II

105TH CONGRESS

2D SESSION S. 1908

To amend title XVIII of the Social Security Act to carve out from payments

to Medicare+Choice organizations amounts attributable to disproportionate share hospital payments and pay such amounts directly to those

disproportionate share hospitals in which their enrollees receive care.

IN THE SENATE OF THE UNITED STATES

APRIL 2, 1998

Mr. MOYNIHAN (for himself, and Mr. D’AMATO) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to carve

out from payments to Medicare+Choice organizations

amounts attributable to disproportionate share hospital

payments and pay such amounts directly to those disproportionate share hospitals in which their enrollees receive care.

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 ‘‘Managed Care Fair

5 Payment Act of 1998’’.
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1 SEC. 2. CARVING OUT DSH PAYMENTS FROM PAYMENTS TO

2 MEDICARE+CHOICE ORGANIZATIONS AND

3 PAYING THE AMOUNTS DIRECTLY TO DSH

4 HOSPITALS ENROLLING MEDICARE+CHOICE

5 ENROLLEES.

6 (a) IN GENERAL.—Section 1853(c)(3) of the Social

7 Security Act (42 U.S.C. 1395w–23(c)(3)), as inserted by

8 section 4001 of the Balanced Budget Act of 1997, is

9 amended—

10 (1) in subparagraph (A), by striking ‘‘subpara11 graph (B)’’ and inserting ‘‘subparagraphs (B) and

12 (D)’’,

13 (2) by redesignating subparagraph (D) as sub14 paragraph (E), and

15 (3) by inserting after subparagraph (C) the fol16 lowing:

17 ‘‘(D) REMOVAL OF PAYMENTS ATTRIB18 UTABLE TO DISPROPORTIONATE SHARE PAY19 MENTS FROM CALCULATION OF ADJUSTED AV20 ERAGE PER CAPITA COST.—

21 ‘‘(i) IN GENERAL.—In determining

22 the area-specific Medicare+Choice capita23 tion rate under subparagraph (A) for a

24 year (beginning with 1999), the annual per

25 capita rate of payment for 1997 deter26 mined under section 1876(a)(1)(C) shall be
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1 adjusted, subject to clause (ii), to exclude

2 from the rate the additional payments that

3 the Secretary estimates were payment dur4 ing 1997 for additional payments described

5 in section 1886(d)(5)(F).

6 ‘‘(ii) TREATMENT OF PAYMENTS COV7 ERED UNDER STATE HOSPITAL REIM8 BURSEMENT SYSTEM.—To the extent that

9 the Secretary estimates that an annual per

10 capita rate of payment for 1997 described

11 in clause (i) reflects payments to hospitals

12 reimbursed under section 1814(b)(3), the

13 Secretary shall estimate a payment adjust14 ment that is comparable to the payment

15 adjustment that would have been made

16 under clause (i) if the hospitals had not

17 been reimbursed under such section.’’.

18 (b) ADDITIONAL PAYMENTS FOR MANAGED CARE

19 ENROLLEES.—Section 1886(d)(5)(F) of the Social Secu20 rity Act (42 U.S.C. 1395ww(d)(5)(F)) is amended—

21 (1) in clause (ii), by striking ‘‘clause (ix)’’ and

22 inserting ‘‘clauses (ix) and (x)’’, and

23 (2) by adding at the end the following:

24 ‘‘(ix)(I) For portions of cost reporting periods occur25 ring on or after January 1, 1999, the Secretary shall pro-
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1 vide for an additional payment amount for each applicable

2 discharge of any subsection (d) hospital that is a dis3 proportionate share hospital (as described in clause (i)).

4 ‘‘(II) For purposes of this clause, the term ‘applicable

5 discharge’ means the discharge of any individual who is

6 enrolled under a risk-sharing contract with an eligible or7 ganization under section 1876 and who is entitled to bene8 fits under part A or any individual who is enrolled with

9 a Medicare+Choice organization under part C.

10 ‘‘(III) The amount of the payment under this clause

11 with respect to any applicable discharge shall be equal to

12 the estimated average per discharge amount that would

13 otherwise have been paid under this subparagraph if the

14 individuals had not been enrolled as described in subclause

15 (II).

16 ‘‘(IV) The Secretary shall establish rules for an addi17 tional payment amount, for any hospital reimbursed under

18 a reimbursement system authorized under section

19 1814(b)(3) if such hospital would qualify as a dispropor20 tionate share hospital under clause (i) were it not so reim21 bursed. Such payment shall be determined in the same

22 manner as the amount of payment is determined under

23 this clause for disproportionate share hospitals.’’.

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