I
105TH CONGRESS
1ST SESSION
H. R. 2701
To amend title XVIII of the Social Security Act to carve out from payments
to Medicare+Choice organizations amounts attributable to disproportion-
ate share hospital payments and pay such amounts directly to those
disproportionate share hospitals in which their enrollees receive care.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 21, 1997
Mr. RANGEL (for himself, Mr. STARK, Mr. CARDIN, Mr. LEWIS of Georgia,
and Mr. BECERRA) introduced the following bill; which was referred to
the Committee on Ways and Means, and in addition to the Committee
on Commerce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
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 dis-
proportionate share hospitals in which their enrollees re-
ceive care.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CARVING OUT DSH PAYMENTS FROM PAY-
MENTS TO MEDICARE+CHOICE ORGANIZA-
TIONS AND PAYING THE AMOUNTS DIRECTLY
TO 
DSH 
HOSPITALS 
ENROLLING
MEDICARE+CHOICE ENROLLEES.
(a) IN GENERAL.—Section 1853(c)(3) of the Social
Security Act (42 U.S.C. 1395w–23(c)(3)), as inserted by
section 4001 of the Balanced Budget Act of 1997, is
amended—
(1) in subparagraph (A), by striking ‘‘subpara-
graph (B)’’ and inserting ‘‘subparagraphs (B) and
(D)’’,
(2) by redesignating subparagraph (D) as sub-
paragraph (E), and
(3) by inserting after subparagraph (C) the fol-
lowing new subparagraph:
‘‘(D) REMOVAL
OF
PAYMENTS
ATTRIB-
UTABLE
TO
DISPROPORTIONATE
SHARE
PAY-
MENTS FROM CALCULATION OF ADJUSTED AV-
ERAGE PER CAPITA COST.—
‘‘(i) IN
GENERAL.—In determining
the area-specific Medicare+Choice capita-
tion rate under subparagraph (A) for a
year (beginning with 1999), the annual per
capita rate of payment for 1997 deter-
mined under section 1876(a)(1)(C) shall be
adjusted, subject to clause (ii) to exclude
from the rate the additional payments that
the Secretary estimates were payment dur-
ing 1997 for additional payments described
in section 1886(d)(5)(F).
‘‘(ii) TREATMENT OF PAYMENTS COV-
ERED
UNDER
STATE
HOSPITAL
REIM-
BURSEMENT SYSTEM.—To the extent that
the Secretary estimates that an annual per
capita rate of payment for 1997 described
in clause (i) reflects payments to hospitals
reimbursed under section 1814(b)(3), the
Secretary shall estimate a payment adjust-
ment that is comparable to the payment
adjustment that would have been made
under clause (i) if the hospitals had not
been reimbursed under such section.’’.
(b) ADDITIONAL PAYMENTS FOR MANAGED CARE
ENROLLEES.—Section 1886(d)(5)(F) of such Act ((42
U.S.C. 1395ww(d)(5)(F)) is amended—
(1) in clause (ii), by striking ‘‘clause (ix)’’ and
inserting ‘‘clauses (ix) and (x)’’, and
(2) by adding at the end the following:
‘‘(ix)(I) For portions of cost reporting periods occur-
ring on or after January 1, 1999, the Secretary shall pro-
vide for an additional payment amount for each applicable
discharge of any subsection (d) hospital that is a dis-
proportionate share hospital (as described in clause (i)).
‘‘(II) For purposes of this clause, the term ‘applicable
discharge’ means the discharge of any individual who is
enrolled under a risk-sharing contract with an eligible or-
ganization under section 1876 and who is entitled to bene-
fits under part A or any individual who is enrolled with
a Medicare+Choice organization under part C.
‘‘(III) The amount of the payment under this clause
with respect to any applicable discharge shall be equal to
the estimated average per discharge amount that would
otherwise have been paid under this subparagraph if the
individuals had not been enrolled as described in subclause
(II).
‘‘(IV) The Secretary shall establish rules for an addi-
tional payment amount, for any hospital reimbursed under
a reimbursement system authorized under section
1814(b)(3) if such hospital would qualify as a dispropor-
tionate share hospital under clause (i) were it not so reim-
bursed. Such payment shall be determined in the same
manner as the amount of payment is determined under
this clause for disproportionate share hospitals.’’.
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