Rural Health Care Protection Act of 1997

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Health Care Protection Act of 
1997''.

SEC. 2. CLASSIFICATION AS RURAL REFERRAL CENTERS.

    (a) Prohibiting Denial of Request for Reclassification on Basis of 
Comparability of Wages.--
            (1) In general.--Section 1886(d)(10)(D) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(10)(D)) is amended--
                    (A) by redesignating clause (iii) as clause (iv); 
                and
                    (B) by inserting after clause (ii) the following 
                new clause:
    ``(iii) Under the guidelines published by the Secretary under 
clause (i), in the case of a hospital which has ever been classified by 
the Secretary as a rural referral center under paragraph (5)(C), the 
Board may not reject the application of the hospital under this 
paragraph on the basis of any comparison between the average hourly 
wage of the hospital and the average hourly wage of hospitals in the 
area in which it is located.''.
            (2) Effective date.--Notwithstanding section 
        1886(d)(10)(C)(ii) of the Social Security Act, a hospital may 
        submit an application to the Medicare Geographic Classification 
        Review Board during the 60-day period beginning on the date of 
        the enactment of this Act requesting a change in its 
        classification for purposes of determining the area wage index 
        applicable to the hospital under section 1886(d)(3)(D) of such 
        Act for fiscal year 1998 if the hospital would be eligible for 
        such a change in its classification under the standards 
        described in section 1886(d)(10)(D) (as amended by paragraph 
        (1)) but for its failure to meet the deadline for applications 
        under section 1886(d)(10)(C)(ii).
            (3) Reference to budget neutrality provision.--For a 
        requirement that the Secretary of Health and Human Services 
        make a proportional adjustment in the Medicare standardized 
        payment amounts for inpatient hospital services to assure that 
        geographic reclassifications of hospitals resulting from this 
        subsection do not result in an increase in aggregate payments 
        under section 1886 of the Social Security Act, see subsection 
        (d)(8)(D) of such section.
    (b) Continuing Treatment of Previously Designated Centers.--
            (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 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 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.

SEC. 3. HOSPITAL GEOGRAPHIC RECLASSIFICATION PERMITTED FOR PURPOSES OF 
              DISPROPORTIONATE SHARE PAYMENT ADJUSTMENTS.

    (a) In General.--Section 1886(d)(10)(C)(i) of the Social Security 
Act (42 U.S.C. 1395ww(d)(10)(C)(i)) is amended--
            (1) by striking ``or'' at the end of subclause (I);
            (2) by striking the period at the end of subclause (II) and 
        inserting ``, or'';
            (3) by inserting after subclause (II) the following:
            ``(III) eligibility for and amount of additional payment 
        amounts under paragraph (5)(F).''; and
            (4) by adding at the end the following:
``Any application approved for purposes of subclause (I) for a fiscal 
year is deemed to be approved for purposes of subclause (III) for that 
fiscal year.''.
    (b) Effective Date.--Notwithstanding section 1886(d)(10)(C)(ii) of 
the Social Security Act, a hospital may submit an application to the 
Medicare Geographic Classification Review Board during the 60-day 
period beginning on the date of the enactment of this Act requesting a 
change in its classification for purposes of determining the 
disproportionate share hospital payment applicable to the hospital 
under section 1886(d)(5)(F) of such Act for fiscal year 1998 if the 
hospital would be eligible for such a change in its classification 
under the guidelines described in subsection (c) of this section but 
for its failure to meet the deadline for applications under section 
1886(d)(10(C)(ii).
    (c) Applicable Guidelines.--Such Board shall apply the guidelines 
established for reclassification under subclause (I) of section 
1886(d)(10)(C)(i) of such Act to reclassification under subclause (III) 
of such section until the Secretary of Health and Human Services 
promulgates separate guidelines for reclassification under such 
subclause (III).
    (d) Reference to Budget Neutrality Provision.--For a requirement 
that the Secretary of Health and Human Services make a proportional 
adjustment in the medicare standardized payment amounts for inpatient 
hospital services to assure that geographic reclassifications of 
hospitals resulting from this section do not result in an increase in 
aggregate payments under section 1886 of the Social Security Act, see 
subsection (d)(8)(D) of such section.

SEC. 4. PERMITTING REBASING OF PAYMENT FOR SOLE COMMUNITY HOSPITALS 
              USING FISCAL YEARS 1994 AND 1995 COSTS.

    Section 1886(b)(3) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)) is amended--
            (1) in subparagraph (C), by inserting ``subject to 
        subparagraph (F),'' after ``subsection (d)(5)(D)(iii)),''; and
            (2) by adding at the end the following new subparagraph:
    ``(F) In applying subparagraph (C) with respect to discharges 
occurring in fiscal year 1998 and each subsequent fiscal year, in no 
case shall the target amount for a hospital for fiscal year 1998 be 
less than the average of--
            ``(i) the allowable operating costs of inpatient hospital 
        services recognized under this title for the hospital's 12-
        month cost reporting period (if any) beginning during fiscal 
        year 1994 increased (in a compounded manner) by the applicable 
        percentage increase under subparagraph (B)(iv) for each of 
        fiscal years 1995, 1996, 1997, and 1998, and
            ``(ii) the allowable operating costs of inpatient hospital 
        services recognized under this title for the hospital's 12-
        month cost reporting period (if any) beginning during fiscal 
        year 1995 increased (in a compounded manner) by the applicable 
        percentage increase under subparagraph (B)(iv) for each of 
        fiscal years 1996, 1997, and 1998.''.

Summary: Rural Health Care Protection Act of 1997 - Amends title XVIII (Medicare) of the Social Security Act, with respect to a hospital which has ever been classified as a rural referral center, to prohibit denial of a request for its reclassification on the basis of any comparison between its average hourly wage and the average hourly wages of hospitals in the area in which it is located. Declares that any hospital classified as a rural referral center by the Secretary of Health and Human Services for FY 1991 shall be so classified for FY 1998 and each subsequent fiscal year. Permits hospital geographic reclassification for purposes of disproportionate share payment adjustments. Permits rebasing of Medicare payment for sole community hospitals using FY 1994 and 1995 costs.