§ 1395ww. Payments to hospitals for inpatient hospital services

Pub. L. 105–33, title IV, § 4629, Aug. 5, 1997, 111 Stat. 484, provided that: “(a) In General.—The Medicare Payment Advisory Commission (established under section 1805 of the Social Security Act [42 U.S.C. 1395b–6] 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

Pub. L. 105–33, title IV, § 4630, Aug. 5, 1997, 111 Stat. 485, 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 [42 U.S.C. 1395ww(h)], 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

Pub. L. 105–33, title IV, § 4644(a)(2), Aug. 5, 1997, 111 Stat. 488, 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

Pub. L. 105–33, title IV, § 4644(b)(2), Aug. 5, 1997, 111 Stat. 488, 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

Pub. L. 105–33, title IV, § 4644(c)(2), Aug. 5, 1997, 111 Stat. 488, provided that: “In the case of an application for a change in geographic classification under such section [42 U.S.C. 1395ww(d)(10)(C)(ii)] 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

Pub. L. 103–66, title XIII, § 13501(b)(2), Aug. 10, 1993, 107 Stat. 574, 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 [42 U.S.C. 1395ww(d)(3)(B), (d)(8)(D)] to account for the amendment made by paragraph (1) [amending this section].”

Extension of Regional Referral Center Classifications Through Fiscal Year 1994; Reclassification

Pub. L. 103–66, title XIII, § 13501(d), Aug. 10, 1993, 107 Stat. 575, 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 [42 U.S.C. 1395ww(d)(5)(C)] 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 [42 U.S.C. 301 et seq.] (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, § 13501(e)(2), (3), Aug. 10, 1993, 107 Stat. 576, as amended by Pub. L. 105–33, title IV, § 4204(a)(3), Aug. 5, 1997, 111 Stat. 376; Pub. L. 106–113, div. B, § 1000(a)(6) [title IV, § 404(b)(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A–372; Pub. L. 109–171, title V, § 5003(a)(2)(B), Feb. 8, 2006, 120 Stat. 32; Pub. L. 111–148, title III, § 3124(b)(2), Mar. 23, 2010, 124 Stat. 425; Pub. L. 112–240, title VI, § 606(b)(2), Jan. 2, 2013, 126 Stat. 2349; Pub. L. 113–67, div. B, title I, § 1106(b)(2), Dec. 26, 2013, 127 Stat. 1197; Pub. L. 113–93, title I, § 106(b)(2), Apr. 1, 2014, 128 Stat. 1042; Pub. L. 114–10, title II, § 205(b)(2), Apr. 16, 2015, 129 Stat. 145; Pub. L. 115–123, div. E, title II, § 50205(b)(2), Feb. 9, 2018, 132 Stat. 183; Pub. L. 117–180, div. D, title I, § 102(b)(2), Sept. 30, 2022, 136 Stat. 2135; Pub. L. 117–229, div. C, title I, § 102(b)(2), Dec. 16, 2022, 136 Stat. 2311; Pub. L. 117–328, div. FF, title IV, § 4102(b)(2), Dec. 29, 2022, 136 Stat. 5896; Pub. L. 118–42, div. G, title I, § 307(b)(2), Mar. 9, 2024, 138 Stat. 417; Pub. L. 118–158, div. C, title II, § 3202(b)(2), Dec. 21, 2024, 138 Stat. 1764; Pub. L. 119–4, div. B, title II, § 2202(b)(2), Mar. 15, 2025, 139 Stat. 42; Pub. L. 119–37, div. F, title II, § 6202(b)(2), Nov. 12, 2025, 139 Stat. 631, 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 [42 U.S.C. 1395ww(d)(5)(G)(i)] 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, fiscal year 2000 through fiscal year 2025, or the portion of fiscal year 2026 beginning on October 1, 2025, and ending on January 30, 2026, 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 [42 U.S.C. 301 et seq.] (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

