished, as

determined by the Secretary.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1891, as added and

amended Pub. L. 100-203, title IV, Secs. 4021(b), 4022(a), 4023(a),

Dec. 22, 1987, 101 Stat. 1330-67, 1330-69, 1330-71; Pub. L.

100-360, title IV, Sec. 411(d)(1)(A), (2)-(3)(B), July 1, 1988, 102

Stat. 773, 774; Pub. L. 100-485, title VI, Sec. 608(d)(20)(A), Oct.

13, 1988, 102 Stat. 2419; Pub. L. 101-508, title IV, Secs.

4206(d)(2), 4207(i)(1), formerly 4027(i)(1), Nov. 5, 1990, 104

Stat. 1388-116, 1388-123, renumbered Pub. L. 103-432, title I, Sec.

160(d)(4), Oct. 31, 1994, 108 Stat. 4444; Pub. L. 104-134, title I,

Sec. 101(d) [title V, Sec. 516(a)], Apr. 26, 1996, 110 Stat.

1321-211, 1321-246; renumbered title I, Pub. L. 104-140, Sec. 1(a),

May 2, 1996, 110 Stat. 1327; Pub. L. 105-33, title IV, Sec.

4604(a), Aug. 5, 1997, 111 Stat. 472.)

-MISC1-

AMENDMENTS

1997 - Subsec. (g). Pub. L. 105-33 added subsec. (g).

1996 - Subsec. (c)(2)(A). Pub. L. 104-134 substituted "36 months"

for "15 months" in first sentence and amended last sentence

generally. Prior to amendment, last sentence read as follows: "The

statewide average interval between standard surveys of any home

health agency shall not exceed 12 months."

1990 - Subsec. (a)(3)(D)(iii). Pub. L. 101-508, Sec. 4207(i)(1),

formerly Sec. 4027(i)(1), as renumbered by Pub. L. 103-432,

substituted "which, within the previous 2 years - " and subcls. (I)

to (IV) for "which has been determined to be out of compliance with

the requirements specified in or pursuant to section 1395x(o) of

this title or subsection (a) of this section within the previous 2

years."

Subsec. (a)(6). Pub. L. 101-508, Sec. 4206(d)(2), added par. (6).

1988 - Subsec. (a)(3)(A). Pub. L. 100-360, Sec. 411(d)(1)(A)(i),

struck out "who is not a licensed health care professional (as

defined in subparagraph (F))" after "any individual" in

introductory provisions.

Subsec. (a)(3)(F). Pub. L. 100-360, Sec. 411(d)(1)(A)(ii),

inserted "physical or occupational therapy assistant," after

"occupational therapist".

Subsec. (a)(4) to (6). Pub. L. 100-360, Sec. 411(d)(1)(A)(iii),

redesignated pars. (5) and (6) as (4) and (5), respectively, and

struck out former par. (4) which read as follows: "With respect to

durable medical equipment furnished to individuals for whom the

agency provides items and services, suppliers of such equipment do

not use (on a full-time, temporary, per diem, or other basis) any

individual who does not meet minimum training standards

(established by the Secretary by October 1, 1988) for the

demonstration and use of any such equipment furnished to

individuals with respect to whom payments may be made under this

subchapter."

Subsec. (c)(1). Pub. L. 100-360, Sec. 411(d)(2)(A), as amended by

Pub. L. 100-485, Sec. 608(d)(20)(A), amended third sentence

generally. Prior to amendment, third sentence read as follows: "The

Secretary shall provide for imposition of civil money penalties

under this clause in a manner similar to that for the imposition of

civil money penalties under section 1320a-7a of this title."

Subsec. (d)(2)(A). Pub. L. 100-360, Sec. 411(d)(2)(B),

substituted "1992" for "1991" in introductory provisions.

Subsecs. (e), (f). Pub. L. 100-360, Sec. 411(d)(3)(A), made

technical amendment to Pub. L. 100-203, Sec. 4023(a), see 1987

Amendment note below.

Subsec. (f)(2)(A). Pub. L. 100-360, Sec. 411(d)(3)(B)(iii),

inserted before last sentence "The provisions of section 1320a-7a

of this title (other than subsections (a) and (b)) shall apply to a

civil money penalty under clause (i) in the same manner as such

provisions apply to a penalty or proceeding under section

1320a-7a(a) of this title."

Pub. L. 100-360, Sec. 411(d)(3)(B)(i), realigned the margins of

cls. (i) to (iii) and concluding provisions.

Subsec. (f)(2)(A)(i). Pub. L. 100-360, Sec. 411(d)(3)(B)(ii),

substituted "in an amount not to exceed $10,000 for each day of

noncompliance" for "for each day of noncompliance".

1987 - Subsecs. (c), (d). Pub. L. 100-203, Sec. 4022(a), added

subsecs. (c) and (d).

Subsecs. (e), (f). Pub. L. 100-203, Sec. 4023(a), as amended by

Pub. L. 100-360, Sec. 411(d)(3)(A), added subsecs. (e) and (f).

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by Pub. L. 105-33 applicable to cost reporting periods

beginning on or after Oct. 1, 1997, see section 4604(c) of Pub. L.

105-33, set out as a note under section 1395x of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 4206(d)(2) of Pub. L. 101-508 applicable

with respect to services furnished on or after the first day of the

first month beginning more than 1 year after Nov. 5, 1990, see

section 4206(e)(1) of Pub. L. 101-508, set out as a note under

section 1395i-3 of this title.

Section 4207(i)(1), formerly 4027(i)(1), of Pub. L. 101-508, as

renumbered by Pub. L. 103-432, title I, Sec. 160(d)(4), Oct. 31,

1994, 108 Stat. 4444, provided that the amendment made by that

section is effective as if included in the enactment of the Omnibus

Budget Reconciliation Act of 1987, Pub. L. 100-203.

Section 4207(i)(2), formerly 4027(i)(2), of Pub. L. 101-508, as

renumbered and amended by Pub. L. 103-432, title I, Sec. 160(d)(4),

(11), Oct. 31, 1994, 108 Stat. 4444, provided that: "The amendments

made by paragraph (1) [amending this section] shall take effect as

if included in the enactment of the Omnibus Budget Reconciliation

Act of 1987 [Pub. L. 100-203], except that the Secretary may not

permit approval of a training and competency evaluation program or

a competency evaluation program offered by or in a home health

agency which, pursuant to any Federal or State law within the

2-year period beginning on October 1, 1988 -

"(i) had its participation terminated under title XVIII of the

Social Security Act [this subchapter];

"(ii) was assessed a civil money penalty not less than $5,000

for deficiencies in applicable quality standards for home health

agencies;

"(iii) was subject to suspension by the Secretary of all or

part of the payments to which it would otherwise be entitled

under such title;

"(iv) operated under a temporary management appointed to

oversee the operation of the agency and to ensure the health and

safety of the agency's patients; or

"(v) pursuant to State action, was closed or had its patients

transferred."

EFFECTIVE DATE OF 1988 AMENDMENTS

Amendment by Pub. L. 100-485 effective as if included in the

enactment of the Medicare Catastrophic Coverage Act of 1988, Pub.

L. 100-360, see section 608(g)(1) of Pub. L. 100-485, set out as a

note under section 704 of this title.

Except as specifically provided in section 411 of Pub. L.

100-360, amendment by Pub. L. 100-360, as it relates to a provision

in the Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-203,

effective as if included in the enactment of that provision in Pub.

L. 100-203, see section 411(a) of Pub. L. 100-360, set out as a

Reference to OBRA; Effective Date note under section 106 of Title

1, General Provisions.

EFFECTIVE DATE OF 1987 AMENDMENT

Section 4022(b) of Pub. L. 100-203 provided that: "Except as

otherwise specifically provided in section 1891(d) of the Social

Security Act [subsec. (d) of this section] (as added by subsection

(a)), the amendment made by subsection (a) [amending this section]

shall become effective on the first day of the 18th calendar month

to begin after the date of the enactment of this Act [Dec. 22,

1987]."

Section 4023(b) of Pub. L. 100-203, as amended by Pub. L.

100-360, title IV, Sec. 411(d)(3)(C), July 1, 1988, 102 Stat. 774,

provided that: "Except as otherwise specifically provided in

subsections (e) and (f) of section 1891 of the Social Security Act

[subsecs. (e) and (f) of this section] (as added by subsection

(a)), the amendment made by subsection (a) [amending this section]

shall become effective on the first day of the 18th calendar month

to begin after the date of the enactment of this Act [Dec. 22,

1987], and no intermediate sanction described in section

1891(f)(2)(A) of such Act [subsec. (f)(2)(A) of this section] shall

be imposed for violations occurring before such effective date."

EFFECTIVE DATE

Section applicable to home health agencies as of the first day of

the 18th calendar month that begins after Dec. 22, 1987, except as

otherwise provided, see section 4021(c) of Pub. L. 100-203, set out

as an Effective Date of 1987 Amendment note under section 1395x of

this title.

TREATMENT OF BRANCH OFFICES; GAO STUDY ON SUPERVISION OF HOME

HEALTH CARE PROVIDED IN ISOLATED RURAL AREAS

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 506], Dec. 21, 2000,

114 Stat. 2763, 2763A-531, provided that:

"(a) Treatment of Branch Offices. -

"(1) In general. - Notwithstanding any other provision of law,

in determining for purposes of title XVIII of the Social Security

Act [this subchapter] whether an office of a home health agency

constitutes a branch office or a separate home health agency,

neither the time nor distance between a parent office of the home

health agency and a branch office shall be the sole determinant

of a home health agency's branch office status.

"(2) Consideration of forms of technology in definition of

supervision. - The Secretary of Health and Human Services may

include forms of technology in determining what constitutes

'supervision' for purposes of determining a home heath [sic]

agency's branch office status under paragraph (1).

"(b) GAO Study. -

"(1) Study. - The Comptroller General of the United States

shall conduct a study of the provision of adequate supervision to

maintain quality of home health services delivered under the

medicare program under title XVIII of the Social Security Act

[this subchapter] in isolated rural areas. The study shall

evaluate the methods that home health agency branches and

subunits use to maintain adequate supervision in the delivery of

services to clients residing in those areas, how these methods of

supervision compare to requirements that subunits independently

meet medicare conditions of participation, and the resources

utilized by subunits to meet such conditions.

"(2) Report. - Not later than January 1, 2002, the Comptroller

General shall submit to Congress a report on the study conducted

under paragraph (1). The report shall include recommendations on

whether exceptions are needed for subunits and branches of home

health agencies under the medicare program to maintain access to

the home health benefit or whether alternative policies should be

developed to assure adequate supervision and access and

recommendations on whether a national standard for supervision is

appropriate."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395x, 1395cc of this

title.

-FOOTNOTE-

(!1) So in original. Probably should be subsection

"(c)(2)(C)(i)(I)".

-End-

-CITE-

42 USC Sec. 1395ccc 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395ccc. Offset of payments to individuals to collect past-due

obligations arising from breach of scholarship and loan contract

-STATUTE-

(a) In general

(1)(A) Subject to subparagraph (B), the Secretary shall enter

into an agreement under this section with any individual who, by

reason of a breach of a contract entered into by such individual

pursuant to the National Health Service Corps Scholarship Program,

the Physician Shortage Area Scholarship Program, or the Health

Education Assistance Loan Program, owes a past-due obligation to

the United States (as defined in subsection (b) of this section).

(B) The Secretary shall not enter into an agreement with an

individual under this section to the extent -

(i)(I) the individual has entered into a contract with the

Secretary pursuant to section 204(a)(1) of the Public Health

Service Amendments of 1987, and

(II) the individual has fulfilled or (as determined by the

Secretary) is fulfilling the terms of such contract; or

(ii) the liability of the individual under such section

204(a)(1) has otherwise been relieved under such section; or

(iii) the individual is performing such physician's (!1)

service obligation under a forbearance agreement entered into

with the Secretary under subpart II of part D of title III of the

Public Health Service Act [42 U.S.C. 254d et seq.].

(2) The agreement under this section shall provide that -

(A) deductions shall be made from the amounts otherwise payable

to the individual under this subchapter, in accordance with a

formula and schedule agreed to by the Secretary and the

individual, until such past-due obligation (and accrued interest)

have been repaid;

(B) payment under this subchapter for services provided by such

individual shall be made only on an assignment-related basis;

(C) if the individual does not provide services, for which

payment would otherwise be made under this subchapter, of a

sufficient quantity to maintain the offset collection according

to the agreed upon formula and schedule -

(i) the Secretary shall immediately inform the Attorney

General, and the Attorney General shall immediately commence an

action to recover the full amount of the past-due obligation,

and

(ii) subject to paragraph (4), the Secretary shall

immediately exclude the individual from the program under this

subchapter, until such time as the entire past-due obligation

has been repaid.

(3) If the individual refuses to enter into an agreement or

breaches any provision of the agreement -

(A) the Secretary shall immediately inform the Attorney

General, and the Attorney General shall immediately commence an

action to recover the full amount of the past-due obligation, and

(B) subject to paragraph (4), the Secretary shall immediately

exclude the individual from the program under this subchapter,

until such time as the entire past-due obligation has been

repaid.

(4) The Secretary shall not exclude an individual pursuant to

paragraph (2)(C)(ii) or paragraph (3)(B) if such individual is a

sole community practitioner or sole source of essential specialized

services in a community if a State requests that the individual not

be excluded.

