I 

109TH CONGRESS 

1ST SESSION H. R. 2961 

To amend title XVIII of the Social Security Act to extend and improve 

protections for sole community hospitals under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 17, 2005 

Mr. WALDEN of Oregon (for himself and Mr. TANNER) 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 extend 

and improve protections for sole community hospitals 

under the Medicare Program. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Sole Community Hos5 pital Preservation Act of 2005’’. 
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1 SEC. 2. PERMANENT HOLD HARMLESS FOR SOLE COMMU2 NITY HOSPITALS UNDER THE PROSPECTIVE 

3 PAYMENT SYSTEM FOR HOSPITAL OUT4 PATIENT DEPARTMENT SERVICES UNDER 

5 THE MEDICARE PROGRAM. 

6 Section 1833(t)(7)(D) of the Social Security Act (42 

7 U.S.C. 1395l(t)(7)(D)) is amended by adding at the end 

8 the following new clause: 

9 ‘‘(iii) PERMANENT HOLD HARMLESS

10 FOR SOLE COMMUNITY HOSPITALS.—In the 

11 case of a sole community hospital (as de12 fined in section 1886(d)(5)(D)(iii)), for 

13 covered OPD services furnished after De14 cember 31, 2005, for which the PPS 

15 amount is less than the pre-BBA amount, 

16 the amount of payment under this sub17 section shall be increased by the amount of 

18 such difference.’’. 

19 SEC. 3. ESTABLISHMENT OF MINIMUM BASE PAYMENT-TO20 COST RATIO FOR DETERMINATION OF PRE21 BBA AMOUNT FOR SOLE COMMUNITY HOS22 PITALS. 

23 (a) MINIMUM BASE PAYMENT-TO-COST RATIO.— 

24 Section 1833(t)(7)(F)(ii) of the Social Security Act (42 

25 U.S.C. 1395l(t)(7)(F)(ii)) is amended by adding at the 

26 end the following new sentence: ‘‘Notwithstanding the pre-
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1 vious sentence, in determining the pre-BBA amount for 

2 covered OPD services furnished by a sole community hos3 pital (as defined in section 1886(d)(5)(D)(iii)), the Sec4 retary shall substitute a minimum base payment-to-cost 

5 ratio if such substitution results in a greater amount of 

6 payment for such services under this subsection furnished 

7 by the sole community hospital. For purposes of the pre8 ceding sentence, a minimum base payment-to-cost ratio is 

9 equal to the 75th percentile of the payment-to-cost ratios 

10 for fiscal year 1996 of all hospitals with a designation as 

11 a sole community hospital in effect during fiscal year 2004 

12 (as determined by the Secretary).’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 subsection (a) shall apply to covered OPD services fur15 nished on or after January 1, 2006. 

16 SEC. 4. REBASING FOR SOLE COMMUNITY HOSPITALS. 

17 (a) REBASING PERMITTED.—Section 1886(b)(3) of 

18 the Social Security Act (42 U.S.C. 1395ww(b)(3)) is 

19 amended by adding at the end the following new subpara20 graph: 

21 ‘‘(K)(i) For cost reporting periods beginning on or 

22 after October 1, 2005, in the case of a sole community 

23 hospital there shall be substituted for the amount other24 wise determined under subsection (d)(5)(D)(i) of this sec-
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1 tion, if such substitution results in a greater amount of 

2 payment under this section for the hospital— 

3 ‘‘(I) with respect to discharges occurring in fis4 cal year 2006, 75 percent of the subsection 

5 (d)(5)(D)(i) amount (as described in subparagraph 

6 (I)(i)(I)) and 25 percent of the subparagraph (K) 

7 rebased target amount (as defined in clause (ii)); 

8 ‘‘(II) with respect to discharges occurring in fis9 cal year 2007, 50 percent of the subsection 

10 (d)(5)(D)(i) amount and 50 percent of the subpara11 graph (K) rebased target amount; 

12 ‘‘(III) with respect to discharges occurring in 

13 fiscal year 2008, 25 percent of the subsection 

14 (d)(5)(D)(i) amount and 75 percent of the subpara15 graph (K) rebased target amount; and 

16 ‘‘(IV) with respect to discharges occurring after 

17 fiscal year 2008, 100 percent of the subparagraph 

18 (K) rebased target amount. 

19 ‘‘(ii) For purposes of this subparagraph, the ‘sub20 paragraph (K) rebased target amount’ has the meaning 

21 given the term ‘target amount’ in subparagraph (C), ex22 cept that— 

23 ‘‘(I) there shall be substituted for the base cost 

24 reporting period the 12-month cost reporting period 

25 beginning during fiscal year 2000 or 2001, which-
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1 ever results in the greater amount of payment under 

2 this section for the hospital; 

3 ‘‘(II) any reference in subparagraph (C)(i) to 

4 the ‘first cost reporting period’ described in such 

5 subparagraph is deemed a reference to the first cost 

6 reporting period beginning on or after October 1, 

7 2005; and 

8 ‘‘(III) the applicable percentage increase shall 

9 only be applied under subparagraph (C)(iv) for dis10 charges occurring in fiscal years beginning with fis11 cal year 2007.’’. 

12 (b) CONFORMING AMENDMENTS.—Section 

13 1886(b)(3) of such Act (42 U.S.C. 1395ww(b)(3)) is 

14 amended— 

15 (1) in subparagraph (C), by inserting ‘‘and sub16 paragraph (K)’’ after ‘‘subject to subparagraph (I)’’ 

17 in the matter preceding clause (i); and 

18 (2) in subparagraph (I)(i)— 

19 (A) by striking ‘‘For’’ in the matter pre20 ceding subclause (I) and inserting ‘‘Subject to 

21 subparagraph (K), for’’; and 

22 (B) in subclause (I), by inserting ‘‘and 

23 subparagraph (K)’’ after ‘‘referred to in this 

24 clause’’. 

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