I

107TH CONGRESS

1ST SESSION H. R. 1609

To amend title XVIII of the Social Security Act to provide for national

standardized payment amounts for inpatient hospital services furnished

under the Medicare Program.

IN THE HOUSE OF REPRESENTATIVES

APRIL 26, 2001

Mr. ENGLISH (for himself, Mr. TANNER, Mr. RILEY, Mr. KENNEDY of Minnesota, Mr. HILLIARD, and Mr. CRAMER) 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 provide

for national standardized payment amounts for inpatient

hospital services furnished 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,
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1 SECTION 1. ESTABLISHING A SINGLE STANDARDIZED

2 AMOUNT UNDER MEDICARE INPATIENT HOS3 PITAL PPS.

4 (a) IN GENERAL.—Section 1886(d)(3)(A) of the So5 cial Security Act (42 U.S.C. 1395ww(d)(3)(A)) is

6 amended—

7 (1) in clause (iv), by inserting ‘‘and ending on

8 or before September 30, 2001,’’ after ‘‘October 1,

9 1995,’’; and

10 (2) by redesignating clauses (v) and (vi) as

11 clauses (vii) and (viii), respectively, and inserting

12 after clause (iv) the following new clauses:

13 ‘‘(v) For discharges occurring in the fiscal year

14 beginning on October 1, 2001, the average standard15 ized amount for hospitals located in areas other than

16 a large urban area shall be equal to the average

17 standardized amount for hospitals located in a large

18 urban area.

19 ‘‘(vi) For discharges occurring in a fiscal year

20 beginning on or after October 1, 2002, the Secretary

21 shall compute an average standardized amount for

22 hospitals located in all areas within the United

23 States equal to the average standardized amount

24 computed under clause (v) or this clause for the pre25 vious fiscal year increased by the applicable percent-
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1 age increase under subsection (b)(3)(B)(i) for the

2 fiscal year involved.’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) UPDATE FACTOR.—Section

5 1886(b)(3)(B)(i)(XVII) of the Social Security Act

6 (42 U.S.C. 1395ww(b)(3)(B)(i)(XVII)) is amended

7 by striking ‘‘for hospitals in all areas,’’ and inserting

8 ‘‘for hospitals located in a large urban area,’’.

9 (2) COMPUTING DRG-SPECIFIC RATES.—

10 (A) IN GENERAL.—Section 1886(d)(3)(D)

11 of such Act (42 U.S.C. 1395ww(d)(3)(D)) is

12 amended—

13 (i) in the heading by striking ‘‘IN DIF14 FERENT AREAS’’;

15 (ii) in the matter preceding clause

16 (i)—

17 (I) by inserting ‘‘for fiscal years

18 before fiscal year 1997’’ before ‘‘a re19 gional DRG prospective payment rate

20 for each region,’’; and

21 (II) by striking ‘‘each of which

22 is’’;

23 (iii) in clause (i)—
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1 (I) by inserting ‘‘for fiscal years

2 before fiscal year 2002,’’ after ‘‘(i)’’;

3 and

4 (II) by striking ‘‘and’’ at the end;

5 (iv) in clause (ii)—

6 (I) by inserting ‘‘for fiscal years

7 before fiscal year 2002,’’ after ‘‘(ii)’’;

8 and

9 (II) by striking the period at the

10 end and inserting ‘‘; and’’; and

11 (v) by adding at the end the following

12 new clause:

13 ‘‘(iii) for a fiscal year beginning after fiscal

14 year 2001, for hospitals located in all areas, to

15 the product of—

16 ‘‘(I) the applicable average standard17 ized amount (computed under subpara18 graph (A)), reduced under subparagraph

19 (B), and adjusted or reduced under sub20 paragraph (C) for the fiscal year; and

21 ‘‘(II) the weighting factor (determined

22 under paragraph (4)(B)) for that diag23 nosis-related group.’’.

24 (B) TECHNICAL CONFORMING SUNSET.—

25 Section 1886(d)(3) of such Act (42 U.S.C.
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1 1395ww(d)(3)) is amended in the matter pre2 ceding subparagraph (A) by inserting ‘‘for fiscal

3 years before fiscal year 1997’’ before ‘‘a re4 gional DRG prospective payment rate’’.

5 SEC. 2. FLOOR ON AREA WAGE ADJUSTMENT FACTORS

6 USED UNDER MEDICARE PPS FOR INPATIENT

7 AND OUTPATIENT HOSPITAL SERVICES.

8 (a) INPATIENT PPS.—Section 1886(d)(3)(E) of the

9 Social Security Act (42 U.S.C. 1395ww(d)(3)(E)) is

10 amended—

11 (1) by inserting ‘‘(i) IN GENERAL.—’’ before

12 ‘‘The Secretary’’, and adjusting the margin two ems

13 to the right;

14 (2) by striking ‘‘The Secretary’’ and inserting

15 ‘‘Subject to clause (ii), the Secretary’’; and

16 (3) by adding at the end the following:

17 ‘‘(ii) FLOOR ON AREA WAGE ADJUSTMENT

18 FACTOR.—Notwithstanding clause (i), in deter19 mining payments under this subsection for dis20 charges occurring on or after October 1, 2001,

21 the Secretary shall substitute a factor of .925

22 for any factor that would otherwise apply under

23 such clause that is less than .925. Nothing in

24 this clause shall be construed as authorizing—
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1 ‘‘(I) the application of the last sen2 tence of clause (i) to any substitution made

3 pursuant to this clause, or

4 ‘‘(II) the application of the preceding

5 sentence of this clause to adjustments for

6 area wage levels made under other pay7 ment systems established under this title

8 (other than the payment system under sec9 tion 1833(t)) to which the factors estab10 lished under clause (i) apply.’’.

11 (b) OUTPATIENT PPS.—Section 1833(t)(2) of the

12 Social Security Act (42 U.S.C. 1395l(t)(2)) is amended

13 by adding at the end the following: ‘‘For purposes of sub14 paragraph (D) for items and services furnished on or after

15 October 1, 2001, if the factors established under clause

16 (i) of section 1886(d)(3)(E) are used to adjust for relative

17 differences in labor and labor-related costs under the pay18 ment system established under this subsection, the provi19 sions of clause (ii) of such section (relating to a floor on

20 area wage adjustment factor) shall apply to such factors,

21 as used in this subsection, in the same manner and to

22 the same extent (including waiving the applicability of the

23 requirement for such floor to be applied in a budget neu-
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1 tral manner) as they apply to factors under section

2 1886.’’.

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