(b) Past-due obligation

For purposes of this section, a past-due obligation is any amount

-

(1) owed by an individual to the United States by reason of a

breach of a scholarship contract under section 338E of the Public

Health Service Act [42 U.S.C. 254o] or under subpart III of part

F of title VII of such Act (as in effect before October 1, 1976)

and which has not been paid by the deadline established by the

Secretary pursuant to such respective section, and has not been

canceled, waived, or suspended by the Secretary pursuant to such

section; or

(2) owed by an individual to the United States by reason of a

loan covered by Federal loan insurance under subpart I (!2) of

part C of title VII of the Public Health Service Act and payment

for which has not been cancelled, waived, or suspended by the

Secretary under such subpart.

(c) Collection under this section shall not be exclusive

This section shall not preclude the United States from applying

other provisions of law otherwise applicable to the collection of

obligations owed to the United States, including (but not limited

to) the use of tax refund offsets pursuant to section 3720A of

title 31 and the application of other procedures provided under

chapter 37 of title 31.

(d) Collection from providers and health maintenance organizations

(1) In the case of an individual who owes a past-due obligation,

and who is an employee of, or affiliated by a medical services

agreement with, a provider having an agreement under section 1395cc

of this title or a health maintenance organization or competitive

medical plan having a contract under section 1395l of this title or

section 1395mm of this title, the Secretary shall deduct the

amounts of such past-due obligation from amounts otherwise payable

under this subchapter to such provider, organization, or plan.

(2) Deductions shall be in accordance with a formula and schedule

agreed to by the Secretary, the individual and the provider,

organization, or plan. The deductions shall be made from the

amounts otherwise payable to the individual under this subchapter

as long as the individual continues to be employed or affiliated by

a medical services agreement.

(3) Such deduction shall not be made until 6 months after the

Secretary notifies the provider, organization, or plan of the

amount to be deducted and the particular physicians (!3) to whom

the deductions are attributable.

(4) A deduction made under this subsection shall relieve the

individual of the obligation (to the extent of the amount

collected) to the United States, but the provider, organization, or

plan shall have a right of action to collect from such individual

the amount deducted pursuant to this subsection (including

accumulated interest).

(5) No deduction shall be made under this subsection if, within

the 6-month period after notice is given to the provider,

organization, or plan, the individual pays the past-due obligation,

or ceases to be employed by the provider, organization, or plan.

(6) The Secretary shall also apply the provisions of this

subsection in the case of an individual who is a member of a group

practice, if such group practice submits bills under this program

as a group, rather than by individual physicians.(!3)

(e) Transfer from trust funds

Amounts equal to the amounts deducted pursuant to this section

shall be transferred from the Trust Fund from which the payment to

the individual, provider, or other entity would otherwise have been

made, to the general fund in the Treasury, and shall be credited as

payment of the past-due obligation of the individual from whom (or

with respect to whom) the deduction was made.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1892, as added Pub. L.

100-203, title IV, Sec. 4052(a), Dec. 22, 1987, 101 Stat. 1330-95;

amended Pub. L. 100-360, title IV, Sec. 411(f)(10)(A), (C)(i), July

1, 1988, 102 Stat. 780; Pub. L. 100-485, title VI, Sec.

608(d)(21)(E)-(H), Oct. 13, 1988, 102 Stat. 2420.)

-REFTEXT-

REFERENCES IN TEXT

Section 204(a)(1) of the Public Health Service Amendments of

1987, referred to in subsec. (a)(1)(B), is section 204(a)(1) of

Pub. L. 100-177, title II, Dec. 1, 1987, 101 Stat. 1000, which is

set out as a note under section 254o of this title.

The Public Health Service Act, referred to in subsecs.

(a)(1)(B)(iii) and (b), is act July 1, 1944, ch. 373, 58 Stat. 682,

as amended. Subpart II of part D of title III of the Act is

classified generally to subpart II (Sec. 254d et seq.) of part D of

subchapter II of chapter 6A of this title. Subpart I of part C of

title VII of the Act was classified generally to subpart I (Sec.

294 et seq.) of part C of subchapter V of chapter 6A of this title

and was omitted in the general revision of subchapter V by Pub. L.

102-408, title I, Sec. 102, Oct. 13, 1992, 106 Stat. 1994. See

subpart I (Sec. 292 et seq.) of part A of subchapter V of chapter

6A of this title. Subpart III of part F of title VII of the Public

Health Service Act (as in effect before October 1, 1976) was

classified to subpart III (Sec. 295g-21 et seq.) of part F of

subchapter V of chapter 6A of this title, prior to repeal by Pub.

L. 94-484, title IV, Sec. 409(a), Oct. 12, 1976, 90 Stat. 2290. For

complete classification of this Act to the Code, see Short Title

note set out under section 201 of this title and Tables.

-MISC1-

AMENDMENTS

1988 - Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(I), substituted

"individuals" for "physicians" and inserted "and loan" in section

catchline.

Subsec. (a)(1)(A). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(IV), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(H), inserted ", the

Physician Shortage Area Scholarship Program, or the Health

Education Assistance Loan Program".

Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as amended by Pub. L.

100-485, Sec. 608(d)(21)(G), substituted "individual" for

"physician" in two places.

Subsec. (a)(1)(B). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(G), substituted "an

individual" for "a physician" in introductory provisions and

"individual" for "physician" in cls. (i)(I) and (II), (ii), and

(iii).

Subsec. (a)(2)(A) to (C). Pub. L. 100-360, Sec.

411(f)(10)(C)(i)(II), as amended by Pub. L. 100-485, Sec.

608(d)(21)(G), substituted "individual" for "physician" wherever

appearing.

Subsec. (a)(2)(C)(ii). Pub. L. 100-360, Sec. 411(f)(10)(A)(i),

substituted "paragraph (4)" for "paragraph (3)".

Subsec. (a)(3). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(G), substituted

"individual" for "physician" in introductory provisions.

Subsec. (a)(3)(B). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(G), substituted

"individual" for "physician".

Pub. L. 100-360, Sec. 411(f)(10)(A)(i), substituted "paragraph

(4)" for "paragraph (3)".

Subsec. (a)(4). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(III),

substituted "community practitioner" for "community physician".

Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as amended by Pub. L.

100-485, Sec. 608(d)(21)(G), substituted "an individual" for "a

physician" and "such individual" for "such physician".

Pub. L. 100-360, Sec. 411(f)(10)(A)(iii), as amended by Pub. L.

100-360, Sec. 608(d)(21)(E), inserted before period at end "if a

State requests that the individual not be excluded".

Pub. L. 100-360, Sec. 411(f)(10)(A)(ii), substituted "exclude"

for "bar".

Subsec. (b). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(V), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(F)(i), substituted "or

under subpart III of part F of title VII of such Act (as in effect

before October 1, 1976) and which has not been paid by the deadline

established by the Secretary pursuant to such respective section"

for ", and (2) which has not been paid by the deadline established

by the Secretary pursuant to section 338E of the Public Health

Service Act".

Subsec. (b)(1). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(G), substituted "an

individual" for "a physician".

Subsec. (b)(2). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(VI), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(F)(i), added par. (2).

Subsec. (d)(1). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(G), substituted "an

individual" for "a physician".

Subsec. (d)(2). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(VII), as

added by Pub. L. 100-485, Sec. 608(d)(21)(F), substituted

"continues" for "continued".

Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as amended by Pub. L.

100-485, Sec. 608(d)(21)(G), substituted "individual" for

"physician" in three places.

Subsec. (d)(4) to (6). Pub. L. 100-360, Sec.

411(f)(10)(C)(i)(II), as amended by Pub. L. 100-485, Sec.

608(d)(21)(G), substituted "individual" for "physician" wherever

appearing.

Subsec. (e). Pub. L. 100-360, Sec. 411(f)(10)(C)(i)(II), as

amended by Pub. L. 100-485, Sec. 608(d)(21)(G), substituted

"individual" for "physician" in two places.

EFFECTIVE DATE OF 1988 AMENDMENTS

Amendment by Pub. L. 100-485 effective as if included in the

enactment of the Medicare Catastrophic Coverage Act of 1988, Pub.

L. 100-360, see section 608(g)(1) of Pub. L. 100-485, set out as a

note under section 704 of this title.

Except as specifically provided in section 411 of Pub. L.

100-360, amendment by section 411(f)(10)(A) of Pub. L. 100-360, as

it relates to a provision in the Omnibus Budget Reconciliation Act

of 1987, Pub. L. 100-203, effective as if included in the enactment

of that provision in Pub. L. 100-203, see section 411(a) of Pub. L.

100-360, set out as a Reference to OBRA; Effective Date note under

section 106 of Title 1, General Provisions.

Section 411(f)(10)(C)(iii) of Pub. L. 100-360 provided that: "The

Amendments made by this subparagraph [amending this section and

former section 294f of this title] shall be effective 30 days after

the date of the enactment of this Act [July 1, 1988]."

EFFECTIVE DATE

Section 4052(c) of Pub. L. 100-203 provided that: "The amendments

made by this section [enacting this section and amending section

254o of this title] shall be effective on the date of the enactment

of this Act [Dec. 22, 1987]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 254o, 292f of this title;

title 25 section 1616a.

-FOOTNOTE-

(!1) So in original. Probably should be "individual's".

(!2) See References in Text note below.

(!3) So in original. Probably should be "individuals".

-End-

-CITE-

42 USC Sec. 1395ddd 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395ddd. Medicare Integrity Program

-STATUTE-

(a) Establishment of Program

There is hereby established the Medicare Integrity Program (in

this section referred to as the "Program") under which the

Secretary shall promote the integrity of the Medicare program by

entering into contracts in accordance with this section with

eligible entities to carry out the activities described in

subsection (b) of this section.

(b) Activities described

The activities described in this subsection are as follows:

(1) Review of activities of providers of services or other

individuals and entities furnishing items and services for which

payment may be made under this subchapter (including skilled

nursing facilities and home health agencies), including medical

and utilization review and fraud review (employing similar

standards, processes, and technologies used by private health

plans, including equipment and software technologies which

surpass the capability of the equipment and technologies used in

the review of claims under this subchapter as of August 21,

1996).

(2) Audit of cost reports.

(3) Determinations as to whether payment should not be, or

should not have been, made under this subchapter by reason of

section 1395y(b) of this title, and recovery of payments that

should not have been made.

(4) Education of providers of services, beneficiaries, and

other persons with respect to payment integrity and benefit

quality assurance issues.

(5) Developing (and periodically updating) a list of items of

durable medical equipment in accordance with section 1395m(a)(15)

of this title which are subject to prior authorization under such

section.

(c) Eligibility of entities

An entity is eligible to enter into a contract under the Program

to carry out any of the activities described in subsection (b) of

this section if -

(1) the entity has demonstrated capability to carry out such

activities;

(2) in carrying out such activities, the entity agrees to

cooperate with the Inspector General of the Department of Health

and Human Services, the Attorney General, and other law

enforcement agencies, as appropriate, in the investigation and

deterrence of fraud and abuse in relation to this subchapter and

in other cases arising out of such activities;

(3) the entity complies with such conflict of interest

standards as are generally applicable to Federal acquisition and

procurement; and

(4) the entity meets such other requirements as the Secretary

may impose.

In the case of the activity described in subsection (b)(5) of this

section, an entity shall be deemed to be eligible to enter into a

contract under the Program to carry out the activity if the entity

is a carrier with a contract in effect under section 1395u of this

title.

(d) Process for entering into contracts

The Secretary shall enter into contracts under the Program in

accordance with such procedures as the Secretary shall by

regulation establish, except that such procedures shall include the

following:

(1) Procedures for identifying, evaluating, and resolving

organizational conflicts of interest that are generally

applicable to Federal acquisition and procurement.

(2) Competitive procedures to be used -

(A) when entering into new contracts under this section;

(B) when entering into contracts that may result in the

elimination of responsibilities of an individual fiscal

intermediary or carrier under section 202(b) of the Health

Insurance Portability and Accountability Act of 1996; and

(C) at any other time considered appropriate by the

Secretary,

except that the Secretary may continue to contract with entities

that are carrying out the activities described in this section

pursuant to agreements under section 1395h of this title or

contracts under section 1395u of this title in effect on August

21, 1996.

(3) Procedures under which a contract under this section may be

renewed without regard to any provision of law requiring

competition if the contractor has met or exceeded the performance

requirements established in the current contract.

The Secretary may enter into such contracts without regard to final

rules having been promulgated.

(e) Limitation on contractor liability

The Secretary shall by regulation provide for the limitation of a

contractor's liability for actions taken to carry out a contract

under the Program, and such regulation shall, to the extent the

Secretary finds appropriate, employ the same or comparable

standards and other substantive and procedural provisions as are

contained in section 1320c-6 of this title.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1893, as added Pub. L.

104-191, title II, Sec. 202(a), Aug. 21, 1996, 110 Stat. 1996.)

-REFTEXT-

REFERENCES IN TEXT

Section 202(b) of the Health Insurance Portability and

Accountability Act of 1996, referred to in subsec. (d)(2)(B), is

section 202(b) of Pub. L. 104-191, which amended sections 1395h and

1395u of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395h, 1395i, 1395u of

this title.

-End-

-CITE-

42 USC Sec. 1395eee 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395eee. Payments to, and coverage of benefits under, programs

of all-inclusive care for elderly (PACE)

-STATUTE-

(a) Receipt of benefits through enrollment in PACE program;

definitions for PACE program related terms

(1) Benefits through enrollment in a PACE program

In accordance with this section, in the case of an individual

who is entitled to benefits under part A of this subchapter or

enrolled under part B of this subchapter and who is a PACE

program eligible individual (as defined in paragraph (5)) with

respect to a PACE program offered by a PACE provider under a PACE

program agreement -

(A) the individual may enroll in the program under this

section; and

(B) so long as the individual is so enrolled and in

accordance with regulations -

(i) the individual shall receive benefits under this

subchapter solely through such program; and

(ii) the PACE provider is entitled to payment under and in

accordance with this section and such agreement for provision

of such benefits.