Pub. L. 103–66, title XIII, § 13563(d), Aug. 10, 1993, 107 Stat. 606, provided that: “(1) In general.—In determining the amount of payment to be made under section 1886(h) of the Social Security Act [42 U.S.C. 1395ww(h)] 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

Pub. L. 101–508, title IV, § 4002(d)(1), Nov. 5, 1990, 104 Stat. 1388–35, provided that: “(A) 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 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

Pub. L. 101–508, title IV, § 4002(h)(2)(A), Nov. 5, 1990, 104 Stat. 1388–38, 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 [42 U.S.C. 1395ww(d)(10)] 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

Pub. L. 101–508, title IV, § 4004, Nov. 5, 1990, 104 Stat. 1388–39, 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 [42 U.S.C. 1395c et seq.] due to a determination that the amount of payments made for graduate medical education programs exceeds the amount allowable under section 1886(h) [42 U.S.C. 1395ww(h)]. “(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 [42 U.S.C. 1395x(v)]). “(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.”

Pub. L. 101–508, title IV, § 4159, Nov. 5, 1990, 104 Stat. 1388–90, 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 [42 U.S.C. 1395j et seq.] due to a determination that the amount of payments made for graduate medical education programs exceeds the amount allowable under section 1886(h) [42 U.S.C. 1395ww(h)]. “(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 [42 U.S.C. 1395x(v)]). “(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

Pub. L. 101–508, title IV, § 4005(b), Nov. 5, 1990, 104 Stat. 1388–40, 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 [42 U.S.C. 1395ww(d)(1)(B)]) receive payment for the operating and capital-related costs of inpatient hospital services under part A [42 U.S.C. 1395c et seq.] 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

Pub. L. 101–508, title IV, § 4005(c)(3), Nov. 5, 1990, 104 Stat. 1388–42, 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 [42 U.S.C. 1395h] and to hospitals that are not subsection (d) hospitals (as defined in section 1886(d)(1)(B) of such Act [42 U.S.C. 1395ww(d)(1)(B)]) 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

Pub. L. 101–508, title IV, § 4007, Nov. 5, 1990, 104 Stat. 1388–43, 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 [42 U.S.C. 1395c et seq.] (including payments under section 1886 of such Act [42 U.S.C. 1395ww] 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 [42 U.S.C. 1395f(i)(2)(B)] 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

Pub. L. 101–508, title IV, § 4008(l), Nov. 5, 1990, 104 Stat. 1388–53, 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 [42 U.S.C. 1395 et seq.] 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 [42 U.S.C. 1395ww(d)(1)(B)] 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

Pub. L. 101–508, title IV, § 4207(b)(1), formerly § 4027(b)(1), Nov. 5, 1990, 104 Stat. 1388–118, as renumbered and amended by Pub. L. 103–432, title I, § 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 [42 U.S.C. 1395 et seq.] 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

Pub. L. 101–508, title IV, § 4207(b)(2), formerly § 4027(b)(2), Nov. 5, 1990, 104 Stat. 1388–118, as renumbered by Pub. L. 103–432, title I, § 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 [42 U.S.C. 1395 et seq.].”

Extension of Area Wage Index

Pub. L. 101–403, title I, § 115(a), Oct. 1, 1990, 104 Stat. 870, 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 [42 U.S.C. 1395c et seq.] 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 [42 U.S.C. 1395ww(d)(3)(E)] 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

Pub. L. 101–403, title I, § 115(b)(2), Oct. 1, 1990, 104 Stat. 870, 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 [42 U.S.C. 1395ww(d)] 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

Pub. L. 101–239, title VI, § 6003(a)(3), Dec. 19, 1989, 103 Stat. 2140, 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 [42 U.S.C. 1395ww(b)(3)(B)]) 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

Pub. L. 101–239, title VI, § 6003(e)(3), Dec. 19, 1989, 103 Stat. 2144, provided that: “Any hospital classified as a sole community hospital under section 1886(d)(5)(C)(ii) of the Social Security Act [42 U.S.C. 1395ww(d)(5)(C)(ii)] 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 [42 U.S.C. 1395ww(d)(5)(D)].”

