SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Dependent Hospital Relief 
Act of 1995''.

SEC. 2. DEVELOPMENT OF SEPARATE APPLICABLE PERCENTAGE INCREASES FOR 
              MEDICARE DEPENDENT HOSPITALS AND OTHER HOSPITALS BY THE 
              PROSPECTIVE PAYMENT ASSESSMENT COMMISSION.

    (a) Development of Separate Applicable Percentage Increases.--
            (1) In general.--The Prospective Payment Assessment 
        Commission established under section 1886(e)(2) of the Social 
        Security Act (42 U.S.C. 1395ww(e)(2)) (in this section referred 
        to as the ``Commission'') shall, in accordance with paragraph 
        (2), develop for fiscal year 1997 and each fiscal year 
        thereafter separate applicable percentage increases described 
        in section 1886(b)(3)(B) of such Act (42 U.S.C. 
        1395ww(b)(3)(B)) for medicare dependent hospitals and 
        subsection (d) hospitals which are not medicare dependent 
        hospitals.
            (2) Equalization of medicare margins.--The Commission shall 
        develop separate applicable percentage increases under 
        paragraph (1) such that, if such factors were in effect, the 
        estimated average annual medicare margins of all medicare 
        dependent hospitals in furnishing inpatient hospital services 
        to medicare beneficiaries in such fiscal year would be equal to 
        the average annual medicare margins of all subsection (d) 
        hospitals which are not medicare dependent hospitals in 
        furnishing inpatient hospital services to medicare 
        beneficiaries in such fiscal year.
            (3) Budget neutrality.--The Commission shall provide that 
        the separate applicable percentage increases developed under 
        paragraph (1) would, if in effect, not result in aggregate 
        payments under section 1886 of the Social Security Act (42 
        U.S.C. 1395ww) to medicare dependent hospitals and subsection 
        (d) hospitals which are not medicare dependent hospitals for 
        the furnishing of inpatient hospital services in a fiscal year 
        in excess of the aggregate payments under such section to such 
        hospitals in such fiscal year if such factors were not in 
        effect.
    (b) Reports.--
            (1) In general.--Beginning in March 1996, the Commission 
        shall, in each of the Commission's March reports to the 
        Congress required under section 1886(e)(3) of the Social 
        Security Act (42 U.S.C. 1395ww(e)(3)) include--
                    (A) the separate applicable percentage increases 
                developed by the Commission under subsection (a)(1) for 
                the upcoming fiscal year; and
                    (B) recommendations on methods to ensure that 
                medicare beneficiaries who receive services furnished 
                by medicare dependent hospitals have the same access 
                and quality of care as medicare beneficiaries who are 
                furnished services by subsection (d) hospitals which 
                are not medicare dependent hospitals.
            (2) Annual review of medicare margins.--The Commission 
        shall develop the recommended methods under paragraph (1)(B) 
        after annually reviewing the average medicare margins in 
        medicare dependent hospitals and the impact of such medicare 
        margins on the medicare dependent hospitals' overall profit 
        margins.

SEC. 3. DEFINITIONS.

    In this Act, the following definitions apply:
            (1) Medicare beneficiary.--The term ``medicare 
        beneficiary'' means an individual who is entitled to benefits 
        under part A of title XVIII of the Social Security Act (42 
        U.S.C. 1395c et seq.).
            (2) Medicare dependent hospital.--The term ``medicare 
        dependent hospital'' means any subsection (d) hospital--
                    (A) that is not classified as a sole community 
                hospital under section 1886(d)(5)(D) of the Social 
                Security Act (42 U.S.C. 1395ww(d)(5)(D)); and
                    (B) for which not less than 60 percent of its 
                inpatient days were attributable to medicare 
                beneficiaries during 2 of the last 3 preceding fiscal 
                years for which data is available.
            (3) Medicare margin.--
                    (A) In general.--The term ``medicare margin'' means 
                for a fiscal year the ratio expressed as a percentage 
                equal to--
                            (i) the difference between all medicare 
                        revenues paid to a hospital for the operating 
                        costs of inpatient hospital services in a 
                        fiscal year and all medicare program eligible 
                        expenses for such operating costs for such 
                        fiscal year (as shown by each hospital's HCFA 
                        2552 report submitted annually to the Health 
                        Care Financing Administration); divided by
                            (ii) all medicare revenues paid to the 
                        hospital for the operating costs of inpatient 
                        hospital services for such fiscal year.
                    (B) Operating costs of inpatient hospital 
                services.--The term ``operating costs of inpatient 
                hospital services'' has the meaning given such term in 
                section 1886(a)(4) of the Social Security Act (42 
                U.S.C. 1395ww(a)(4)).
            (4) Subsection (d) hospital.--The term ``subsection (d) 
        hospital'' has the meaning given such term in section 
        1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
        1395ww(d)(1)(B)).
Medicare Dependent Hospital Relief Act of 1995 - Directs the Prospective Payment Assessment Commission to:  (1) develop separate applicable percentage increases for Medicare dependent and certain non-Medicare dependent hospitals to ensure that the average annual Medicare margins of the two hospitals are equalized while ensuring budget neutrality; and (2) include in each of its March reports to the Congress the percentage increases for the upcoming fiscal year, as well as recommendations on methods for ensuring that Medicare beneficiaries who receive Medicare dependent hospital services have the same access and quality of care as those beneficiaries furnished with certain non-Medicare dependent hospital services.
Medicare Dependent Hospital Relief Act of 1995