(2) "PACE program" defined

For purposes of this section, the term "PACE program" means a

program of all-inclusive care for the elderly that meets the

following requirements:

(A) Operation

The entity operating the program is a PACE provider (as

defined in paragraph (3)).

(B) Comprehensive benefits

The program provides comprehensive health care services to

PACE program eligible individuals in accordance with the PACE

program agreement and regulations under this section.

(C) Transition

In the case of an individual who is enrolled under the

program under this section and whose enrollment ceases for any

reason (including that the individual no longer qualifies as a

PACE program eligible individual, the termination of a PACE

program agreement, or otherwise), the program provides

assistance to the individual in obtaining necessary

transitional care through appropriate referrals and making the

individual's medical records available to new providers.

(3) "PACE provider" defined

(A) In general

For purposes of this section, the term "PACE provider" means

an entity that -

(i) subject to subparagraph (B), is (or is a distinct part

of) a public entity or a private, nonprofit entity organized

for charitable purposes under section 501(c)(3) of the

Internal Revenue Code of 1986; and

(ii) has entered into a PACE program agreement with respect

to its operation of a PACE program.

(B) Treatment of private, for-profit providers

Clause (i) of subparagraph (A) shall not apply -

(i) to entities subject to a demonstration project waiver

under subsection (h) of this section; and

(ii) after the date the report under section 4804(b) of the

Balanced Budget Act of 1997 is submitted, unless the

Secretary determines that any of the findings described in

subparagraph (A), (B), (C), or (D) of paragraph (2) of such

section are true.

(4) "PACE program agreement" defined

For purposes of this section, the term "PACE program agreement"

means, with respect to a PACE provider, an agreement, consistent

with this section, section 1396u-4 of this title (if applicable),

and regulations promulgated to carry out such sections, between

the PACE provider and the Secretary, or an agreement between the

PACE provider and a State administering agency for the operation

of a PACE program by the provider under such sections.

(5) "PACE program eligible individual" defined

For purposes of this section, the term "PACE program eligible

individual" means, with respect to a PACE program, an individual

who -

(A) is 55 years of age or older;

(B) subject to subsection (c)(4) of this section, is

determined under subsection (c) of this section to require the

level of care required under the State medicaid plan for

coverage of nursing facility services;

(C) resides in the service area of the PACE program; and

(D) meets such other eligibility conditions as may be imposed

under the PACE program agreement for the program under

subsection (e)(2)(A)(ii) of this section.

(6) "PACE protocol" defined

For purposes of this section, the term "PACE protocol" means

the Protocol for the Program of All-inclusive Care for the

Elderly (PACE), as published by On Lok, Inc., as of April 14,

1995, or any successor protocol that may be agreed upon between

the Secretary and On Lok, Inc.

(7) "PACE demonstration waiver program" defined

For purposes of this section, the term "PACE demonstration

waiver program" means a demonstration program under either of the

following sections (as in effect before the date of their

repeal):

(A) Section 603(c) of the Social Security Amendments of 1983

(Public Law 98-21), as extended by section 9220 of the

Consolidated Omnibus Budget Reconciliation Act of 1985 (Public

Law 99-272).

(B) Section 9412(b) of the Omnibus Budget Reconciliation Act

of 1986 (Public Law 99-509).

(8) "State administering agency" defined

For purposes of this section, the term "State administering

agency" means, with respect to the operation of a PACE program in

a State, the agency of that State (which may be the single agency

responsible for administration of the State plan under subchapter

XIX of this chapter in the State) responsible for administering

PACE program agreements under this section and section 1396u-4 of

this title in the State.

(9) "Trial period" defined

(A) In general

For purposes of this section, the term "trial period" means,

with respect to a PACE program operated by a PACE provider

under a PACE program agreement, the first 3 contract years

under such agreement with respect to such program.

(B) Treatment of entities previously operating PACE

demonstration waiver programs

Each contract year (including a year occurring before the

effective date of this section) during which an entity has

operated a PACE demonstration waiver program shall be counted

under subparagraph (A) as a contract year during which the

entity operated a PACE program as a PACE provider under a PACE

program agreement.

(10) "Regulations" defined

For purposes of this section, the term "regulations" refers to

interim final or final regulations promulgated under subsection

(f) of this section to carry out this section and section 1396u-4

of this title.

(b) Scope of benefits; beneficiary safeguards

(1) In general

Under a PACE program agreement, a PACE provider shall -

(A) provide to PACE program eligible individuals enrolled

with the provider, regardless of source of payment and directly

or under contracts with other entities, at a minimum -

(i) all items and services covered under this subchapter

(for individuals enrolled under this section) and all items

and services covered under subchapter XIX of this chapter,

but without any limitation or condition as to amount,

duration, or scope and without application of deductibles,

copayments, coinsurance, or other cost-sharing that would

otherwise apply under this subchapter or such subchapter,

respectively; and

(ii) all additional items and services specified in

regulations, based upon those required under the PACE

protocol;

(B) provide such enrollees access to necessary covered items

and services 24 hours per day, every day of the year;

(C) provide services to such enrollees through a

comprehensive, multidisciplinary health and social services

delivery system which integrates acute and long-term care

services pursuant to regulations; and

(D) specify the covered items and services that will not be

provided directly by the entity, and to arrange for delivery of

those items and services through contracts meeting the

requirements of regulations.

(2) Quality assurance; patient safeguards

The PACE program agreement shall require the PACE provider to

have in effect at a minimum -

(A) a written plan of quality assurance and improvement, and

procedures implementing such plan, in accordance with

regulations; and

(B) written safeguards of the rights of enrolled participants

(including a patient bill of rights and procedures for

grievances and appeals) in accordance with regulations and with

other requirements of this subchapter and Federal and State law

that are designed for the protection of patients.

(c) Eligibility determinations

(1) In general

The determination of whether an individual is a PACE program

eligible individual -

(A) shall be made under and in accordance with the PACE

program agreement; and

(B) who is entitled to medical assistance under subchapter

XIX of this chapter, shall be made (or who is not so entitled,

may be made) by the State administering agency.

(2) Condition

An individual is not a PACE program eligible individual (with

respect to payment under this section) unless the individual's

health status has been determined by the Secretary or the State

administering agency, in accordance with regulations, to be

comparable to the health status of individuals who have

participated in the PACE demonstration waiver programs. Such

determination shall be based upon information on health status

and related indicators (such as medical diagnoses and measures of

activities of daily living, instrumental activities of daily

living, and cognitive impairment) that are part of a uniform

minimum data set collected by PACE providers on potential PACE

program eligible individuals.

(3) Annual eligibility recertifications

(A) In general

Subject to subparagraph (B), the determination described in

subsection (a)(5)(B) of this section for an individual shall be

reevaluated at least annually.

(B) Exception

The requirement of annual reevaluation under subparagraph (A)

may be waived during a period in accordance with regulations in

those cases where the State administering agency determines

that there is no reasonable expectation of improvement or

significant change in an individual's condition during the

period because of the severity of chronic condition, or degree

of impairment of functional capacity of the individual

involved.

(4) Continuation of eligibility

An individual who is a PACE program eligible individual may be

deemed to continue to be such an individual notwithstanding a

determination that the individual no longer meets the requirement

of subsection (a)(5)(B) of this section if, in accordance with

regulations, in the absence of continued coverage under a PACE

program the individual reasonably would be expected to meet such

requirement within the succeeding 6-month period.

(5) Enrollment; disenrollment

(A) Voluntary disenrollment at any time

The enrollment and disenrollment of PACE program eligible

individuals in a PACE program shall be pursuant to regulations

and the PACE program agreement and shall permit enrollees to

voluntarily disenroll without cause at any time.

(B) Limitations on disenrollment

(i) In general

Regulations promulgated by the Secretary under this section

and section 1396u-4 of this title, and the PACE program

agreement, shall provide that the PACE program may not

disenroll a PACE program eligible individual except -

(I) for nonpayment of premiums (if applicable) on a

timely basis; or

(II) for engaging in disruptive or threatening behavior,

as defined in such regulations (developed in close

consultation with State administering agencies).

(ii) No disenrollment for noncompliant behavior

Except as allowed under regulations promulgated to carry

out clause (i)(II), a PACE program may not disenroll a PACE

program eligible individual on the ground that the individual

has engaged in noncompliant behavior if such behavior is

related to a mental or physical condition of the individual.

For purposes of the preceding sentence, the term

"noncompliant behavior" includes repeated noncompliance with

medical advice and repeated failure to appear for

appointments.

(iii) Timely review of proposed nonvoluntary disenrollment

A proposed disenrollment, other than a voluntary

disenrollment, shall be subject to timely review and final

determination by the Secretary or by the State administering

agency (as applicable), prior to the proposed disenrollment

becoming effective.

(d) Payments to PACE providers on capitated basis

(1) In general

In the case of a PACE provider with a PACE program agreement

under this section, except as provided in this subsection or by

regulations, the Secretary shall make prospective monthly

payments of a capitation amount for each PACE program eligible

individual enrolled under the agreement under this section in the

same manner and from the same sources as payments are made to a

Medicare+ÐChoice organization under section 1395w-23 of this

title (or, for periods beginning before January 1, 1999, to an

eligible organization under a risk-sharing contract under section

1395mm of this title). Such payments shall be subject to

adjustment in the manner described in section 1395w-23(a)(2) of

this title or section 1395mm(a)(1)(E) of this title, as the case

may be.

(2) Capitation amount

The capitation amount to be applied under this subsection for a

provider for a contract year shall be an amount specified in the

PACE program agreement for the year. Such amount shall be based

upon payment rates established for purposes of payment under

section 1395w-23 of this title (or, for periods before January 1,

1999, for purposes of risk-sharing contracts under section 1395mm

of this title) and shall be adjusted to take into account the

comparative frailty of PACE enrollees and such other factors as

the Secretary determines to be appropriate. Such amount under

such an agreement shall be computed in a manner so that the total

payment level for all PACE program eligible individuals enrolled

under a program is less than the projected payment under this

subchapter for a comparable population not enrolled under a PACE

program.

(e) PACE program agreement

(1) Requirement

(A) In general

The Secretary, in close cooperation with the State

administering agency, shall establish procedures for entering

into, extending, and terminating PACE program agreements for

the operation of PACE programs by entities that meet the

requirements for a PACE provider under this section, section

1396u-4 of this title, and regulations.

(B) Numerical limitation

(i) In general

The Secretary shall not permit the number of PACE providers

with which agreements are in effect under this section or

under section 9412(b) of the Omnibus Budget Reconciliation

Act of 1986 to exceed -

(I) 40 as of August 5, 1997; or

(II) as of each succeeding anniversary of August 5, 1997,

the numerical limitation under this subparagraph for the

preceding year plus 20.

Subclause (II) shall apply without regard to the actual

number of agreements in effect as of a previous anniversary

date.

(ii) Treatment of certain private, for-profit providers

The numerical limitation in clause (i) shall not apply to a

PACE provider that -

(I) is operating under a demonstration project waiver

under subsection (h) of this section; or

(II) was operating under such a waiver and subsequently

qualifies for PACE provider status pursuant to subsection

(a)(3)(B)(ii) of this section.

(2) Service area and eligibility

(A) In general

A PACE program agreement for a PACE program -

(i) shall designate the service area of the program;

(ii) may provide additional requirements for individuals to

qualify as PACE program eligible individuals with respect to

the program;

(iii) shall be effective for a contract year, but may be

extended for additional contract years in the absence of a

notice by a party to terminate and is subject to termination

by the Secretary and the State administering agency at any

time for cause (as provided under the agreement);

(iv) shall require a PACE provider to meet all applicable

State and local laws and requirements; and

(v) shall contain such additional terms and conditions as

the parties may agree to, so long as such terms and

conditions are consistent with this section and regulations.

(B) Service area overlap

In designating a service area under a PACE program agreement

under subparagraph (A)(i), the Secretary (in consultation with

the State administering agency) may exclude from designation an

area that is already covered under another PACE program

agreement, in order to avoid unnecessary duplication of

services and avoid impairing the financial and service

viability of an existing program.

(3) Data collection; development of outcome measures

(A) Data collection

(i) In general

Under a PACE program agreement, the PACE provider shall -

(I) collect data;

(II) maintain, and afford the Secretary and the State

administering agency access to, the records relating to the

program, including pertinent financial, medical, and

personnel records; and

(III) make available to the Secretary and the State

administering agency reports that the Secretary finds (in

consultation with State administering agencies) necessary

to monitor the operation, cost, and effectiveness of the

PACE program under this section and section 1396u-4 of this

title.

(ii) Requirements during trial period

During the first 3 years of operation of a PACE program

(either under this section or under a PACE demonstration

waiver program), the PACE provider shall provide such

additional data as the Secretary specifies in regulations in

order to perform the oversight required under paragraph

(4)(A).

(B) Development of outcome measures

Under a PACE program agreement, the PACE provider, the

Secretary, and the State administering agency shall jointly

cooperate in the development and implementation of health

status and quality of life outcome measures with respect to

PACE program eligible individuals.

(4) Oversight

(A) Annual, close oversight during trial period

During the trial period (as defined in subsection (a)(9) of

this section) with respect to a PACE program operated by a PACE

provider, the Secretary (in cooperation with the State

administering agency) shall conduct a comprehensive annual

review of the operation of the PACE program by the provider in

order to assure compliance with the requirements of this

section and regulations. Such a review shall include -

(i) an on-site visit to the program site;

(ii) comprehensive assessment of a provider's fiscal

soundness;

(iii) comprehensive assessment of the provider's capacity

to provide all PACE services to all enrolled participants;

(iv) detailed analysis of the entity's substantial

compliance with all significant requirements of this section

and regulations; and

(v) any other elements the Secretary or State administering

agency considers necessary or appropriate.