Additional Payment Resulting From Corrections of Erroneously Determined Wage Index

Pub. L. 101–239, title VI, § 6003(h)(5), Dec. 19, 1989, 103 Stat. 2157, 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 [42 U.S.C. 1395ww(d)(3)(E)] and subsequently corrects such error, the Secretary shall make an additional payment under title XVIII of such Act [42 U.S.C. 1395 et seq.] 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, § 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, § 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

Pub. L. 101–239, title VI, § 6011(b), (c), Dec. 19, 1989, 103 Stat. 2161, 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 [42 U.S.C. 1395c et seq.] 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

Pub. L. 101–239, title VI, § 6015(b), Dec. 19, 1989, 103 Stat. 2164, 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 [42 U.S.C. 1395ww(b)(4)(A)].”

Delay in Recoupment of Certain Nursing and Allied Education Costs

Pub. L. 101–239, title VI, § 6205(b), Dec. 19, 1989, 103 Stat. 2243, 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 [42 U.S.C. 1395 et seq.] 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 [42 U.S.C. 1395ww(a)(4)], 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 [42 U.S.C. 1395ww(a)(3)] 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

Pub. L. 101–239, title VI, § 6217, Dec. 19, 1989, 103 Stat. 2253, as amended by Pub. L. 101–508, title IV, § 4207(k)(5), formerly § 4027(k)(5), Nov. 5, 1990, 104 Stat. 1388–125, renumbered Pub. L. 103–432, title I, § 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

Pub. L. 101–234, title I, § 101(c)(2)(B), Dec. 13, 1989, 103 Stat. 1980, 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 [42 U.S.C. 1395ww(b)(3)(A)] 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

Pub. L. 100–647, title VIII, § 8405, Nov. 10, 1988, 102 Stat. 3800, 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 [42 U.S.C. 1395ww(e)(6)(D)].”

Adjustments in Payments for Inpatient Hospital Services

Pub. L. 100–360, title I, § 104(c), July 1, 1988, 102 Stat. 688, as amended by Pub. L. 100–485, title VI, § 608(d)(3)(C)–(E), Oct. 13, 1988, 102 Stat. 2413; Pub. L. 101–234, title I, § 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 [42 U.S.C. 1395ww(d)], 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 [42 U.S.C. 1395ww(b)(3)] 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

Pub. L. 100–360, title II, § 203(c)(2), July 1, 1988, 102 Stat. 723, 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, § 201(a), Dec. 13, 1989, 103 Stat. 1981.

Clinic Hospital Wage Indices

Pub. L. 100–203, title IV, § 4004(b), Dec. 22, 1987, 101 Stat. 1330–47, provided that: “In calculating the wage index under section 1886(d) of the Social Security Act [42 U.S.C. 1395ww(d)] 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

Pub. L. 100–203, title IV, § 4005(c)(2)(B), Dec. 22, 1987, 101 Stat. 1330–49, 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 [42 U.S.C. 1395 et seq.] 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

Pub. L. 100–203, title IV, § 4005(d)(2), Dec. 22, 1987, 101 Stat. 1330–49, 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

Pub. L. 100–203, title IV, § 4005(e), Dec. 22, 1987, 101 Stat. 1330–50, as amended by Pub. L. 101–239, title VI, § 6003(g)(1)(B)(i), Dec. 19, 1989, 103 Stat. 2150; Pub. L. 103–432, title I, § 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 [42 U.S.C. 1395ww(d)(2)(D)]) 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 [42 U.S.C. 254e(a)(1)(A)]. “(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 [42 U.S.C. 1395i–4(i)(2)], 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 [42 U.S.C. 1395ww(d)(3)(D)]. “(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 [42 U.S.C. 1395ww(a)(4)]) 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 [42 U.S.C. 1395i–4]) 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.]

