H. R. 1—231
‘‘(iv) Any other specialized category of services that
the Secretary designates as inconsistent with the pur-
pose of permitting physician ownership and investment
interests in a hospital under this section.
‘‘(B) EXCEPTION.—For purposes of this section, the term
‘specialty hospital’ does not include any hospital—
‘‘(i) determined by the Secretary—
‘‘(I) to be in operation before November 18,
2003; or
‘‘(II) under development as of such date;
‘‘(ii) for which the number of physician investors
at any time on or after such date is no greater than
the number of such investors as of such date;
‘‘(iii) for which the type of categories described
in subparagraph (A) at any time on or after such
date is no different than the type of such categories
as of such date;
‘‘(iv) for which any increase in the number of beds
occurs only in the facilities on the main campus of
the hospital and does not exceed 50 percent of the
number of beds in the hospital as of November 18,
2003, or 5 beds, whichever is greater; and
‘‘(v) that meets such other requirements as the
Secretary may specify.’’.
(2) OWNERSHIP AND INVESTMENT INTERESTS IN A RURAL
PROVIDER.—Section 1877(d)(2) (42 U.S.C. 1395nn(d)(2)) is
amended to read as follows:
‘‘(2) RURAL PROVIDERS.—In the case of designated health
services furnished in a rural area (as defined in section
1886(d)(2)(D)) by an entity, if—
‘‘(A) substantially all of the designated health services
furnished by the entity are furnished to individuals residing
in such a rural area; and
‘‘(B) effective for the 18-month period beginning on
the date of the enactment of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003, the
entity is not a specialty hospital (as defined in subsection
(h)(7)).’’.
(b) APPLICATION
OF
EXCEPTION
FOR
HOSPITALS
UNDER
DEVELOPMENT.—For purposes of section 1877(h)(7)(B)(i)(II) of the
Social Security Act, as added by subsection (a)(1)(B), in determining
whether a hospital is under development as of November 18, 2003,
the Secretary shall consider—
(1) whether architectural plans have been completed,
funding has been received, zoning requirements have been met,
and necessary approvals from appropriate State agencies have
been received; and
(2) any other evidence the Secretary determines would
indicate whether a hospital is under development as of such
date.
(c) STUDIES.—
(1) MEDPAC STUDY.—The Medicare Payment Advisory
Commission, in consultation with the Comptroller General of
the United States, shall conduct a study to determine—
(A) any differences in the costs of health care services
furnished to patients by physician-owned specialty hos-
pitals and the costs of such services furnished by local
H. R. 1—232
full-service community hospitals within specific diagnosis-
related groups;
(B) the extent to which specialty hospitals, relative
to local full-service community hospitals, treat patients
in certain diagnosis-related groups within a category, such
as cardiology, and an analysis of the selection;
(C) the financial impact of physician-owned specialty
hospitals on local full-service community hospitals;
(D) how the current diagnosis-related group system
should be updated to better reflect the cost of delivering
care in a hospital setting; and
(E) the proportions of payments received, by type of
payer, between the specialty hospitals and local full-service
community hospitals.
(2) HHS STUDY.—The Secretary shall conduct a study of
a representative sample of specialty hospitals—
(A) to determine the percentage of patients admitted
to physician-owned specialty hospitals who are referred
by physicians with an ownership interest;
(B) to determine the referral patterns of physician
owners, including the percentage of patients they referred
to physician-owned specialty hospitals and the percentage
of patients they referred to local full-service community
hospitals for the same condition;
(C) to compare the quality of care furnished in physi-
cian-owned specialty hospitals and in local full-service
community hospitals for similar conditions and patient
satisfaction with such care; and
(D) to assess the differences in uncompensated care,
as defined by the Secretary, between the specialty hospital
and local full-service community hospitals, and the relative
value of any tax exemption available to such hospitals.
(3) REPORTS.—Not later than 15 months after the date
of the enactment of this Act, the Commission and the Secretary,
respectively, shall each submit to Congress a report on the
studies conducted under paragraphs (1) and (2), respectively,
and shall include any recommendations for legislation or
administrative changes.
SEC. 508. ONE-TIME APPEALS PROCESS FOR HOSPITAL WAGE INDEX
CLASSIFICATION.
(a) ESTABLISHMENT OF PROCESS.—
(1) IN GENERAL.—The Secretary shall establish not later
than January 1, 2004, by instruction or otherwise a process
under which a hospital may appeal the wage index classification
otherwise applicable to the hospital and select another area
within the State (or, at the discretion of the Secretary, within
a contiguous State) to which to be reclassified.
(2) PROCESS
REQUIREMENTS.—The process established
under paragraph (1) shall be consistent with the following:
(A) Such an appeal may be filed as soon as possible
after the date of the enactment of this Act but shall be
filed by not later than February 15, 2004.
(B) Such an appeal shall be heard by the Medicare
Geographic Reclassification Review Board.
(C) There shall be no further administrative or judicial
review of a decision of such Board.
H. R. 1—233
(3) RECLASSIFICATION
UPON
SUCCESSFUL
APPEAL.—If the
Medicare Geographic Reclassification Review Board determines
that the hospital is a qualifying hospital (as defined in sub-
section (c)), the hospital shall be reclassified to the area selected
under paragraph (1). Such reclassification shall apply with
respect to discharges occurring during the 3-year period begin-
ning with April 1, 2004.
