SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Fairness in Reimbursement 
Act of 2000''.

SEC. 2. IMPROVING FAIRNESS OF PAYMENTS UNDER THE MEDICARE FEE-FOR-
              SERVICE PROGRAM.

    (a) Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 
is amended by adding at the end the following new sections:

 ``improving fairness of payments under the original medicare fee-for-
                            service program

    ``Sec. 1897. (a) Establishment of System.--Notwithstanding any 
other provision of law, the Secretary shall establish a system for 
making adjustments to the amount of payment made to entities and 
individuals for items and services provided under the original medicare 
fee-for-service program under parts A and B.
    ``(b) System Requirements.--
            ``(1) Adjustments.--Under the system described in 
        subsection (a), the Secretary (beginning in 2001) shall make 
        the following adjustments:
                    ``(A) Certain states above national average.--If a 
                State average per beneficiary amount for a year is 
                greater than 105 percent (or 110 percent in the case of 
                the determination made in 2000) of the national average 
                per beneficiary amount for such year, then the 
                Secretary shall reduce the amount of applicable 
                payments in such a manner as will result (as estimated 
                by the Secretary) in the State average per beneficiary 
                amount for the subsequent year being at 105 percent (or 
                110 percent in the case of payments made in 2001) of 
                the national average per beneficiary amount for such 
                subsequent year.
                    ``(B) Certain states below national average.--If a 
                State average per beneficiary amount for a year is less 
                than 95 percent (or 90 percent in the case of the 
                determination made in 2000) of the national average per 
                beneficiary amount for such year, then the Secretary 
                shall increase the amount of applicable payments in 
                such a manner as will result (as estimated by the 
                Secretary) in the State average per beneficiary amount 
                for the subsequent year being at 95 percent (or 90 
                percent in the case of payments made in 2001) of the 
                national average per beneficiary amount for such 
                subsequent year.
            ``(2) Determination of averages.--
                    ``(A) State average per beneficiary amount.--Each 
                year (beginning in 2000), the Secretary shall determine 
                a State average per beneficiary amount for each State 
                which shall be equal to the Secretary's estimate of the 
                average amount of expenditures under the original 
                medicare fee-for-service program under parts A and B 
                for the year for a beneficiary enrolled under such 
                parts that resides in the State
                    ``(B) National average per beneficiary amount.--
                Each year (beginning in 2000), the Secretary shall 
                determine the national average per beneficiary amount 
                which shall be equal to the average of the State 
                average per beneficiary amounts determined under 
                subparagraph (B) for the year.
            ``(3) Definitions.--In this section:
                    ``(A) Applicable payments.--The term `applicable 
                payments' means payments made to entities and 
                individuals for items and services provided under the 
                original medicare fee-for-service program under parts A 
                and B to beneficiaries enrolled under such parts that 
                reside in the State.
                    ``(B) State.--The term `State' has the meaning 
                given such term in section 210(h).
    ``(c) Beneficiaries Held Harmless.--The provisions of this section 
shall not effect--
            ``(1) the entitlement to items and services of a 
        beneficiary under this title, including the scope of such items 
        and services; or
            ``(2) any liability of the beneficiary with respect to such 
        items and services.
    ``(d) Regulations.--
            ``(1) In general.--The Secretary, in consultation with the 
        Medicare Payment Advisory Commission, shall promulgate 
        regulations to carry out this section.
            ``(2) Protecting rural communities.--In promulgating the 
        regulations pursuant to paragraph (1), the Secretary shall give 
        special consideration to rural areas.
    ``(e) Budget Neutrality.--The Secretary shall ensure that the 
provisions contained in this section do not cause the estimated amount 
of expenditures under this title for a year to increase or decrease 
from the estimated amount of expenditures under this title that would 
have been made in such year if this section had not been enacted.

       ``improvements in collection and use of hospital wage data

    ``Sec. 1898. (a) Collection of Data.--
            ``(1) In general.--The Secretary shall establish procedures 
        for improving the methods used by the Secretary to collect data 
        on employee compensation and paid hours of employment for 
        hospital employees by occupational category.
            ``(2) Timeframe.--The Secretary shall implement the 
        procedures described in paragraph (1) by not later than 180 
        days after the date of enactment of the Rural Health Protection 
        and Improvement Act of 2000.
    ``(b) Adjustment to Hospital Wage Level.--By not later than 1 year 
after the date of enactment of the Rural Health Protection and 
Improvement Act of 2000, the Secretary shall make necessary revisions 
to the methods used to adjust payments to hospitals for different area 
wage levels under section 1886(d)(3)(E) to ensure that such methods 
take into account the data described in subsection (a)(1).
    ``(c) Limitation.--To the extent possible, in making the revisions 
described in subsection (b), the Secretary shall ensure that current 
rules regarding which hospital employees are included in, or excluded 
from, the determination of the hospital wage levels are not effected by 
such revisions.
    ``(d) Budget Neutrality.--The Secretary shall ensure that any 
revisions made under subsection (b) do not cause the estimated amount 
of expenditures under this title for a year to increase or decrease 
from the estimated amount of expenditures under this title that would 
have been made in such year if the Secretary had not made such 
revisions.''.
Requires the Secretary to: (1) establish procedures for improving methods to collect wage and hour data on hospital employees by occupational category; and (2) revise the methods used to adjust payments to hospitals for different area wage levels to ensure that such data are taken into account.
Medicare Fairness in Reimbursement Act of 2000