I
107TH CONGRESS
1ST SESSION
H. R. 2003
To amend title XVIII of the Social Security Act to provide that geographic
reclassifications of hospitals from one urban area to another urban area
do not result in lower wage indexes in the urban area in which the
hospital was originally classified.
IN THE HOUSE OF REPRESENTATIVES
MAY 24, 2001
Mrs. ROUKEMA (for herself, Mr. SMITH of New Jersey, Mr. FERGUSON, Mr.
SAXTON, Mr. LOBIONDO, Mr. FRELINGHUYSEN, and Mr. PASCRELL) in-
troduced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend title XVIII of the Social Security Act to provide
that geographic reclassifications of hospitals from one
urban area to another urban area do not result in lower
wage indexes in the urban area in which the hospital
was originally classified.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Hospital Medicare
Payment Parity Act of 2001’’.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Reimbursement under the medicare pro-
gram for approximately 250 hospitals nationwide is
decreased by approximately $80,000,000 each year
due to the damaging effect of geographic reclassi-
fication of hospitals located in the same area as such
urban hospitals to other areas with a higher wage
indexes.
(2) A provision to protect rural hospitals from
similar damaging effects already exists under the
medicare program.
(3) The Medicare Payment Advisory Commis-
sion, in its March 2001 report to Congress, recog-
nized these damaging effects on urban hospitals and
the inequity related to the existing rule to protect
rural hospitals when they stated that ‘‘Congress
should protect urban hospitals from the adverse ef-
fect of nearby hospitals being reclassified to areas
with higher wage indexes by computing each area’s
wage index as if none of the hospitals located in the
area had been reassigned’’.
SEC. 3. APPLICATION OF WAGE INDEX FLOOR FOR HOS-
PITAL 
GEOGRAPHIC 
RECLASSIFICATIONS
FROM 
ONE 
URBAN 
AREA 
TO 
ANOTHER
URBAN AREA.
(a) IN GENERAL.—Section 1886(d)(8)(C)(ii) of the
Social Security Act (42 U.S.C. 1395ww(d)(8)(C)(ii)) is
amended—
(1) by inserting ‘‘(I)’’ after ‘‘(ii)’’; and
(2) by adding at the end the following new sub-
clause:
‘‘(II) If the application of subparagraph (B) or a de-
cision of the Medicare Geographic Classification Review
Board or the Secretary under paragraph (10), by treating
hospitals located in one urban area as being located in
another urban area reduces the wage index for that one
urban area (as applied under this subsection), the Sec-
retary shall calculate and apply such wage index under
this subsection as if the hospitals so treated had not been
excluded from the calculation of the wage index for that
one urban area.’’.
(b) WAIVER
OF BUDGET NEUTRALITY.—Section
1886(d)(8)(D) of the Social Security Act (42 U.S.C.
1395ww(d)(8)(D)) is amended by inserting before the pe-
riod at the end the following: ‘‘, except that no such ad-
justment may be made to such amounts as a result of the
application of subparagraph (C)(ii)(II)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to cost reporting periods beginning
on or after October 1, 2001.
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