II

104TH CONGRESS

1ST SESSION S. 832

To require the Prospective Payment Assessment Commission to develop separate applicable percentage increases to ensure that medicare beneficiaries

who receive services from medicare dependent hospitals receive the same

quality of care and access to services as medicare beneficiaries in other

hospitals, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 19 (legislative day, MAY 15), 1995

Mr. GRAHAM introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To require the Prospective Payment Assessment Commission

to develop separate applicable percentage increases to

ensure that medicare beneficiaries who receive services

from medicare dependent hospitals receive the same quality of care and access to services as medicare beneficiaries in other hospitals, and for other purposes.

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 ‘‘Medicare Dependent

5 Hospital Relief Act of 1995’’.
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1 SEC. 2. DEVELOPMENT OF SEPARATE APPLICABLE PER2 CENTAGE INCREASES FOR MEDICARE DE3 PENDENT HOSPITALS AND OTHER HOS4 PITALS BY THE PROSPECTIVE PAYMENT AS5 SESSMENT COMMISSION.

6 (a) DEVELOPMENT OF SEPARATE APPLICABLE PER7 CENTAGE INCREASES.—

8 (1) IN GENERAL.—The Prospective Payment

9 Assessment Commission established under section

10 1886(e)(2) of the Social Security Act (42 U.S.C.

11 1395ww(e)(2)) (in this section referred to as the

12 ‘‘Commission’’) shall, in accordance with paragraph

13 (2), develop for fiscal year 1997 and each fiscal year

14 thereafter separate applicable percentage increases

15 described in section 1886(b)(3)(B) of such Act (42

16 U.S.C. 1395ww(b)(3)(B)) for medicare dependent

17 hospitals and subsection (d) hospitals which are not

18 medicare dependent hospitals.

19 (2) EQUALIZATION OF MEDICARE MARGINS.—

20 The Commission shall develop separate applicable

21 percentage increases under paragraph (1) such that,

22 if such increases were in effect, the estimated aver23 age annual medicare margins of all medicare de24 pendent hospitals in furnishing inpatient hospital

25 services to medicare beneficiaries in such fiscal year

26 would be equal to the average annual medicare mar-
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1 gins of all subsection (d) hospitals which are not

2 medicare dependent hospitals in furnishing inpatient

3 hospital services to medicare beneficiaries in such

4 fiscal year.

5 (3) BUDGET NEUTRALITY.—The Commission

6 shall provide that the separate applicable percentage

7 increases developed under paragraph (1) would, if in

8 effect, not result in aggregate payments under sec9 tion 1886 of the Social Security Act (42 U.S.C.

10 1395ww) to medicare dependent hospitals and sub11 section (d) hospitals which are not medicare depend12 ent hospitals for the furnishing of inpatient hospital

13 services in a fiscal year in excess of the aggregate

14 payments under such section to such hospitals in

15 such fiscal year if such increases were not in effect.

16 (b) REPORTS.—

17 (1) IN GENERAL.—Beginning in March 1996,

18 the Commission shall, in each of the Commission’s

19 March reports to the Congress required under sec20 tion 1886(e)(3) of the Social Security Act (42

21 U.S.C. 1395ww(e)(3)), include—

22 (A) the separate applicable percentage in23 creases developed by the Commission under

24 subsection (a)(1) for the upcoming fiscal year;

25 and
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1 (B) recommendations on methods to en2 sure that medicare beneficiaries who receive

3 services furnished by medicare dependent hos4 pitals have the same access and quality of care

5 as medicare beneficiaries who are furnished

6 services by subsection (d) hospitals which are

7 not medicare dependent hospitals.

8 (2) ANNUAL REVIEW OF MEDICARE MARGINS.—

9 The Commission shall develop the recommended

10 methods under paragraph (1)(B) after annually re11 viewing the average medicare margins in medicare

12 dependent hospitals and the impact of such medicare

13 margins on the medicare dependent hospitals’ overall

14 profit margins.

15 SEC. 3. DEFINITIONS.

16 In this Act, the following definitions apply:

17 (1) MEDICARE BENEFICIARY.—The term ‘‘med18 icare beneficiary’’ means an individual who is enti19 tled to benefits under part A of title XVIII of the

20 Social Security Act (42 U.S.C. 1395c et seq.).

21 (2) MEDICARE DEPENDENT HOSPITAL.—The

22 term ‘‘medicare dependent hospital’’ means any sub23 section (d) hospital—

24 (A) that is not classified as a sole commu25 nity hospital under section 1886(d)(5)(D) of
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1 the Social Security Act (42 U.S.C.

2 1395ww(d)(5)(D)); and

3 (B) for which not less than 60 percent of

4 its inpatient days were attributable to medicare

5 beneficiaries during 2 of the last 3 preceding

6 fiscal years for which data is available.

7 (3) MEDICARE MARGIN.—

8 (A) IN GENERAL.—The term ‘‘medicare

9 margin’’ means for a fiscal year the ratio ex10 pressed as a percentage equal to—

11 (i) the difference between all medicare

12 revenues paid to a hospital for the operat13 ing costs of inpatient hospital services in a

14 fiscal year and all medicare program eligi15 ble expenses for such operating costs for

16 such fiscal year (as shown by each hos17 pital’s HCFA 2552 report submitted annu18 ally to the Health Care Financing Admin19 istration); divided by

20 (ii) all medicare revenues paid to the

21 hospital for the operating costs of inpatient

22 hospital services for such fiscal year.

23 (B) OPERATING COSTS OF INPATIENT HOS24 PITAL SERVICES.—The term ‘‘operating costs of

25 inpatient hospital services’’ has the meaning
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1 given such term in section 1886(a)(4) of the

2 Social Security Act (42 U.S.C. 1395ww(a)(4)).

3 (4) SUBSECTION (D) HOSPITAL.—The term

4 ‘‘subsection (d) hospital’’ has the meaning given

5 such term in section 1886(d)(1)(B) of the Social Se6 curity Act (42 U.S.C. 1395ww(d)(1)(B)).

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