(B) Continuing oversight

After the trial period, the Secretary (in cooperation with

the State administering agency) shall continue to conduct such

review of the operation of PACE providers and PACE programs as

may be appropriate, taking into account the performance level

of a provider and compliance of a provider with all significant

requirements of this section and regulations.

(C) Disclosure

The results of reviews under this paragraph shall be reported

promptly to the PACE provider, along with any recommendations

for changes to the provider's program, and shall be made

available to the public upon request.

(5) Termination of PACE provider agreements

(A) In general

Under regulations -

(i) the Secretary or a State administering agency may

terminate a PACE program agreement for cause; and

(ii) a PACE provider may terminate an agreement after

appropriate notice to the Secretary, the State agency, and

enrollees.

(B) Causes for termination

In accordance with regulations establishing procedures for

termination of PACE program agreements, the Secretary or a

State administering agency may terminate a PACE program

agreement with a PACE provider for, among other reasons, the

fact that -

(i) the Secretary or State administering agency determines

that -

(I) there are significant deficiencies in the quality of

care provided to enrolled participants; or

(II) the provider has failed to comply substantially with

conditions for a program or provider under this section or

section 1396u-4 of this title; and

(ii) the entity has failed to develop and successfully

initiate, within 30 days of the date of the receipt of

written notice of such a determination, a plan to correct the

deficiencies, or has failed to continue implementation of

such a plan.

(C) Termination and transition procedures

An entity whose PACE provider agreement is terminated under

this paragraph shall implement the transition procedures

required under subsection (a)(2)(C) of this section.

(6) Secretary's oversight; enforcement authority

(A) In general

Under regulations, if the Secretary determines (after

consultation with the State administering agency) that a PACE

provider is failing substantially to comply with the

requirements of this section and regulations, the Secretary

(and the State administering agency) may take any or all of the

following actions:

(i) Condition the continuation of the PACE program

agreement upon timely execution of a corrective action plan.

(ii) Withhold some or all further payments under the PACE

program agreement under this section or section 1396u-4 of

this title with respect to PACE program services furnished by

such provider until the deficiencies have been corrected.

(iii) Terminate such agreement.

(B) Application of intermediate sanctions

Under regulations, the Secretary may provide for the

application against a PACE provider of remedies described in

section 1395w-27(g)(2) (or, for periods before January 1, 1999,

section 1395mm(i)(6)(B) of this title) or 1396b(m)(5)(B) of

this title in the case of violations by the provider of the

type described in section 1395w-27(g)(1) (or section

1395mm(i)(6)(A) of this title for such periods) or

1396b(m)(5)(A) of this title, respectively (in relation to

agreements, enrollees, and requirements under this section or

section 1396u-4 of this title, respectively).

(7) Procedures for termination or imposition of sanctions

Under regulations, the provisions of section 1395w-27(h) of

this title (or for periods before January 1, 1999, section

1395mm(i)(9) of this title) shall apply to termination and

sanctions respecting a PACE program agreement and PACE provider

under this subsection in the same manner as they apply to a

termination and sanctions with respect to a contract and a

Medicare+Choice organization under part C of this subchapter (or

for such periods an eligible organization under section 1395mm of

this title).

(8) Timely consideration of applications for PACE program

provider status

In considering an application for PACE provider program status,

the application shall be deemed approved unless the Secretary,

within 90 days after the date of the submission of the

application to the Secretary, either denies such request in

writing or informs the applicant in writing with respect to any

additional information that is needed in order to make a final

determination with respect to the application. After the date the

Secretary receives such additional information, the application

shall be deemed approved unless the Secretary, within 90 days of

such date, denies such request.

(f) Regulations

(1) In general

The Secretary shall issue interim final or final regulations to

carry out this section and section 1396u-4 of this title.

(2) Use of PACE protocol

(A) In general

In issuing such regulations, the Secretary shall, to the

extent consistent with the provisions of this section,

incorporate the requirements applied to PACE demonstration

waiver programs under the PACE protocol.

(B) Flexibility

In order to provide for reasonable flexibility in adapting

the PACE service delivery model to the needs of particular

organizations (such as those in rural areas or those that may

determine it appropriate to use nonstaff physicians according

to State licensing law requirements) under this section and

section 1396u-4 of this title, the Secretary (in close

consultation with State administering agencies) may modify or

waive provisions of the PACE protocol so long as any such

modification or waiver is not inconsistent with and would not

impair the essential elements, objectives, and requirements of

this section, but may not modify or waive any of the following

provisions:

(i) The focus on frail elderly qualifying individuals who

require the level of care provided in a nursing facility.

(ii) The delivery of comprehensive, integrated acute and

long-term care services.

(iii) The interdisciplinary team approach to care

management and service delivery.

(iv) Capitated, integrated financing that allows the

provider to pool payments received from public and private

programs and individuals.

(v) The assumption by the provider of full financial risk.

(C) Continuation of modifications or waivers of operational

requirements under demonstration status

If a PACE program operating under demonstration authority has

contractual or other operating arrangements which are not

otherwise recognized in regulation and which were in effect on

July 1, 2000, the Secretary (in close consultation with, and

with the concurrence of, the State administering agency) shall

permit any such program to continue such arrangements so long

as such arrangements are found by the Secretary and the State

to be reasonably consistent with the objectives of the PACE

program.

(3) Application of certain additional beneficiary and program

protections

(A) In general

In issuing such regulations and subject to subparagraph (B),

the Secretary may apply with respect to PACE programs,

providers, and agreements such requirements of part C of this

subchapter (or, for periods before January 1, 1999, section

1395mm of this title) and sections 1396b(m) and 1396u-2 of this

title relating to protection of beneficiaries and program

integrity as would apply to Medicare+Choice organizations under

part C of this subchapter (or for such periods eligible

organizations under risk-sharing contracts under section 1395mm

of this title) and to medicaid managed care organizations under

prepaid capitation agreements under section 1396b(m) of this

title.

(B) Considerations

In issuing such regulations, the Secretary shall -

(i) take into account the differences between populations

served and benefits provided under this section and under

part C of this subchapter (or, for periods before January 1,

1999, section 1395mm of this title) and section 1396b(m) of

this title;

(ii) not include any requirement that conflicts with

carrying out PACE programs under this section; and

(iii) not include any requirement restricting the

proportion of enrollees who are eligible for benefits under

this subchapter or subchapter XIX of this chapter.

(4) Construction

Nothing in this subsection shall be construed as preventing the

Secretary from including in regulations provisions to ensure the

health and safety of individuals enrolled in a PACE program under

this section that are in addition to those otherwise provided

under paragraphs (2) and (3).

(g) Waivers of requirements

With respect to carrying out a PACE program under this section,

the following requirements of this subchapter (and regulations

relating to such requirements) are waived and shall not apply:

(1) Section 1395d of this title, insofar as it limits coverage

of institutional services.

(2) Sections 1395e, 1395f, 1395l, and 1395ww of this title,

insofar as such sections relate to rules for payment for

benefits.

(3) Sections 1395f(a)(2)(B), 1395f(a)(2)(C), and 1395n(a)(2)(A)

of this title, insofar as they limit coverage of extended care

services or home health services.

(4) Section 1395x(i) of this title, insofar as it imposes a

3-day prior hospitalization requirement for coverage of extended

care services.

(5) Paragraphs (1) and (9) of section 1395y(a) of this title,

insofar as they may prevent payment for PACE program services to

individuals enrolled under PACE programs.

(h) Demonstration project for for-profit entities

(1) In general

In order to demonstrate the operation of a PACE program by a

private, for-profit entity, the Secretary (in close consultation

with State administering agencies) shall grant waivers from the

requirement under subsection (a)(3) of this section that a PACE

provider may not be a for-profit, private entity.

(2) Similar terms and conditions

(A) In general

Except as provided under subparagraph (B), and paragraph (1),

the terms and conditions for operation of a PACE program by a

provider under this subsection shall be the same as those for

PACE providers that are nonprofit, private organizations.

(B) Numerical limitation

The number of programs for which waivers are granted under

this subsection shall not exceed 10. Programs with waivers

granted under this subsection shall not be counted against the

numerical limitation specified in subsection (e)(1)(B) of this

section.

(i) Miscellaneous provisions

Nothing in this section or section 1396u-4 of this title shall be

construed as preventing a PACE provider from entering into

contracts with other governmental or nongovernmental payers for the

care of PACE program eligible individuals who are not eligible for

benefits under part A of this subchapter, or enrolled under part B

of this subchapter, or eligible for medical assistance under

subchapter XIX of this title.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1894, as added Pub. L.

105-33, title IV, Sec. 4801, Aug. 5, 1997, 111 Stat. 528; amended

Pub. L. 106-554, Sec. 1(a)(6) [title IX, Sec. 902(a)], Dec. 21,

2000, 114 Stat. 2763, 2763A-582.)

-REFTEXT-

REFERENCES IN TEXT

Parts A, B, and C of this subchapter, referred to in subsecs.

(a)(1), (e)(7), (f)(3), and (i), are classified to sections 1395c

et seq., 1395j et seq., and 1395w-21 et seq., respectively, of this

title.

The Internal Revenue Code of 1986, referred to in subsec.

(a)(3)(A)(i), is classified generally to Title 26, Internal Revenue

Code.

Section 4804(b) of the Balanced Budget Act of 1997, referred to

in subsec. (a)(3)(B)(ii), is section 4804(b) of Pub. L. 105-33,

which is set out as a note below.

Section 603(c) of the Social Security Amendments of 1983,

referred to in subsec. (a)(7)(A), is section 603(c) of Pub. L.

98-21, title VI, Apr. 20, 1983, 97 Stat. 168, which was not

classified to the Code and was repealed by Pub. L. 105-33, title

IV, Sec. 4803(d), Aug. 5, 1997, 111 Stat. 550, subject to

transition provisions.

Section 9220 of the Consolidated Omnibus Budget Reconciliation

Act of 1985, referred to in subsec. (a)(7)(A), is section 9220 of

Pub. L. 99-272, title IX, Apr. 7, 1986, 100 Stat. 183, which was

not classified to the Code and was repealed by Pub. L. 105-33,

title IV, Sec. 4803(d), Aug. 5, 1997, 111 Stat. 550, subject to

transition provisions.

Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986,

referred to in subsecs. (a)(7)(B) and (e)(1)(B)(i), is section

9412(b) of Pub. L. 99-509, title IX, Oct. 21, 1986, 100 Stat. 2062,

which was not classified to the Code and was repealed by Pub. L.

105-33, title IV, Sec. 4803(d), Aug. 5, 1997, 111 Stat. 550,

subject to transition provisions.

For the effective date of this section, referred to in subsec.

(a)(9)(B), see section 4803 of Pub. L. 105-33, set out below.

-MISC1-

AMENDMENTS

2000 - Subsec. (f)(2)(C). Pub. L. 106-554 added subpar. (C).

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(6) [title IX, Sec. 902(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-583, provided that: "The amendments

made by this section [amending this section and section 1396u-4 of

this title] shall be effective as [if] included in the enactment of

BBA [Pub. L. 105-33]."

FLEXIBILITY IN EXERCISING WAIVER AUTHORITY

Pub. L. 106-554, Sec. 1(a)(6) [title IX, Sec. 903], Dec. 21,

2000, 114 Stat. 2763, 2763A-583, provided that: "In applying

sections 1894(f)(2)(B) and 1934(f)(2)(B) of the Social Security Act

(42 U.S.C. 1395eee(f)(2)(B), 1396u-4(f)(2)(B)), the Secretary of

Health and Human Services -

"(1) shall approve or deny a request for a modification or a

waiver of provisions of the PACE protocol not later than 90 days

after the date the Secretary receives the request; and

"(2) may exercise authority to modify or waive such provisions

in a manner that responds promptly to the needs of PACE programs

relating to areas of employment and the use of community-based

primary care physicians."

TRANSITION; REGULATIONS

Section 4803 of title IV of Pub. L. 105-33, as amended by Pub. L.

106-554, Sec. 1(a)(6) [title IX, Sec. 901], Dec. 21, 2000, 114

Stat. 2763, 2763A-582, provided that:

"(a) Timely Issuance of Regulations; Effective Date. - The

Secretary of Health and Human Services shall promulgate regulations

to carry out this subtitle [subtitle I (Secs. 4801-4804) of title

IV of Pub. L. 105-33, enacting this section and section 1396u-4 of

this title, amending sections 1396b, 1396d, 1396r-5, and 1396v of

this title, and enacting provisions set out as notes under this

section and section 1395b-6 of this title] in a timely manner. Such

regulations shall be designed so that entities may establish and

operate PACE programs under sections 1894 and 1934 of the Social

Security Act [this section and section 1396u-4 of this title] (as

added by sections 4801 and 4802 of this subtitle) for periods

beginning not later than 1 year after the date of the enactment of

this Act [Aug. 5, 1997].

"(b) Expansion and Transition for PACE Demonstration Project

Waivers. -

"(1) Expansion in current number and extension of demonstration

projects. - Section 9412(b) of the Omnibus Budget Reconciliation

Act of 1986 [see subsec. (d) below], as amended by section

4118(g) of the Omnibus Budget Reconciliation Act of 1987, is

amended -

"(A) in paragraph (1), by inserting before the period at the

end the following: ', except that the Secretary shall grant

waivers of such requirements to up to the applicable numerical

limitation specified in sections 1894(e)(1)(B) and

1934(e)(1)(B) of the Social Security Act' [subsec. (e)(1)(B) of

this section and section 1396u-4(e)(1)(B) of this title]; and

"(B) in paragraph (2) -

"(i) in subparagraph (A), by striking ', including

permitting the organization to assume progressively (over the

initial 3-year period of the waiver) the full financial

risk'; and

"(ii) in subparagraph (C), by adding at the end the

following: 'In granting further extensions, an organization

shall not be required to provide for reporting of information

which is only required because of the demonstration nature of

the project.'

