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Orange County, New York that was reclassified 
under the authority of section 508 of the Medicare 
Prescription Drug, Improvement and Modernization 
Act of 2003 (Public Law 108–173) as being located 
in the New York-White Plains-Wayne, NY–NJ Core 
Based Statistical Area. Any reclassification under 
this subsection shall be treated as a reclassification 
under section 1886(d)(8) of such Act. 
(3) For purposes of making payments under 
section 1886(d) of the Social Security Act (42 
U.S.C. 1395ww(d)), the large urban area of New 
York, New York is deemed to include hospitals, re-
quired by State law enacted prior to June 30, 2007, 
to join under a single unified governance structure 
if— 
(A) such hospitals are located in a city 
with a population of no less than 20,000 and no 
greater than 30,000; and 
(B) such hospitals are less than 3/4 miles 
apart. 
(4) For purposes of making payments under 
section 1886(d) of the Social Security Act (42 
U.S.C. 1395ww(d)) the large urban area of Buffalo- 
Niagara Falls, New York is deemed to include Chau-
tauqua County, New York. In no case shall there be 
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a reduction in the hospital wage index for Erie 
County, New York, or any adjoining county, as a re-
sult of the application of this paragraph (other than 
as a result of a general reduction required to carry 
out paragraph (8)(D) of that section). 
(5) For purposes of making payments under 
section 1886(d) of the Social Security Act (42 
U.S.C. 1395ww(d)) a hospital shall be reclassified 
into the New York-White Plains-Wayne, New York- 
New Jersey core based statistical area (CBSA code 
35644) if the hospital is 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— 
(A) is licensed by the State in which it is 
located as a specialty hospital; 
(B) specializes in the treatment of cardiac, 
vascular, and pulmonary diseases; 
(C) provides at least 100 beds; and 
(D) is located in Burlington County, New 
Jersey. 
(6)(A) Any hospital described in subparagraph 
(B) shall be treated as located in the core based sta-
tistical area described in subparagraph (C) for pur-
poses of making payments under section 1886(d) of 
the Social Security Act (42 U.S.C. 1395ww(d)). 
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(B) A hospital described in this subparagraph 
is any hospital that— 
(i) is located in a core based statistical 
area (CBSA) that— 
(I) had a population (as reported in 
the decennial census for the year 2000) of 
at least 500,000, but not more than 
750,000; 
(II) had a population (as reported in 
such census) that was at least 10,000 
below the population for the area as re-
ported in the previous decennial census; 
and 
(III) has as of January 1, 2006, at 
least 5, and no more than 7, subsection (d) 
hospitals; and 
(ii) demonstrates that its average hourly 
wage amount (as determined consistent with 
section 1886(d)(10)(D)(vi) of the Social Secu-
rity Act is not less than 96 percent of such av-
erage hourly wage amount rate for all sub-
section (d) hospitals located in same core base 
statistical area of the hospital. 
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(C) The area described in this subparagraph, 
with respect to a hospital described in subparagraph 
(B), is the core based statistical area that— 
(i) is within the same State as, and is ad-
jacent to, the core based statistical area in 
which the hospital is located; and 
(ii) has an average hourly wage amount 
(described in subparagraph (B)(ii)) that is clos-
est to (but does not exceed) such average hourly 
wage amount of the hospital. 
(7) For purposes of making payments under 
section 1886(d) of the Social Security Act (42 
U.S.C. 1395ww(d)), the large urban area of Hart-
ford, Connecticut is deemed to include Albany, Sche-
nectady, and Rensselaer Counties, New York. 
(8) For purposes of making payment under sec-
tion 1886(d) of the Social Security Act (42 U.S.C. 
1395ww(d)), the Nashville-Davidson-Murfreesboro 
core based statistical area is deemed to include 
Cumberland County, Tennessee. 
(9) For purposes of making payment under sec-
tion 1886(d) of the Social Security Act (42 U.S.C. 
1395ww(d)), any hospital that is co-located in 
Marinette, Wisconsin and the Menominee, Michigan 
is deemed to be located in Chicago, Illinois. 
