‘‘(II) the total average number of standardized
medicare beneficiaries residing in all the medicare
payment areas for that year.
‘‘(iii) In applying this subparagraph for 1998—
‘‘(I) medicare services shall be divided into 2
types of services: part A services and part B serv-
ices;
‘‘(II) the proportions described in clause (i)(II)
for such types of services shall be—
‘‘(aa) for part A services, the ratio (ex-
pressed as a percentage) of the national average
annual per capita rate of payment for part A
for 1997 to the total average annual per capita
rate of payment for parts A and B for 1997,
and
‘‘(bb) for part B services, 100 percent
minus the ratio described in item (aa);
‘‘(III) for part A services, 70 percent of pay-
ments attributable to such services shall be adjusted
by the index used under section 1886(d)(3)(E) to
adjust payment rates for relative hospital wage levels
for hospitals located in the payment area involved;
and
‘‘(IV) for part B services—
‘‘(aa) 66 percent of payments attributable
to such services shall be adjusted by the index
of the geographic area factors under section
1848(e) used to adjust payment rates for physi-
cians’ services furnished in the payment area,
and
‘‘(bb) of the remaining 34 percent of the
amount of such payments, 70 percent shall be
adjusted by the index described in subclause
(III).
The Secretary may continue to apply the rules described
in this clause (or similar rules) for 1999.
‘‘(E) For each year, the Secretary shall compute a
budget neutrality adjustment factor so that the aggregate
of the payments under this section shall be equal to the
aggregate payments that would have been made under this
section if the area-specific percentage for the year had
been 100 percent and the national percentage had been
0 percent.
‘‘(F) In this section, the ‘national average per capita
growth percentage’ is equal to the percentage growth in
medicare fee-for-service per capita expenditures, which the
Secretary shall project for each year.
‘‘(5)(A) In this section, except as provided in sub-
paragraph (C), the term ‘medicare payment area’ means
a county, or equivalent area specified by the Secretary.
‘‘(B) In the case of individuals who are determined
to have end stage renal disease, the medicare payment
area shall be specified by the Secretary.
‘‘(C)(i) Upon written request of the Chief Executive
Officer of a State for a contract year (beginning after
1997) made at least 7 months before the beginning of the
year, the Secretary shall adjust the system under which
medicare payment areas in the State are otherwise deter-
mined under subparagraph (A) to a system which—
‘‘(I) has a single statewide medicare payment
area,
‘‘(II) is a metropolitan based system described
in clause (iii), or
‘‘(III) which consolidates into a single medicare
payment area noncontiguous counties (or equivalent
areas described in subparagraph (A)) within a State.
Such adjustment shall be effective for payments for
months beginning with January of the year following the
year in which the request is received.
‘‘(ii) In the case of a State requesting an adjustment
under this subparagraph, the Secretary shall adjust the
payment rates otherwise established under this section for
medicare payment areas in the State in a manner so that
the aggregate of the payments under this section in the
State shall be equal to the aggregate payments that would
have been made under this section for medicare payment
areas in the State in the absence of the adjustment under
this subparagraph.
‘‘(iii) The metropolitan based system described in this
clause is one in which—
‘‘(I) all the portions of each metropolitan statis-
tical area in the State or in the case of a consoli-
dated metropolitan statistical area, all of the por-
tions of each primary metropolitan statistical area
within the consolidated area within the State, are
treated as a single medicare payment area, and
‘‘(II) all areas in the State that do not fall
within a metropolitan statistical area are treated as
a single medicare payment area.
‘‘(iv) In clause (iii), the terms ‘metropolitan statis-
tical area’, ‘consolidated metropolitan statistical area’, and
‘primary metropolitan statistical area’ mean any area des-
ignated as such by the Secretary of Commerce.
‘‘(6) Subject to subsections (c)(2)(B)(ii) and (c)(7),
if an individual is enrolled under this section with an eligi-
ble organization having a risk-sharing contract, only the
eligible organization shall be entitled to receive payments
from the Secretary under this title for services furnished
to the individual.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on October 1, 1997.
Æ