I
104TH CONGRESS
1ST SESSION
H. R. 1651
To require the Prospective Payment Assessment Commission to develop sepa-
rate applicable percentage increases to ensure that medicare beneficiaries
who receive services from medicare dependent hospitals receive the same
quality of care and access to services as medicare beneficiaries in other
hospitals, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 16, 1995
Mr. SHAW introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To require the Prospective Payment Assessment Commission
to develop separate applicable percentage increases to
ensure that medicare beneficiaries who receive services
from medicare dependent hospitals receive the same qual-
ity of care and access to services as medicare bene-
ficiaries in other hospitals, and for other purposes.
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 ‘‘Medicare Dependent
Hospital Relief Act of 1995’’.
SEC. 2. DEVELOPMENT OF SEPARATE APPLICABLE PER-
CENTAGE INCREASES FOR MEDICARE DE-
PENDENT 
HOSPITALS 
AND 
OTHER 
HOS-
PITALS BY THE PROSPECTIVE PAYMENT AS-
SESSMENT COMMISSION.
(a) DEVELOPMENT OF SEPARATE APPLICABLE PER-
CENTAGE INCREASES.—
(1) IN
GENERAL.—The Prospective Payment
Assessment Commission established under section
1886(e)(2) of the Social Security Act (42 U.S.C.
1395ww(e)(2)) (in this section referred to as the
‘‘Commission’’) shall, in accordance with paragraph
(2), develop for fiscal year 1997 and each fiscal year
thereafter separate applicable percentage increases
described in section 1886(b)(3)(B) of such Act (42
U.S.C. 1395ww(b)(3)(B)) for medicare dependent
hospitals and subsection (d) hospitals which are not
medicare dependent hospitals.
(2) EQUALIZATION OF MEDICARE MARGINS.—
The Commission shall develop separate applicable
percentage increases under paragraph (1) such that,
if such factors were in effect, the estimated average
annual medicare margins of all medicare dependent
hospitals in furnishing inpatient hospital services to
medicare beneficiaries in such fiscal year would be
equal to the average annual medicare margins of all
subsection (d) hospitals which are not medicare de-
pendent hospitals in furnishing inpatient hospital
services to medicare beneficiaries in such fiscal year.
(3) BUDGET
NEUTRALITY.—The Commission
shall provide that the separate applicable percentage
increases developed under paragraph (1) would, if in
effect, not result in aggregate payments under sec-
tion 1886 of the Social Security Act (42 U.S.C.
1395ww) to medicare dependent hospitals and sub-
section (d) hospitals which are not medicare depend-
ent hospitals for the furnishing of inpatient hospital
services in a fiscal year in excess of the aggregate
payments under such section to such hospitals in
such fiscal year if such factors were not in effect.
(b) REPORTS.—
(1) IN GENERAL.—Beginning in March 1996,
the Commission shall, in each of the Commission’s
March reports to the Congress required under sec-
tion 1886(e)(3) of the Social Security Act (42
U.S.C. 1395ww(e)(3)) include—
(A) the separate applicable percentage in-
creases developed by the Commission under
subsection (a)(1) for the upcoming fiscal year;
and
(B) recommendations on methods to en-
sure that medicare beneficiaries who receive
services furnished by medicare dependent hos-
pitals have the same access and quality of care
as medicare beneficiaries who are furnished
services by subsection (d) hospitals which are
not medicare dependent hospitals.
(2) ANNUAL REVIEW OF MEDICARE MARGINS.—
The Commission shall develop the recommended
methods under paragraph (1)(B) after annually re-
viewing the average medicare margins in medicare
dependent hospitals and the impact of such medicare
margins on the medicare dependent hospitals’ overall
profit margins.
SEC. 3. DEFINITIONS.
In this Act, the following definitions apply:
(1) MEDICARE BENEFICIARY.—The term ‘‘med-
icare beneficiary’’ means an individual who is enti-
tled to benefits under part A of title XVIII of the
Social Security Act (42 U.S.C. 1395c et seq.).
(2) MEDICARE
DEPENDENT
HOSPITAL.—The
term ‘‘medicare dependent hospital’’ means any sub-
section (d) hospital—
(A) that is not classified as a sole commu-
nity hospital under section 1886(d)(5)(D) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395ww(d)(5)(D)); and
(B) for which not less than 60 percent of
its inpatient days were attributable to medicare
beneficiaries during 2 of the last 3 preceding
fiscal years for which data is available.
(3) MEDICARE MARGIN.—
(A) IN
GENERAL.—The term ‘‘medicare
margin’’ means for a fiscal year the ratio ex-
pressed as a percentage equal to—
(i) the difference between all medicare
revenues paid to a hospital for the operat-
ing costs of inpatient hospital services in a
fiscal year and all medicare program eligi-
ble expenses for such operating costs for
such fiscal year (as shown by each hos-
pital’s HCFA 2552 report submitted annu-
ally to the Health Care Financing Admin-
istration); divided by
(ii) all medicare revenues paid to the
hospital for the operating costs of inpatient
hospital services for such fiscal year.
(B) OPERATING COSTS OF INPATIENT HOS-
PITAL SERVICES.—The term ‘‘operating costs of
inpatient hospital services’’ has the meaning
given such term in section 1886(a)(4) of the
Social Security Act (42 U.S.C. 1395ww(a)(4)).
(4) SUBSECTION
(d) HOSPITAL.—The term
‘‘subsection (d) hospital’’ has the meaning given
such term in section 1886(d)(1)(B) of the Social Se-
curity Act (42 U.S.C. 1395ww(d)(1)(B)).
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