"(2) Elimination of replication requirement. - Section

9412(b)(2)(B) of such Act, as so amended, shall not apply to

waivers granted under such section after the date of the

enactment of this Act [Aug. 5, 1997].

"(3) Timely consideration of applications. - In considering an

application for waivers under such section before the effective

date of the repeals under subsection (d), subject to the

numerical limitation under the amendment made by paragraph (1),

the application shall be deemed approved unless the Secretary of

Health and Human Services, within 90 days after the date of its

submission to the Secretary, either denies such request in

writing or informs the applicant in writing with respect to any

additional information which is needed in order to make a final

determination with respect to the application. After the date the

Secretary receives such additional information, the application

shall be deemed approved unless the Secretary, within 90 days of

such date, denies such request.

"(c) Priority and Special Consideration in Application. - During

the 3-year period beginning on the date of the enactment of this

Act [Aug. 5, 1997]:

"(1) Provider status. - The Secretary of Health and Human

Services shall give priority in processing applications of

entities to qualify as PACE programs under section 1894 or 1934

of the Social Security Act [this section and section 1396u-4 of

this title] -

"(A) first, to entities that are operating a PACE

demonstration waiver program (as defined in sections 1894(a)(7)

and 1934(a)(7) of such Act [subsec. (a)(7) of this section and

section 1396u-4(a)(7) of this title]); and

"(B) then to entities that have applied to operate such a

program as of May 1, 1997.

"(2) New waivers. - The Secretary shall give priority, in the

awarding of additional waivers under section 9412(b) of the

Omnibus Budget Reconciliation Act of 1986 [see subsec. (d) below]

-

"(A) to any entities that have applied for such waivers under

such section as of May 1, 1997; and

"(B) to any entity that, as of May 1, 1997, has formally

contracted with a State to provide services for which payment

is made on a capitated basis with an understanding that the

entity was seeking to become a PACE provider.

"(3) Special consideration. - The Secretary shall give special

consideration, in the processing of applications described in

paragraph (1) and the awarding of waivers described in paragraph

(2), to an entity which as of May 1, 1997, through formal

activities (such as entering into contracts for feasibility

studies) has indicated a specific intent to become a PACE

provider.

"(d) Repeal of Current PACE Demonstration Project Waiver

Authority. -

"(1) In general. - Subject to paragraph (2), the following

provisions of law are repealed:

"(A) Section 603(c) of the Social Security Amendments of 1983

(Public Law 98-21) [97 Stat. 168].

"(B) Section 9220 of the Consolidated Omnibus Budget

Reconciliation Act of 1985 (Public Law 99-272) [100 Stat. 183].

"(C) Section 9412(b) of the Omnibus Budget Reconciliation Act

of 1986 (Public Law 99-509) [100 Stat. 2062].

"(2) Delay in application to current waivers. -

"(A) In general. - Subject to subparagraph (B), in the case

of waivers granted with respect to a PACE program before July

1, 2000, the repeals made by paragraph (1) shall not apply

until the end of a transition period (of up to 36 months) that

begins on the initial effective date of such regulations, and

that allows sufficient time for an orderly transition from

demonstration project authority to general authority provided

under the amendments made by this subtitle [subtitle I (Secs.

4801-4804) of title IV of Pub. L. 105-33, enacting this section

and section 1396u-4 of this title and amending sections 1396b,

1396d, 1396r-5, and 1396v of this title].

"(B) State option to seek extension of current period. - A

State may elect to maintain the PACE programs which (as of the

date of the enactment of this Act [Aug. 5, 1997]) were

operating in the State under the authority described in

paragraph (1) until a date (specified by the State) that is not

later than 4 years after the initial effective date of

regulations described in subsection (a). If a State makes such

an election, the repeals made by paragraph (1) shall not apply

to the programs until the date so specified, but only so long

as such programs continue to operate under the same terms and

conditions as apply to such programs as of the date of the

enactment of this Act, and subparagraph (A) shall not apply to

such programs."

PACE PROGRAMS; STUDY AND REPORTS

Section 4804(a), (b) of title IV of Pub. L. 105-33 provided that:

"(a) Study. -

"(1) In general. - The Secretary of Health and Human Services

(in close consultation with State administering agencies, as

defined in sections 1894(a)(8) and 1934(a)(8) of the Social

Security Act [subsec. (a)(8) of this section and section

1396u-4(a)(8) of this title]) shall conduct a study of the

quality and cost of providing PACE program services under the

medicare and medicaid programs under the amendments made by this

subtitle [subtitle I (Secs. 4801-4804) of title IV of Pub. L.

105-33, enacting this section and section 1396u-4 of this title

and amending sections 1396b, 1396d, 1396r-5, and 1396v of this

title].

"(2) Study of private, for-profit providers. - Such study shall

specifically compare the costs, quality, and access to services

by entities that are private, for-profit entities operating under

demonstration projects waivers granted under sections 1894(h) and

1934(h) of the Social Security Act [subsec. (h) of this section

and section 1396u-4(h) of this title] with the costs, quality,

and access to services of other PACE providers.

"(b) Report. -

"(1) In general. - Not later than 4 years after the date of the

enactment of this Act [Aug. 5, 1997], the Secretary shall provide

for a report to Congress on the impact of such amendments on

quality and cost of services. The Secretary shall include in such

report such recommendations for changes in the operation of such

amendments as the Secretary deems appropriate.

"(2) Treatment of private, for-profit providers. - The report

shall include specific findings on whether any of the following

findings is true:

"(A) The number of covered lives enrolled with entities

operating under demonstration project waivers under sections

1894(h) and 1934(h) of the Social Security Act is fewer than

800 (or such lesser number as the Secretary may find

statistically sufficient to make determinations respecting

findings described in the succeeding subparagraphs).

"(B) The population enrolled with such entities is less frail

than the population enrolled with other PACE providers.

"(C) Access to or quality of care for individuals enrolled

with such entities is lower than such access or quality for

individuals enrolled with other PACE providers.

"(D) The application of such section has resulted in an

increase in expenditures under the medicare or medicaid

programs above the expenditures that would have been made if

such section did not apply."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395cc-2, 1395ss,

1396r-5, 1396u-4 of this title.

-End-

-CITE-

42 USC Sec. 1395fff 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395fff. Prospective payment for home health services

-STATUTE-

(a) In general

Notwithstanding section 1395x(v) of this title, the Secretary

shall provide, for portions of cost reporting periods occurring on

or after October 1, 2000, for payments for home health services in

accordance with a prospective payment system established by the

Secretary under this section.

(b) System of prospective payment for home health services

(1) In general

The Secretary shall establish under this subsection a

prospective payment system for payment for all costs of home

health services. Under the system under this subsection all

services covered and paid on a reasonable cost basis under the

medicare home health benefit as of August 5, 1997, including

medical supplies, shall be paid for on the basis of a prospective

payment amount determined under this subsection and applicable to

the services involved. In implementing the system, the Secretary

may provide for a transition (of not longer than 4 years) during

which a portion of such payment is based on agency-specific

costs, but only if such transition does not result in aggregate

payments under this subchapter that exceed the aggregate payments

that would be made if such a transition did not occur.

(2) Unit of payment

In defining a prospective payment amount under the system under

this subsection, the Secretary shall consider an appropriate unit

of service and the number, type, and duration of visits provided

within that unit, potential changes in the mix of services

provided within that unit and their cost, and a general system

design that provides for continued access to quality services.

(3) Payment basis

(A) Initial basis

(i) In general

Under such system the Secretary shall provide for

computation of a standard prospective payment amount (or

amounts) as follows:

(I) Such amount (or amounts) shall initially be based on

the most current audited cost report data available to the

Secretary and shall be computed in a manner so that the

total amounts payable under the system for the 12-month

period beginning on the date the Secretary implements the

system shall be equal to the total amount that would have

been made if the system had not been in effect and if

section 1395x(v)(1)(L)(ix) of this title had not been

enacted.

(II) For the 12-month period beginning after the period

described in subclause (I), such amount (or amounts) shall

be equal to the amount (or amounts) determined under

subclause (I), updated under subparagraph (B).

(III) For periods beginning after the period described in

subclause (II), such amount (or amounts) shall be equal to

the amount (or amounts) that would have been determined

under subclause (I) that would have been made for fiscal

year 2001 if the system had not been in effect and if

section 1395x(v)(1)(L)(ix) of this title had not been

enacted but if the reduction in limits described in clause

(ii) had been in effect, updated under subparagraph (B).

Each such amount shall be standardized in a manner that

eliminates the effect of variations in relative case mix and

area wage adjustments among different home health agencies in

a budget neutral manner consistent with the case mix and wage

level adjustments provided under paragraph (4)(A). Under the

system, the Secretary may recognize regional differences or

differences based upon whether or not the services or agency

are in an urbanized area.

(ii) Reduction

The reduction described in this clause is a reduction by 15

percent in the cost limits and per beneficiary limits

described in section 1395x(v)(1)(L) of this title, as those

limits are in effect on September 30, 2000.

(B) Annual update

(i) In general

The standard prospective payment amount (or amounts) shall

be adjusted for each fiscal year (beginning with fiscal year

2002) in a prospective manner specified by the Secretary by

the home health applicable increase percentage (as defined in

clause (ii)) applicable to the fiscal year involved.

(ii) Home health applicable increase percentage

For purposes of this subparagraph, the term "home health

applicable increase percentage" means, with respect to -

(I) each of fiscal years 2002 and 2003, the home health

market basket percentage increase (as defined in clause

(iii)) minus 1.1 percentage points; or

(II) any subsequent fiscal year, the home health market

basket percentage increase.

(iii) Home health market basket percentage increase

For purposes of this subsection, the term "home health

market basket percentage increase" means, with respect to a

fiscal year, a percentage (estimated by the Secretary before

the beginning of the fiscal year) determined and applied with

respect to the mix of goods and services included in home

health services in the same manner as the market basket

percentage increase under section 1395ww(b)(3)(B)(iii) of

this title is determined and applied to the mix of goods and

services comprising inpatient hospital services for the

fiscal year.

(iv) Adjustment for case mix changes

Insofar as the Secretary determines that the adjustments

under paragraph (4)(A)(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

different units of services that do not reflect real changes

in case mix, the Secretary may adjust the standard

prospective payment amount (or amounts) under paragraph (3)

for subsequent fiscal years so as to eliminate the effect of

such coding or classification changes.

(C) Adjustment for outliers

The Secretary shall reduce the standard prospective payment

amount (or amounts) under this paragraph applicable to home

health services furnished during a period by such proportion as

will result in an aggregate reduction in payments for the

period equal to the aggregate increase in payments resulting

from the application of paragraph (5) (relating to outliers).

(4) Payment computation

(A) In general

The payment amount for a unit of home health services shall

be the applicable standard prospective payment amount adjusted

as follows:

(i) Case mix adjustment

The amount shall be adjusted by an appropriate case mix

adjustment factor (established under subparagraph (B)).

(ii) Area wage adjustment

The portion of such amount that the Secretary estimates to

be attributable to wages and wage-related costs shall be

adjusted for geographic differences in such costs by an area

wage adjustment factor (established under subparagraph (C))

for the area in which the services are furnished or such

other area as the Secretary may specify.

(B) Establishment of case mix adjustment factors

The Secretary shall establish appropriate case mix adjustment

factors for home health services in a manner that explains a

significant amount of the variation in cost among different

units of services.

(C) Establishment of area wage adjustment factors

The Secretary shall establish area wage adjustment factors

that reflect the relative level of wages and wage-related costs

applicable to the furnishing of home health services in a

geographic area compared to the national average applicable

level. Such factors may be the factors used by the Secretary

for purposes of section 1395ww(d)(3)(E) of this title.

(5) Outliers

The Secretary may provide for an addition or adjustment to the

payment amount otherwise made in the case of outliers because of

unusual variations in the type or amount of medically necessary

care. The total amount of the additional payments or payment

adjustments made under this paragraph with respect to a fiscal

year may not exceed 5 percent of the total payments projected or

estimated to be made based on the prospective payment system

under this subsection in that year.

(6) Proration of prospective payment amounts

If a beneficiary elects to transfer to, or receive services

from, another home health agency within the period covered by the

prospective payment amount, the payment shall be prorated between

the home health agencies involved.

(c) Requirements for payment information

With respect to home health services furnished on or after

October 1, 1998, no claim for such a service may be paid under this

subchapter unless -

(1) the claim has the unique identifier (provided under section

1395u(r) of this title) for the physician who prescribed the

services or made the certification described in section

1395f(a)(2) or 1395n(a)(2)(A) of this title; and

(2) in the case of a service visit described in paragraph (1),

(2), (3), or (4) of section 1395x(m) of this title, the claim

contains a code (or codes) specified by the Secretary that

identifies the length of time of the service visit, as measured

in 15 minute increments.

(d) Limitation on review

There shall be no administrative or judicial review under section

1395ff of this title, 1395oo of this title, or otherwise of -

(1) the establishment of a transition period under subsection

(b)(1) of this section;

(2) the definition and application of payment units under

subsection (b)(2) of this section;

(3) the computation of initial standard prospective payment

amounts under subsection (b)(3)(A) of this section (including the

reduction described in clause (ii) of such subsection);

(4) the establishment of the adjustment for outliers under

subsection (b)(3)(C) of this section;

(5) the establishment of case mix and area wage adjustments

under subsection (b)(4) of this section; and

(6) the establishment of any adjustments for outliers under

subsection (b)(5) of this section.

