I 
114TH CONGRESS 
2D SESSION 
H. R. 4428 
To amend title XVIII of the Social Security Act to ensure fairness in Medicare 
hospital payments by establishing a floor for the area wage index applied 
with respect to certain hospitals. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 2, 2016 
Mrs. BLACK (for herself, Ms. SEWELL of Alabama, Mr. ROE of Tennessee, 
Mr. DUNCAN of Tennessee, Mr. FLEISCHMANN, Mr. DESJARLAIS, Mr. 
COOPER, Mrs. BLACKBURN, Mr. FINCHER, Mr. COHEN, Mr. BYRNE, 
Mrs. ROBY, Mr. ROGERS of Alabama, Mr. ADERHOLT, Mr. BROOKS of 
Alabama, Mr. DAVID
SCOTT
of Georgia, Mr. GRIFFITH, Mr. 
WESTERMAN, Mr. CRAWFORD, Mr. HILL, Mr. WOMACK, Mr. BISHOP of 
Georgia, Mr. PALMER, Mr. VELA, Mr. WHITFIELD, Mr. HARPER, Mr. 
BOUSTANY, Mr. RICHMOND, Mr. ALLEN, Mr. GUTHRIE, Mr. CARTER of 
Georgia, and Mr. HINOJOSA) introduced the following bill; which was re-
ferred to the Committee on Ways and Means, and in addition to the 
Committee on Energy and Commerce, for a period to be subsequently de-
termined 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 ensure 
fairness in Medicare hospital payments by establishing 
a floor for the area wage index applied with respect 
to certain hospitals. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘The Fair Medicare 
Hospital Payments Act of 2016’’. 
SEC. 2. ENSURING FAIRNESS IN MEDICARE HOSPITAL PAY-
MENTS. 
(a) 
HOSPITAL
INPATIENT
SERVICES.—Section 
1886(d)(3)(E) of the Social Security Act (42 U.S.C. 
1395www(d)(3)(E)) is amended— 
(1) in clause (i), by striking ‘‘clause (ii) or (iii)’’ 
and inserting ‘‘clause (ii), (iii), or (iv)’’; and 
(2) by adding at the end the following new 
clause: 
‘‘(iv) AREA WAGE INDEX FLOOR.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), for discharges occur-
ring on or after October 1, 2016, the 
area wage index applicable under this 
subparagraph to any hospital which is 
not located in a frontier State (as de-
fined in clause (iii)(II)) may not be 
less than 0.874. 
‘‘(II) ENSURING
BUDGET
NEU-
TRALITY.—In order to ensure that the 
aggregate payments made under this 
subsection for a fiscal year (beginning 
with fiscal year 2017) are not greater 
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than the aggregate payments that 
would have been made under this sub-
section for such fiscal year without 
the application of subclause (I), the 
Secretary shall establish pursuant to 
rulemaking a maximum area wage 
index to apply under this subpara-
graph to any hospital which is not lo-
cated in a frontier State (as defined 
in clause (iii)(II)).’’. 
(b) HOSPITAL OUTPATIENT DEPARTMENT SERV-
ICES.—Section 1833(t) of the Social Security Act (42 
U.S.C. 1395l(t)), is amended— 
(1) in paragraph (2)(D), by striking ‘‘para-
graph (19), the Secretary’’ and inserting ‘‘para-
graphs (19) and (22), the Secretary’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(22) FLOOR
ON
AREA
WAGE
ADJUSTMENT 
FACTOR FOR HOSPITAL OUTPATIENT DEPARTMENT 
SERVICES.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), with respect to covered OPD serv-
ices furnished on or after January 1, 2017, the 
area wage adjustment factor applicable under 
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the payment system established under this sub-
section to any hospital outpatient department 
which is not located in a frontier State (as de-
fined in section 1886(d)(3)(E)(iii)(II)) may not 
be less than 0.874. 
‘‘(B) ENSURING BUDGET NEUTRALITY.— 
In order to ensure that the aggregate payments 
made under this subsection for a year (begin-
ning with 2017) are not greater than the aggre-
gate payments that would have been made 
under this subsection for such year without the 
application of subparagraph (A), the Secretary 
shall establish pursuant to rulemaking a max-
imum area wage adjustment factor to apply 
under the payment system established under 
this subsection to any hospital outpatient de-
partment which is not located in a frontier 
State (as defined in clause (iii)(II)).’’. 
Æ 
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