I 

114TH CONGRESS 

2D SESSION H. R. 4428 

To amend title XVIII of the Social Security Act to ensure fairness in Medicare 

hospital payments by establishing a floor for the area wage index applied 

with respect to certain hospitals. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 2, 2016 

Mrs. BLACK (for herself, Ms. SEWELL of Alabama, Mr. ROE of Tennessee, 

Mr. DUNCAN of Tennessee, Mr. FLEISCHMANN, Mr. DESJARLAIS, Mr. 

COOPER, Mrs. BLACKBURN, Mr. FINCHER, Mr. COHEN, Mr. BYRNE, 

Mrs. ROBY, Mr. ROGERS of Alabama, Mr. ADERHOLT, Mr. BROOKS of 

Alabama, Mr. DAVID SCOTT of Georgia, Mr. GRIFFITH, Mr. 

WESTERMAN, Mr. CRAWFORD, Mr. HILL, Mr. WOMACK, Mr. BISHOP of 

Georgia, Mr. PALMER, Mr. VELA, Mr. WHITFIELD, Mr. HARPER, Mr. 

BOUSTANY, Mr. RICHMOND, Mr. ALLEN, Mr. GUTHRIE, Mr. CARTER of 

Georgia, and Mr. HINOJOSA) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the 

Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to ensure 

fairness in Medicare hospital payments by establishing 

a floor for the area wage index applied with respect 

to certain hospitals. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘The Fair Medicare 

3 Hospital Payments Act of 2016’’. 

4 SEC. 2. ENSURING FAIRNESS IN MEDICARE HOSPITAL PAY5 MENTS. 

6 (a) HOSPITAL INPATIENT SERVICES.—Section 

7 1886(d)(3)(E) of the Social Security Act (42 U.S.C. 

8 1395www(d)(3)(E)) is amended— 

9 (1) in clause (i), by striking ‘‘clause (ii) or (iii)’’ 

10 and inserting ‘‘clause (ii), (iii), or (iv)’’; and 

11 (2) by adding at the end the following new 

12 clause: 

13 ‘‘(iv) AREA WAGE INDEX FLOOR.— 

14 ‘‘(I) IN GENERAL.—Subject to 

15 subclause (II), for discharges occur16 ring on or after October 1, 2016, the 

17 area wage index applicable under this 

18 subparagraph to any hospital which is 

19 not located in a frontier State (as de20 fined in clause (iii)(II)) may not be 

21 less than 0.874. 

22 ‘‘(II) ENSURING BUDGET NEU23 TRALITY.—In order to ensure that the 

24 aggregate payments made under this 

25 subsection for a fiscal year (beginning 

26 with fiscal year 2017) are not greater 


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1 than the aggregate payments that 

2 would have been made under this sub3 section for such fiscal year without 

4 the application of subclause (I), the 

5 Secretary shall establish pursuant to 

6 rulemaking a maximum area wage 

7 index to apply under this subpara8 graph to any hospital which is not lo9 cated in a frontier State (as defined 

10 in clause (iii)(II)).’’. 

11 (b) HOSPITAL OUTPATIENT DEPARTMENT SERV12 ICES.—Section 1833(t) of the Social Security Act (42 

13 U.S.C. 1395l(t)), is amended— 

14 (1) in paragraph (2)(D), by striking ‘‘para15 graph (19), the Secretary’’ and inserting ‘‘para16 graphs (19) and (22), the Secretary’’; and 

17 (2) by adding at the end the following new 

18 paragraph: 

19 ‘‘(22) FLOOR ON AREA WAGE ADJUSTMENT

20 FACTOR FOR HOSPITAL OUTPATIENT DEPARTMENT

21 SERVICES.— 

22 ‘‘(A) IN GENERAL.—Subject to subpara23 graph (B), with respect to covered OPD serv24 ices furnished on or after January 1, 2017, the 

25 area wage adjustment factor applicable under 


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1 the payment system established under this sub2 section to any hospital outpatient department 

3 which is not located in a frontier State (as de4 fined in section 1886(d)(3)(E)(iii)(II)) may not 

5 be less than 0.874. 

6 ‘‘(B) ENSURING BUDGET NEUTRALITY.— 

7 In order to ensure that the aggregate payments 

8 made under this subsection for a year (begin9 ning with 2017) are not greater than the aggre10 gate payments that would have been made 

11 under this subsection for such year without the 

12 application of subparagraph (A), the Secretary 

13 shall establish pursuant to rulemaking a max14 imum area wage adjustment factor to apply 

15 under the payment system established under 

16 this subsection to any hospital outpatient de17 partment which is not located in a frontier 

18 State (as defined in clause (iii)(II)).’’. 

Æ 


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