(e) Construction related to home health services

(1) Telecommunications

Nothing in this section shall be construed as preventing a home

health agency furnishing a home health unit of service for which

payment is made under the prospective payment system established

by this section for such units of service from furnishing

services via a telecommunication system if such services -

(A) do not substitute for in-person home health services

ordered as part of a plan of care certified by a physician

pursuant to section 1395f(a)(2)(C) or 1395n(a)(2)(A) of this

title; and

(B) are not considered a home health visit for purposes of

eligibility or payment under this subchapter.

(2) Physician certification

Nothing in this section shall be construed as waiving the

requirement for a physician certification under section

1395f(a)(2)(C) or 1395n(a)(2)(A) of this title for the payment

for home health services, whether or not furnished via a

telecommunications system.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1895, as added Pub. L.

105-33, title IV, Sec. 4603(a), Aug. 5, 1997, 111 Stat. 467;

amended Pub. L. 105-277, div. J, title V, Sec. 5101(c)(1), (d)(2),

Oct. 21, 1998, 112 Stat. 2681-914; Pub. L. 106-113, div. B, Sec.

1000(a)(6) [title III, Secs. 302(b), 303(b), 306, 321(k)(19)], Nov.

29, 1999, 113 Stat. 1536, 1501A-359, 1501A-361, 1501A-362,

1501A-368; Pub. L. 106-554, Sec. 1(a)(6) [title V, Secs. 501(a),

(c)(1), 504], Dec. 21, 2000, 114 Stat. 2763, 2763A-529, 2763A-531.)

-MISC1-

AMENDMENTS

2000 - Subsec. (b)(3)(A)(i)(II). Pub. L. 106-554, Sec. 1(a)(6)

[title V, Sec. 501(a)(3)], added subcl. (II). Former subcl. (II)

redesignated (III).

Subsec. (b)(3)(A)(i)(III). Pub. L. 106-554, Sec. 1(a)(6) [title

V, Sec. 501(a)(1), (2)], redesignated subcl. (II) as (III) and

substituted "described in subclause (II)" for "described in

subclause (I)".

Subsec. (b)(3)(B)(iv). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 501(c)(1)], added cl. (iv).

Subsec. (e). Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 504],

added subsec. (e).

1999 - Subsec. (b)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(19)], made technical amendment to reference in

original act which appears in text as reference to August 5, 1997.

Subsec. (b)(3)(A)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 302(b)], amended heading and text of cl. (i) generally.

Prior to amendment, text read as follows: "Under such system the

Secretary shall provide for computation of a standard prospective

payment amount (or amounts). Such amount (or amounts) shall

initially be based on the most current audited cost report data

available to the Secretary and shall be computed in a manner so

that the total amounts payable under the system for fiscal year

2001 shall be equal to the total amount that would have been made

if the system had not been in effect but if the reduction in limits

described in clause (ii) had been in effect. Such amount shall be

standardized in a manner that eliminates the effect of variations

in relative case mix and wage levels among different home health

agencies in a budget neutral manner consistent with the case mix

and wage level adjustments provided under paragraph (4)(A). Under

the system, the Secretary may recognize regional differences or

differences based upon whether or not the services or agency are in

an urbanized area."

Subsec. (b)(3)(A)(i)(I). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 303(b)(1)], which directed that the second sentence of

cl. (i) be amended in subcl. (I) by the insertion of "and if

section 1395x(v)(1)(L)(ix) of this title had not been enacted"

before semicolon, was executed by making the insertion before the

period at end of subcl. (I) to reflect the probable intent of

Congress.

Subsec. (b)(3)(A)(i)(II). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 303(b)(2)], inserted "and if section 1395x(v)(1)(L)(ix)

of this title had not been enacted" after "if the system had not

been in effect".

Subsec. (b)(3)(B)(ii)(I). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 306], substituted "each of fiscal years 2002 and 2003"

for "fiscal year 2002 or 2003".

1998 - Subsec. (a). Pub. L. 105-277, Sec. 5101(c)(1)(A),

substituted "for portions of cost reporting periods occurring on or

after October 1, 2000" for "for cost reporting periods beginning on

or after October 1, 1999".

Subsec. (b)(3)(A)(i). Pub. L. 105-277, Sec. 5101(c)(1)(B)(i),

substituted "fiscal year 2001" for "fiscal year 2000".

Subsec. (b)(3)(A)(ii). Pub. L. 105-277, Sec. 5101(c)(1)(B)(ii),

substituted "September 30, 2000" for "September 30, 1999".

Subsec. (b)(3)(B)(i). Pub. L. 105-277, Sec. 5101(d)(2)(A),

substituted "home health applicable increase percentage (as defined

in clause (ii))" for "home health market basket percentage

increase".

Pub. L. 105-277, Sec. 5101(c)(1)(B)(iii), substituted "fiscal

year 2002" for "fiscal year 2001".

Subsec. (b)(3)(B)(ii), (iii). Pub. L. 105-277, Sec.

5101(d)(2)(B), (C), added cl. (ii) and redesignated former cl. (ii)

as (iii).

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 501(c)(2)], Dec. 21,

2000, 114 Stat. 2763, 2763A-529, provided that: "The amendment made

by paragraph (1) [amending this section] shall apply to episodes

concluding on or after October 1, 2001."

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by section 1000(a)(6) [title III, Sec. 303(b)] of Pub.

L.106-113 applicable to services furnished by home health agencies

for cost reporting periods beginning on or after Oct. 1, 1999, see

section 1000(a)(6) [title III, Sec. 303(c)] of Pub. L. 106-113, set

out as a note under section 1395x of this title.

Amendment by section 1000(a)(6) [title III, Sec. 321(k)(19)] of

Pub. L. 106-113 effective as if included in the enactment of the

Balanced Budget Act of 1997, Pub. L. 105-33, except as otherwise

provided, see section 1000(a)(6) [title III, Sec. 321(m)] of Pub.

L. 106-113, set out as a note under section 1395d of this title.

EFFECTIVE DATE

Pub. L. 105-33, title IV, Sec. 4603(d), Aug. 5, 1997, 111 Stat.

471, as amended by Pub. L. 105-277, div. J, title V, Sec.

5101(c)(2), Oct. 21, 1998, 112 Stat. 2681-914, provided that:

"Except as otherwise provided, the amendments made by this section

[enacting this section and amending sections 1395f, 1395g, 1395k,

1395l, 1395u, and 1395y of this title] shall apply to portions of

cost reporting periods occurring on or after October 1, 2000."

SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR 2001 BASED ON ADJUSTED

PROSPECTIVE PAYMENT AMOUNTS

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 502(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-530, provided that:

"(1) In general. - Notwithstanding the amendments made by

subsection (a) [amending section 1395x of this title], for purposes

of making payments under section 1895(b) of the Social Security Act

(42 U.S.C. 1395fff(b)) for home health services furnished during

fiscal year 2001, the Secretary of Health and Human Services shall

-

"(A) with respect to episodes and visits ending on or after

October 1, 2000, and before April 1, 2001, use the final

standardized and budget neutral prospective payment amounts for

60-day episodes and standardized average per visit amounts for

fiscal year 2001 as published by the Secretary in the Federal

Register on July 3, 2000 (65 Fed. Reg. 41128-41214); and

"(B) with respect to episodes and visits ending on or after

April 1, 2001, and before October 1, 2001, use such amounts

increased by 2.2 percent.

"(2) No effect on other payments or determinations. - The

Secretary shall not take the provisions of paragraph (1) into

account for purposes of payments, determinations, or budget

neutrality adjustments under section 1895 of the Social Security

Act."

TEMPORARY TWO-MONTH PERIODIC INTERIM PAYMENT

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 503], Dec. 21, 2000,

114 Stat. 2763, 2763A-530, provided that:

"(a) In General. - Notwithstanding the amendments made by section

4603(b) of BBA [Pub. L. 105-33, amending section 1395g of this

title] (42 U.S.C. 1395fff note), in the case of a home health

agency that was receiving periodic interim payments under section

1815(e)(2) of the Social Security Act (42 U.S.C. 1395g(e)(2)) as of

September 30, 2000, and that is not described in subsection (b),

the Secretary of Health and Human Services shall, as soon as

practicable, make a single periodic interim payment to such agency

in an amount equal to four times the last full fortnightly periodic

interim payment made to such agency under the payment system in

effect prior to the implementation of the prospective payment

system under section 1895(b) of such Act (42 U.S.C. 1395fff(b)).

Such amount of such periodic interim payment shall be included in

the tentative settlement of the last cost report for the home

health agency under the payment system in effect prior to the

implementation of such prospective payment system, regardless of

the ending date of such cost report.

"(b) Exceptions. - The Secretary shall not make an additional

periodic interim payment under subsection (a) in the case of a home

health agency (determined as of the day that such payment would

otherwise be made) that -

"(1) notifies the Secretary that such agency does not want to

receive such payment;

"(2) is not receiving payments pursuant to section 405.371 of

title 42, Code of Federal Regulations;

"(3) is excluded from the medicare program under title XI of

the Social Security Act [subchapter XI of this chapter];

"(4) no longer has a provider agreement under section 1866 of

such Act (42 U.S.C. 1395cc);

"(5) is no longer in business; or

"(6) is subject to a court order providing for the withholding

of medicare payments under title XVIII of such Act [this

subchapter]."

TEMPORARY INCREASE FOR HOME HEALTH SERVICES FURNISHED IN A RURAL

AREA

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 508], Dec. 21, 2000,

114 Stat. 2763, 2763A-533, provided that:

"(a) 24-Month Increase Beginning April 1, 2001. - In the case of

home health services furnished in a rural area (as defined in

section 1886(d)(2)(D) of the Social Security Act (42 U.S.C.

1395ww(d)(2)(D))) on or after April 1, 2001, and before April 1,

2003, the Secretary of Health and Human Services shall increase the

payment amount otherwise made under section 1895 of such Act (42

U.S.C. 1395fff) for such services by 10 percent.

"(b) Waiving Budget Neutrality. - The Secretary shall not reduce

the standard prospective payment amount (or amounts) under section

1895 of the Social Security Act (42 U.S.C. 1395fff) applicable to

home health services furnished during a period to offset the

increase in payments resulting from the application of subsection

(a)."

CLARIFICATION OF APPLICATION OF TEMPORARY PAYMENT INCREASES FOR

2001

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 547(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-553, provided that:

"(1) Transitional allowance for full marketbasket [sic] increase.

- The payment increase provided under section 502(b)(1)(B) [set out

as a note above] shall not apply to episodes and visits ending

after fiscal year 2001 and shall not be taken into account in

calculating the payment amounts applicable for subsequent episodes

and visits.

"(2) Temporary increase for rural home health services. - The

payment increase provided under section 508(a) [set out as a note

above] for the period beginning on April 1, 2001, and ending on

September 30, 2002, shall not apply to episodes and visits ending

after such period, and shall not be taken into account in

calculating the payment amounts applicable for episodes and visits

occurring after such period."

ADJUSTMENT TO REFLECT ADMINISTRATIVE COSTS NOT INCLUDED IN THE

INTERIM PAYMENT SYSTEM; GAO REPORT ON COSTS OF COMPLIANCE WITH

OASIS DATA COLLECTION REQUIREMENTS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec. 301],

Nov. 29, 1999, 113 Stat. 1536, 1501A-358, provided that:

"(a) Adjustment To Reflect Administrative Costs

"(1) In general. - In the case of a home health agency that

furnishes home health services to a medicare beneficiary, for

each such beneficiary to whom the agency furnished such services

during the agency's cost reporting period beginning in fiscal

year 2000, the Secretary of Health and Human Services shall pay

the agency, in addition to any amount of payment made under

section 1861(v)(1)(L) of the Social Security Act (42 U.S.C.

1395x(v)(1)(L)) for the beneficiary and only for such cost

reporting period, an aggregate amount of $10 to defray costs

incurred by the agency attributable to data collection and

reporting requirements under the Outcome and Assessment

Information Set (OASIS) required by reason of section 4602(e) of

BBA [the Balanced Budget Act of 1997, Pub. L. 105-33] (42 U.S.C.

1395fff note).

"(2) Payment schedule

"(A) Midyear payment. - Not later than April 1, 2000, the

Secretary shall pay to a home health agency an amount that the

Secretary estimates to be 50 percent of the aggregate amount

payable to the agency by reason of this subsection.

"(B) Upon settled cost report. - The Secretary shall pay the

balance of amounts payable to an agency under this subsection

on the date that the cost report submitted by the agency for

the cost reporting period beginning in fiscal year 2000 is

settled.

"(3) Payment from trust funds. - Payments under this subsection

shall be made, in appropriate part as specified by the Secretary,

from the Federal Hospital Insurance Trust Fund and from the

Federal Supplementary Medical Insurance Trust Fund.

"(4) Definitions. - In this subsection:

"(A) Home health agency. - The term 'home health agency' has

the meaning given that term under section 1861(o) of the Social

Security Act (42 U.S.C. 1395x(o)).

"(B) Home health services. - The term 'home health services'

has the meaning given that term under section 1861(m) of such

Act (42 U.S.C. 1395x(m)).

"(C) Medicare beneficiary. - The term 'medicare beneficiary'

means a beneficiary described in section 1861(v)(1)(L)(vi)(II)

of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vi)(II)).