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(10) In the case of a hospital located in Massa-
chusetts or Clinton County, New York, that is re-
classified based on wages under paragraph (8) or 
(10) of section 1886(d) of the Social Security Act 
into an area the area wage index for which is in-
creased under section 4410(a) of the Balanced 
Budget Act of 1997 (Public Law 10533), such in-
creased area wage index shall also apply to such hos-
pital under such section 1886(d). 
(11) For purposes of applying the area wage 
index under section 1886(d) of the Social Security 
Act (42 U.S.C. 1395ww(d)), hospital provider num-
bers 360112 and 23005 shall be treated as located 
in the same urban area as Ann Arbor, Michigan. 
(12) For purposes of making payment under 
section 1886(d) of the Social Security Act (42 
U.S.C. 1395ww(d)), any hospital that is located in 
Columbia County, New York, with less 250 beds is 
deemed to be located in the New York-White Plains- 
Wayne, NY–NJ core based statistical area. 
(13) For purposes of the previous provisions of 
this subsection (other than paragraph (1))— 
(A) any reclassification effected under such 
provisions shall be treated as a decision of the 
Medicare 
Geographic 
Classification 
Review 
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Board under section 1886(d) of the Social Se-
curity Act and subject to budget neutrality 
under paragraph (8)(D) of such section; and 
(B) such provisions shall only apply to dis-
charges occurring on or after October 1, 2008, 
during the 3-year reclassification period begin-
ning on such date. 
SEC. 509. MEDICARE CRITICAL ACCESS HOSPITAL DES-
IGNATIONS. 
(a) IN GENERAL.— 
(1) Section 405(h) of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 
(Public Law 108–173; 117 Stat. 2269) is amended 
by adding at the end the following new paragraph: 
‘‘(3) EXCEPTION.— 
‘‘(A) IN GENERAL.—The amendment made 
by paragraph (1) shall not apply to the certifi-
cation by the State of Minnesota on or after 
January 
1, 
2006, 
under 
section 
1820(c)(2)(B)(i)(II) of the Social Security Act 
(42 U.S.C. 1395i–4(c)(2)(B)(i)(II)) of one hos-
pital that meets the criteria described in sub-
paragraph (B) and is located in Cass County, 
Minnesota, as a necessary provider of health 
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care services to residents in the area of the hos-
pital. 
‘‘(B) CRITERIA
DESCRIBED.—A hospital 
meets the criteria described in this subpara-
graph if the hospital— 
‘‘(i) has been granted an exception by 
the State to an otherwise applicable statu-
tory restriction on hospital construction or 
licensing prior to the date of enactment of 
this subparagraph; and 
‘‘(ii) is located on property which the 
State has approved for conveyance to a 
county within the State prior to such date 
of enactment.’’. 
(2) Section 1820(c)(2)(B)(i)(I) of the Social Se-
curity Act (42 U.S.C. 1395i–4(c)(2)(B)(i)(I)) is 
amended by striking ‘‘or,’’ and inserting ‘‘or, in the 
case of a hospital that is located in the county seat 
of Butler, Alabama, a 32-mile drive, or,’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a)(2) shall apply to cost reporting periods be-
ginning on or after the date of the enactment of this Act. 
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TITLE VI—OTHER PROVISIONS 
RELATING 
TO 
MEDICARE 
PART B 
Subtitle A—Payment and Coverage 
Improvements 
SEC. 601. PAYMENT FOR THERAPY SERVICES. 
(a) EXTENSION
OF
EXCEPTIONS
PROCESS
FOR 
MEDICARE THERAPY CAPS.—Section 1833(g)(5) of the 
Social Security Act (42 U.S.C. 1395l(g)(5)), as amended 
by section 201 of the Medicare Improvements and Exten-
sion Act of 2006 (division B of Public Law 109–432), is 
amended by striking ‘‘2007’’ and inserting ‘‘2009’’. 
(b) STUDY AND REPORT.— 
(1) STUDY.—The Secretary of Health and 
Human Services, in consultation with appropriate 
stakeholders, shall conduct a study on refined and 
alternative payment systems to the Medicare pay-
ment cap under section 1833(g) of the Social Secu-
rity Act (42 U.S.C. 1395l(g)) for physical therapy 
services and speech-language pathology services, de-
scribed in paragraph (1) of such section and occupa-
tional therapy services described in paragraph (3) of 
such section. Such study shall consider, with respect 
to payment amounts under Medicare, the following: 
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