(4) INAPPLICABILITY OF CERTAIN PROVISIONS.—Except as the
Secretary may provide, the provisions of paragraphs (8) and
(10) of section 1886(d) of the Social Security Act (42 U.S.C.
1395ww(d)) shall not apply to an appeal under this section.
(b) APPLICATION
OF RECLASSIFICATION.—In the case of an
appeal decided in favor of a qualifying hospital under subsection
(a), the wage index reclassification shall not affect the wage index
computation for any area or for any other hospital and shall not
be effected in a budget neutral manner. The provisions of this
section shall not affect payment for discharges occurring after the
end of the 3-year-period referred to in subsection (a).
(c) QUALIFYING HOSPITAL DEFINED.—For purposes of this sec-
tion, the term ‘‘qualifying hospital’’ means a subsection (d) hospital
(as defined in section 1886(d)(1)(B) of the Social Security Act, 42
U.S.C. 1395ww(d)(1)(B)) that—
(1) does not qualify for a change in wage index classification
under paragraph (8) or (10) of section 1886(d) of the Social
Security Act (42 U.S.C. 1395ww(d)) on the basis of requirements
relating to distance or commuting; and
(2) meets such other criteria, such as quality, as the Sec-
retary may specify by instruction or otherwise.
The Secretary may modify the wage comparison guidelines promul-
gated under section 1886(d)(10)(D) of such Act (42 U.S.C.
1395ww(d)(10)(D)) in carrying out this section.
(d) WAGE INDEX CLASSIFICATION.—For purposes of this section,
the term ‘‘wage index classification’’ means the geographic area
in which it is classified for purposes of determining for a fiscal
year the factor used to adjust the DRG prospective payment rate
under section 1886(d) of the Social Security Act (42 U.S.C.
1395ww(d)) for area differences in hospital wage levels that applies
to such hospital under paragraph (3)(E) of such section.
(e) LIMITATION ON EXPENDITURES.—The aggregate amount of
additional expenditures resulting from the application of this section
shall not exceed $900,000,000.
(f) TRANSITIONAL EXTENSION.—Any reclassification of a county
or other area made by Act of Congress for purposes of making
payments under section 1886(d) of the Social Security Act (42
U.S.C. 1395ww(d)) that expired on September 30, 2003, shall be
deemed to be in effect during the period beginning on January
1, 2004, and ending on September 30, 2004.
Subtitle B—Other Provisions
SEC. 511. PAYMENT FOR COVERED SKILLED NURSING FACILITY SERV-
ICES.
(a) ADJUSTMENT TO RUGS FOR AIDS RESIDENTS.—Paragraph
(12) of section 1888(e) (42 U.S.C. 1395yy(e)) is amended to read
as follows:
‘‘(12) ADJUSTMENT FOR RESIDENTS WITH AIDS.—
H. R. 1—234
‘‘(A) IN GENERAL.—Subject to subparagraph (B), in the
case of a resident of a skilled nursing facility who is
afflicted with acquired immune deficiency syndrome
(AIDS), the per diem amount of payment otherwise
applicable (determined without regard to any increase
under section 101 of the Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999, or under section
314(a) of Medicare, Medicaid, and SCHIP Benefits Improve-
ment and Protection Act of 2000), shall be increased by
128 percent to reflect increased costs associated with such
residents.
‘‘(B) SUNSET.—Subparagraph (A) shall not apply on
and after such date as the Secretary certifies that there
is an appropriate adjustment in the case mix under para-
graph (4)(G)(i) to compensate for the increased costs associ-
ated with residents described in such subparagraph.’’.
(b) EFFECTIVE DATE.—The amendment made by paragraph (1)
shall apply to services furnished on or after October 1, 2004.
SEC. 512. COVERAGE OF HOSPICE CONSULTATION SERVICES.
(a) COVERAGE OF HOSPICE CONSULTATION SERVICES.—Section
1812(a) (42 U.S.C. 1395d(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph (3);
(2) by striking the period at the end of paragraph (4)
and inserting ‘‘; and’’; and
(3) by inserting after paragraph (4) the following new para-
graph:
‘‘(5) for individuals who are terminally ill, have not made
an election under subsection (d)(1), and have not previously
received services under this paragraph, services that are fur-
nished by a physician (as defined in section 1861(r)(1)) who
is either the medical director or an employee of a hospice
program and that—
‘‘(A) consist of—
‘‘(i) an evaluation of the individual’s need for pain
and symptom management, including the individual’s
need for hospice care; and
‘‘(ii) counseling the individual with respect to hos-
pice care and other care options; and
‘‘(B) may include advising the individual regarding
advanced care planning.’’.
(b) PAYMENT.—Section 1814(i) (42 U.S.C. 1395f(i)) is amended
by adding at the end the following new paragraph:
‘‘(4) The amount paid to a hospice program with respect to
the services under section 1812(a)(5) for which payment may be
made under this part shall be equal to an amount established
for an office or other outpatient visit for evaluation and management
associated with presenting problems of moderate severity and
requiring medical decisionmaking of low complexity under the fee
schedule established under section 1848(b), other than the portion
of such amount attributable to the practice expense component.’’.
(c) CONFORMING AMENDMENT.—Section 1861(dd)(2)(A)(i) (42
U.S.C. 1395x(dd)(2)(A)(i)) is amended by inserting before the comma
at the end the following: ‘‘and services described in section
1812(a)(5)’’.