"(b) GAO Report on Costs of Compliance With OASIS Data Collection

Requirements. -

"(1) Report to congress. -

"(A) In general. - Not later than 180 days after the date of

the enactment of this Act [Nov. 29, 1999], the Comptroller

General of the United States shall submit to Congress a report

on the matters described in subparagraph (B) with respect to

the data collection requirement of patients of such agencies

under the Outcome and Assessment Information Set (OASIS)

standard as part of the comprehensive assessment of patients.

"(B) Matters studied. - For purposes of subparagraph (A), the

matters described in this subparagraph include the following:

"(i) An assessment of the costs incurred by medicare home

health agencies in complying with such data collection

requirement.

"(ii) An analysis of the effect of such data collection

requirement on the privacy interests of patients from whom

data is collected.

"(C) Audit. - The Comptroller General shall conduct an

independent audit of the costs described in subparagraph

(B)(i). Not later than 180 days after receipt of the report

under subparagraph (A), the Comptroller General shall submit to

Congress a report describing the Comptroller General's findings

with respect to such audit, and shall include comments on the

report submitted to Congress by the Secretary of Health and

Human Services under subparagraph (A).

"(2) Definitions. - In this subsection:

"(A) Comprehensive assessment of patients. - The term

'comprehensive assessment of patients' means the rule published

by the Health Care Financing Administration that requires, as a

condition of participation in the medicare program, a home

health agency to provide a patient-specific comprehensive

assessment that accurately reflects the patient's current

status and that incorporates the Outcome and Assessment

Information Set (OASIS).

"(B) Outcome and assessment information set. - The term

'Outcome and Assessment Information Set' means the standard

provided under the rule relating to data items that must be

used in conducting a comprehensive assessment of patients."

REPORT TO CONGRESS ON NEED FOR REDUCTIONS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec.

302(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A-360, as amended by

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 501(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-529, provided that: "Not later than

April 1, 2002, the Comptroller General of the United States shall

submit to Congress a report analyzing the need for the 15 percent

reduction under subsection (b)(3)(A)(ii) of such section [subsec.

(b)(3)(A)(ii) of this section], or for any reduction, in the

computation of the base payment amounts under the prospective

payment system for home health services established under such

section."

STUDY AND REPORT TO CONGRESS REGARDING EXEMPTION OF RURAL AGENCIES

AND POPULATIONS FROM INCLUSION IN HOME HEALTH PROSPECTIVE PAYMENT

SYSTEM

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec. 307],

Nov. 29, 1999, 113 Stat. 1536, 1501A-362, provided that:

"(a) Study. - The Medicare Payment Advisory Commission (referred

to in this section as 'MedPAC') shall conduct a study to determine

the feasibility and advisability of exempting home health services

provided by a home health agency (or by others under arrangements

with such agency) located in a rural area, or to an individual

residing in a rural area, from payment under the prospective

payment system for such services established by the Secretary of

Health and Human Services in accordance with section 1895 of the

Social Security Act (42 U.S.C. 1395fff).

"(b) Report. - Not later than 2 years after the date of the

enactment of this Act [Nov. 29, 1999], MedPAC shall submit a report

to Congress on the study conducted under subsection (a), together

with any recommendations for legislation that MedPAC determines to

be appropriate as a result of such study."

CASE MIX SYSTEM DEVELOPMENT

Section 4602(d) of Pub. L. 105-33 provided that: "The Secretary

of Health and Human Services shall expand research on a prospective

payment system for home health agencies under the medicare program

that ties prospective payments to a unit of service, including an

intensive effort to develop a reliable case mix adjuster that

explains a significant amount of the variances in costs."

CASE MIX SYSTEM; SUBMISSION OF DATA

Section 4602(e) of Pub. L. 105-33 provided that: "Effective for

cost reporting periods beginning on or after October 1, 1997, the

Secretary of Health and Human Services may require all home health

agencies to submit additional information that the Secretary

considers necessary for the development of a reliable case mix

system."

PROSPECTIVE PAYMENT SYSTEM CONTINGENCY

Pub. L. 105-33, title IV, Sec. 4603(e), Aug. 5, 1997, 111 Stat.

471, as amended by Pub. L. 105-277, div. J, title V, Sec.

5101(c)(3), Oct. 21, 1998, 112 Stat. 2681-914, provided that if the

Secretary of Health and Human Services did not establish and

implement the prospective payment system for home health services

described in subsec. (b) of this section for portions of cost

reporting periods described in section 4603(d) of Pub. L. 105-33

(set out as a note above), for such portions the Secretary was to

provide for a reduction by 15 percent in the cost limits and per

beneficiary limits described in section 1395x(v)(1)(L) of this

title, as those limits would otherwise have been in effect on Sept.

30, 2000, prior to repeal by Pub. L. 106-113, div. B, Sec.

1000(a)(6) [title III, Sec. 302(a)], Nov. 29, 1999, 113 Stat. 1536,

1501A-359.

REPORTS TO CONGRESS REGARDING HOME HEALTH COST CONTAINMENT

Section 4616 of Pub. L. 105-33 provided that:

"(a) Estimate. - Not later than October 1, 1997, the Secretary of

Health and Human Services shall submit to the Committees on

Commerce and Ways and Means of the House of Representatives and the

Committee on Finance of the Senate a report that includes an

estimate of the outlays that will be made under parts A and B of

title XVIII of the Social Security Act [parts A and B of this

subchapter] for the provision of home health services during each

of fiscal years 1998 through 2002.

"(b) Annual Report. - Not later than the end of each of years

1999 through 2002, the Secretary shall submit to such Committees a

report that compares the actual outlays under such parts for such

services during the fiscal year ending in the year, to the outlays

estimated under subsection (a) for such fiscal year. If the

Secretary finds that such actual outlays were greater than such

estimated outlays for the fiscal year, the Secretary shall include

in the report recommendations regarding beneficiary copayments for

home health services provided under the medicare program or such

other methods as will reduce the growth in outlays for home health

services under the medicare program."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395f, 1395l, 1395r of

this title.

-End-

-CITE-

42 USC Sec. 1395ggg 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395ggg. Medicare subvention demonstration project for

military retirees

-STATUTE-

(a) Definitions

In this section:

(1) Administering Secretaries

The term "administering Secretaries" means the Secretary and

the Secretary of Defense acting jointly.

(2) Demonstration project; project

The terms "demonstration project" and "project" mean the

demonstration project carried out under this section.

(3) Designated provider

The term "designated provider" has the meaning given that term

in section 721(5) of the National Defense Authorization Act For

Fiscal Year 1997 (Public Law 104-201; 110 Stat. 2593; 10 U.S.C.

1073 note).

(4) Medicare-eligible military retiree or dependent

The term "medicare-eligible military retiree or dependent"

means an individual described in section 1074(b) or 1076(b) of

title 10 who -

(A) is eligible for health benefits under section 1086 of

such title by reason of subsection (c)(1) of such section;

(B)(i) is entitled to benefits under part A of this

subchapter; and

(ii) if the individual was entitled to such benefits before

July 1, 1997, received health care items or services from a

health care facility of the uniformed services before that

date, but after becoming entitled to benefits under part A of

this subchapter;

(C) is enrolled for benefits under part B of this subchapter;

and

(D) has attained age 65.

(5) Medicare health care services

The term "medicare health care services" means items or

services covered under part A or B of this subchapter.

(6) Military treatment facility

The term "military treatment facility" means a facility

referred to in section 1074(a) of title 10.

(7) TRICARE

The term "TRICARE" has the same meaning as the term "TRICARE

program" under section 711 of the National Defense Authorization

Act for Fiscal Year 1996 (10 U.S.C. 1073 note).

(8) Trust funds

The term "trust funds" means the Federal Hospital Insurance

Trust Fund established in section 1395i of this title and the

Federal Supplementary Medical Insurance Trust Fund established in

section 1395t of this title.

(b) Demonstration project

(1) In general

(A) Establishment

The administering Secretaries are authorized to establish a

demonstration project (under an agreement entered into by the

administering Secretaries) under which the Secretary shall

reimburse the Secretary of Defense, from the trust funds, for

medicare health care services furnished to certain

medicare-eligible military retirees or dependents in a military

treatment facility or by a designated provider.

(B) Agreement

The agreement entered into under subparagraph (A) shall

include at a minimum -

(i) a description of the benefits to be provided to the

participants of the demonstration project established under

this section;

(ii) a description of the eligibility rules for

participation in the demonstration project, including any

cost sharing requirements;

(iii) a description of how the demonstration project will

satisfy the requirements under this subchapter;

(iv) a description of the sites selected under paragraph

(2);

(v) a description of how reimbursement requirements under

subsection (i) of this section and maintenance of effort

requirements under subsection (j) of this section will be

implemented in the demonstration project;

(vi) a statement that the Secretary shall have access to

all data of the Department of Defense that the Secretary

determines is necessary to conduct independent estimates and

audits of the maintenance of effort requirement, the annual

reconciliation, and related matters required under the

demonstration project;

(vii) a description of any requirement that the Secretary

waives pursuant to subsection (d) of this section; and

(viii) a certification, provided after review by the

administering Secretaries, that any entity that is receiving

payments by reason of the demonstration project has

sufficient -

(I) resources and expertise to provide, consistent with

payments under subsection (i) of this section, the full

range of benefits required to be provided to beneficiaries

under the project; and

(II) information and billing systems in place to ensure

the accurate and timely submission of claims for benefits

and to ensure that providers of services, physicians, and

other health care professionals are reimbursed by the

entity in a timely and accurate manner.

(2) Number of sites

The project established under this section shall be conducted

in no more than 6 sites, designated jointly by the administering

Secretaries after review of all TRICARE regions.

(3) Restriction

No new military treatment facilities will be built or expanded

with funds from the demonstration project.

(4) Duration

The administering Secretaries shall conduct the demonstration

project during the 4-year period beginning on January 1, 1998,

except that the administering Secretaries may negotiate and

(subject to section 701(f) of the Floyd D. Spence National

Defense Authorization Act for Fiscal Year 2001) (!1) enter into a

new or revised agreement under paragraph (1)(A) to continue the

project after the end of such period. If the project is so

continued, the administering Secretaries may terminate the

agreement under which the program operates after providing notice

to Congress in accordance with subsection (k)(2)(B)(v) (!1) of

this section.

(5) Report

At least 60 days prior to the commencement of the demonstration

project, the administering Secretaries shall submit a copy of the

agreement entered into under paragraph (1) to the committees of

jurisdiction under this subchapter.

(c) Crediting of payments

A payment received by the Secretary of Defense under the

demonstration project shall be credited to the applicable

Department of Defense medical appropriation (and within that

appropriation). Any such payment received during a fiscal year for

services provided during a prior fiscal year may be obligated by

the Secretary of Defense during the fiscal year during which the

payment is received.

(d) Waiver of certain medicare requirements

(1) Authority

(A) In general

Except as provided under subparagraph (B), the demonstration

project shall meet all requirements of Medicare+Choice plans

under part C of this subchapter and regulations pertaining

thereto, and other requirements for receiving medicare

payments, except that the prohibition of payments to Federal

providers of services under sections 1395f(c) and 1395n(d) of

this title, and paragraphs (2) and (3) of section 1395y(a) of

this title shall not apply.

(B) Waiver

Except as provided in paragraph (2), the Secretary is

authorized to waive any requirement described under

subparagraph (A), or approve equivalent or alternative ways of

meeting such a requirement, but only if such waiver or approval

-

(i) reflects the unique status of the Department of Defense

as an agency of the Federal Government; and

(ii) is necessary to carry out the demonstration project.

(2) Beneficiary protections and other matters

The demonstration project shall comply with the requirements of

part C of this subchapter that relate to beneficiary protections

and other matters, including such requirements relating to the

following areas:

(A) Enrollment and disenrollment.

(B) Nondiscrimination.

(C) Information provided to beneficiaries.

(D) Cost-sharing limitations.

(E) Appeal and grievance procedures.

(F) Provider participation.

(G) Access to services.

(H) Quality assurance and external review.

(I) Advance directives.

(J) Other areas of beneficiary protections that the Secretary

determines are applicable to such project.

(e) Inspector General

Nothing in the agreement entered into under subsection (b) of

this section shall limit the Inspector General of the Department of

Health and Human Services from investigating any matters regarding

the expenditure of funds under this subchapter for the

demonstration project, including compliance with the provisions of

this subchapter and all other relevant laws.

(f) Voluntary participation

Participation of medicare-eligible military retirees or

dependents in the demonstration project shall be voluntary.

(g) TRICARE health care plans

(1) Modification of TRICARE contracts

In carrying out the demonstration project, the Secretary of

Defense is authorized to amend existing TRICARE contracts

(including contracts with designated providers) in order to

provide the medicare health care services to the

medicare-eligible military retirees and dependents enrolled in

the demonstration project consistent with part C of this

subchapter.

(2) Health care benefits

The administering Secretaries shall prescribe the minimum

health care benefits to be provided under such a plan to

medicare-eligible military retirees or dependents enrolled in the

plan. Those benefits shall include at least all medicare health

care services covered under this subchapter.

(h) Additional plans

Notwithstanding any provisions of title 10, the administering

Secretaries may agree to include in the demonstration project any

of the Medicare+Choice plans described in section 1395w-21(a)(2)(A)

of this title, and such agreement may include an agreement between

the Secretary of Defense and the Medicare+Choice organization

offering such plan to provide medicare health care services to

medicare-eligible military retirees or dependents and for such

Secretary to receive payments from such organization for the

provision of such services.

