shall establish a conversion factor for de-
termining Medicare OPD fee schedule
amounts for each group for 1998 in a
manner so that, taking into account the
products, for all the groups, of 80 percent
of the Medicare OPD fee schedule amounts
(taking into account appropriate adjust-
ments described in paragraphs (2)(D) and
(2)(E)), and the frequency of utilization
for such group, the total projected Medi-
care payments under this part to hospitals
under the system under this subsection for
outpatient department services in 1998
shall equal the total projected Medicare
payments estimated under subparagraph
(A).
‘‘(ii) SUBSEQUENT
YEARS.—Before
the beginning of each year after 1998, the
Secretary shall determine the conversion
factor for determining Medicare OPD fee
schedule amounts for each group for that
year. The conversion factor shall be equal
to the conversion factor determined under
this subparagraph for the previous year in-
creased by the market basket percentage
increase 
(as 
defined 
in 
section
1886(b)(3)(B)(iii)) for the fiscal year in
which the year involved begins.
‘‘(5) CALCULATION
OF MEDICARE
OPD
FEE
SCHEDULE AMOUNTS.—The Secretary shall compute
a Medicare OPD fee schedule amount for each
group for each year in an amount equal to the prod-
uct of—
‘‘(A) the conversion factor computed under
paragraph (4)(B) for the year, and
‘‘(B) the relative payment weights (deter-
mined under paragraph (2)(C)) for such group
for such year.
‘‘(6) PERIODIC REVIEW AND ADJUSTMENTS TO
GROUP PRICES.—
‘‘(A) PERIODIC
REVIEW.—The Secretary
may periodically review and revise the groups,
the relative payment weights, and the wage and
other adjustments described in paragraph (2)
and take into account changes in medical prac-
tice, volume, changes in technology, the addi-
tion of new procedures, new cost data, and
other relevant information and factors.
‘‘(B) BUDGET NEUTRALITY FOR ADJUST-
MENT.—If the Secretary makes adjustments
under subparagraph (A), then such adjustments
for a year may not cause the estimated amount
of expenditures under this part for the year to
increase or decrease from the estimated amount
of expenditures under this part that would have
been made if such adjustments had not been
made.’’.
(b) COINSURANCE.—Section 1866(a)(2)(A)(ii) of
such Act (42 U.S.C. 1395cc(a)(2)(A)(ii)) is amended by
adding at the end the following new sentence: ‘‘In the case
of items and services for which payment is made under
part B under the prospective payment system established
under section 1833(t), clause (ii) of the first sentence shall
be applied by substituting for 20 percent of the reasonable
charge, the 20 percent of the applicable Medicare OPD
fee schedule amount under section 1833(t)(5)).’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 1833(i)(3) of such Act (42 U.S.C.
13951(i)(3)) is amended by adding at the end the
following:
‘‘(C) The previous provisions of this paragraph shall
not apply to items and services for which the amount of
payment is determined under subsection (t).’’.
(2) Section 1833(n) of such Act (42 U.S.C.
13951(n)) is amended by adding at the end the fol-
lowing:
‘‘(4) The previous provisions of this subsection shall
not apply to items and services for which the amount of
payment is determined under subsection (t).’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to services provided on or after
January 1, 1998.
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