[Pub. L. 103–432, title I, § 103(a)(2), Oct. 31, 1994, 108 Stat. 4405, 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, § 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.]

[Pub. L. 101–239, title VI, § 6003(g)(1)(B)(ii), Dec. 19, 1989, 103 Stat. 2151, 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

Pub. L. 100–203, title IV, § 4007, Dec. 22, 1987, 101 Stat. 1330–53, as amended by Pub. L. 100–360, title IV, § 411(b)(6), July 1, 1988, 102 Stat. 770; Pub. L. 100–485, title VI, § 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 [42 U.S.C. 1395 et seq.], a State plan approved under title XIX of such Act [42 U.S.C. 1396 et seq.], 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

Pub. L. 100–203, title IV, § 4008(d), Dec. 22, 1987, 101 Stat. 1330–55, as amended by Pub. L. 100–360, title IV, § 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 [42 U.S.C. 1395ww(d)(5)(A)(iii)] 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 [42 U.S.C. 1395ww(d)(5)(A)]. “(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 [42 U.S.C. 1395ll(b)] 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 [42 U.S.C. 1395ww(d)(3)(B)] and additional payments under section 1886(d)(5)(A) of such Act.”

ProPAC Studies and Reports

Pub. L. 100–203, title IV, § 4009(h), Dec. 22, 1987, 101 Stat. 1330–58, 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 [42 U.S.C. 1395ww(d)(2)(D)]) 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 [42 U.S.C. 1395ww(d)(3)] 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

Pub. L. 100–203, title IV, § 4009(i), Dec. 22, 1987, 101 Stat. 1330–58, as amended by Pub. L. 100–360, title IV, § 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 [42 U.S.C. 1395ww(d)(2)(D)], 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

Pub. L. 100–203, title IV, § 4038, Dec. 22, 1987, 101 Stat. 1330–80, as amended by Pub. L. 101–239, title VI, § 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 [42 U.S.C. 1395ww]—“(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 [42 U.S.C. 1395ww(d)(5)(B), (h)].”

Prohibition on Policy by Secretary of Health and Human Services To Reduce Expenditures in Fiscal Years 1989, 1990, and 1991

Pub. L. 100–203, title IV, § 4039(d), Dec. 22, 1987, 101 Stat. 1330–82, as amended by Pub. L. 100–360, title IV, § 426(e), July 1, 1988, 102 Stat. 814; Pub. L. 101–239, title VI, § 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 [42 U.S.C. 1395 et seq.] 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, § 107(a)(1), Sept. 29, 1987, 101 Stat. 782, as amended by Pub. L. 100–203, title IV, § 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 [42 U.S.C. 1395ww]: “(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, § 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 [42 U.S.C. 1395 et seq.] 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

Pub. L. 99–509, title IX, § 9302(b)(3), Oct. 21, 1986, 100 Stat. 1982, provided that: “For payments made under section 1886(d) of the Social Security Act [42 U.S.C. 1395ww(d)] 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

Pub. L. 101–239, title VI, § 6003(d), Dec. 19, 1989, 103 Stat. 2142, provided that: “Any hospital that is classified as a regional referral center under section 1886(d)(5)(C) of the Social Security Act [42 U.S.C. 1395ww(d)(5)(C)] 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.”

Pub. L. 99–509, title IX, § 9302(d)(2), Oct. 21, 1986, 100 Stat. 1983, provided that: “Any hospital that is classified as a regional referral center under section 1886(d)(5)(C)(i) of the Social Security Act [42 U.S.C. 1395ww(d)(5)(C)(i)] 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

Pub. L. 99–509, title IX, § 9302(d)(3), Oct. 21, 1986, 100 Stat. 1983, 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 [42 U.S.C. 1395ww] are not increased or decreased by reason of the classifications required by such paragraph or amendment.”

Promulgation of New Rate

Pub. L. 99–509, title IX, § 9302(f), Oct. 21, 1986, 100 Stat. 1984, 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 [42 U.S.C. 1395ww], 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