(i) Payments based on regular medicare payment rates

(1) In general

Subject to the succeeding provisions of this subsection, the

Secretary shall reimburse the Secretary of Defense for services

provided under the demonstration project at a rate equal to 95

percent of the amount paid to a Medicare+Choice organization

under part C of this subchapter with respect to such an enrollee.

In cases in which a payment amount may not otherwise be readily

computed, the Secretary shall establish rules for computing

equivalent or comparable payment amounts.

(2) Exclusion of certain amounts

In computing the amount of payment under paragraph (1), the

following shall be excluded:

(A) Special payments

Any amount attributable to an adjustment under subparagraphs

(B) and (F) of section 1395ww(d)(5) of this title and

subsection (h) of such section.

(B) Percentage of capital payments

An amount determined by the administering Secretaries for

amounts attributable to payments for capital-related costs

under subsection (g) of such section.

(3) Periodic payments from medicare trust funds

Payments under this subsection shall be made -

(A) on a periodic basis consistent with the periodicity of

payments under this subchapter; and

(B) in appropriate part, as determined by the Secretary, from

the trust funds.

(4) Cap on amount

The aggregate amount to be reimbursed under this subsection

pursuant to the agreement entered into between the administering

Secretaries under subsection (b) of this section shall not exceed

a total of -

(A) $50,000,000 for calendar year 1998;

(B) $60,000,000 for calendar year 1999;

(C) $65,000,000 for calendar year 2000; and

(D) $70,000,000 for calendar year 2001.

(j) Maintenance of effort

(1) Monitoring effect of demonstration program on costs to

medicare program

(A) In general

The administering Secretaries, in consultation with the

Comptroller General, shall closely monitor the expenditures

made under the medicare program for medicare-eligible military

retirees or dependents during the period of the demonstration

project compared to the expenditures that would have been made

for such medicare-eligible military retirees or dependents

during that period if the demonstration project had not been

conducted. The agreement entered into by the administering

Secretaries under subsection (b) of this section shall require

any participating military treatment facility to maintain the

level of effort for space available care to medicare-eligible

military retirees or dependents.

(B) Annual report by the Comptroller General

Not later than December 31 of each year during which the

demonstration project is conducted, the Comptroller General

shall submit to the administering Secretaries and the

appropriate committees of Congress a report on the extent, if

any, to which the costs of the Secretary under the medicare

program under this subchapter increased during the preceding

fiscal year as a result of the demonstration project.

(2) Required response in case of increase in costs

(A) In general

If the administering Secretaries find, based on paragraph

(1), that the expenditures under the medicare program under

this subchapter increased (or are expected to increase) during

a fiscal year because of the demonstration project, the

administering Secretaries shall take such steps as may be

needed -

(i) to recoup for the medicare program the amount of such

increase in expenditures; and

(ii) to prevent any such increase in the future.

(B) Steps

Such steps -

(i) under subparagraph (A)(i) shall include payment of the

amount of such increased expenditures by the Secretary of

Defense from the current medical care appropriation of the

Department of Defense to the trust funds; and

(ii) under subparagraph (A)(ii) shall include suspending or

terminating the demonstration project (in whole or in part)

or lowering the amount of payment under subsection (i)(1) of

this section.

(k) Evaluation and reports

(1) Independent evaluation

The Comptroller General of the United States shall conduct an

evaluation of the demonstration project, and shall submit annual

reports on the demonstration project to the administering

Secretaries and to the committees of jurisdiction in the

Congress. The first report shall be submitted not later than 12

months after the date on which the demonstration project begins

operation, and the final report not later than 3 1/2 years after

that date. The evaluation and reports shall include an

assessment, based on the agreement entered into under subsection

(b) of this section, of the following:

(A) Any savings or costs to the medicare program under this

subchapter resulting from the demonstration project.

(B) The cost to the Department of Defense of providing care

to medicare-eligible military retirees and dependents under the

demonstration project.

(C) A description of the effects of the demonstration project

on military treatment facility readiness and training and the

probable effects of the project on overall Department of

Defense medical readiness and training.

(D) Any impact of the demonstration project on access to care

for active duty military personnel and their dependents.

(E) An analysis of how the demonstration project affects the

overall accessibility of the uniformed services treatment

system and the amount of space available for point-of-service

care, and a description of the unintended effects (if any) upon

the normal treatment priority system.

(F) Compliance by the Department of Defense with the

requirements under this subchapter.

(G) The number of medicare-eligible military retirees and

dependents opting to participate in the demonstration project

instead of receiving health benefits through another health

insurance plan (including benefits under this subchapter).

(H) A list of the health insurance plans and programs that

were the primary payers for medicare-eligible military retirees

and dependents during the year prior to their participation in

the demonstration project and the distribution of their

previous enrollment in such plans and programs.

(I) Any impact of the demonstration project on private health

care providers and beneficiaries under this subchapter that are

not enrolled in the demonstration project.

(J) An assessment of the access to care and quality of care

for medicare-eligible military retirees and dependents under

the demonstration project.

(K) An analysis of whether, and in what manner, easier access

to the uniformed services treatment system affects the number

of medicare-eligible military retirees and dependents receiving

medicare health care services.

(L) Any impact of the demonstration project on the access to

care for medicare-eligible military retirees and dependents who

did not enroll in the demonstration project and for other

individuals entitled to benefits under this subchapter.

(M) A description of the difficulties (if any) experienced by

the Department of Defense in managing the demonstration project

and TRICARE contracts.

(N) Any additional elements specified in the agreement

entered into under subsection (b) of this section.

(O) Any additional elements that the Comptroller General of

the United States determines is appropriate to assess regarding

the demonstration project.

(2) Repealed. Pub. L. 107-314, div. A, title VII, Sec. 713, Dec.

2, 2002, 116 Stat. 2589

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1896, as added Pub. L.

105-33, title IV, Sec. 4015(a), Aug. 5, 1997, 111 Stat. 337;

amended Pub. L. 106-398, Sec. 1 [[div. A], title VII, Sec.

712(a)(2), (b)-(e)], Oct. 30, 2000, 114 Stat. 1654, 1654A-177,

1654A-178; Pub. L. 107-314, div. A, title VII, Sec. 713, Dec. 2,

2002, 116 Stat. 2589.)

-STATAMEND-

AMENDMENT OF SECTION

Pub. L. 106-398, Sec. 1 [[div. A], title VII, Sec. 712(c)(2),

(3), (d), (f)], Oct. 30, 2000, 114 Stat. 1654, 1654A-177 to

1654A-179, provided that, effective on the date as is provided for

in the agreement proposed under the amendment made by section 1

[[div. A], title VII, Sec. 712(c)(1)] of Pub. L. 106-398 to

subsection (b)(4) of this section and as is provided for in an Act

enacted after Oct. 30, 2000, this section is amended as follows:

(1) in the section catchline, by striking "demonstration project"

and inserting "program";

(2) wherever appearing in text, by substituting "program" for

"demonstration project" and for "project";

(3) by amending subsection (a)(2) to read as follows:

"(2) Program

"The term 'program' means the program carried out under this

section.";

(4) in subsection (b) heading, by substituting "Program" for

"Demonstration project";

(5) by amending subsection (b)(2) to read as follows:

"(2) Location of sites

"Subject to subsection (k)(2)(B) of this section, the program

shall be conducted in any site that is designated jointly by the

administering Secretaries.";

(6) in subsection (d)(2), by inserting ", or (subject to

subsection (k)(2)(B) of this section) such comparable requirements

as are included in the agreement under subsection (b)(1)(A) of this

section" after "the following areas";

(7) in subsection (i)(2), by inserting "subject to paragraph

(4)," after "paragraph (1)";

(8) by amending subsection (i)(4) to read as follows:

"(4) Cap on amount

"The maximum aggregate expenditures from the trust funds under

this subsection pursuant to the agreement entered into between

the administering Secretaries under subsection (b) of this

section for a fiscal year (before fiscal year 2006) shall not

exceed the amount agreed by the Secretaries to be the amount that

would have been expended from the trust funds on beneficiaries

who enroll in the program, had the program not been established,

plus the following:

"(A) $35,000,000 for fiscal year 2002.

"(B) $55,000,000 for fiscal year 2003.

"(C) $75,000,000 for fiscal year 2004.

"(D) $100,000,000 for fiscal year 2005.";

(9) by striking subsection (i)(4) and inserting the following:

"(4) Modification of payment methodology

"The administering Secretaries may, subject to subsection

(k)(2)(B) of this section, modify the payment methodology

provided under paragraphs (1) and (2) so long as the amount of

the reimbursement provided to the Secretary of Defense fully

reimburses the Department of Defense for its cost of providing

services under the program but does not exceed an amount that is

estimated to be equivalent to the amount that otherwise would

have been expended under this subchapter for such services if

provided other than under the program (not including amounts

described in paragraph (2)). Such limiting amount may be based

for any site on the amount that would be payable to

Medicare+Choice organizations under part C of this subchapter for

the area of the site or the amounts that would be payable under

parts A and B of this subchapter."; and

(10) in subsection (j)(1) heading, by striking "demonstration".

-REFTEXT-

REFERENCES IN TEXT

Parts A and B of this subchapter, referred to in subsec. (a)(4),

(5), are classified to sections 1395c et seq. and 1395j et seq.,

respectively, of this title.

Section 711 of the National Defense Authorization Act for Fiscal

Year 1996, referred to in subsec. (a)(7), is section 711 of Pub. L.

104-106, div. A, title VII, Feb. 10, 1996, 110 Stat. 374, which is

set out as a note under section 1073 of Title 10, Armed Forces.

Section 701(f) of the Floyd D. Spence National Defense

Authorization Act for Fiscal Year 2001, referred to in subsec.

(b)(4), probably means section 712(f) of the Floyd D. Spence

National Defense Authorization Act for Fiscal Year 2001, which is

section 1 [[div. A], title VII, Sec. 712(f)] of Pub. L. 106-398,

and is set out as an Effective Date of 2000 Amendment note below.

Section 701 of that Act does not contain a subsec. (f).

Subsection (k)(2) of this section, referred to in subsec. (b)(4),

was repealed by Pub. L. 107-314, div. A, title VII, Sec. 713, Dec.

2, 2002, 116 Stat. 2589. See 2002 Amendment note below.

Part C of this subchapter, referred to in subsecs. (d), (g)(1),

and (i)(1), is classified to section 1395w-21 et seq. of this

title.

-MISC1-

AMENDMENTS

2002 - Subsec. (k)(2). Pub. L. 107-314 repealed heading and text

of par. (2). Text read as follows: "Not later than 6 months after

the date of the submission of the final report by the Comptroller

General of the United States under paragraph (1), the administering

Secretaries shall submit to Congress a report containing their

recommendation as to -

"(A) whether there is a cost to the health care program under

this subchapter in conducting the demonstration project, and

whether the demonstration project could be expanded without there

being a cost to such health care program or to the Federal

Government;

"(B) whether to extend the demonstration project or make the

project permanent; and

"(C) whether the terms and conditions of the project should be

continued (or modified) if the project is extended or expanded."

Pub. L. 107-314 provided that the amendment by Pub. L. 106-398,

Sec. 1 [[div. A], title VII, Sec. 712(e)], shall not take effect.

See 2000 Amendment note below.

2000 - Subsec. (a)(4)(A). Pub. L. 106-398, Sec. 1 [[div. A],

title VII, Sec. 712(a)(2)], amended subpar. (A) generally. Prior to

amendment, subpar. (A) read as follows: "would be eligible for

health benefits under section 1086 of such title by reason of

subsection (c)(1) of such section 1086 but for the operation of

subsection (d) of such section 1086;".

Subsec. (b)(4). Pub. L. 106-398, Sec. 1 [[div. A], title VII,

Sec. 712(c)(1)], inserted before period at end ", except that the

administering Secretaries may negotiate and (subject to section

701(f) of the Floyd D. Spence National Defense Authorization Act

for Fiscal Year 2001) enter into a new or revised agreement under

paragraph (1)(A) to continue the project after the end of such

period. If the project is so continued, the administering

Secretaries may terminate the agreement under which the program

operates after providing notice to Congress in accordance with

subsection (k)(2)(B)(v) of this section".

Pub. L. 106-398, Sec. 1 [[div. A], title VII, Sec. 712(b)(1)],

substituted "4-year period" for "3-year period".

Subsec. (i)(4)(D). Pub. L. 106-398, Sec. 1 [[div. A], title VII,

Sec. 712(b)(2)], added subpar. (D).

Subsec. (k)(2). Pub. L. 106-398, Sec. 1 [[div. A], title VII,

Sec. 712(e)], directed substitution of "Reports on program

operation and changes" for "Report on extension and expansion of

demonstration project" in par. heading and amendment of text to

read as follows:

"(A) Annual report. - The administering Secretaries shall submit

to the Committees on Armed Services and Finance of the Senate and

the Committees on Armed Services and Ways and Means of the House of

Representatives an annual report on the program and its impact on

costs and the provision of health services under this subchapter

and title 10.

"(B) Before making certain program changes. - The administering

Secretaries shall submit to such Committees a report at least 60

days before -

"(i) changing the designation of a site under subsection (b)(2)

of this section;

"(ii) applying comparable requirements under subsection (d)(2)

of this section;

"(iii) making significant changes in payment methodology or

amounts under subsection (i)(4) of this section;

"(iv) making other significant changes in the operation of the

program; or

"(v) terminating the agreement under the second sentence of

subsection (b)(4) of this section.

"(C) Explanation. - Each report under subparagraph (B) shall

include justifications for the changes or termination to which the

report refers."

Pub. L. 107-314, Sec. 713, provided that the amendment made by Pub.

L. 106-398, Sec. 1 [[div. A], title VII, Sec. 712(e)], shall not

take effect. See 2002 Amendment note above.