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HR 3162 PCS
member (or its predecessors or such university) was 
recognized as a comprehensive cancer center by the 
National Cancer Institute of the National Institutes 
of Health as of April 20, 1983, if the hospital’s arti-
cles of incorporation specify that at least 50 percent 
of its total discharges have a principal finding of 
neoplastic disease (as defined in subparagraph (E)) 
and if, of December 31, 2005, the hospital was li-
censed for less than 150 acute care beds, or 
‘‘(V) a hospital (aa) that the Secretary has de-
termined to be, at any time on or before December 
31, 2011, a hospital involved extensively in treat-
ment for, or research on, cancer, (bb) that is (as of 
the date of such determination) a free-standing facil-
ity, (cc) for which the hospital’s predecessor provider 
entity was University Hospitals of Cleveland with 
medicare provider number 36–0137;’’; 
(B) in subparagraph (B), by inserting 
after clause (vi), as redesignated by section 
503(c)(1)(A)(ii)(II), the following new clause: 
‘‘(vii) a hospital that— 
‘‘(I) is located in a State that as of Decem-
ber 31, 2006, had only one center under section 
414 of the Public Health Service Act that has 
been designated by the National Cancer Insti-
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HR 3162 PCS
tute as a comprehensive center currently serv-
ing all 21 counties in the most densely popu-
lated State in the nation (U.S. Census estimate 
for 2005: 8,717,925 persons; 1,134.5 persons 
per square mile), serving more than 70,000 pa-
tient visits annually; 
‘‘(II) as of December 31, 2006, served as 
the teaching and clinical care, research and 
training hospital for the Center described in 
subclause (II), providing significant financial 
and operational support to such Center; 
‘‘(III) as of December 31, 2006, served as 
a core and essential element in such Center 
which conducts more than 130 clinical trial ac-
tivities, national cooperative group studies, in-
vestigator-initiated and peer review studies and 
has received as of 2005 at least $93,000,000 in 
research grant awards; 
‘‘(IV) as of December 31, 2006, includes 
dedicated patient care units organized primarily 
for the treatment of and research on cancer 
with approximately 125 beds, 75 percent of 
which are dedicated to cancer patients, and con-
tains a radiation oncology department as well 
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HR 3162 PCS
as specialized emergency services for oncology 
patients; and 
‘‘(V) as of December 31, 2004, is identi-
fied as the focus of the Center’s inpatient ac-
tivities in the Center’s application as a NCI- 
designated comprehensive cancer center and 
shares the NCI comprehensive cancer designa-
tion with the Center;’’; and 
(C) in subparagraph (E)— 
(i) by striking ‘‘subclauses (II) and 
(III)’’ and inserting ‘‘subclauses (II), (III), 
and (IV)’’; and 
(ii) by inserting ‘‘and subparagraph 
(B)(vi)’’ after ‘‘subparagraph (B)(v)’’. 
(2) EFFECTIVE DATES; PAYMENTS.— 
(A) APPLICATION TO COST REPORTING PE-
RIODS.— 
(i) Any classification by reason of sec-
tion 1886(d)(1)(B)(vi) of the Social Secu-
rity Act (42 U.S.C. 1395ww(d)(1)(B)(vi)), 
as inserted by paragraph (1), shall apply 
to cost reporting periods beginning on or 
after January 1, 2006. 
(ii) 
The 
provisions 
of 
section 
1886(d)(1)(B)(v)(IV) of the Social Secu-
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rity Act, as added by paragraph (1), shall 
take effect on January 1, 2008. 
(B) BASE
TARGET
AMOUNT.—Notwith-
standing subsection (b)(3)(E) of section 1886 
of the Social Security Act (42 U.S.C. 1395ww), 
in the case of a hospital described in subsection 
(d)(1)(B)(vi) of such section, as inserted by 
paragraph (1)— 
(i) the hospital shall be permitted to 
resubmit the 2006 Medicare 2552 cost re-
port incorporating a cancer hospital sub- 
provider number and to apply the Medicare 
ratio-of-cost-to-charge settlement method-
ology for outpatient cancer services; and 
(ii) the hospital’s target amount under 
subsection (b)(3)(E)(i) of such section for 
the first cost reporting period beginning on 
or after January 1, 2006, shall be the al-
lowable operating costs of inpatient hos-
pital services (referred to in subclause (I) 
of such subsection) for such first cost re-
porting period. 
(C) DEADLINE FOR PAYMENTS.—Any pay-
ments owed to a hospital as a result of this sub-
section for periods occurring before the date of 
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the enactment of this Act shall be made expedi-
tiously, but in no event later than 1 year after 
such date of enactment. 
(3) APPLICATION TO CERTAIN HOSPITALS.— 
(A) INAPPLICABILITY
OF
CERTAIN
RE-
QUIREMENTS.—The 
provisions 
of 
section 
412.22(e) of title 42, Code of Federal Regula-
tions, shall not apply to a hospital described in 
section 1886(d)(1)(B)(v)(V) of the Social Secu-
rity Act, as added by paragraph (1). 
(B) APPLICATION TO COST REPORTING PE-
RIODS.—If the Secretary makes a determina-
tion that a hospital is described in section 
1886(d)(1)(B)(v)(V) of the Social Security Act, 
as added by paragraph (1), such determination 
shall apply as of the first cost reporting period 
beginning on or after the date of such deter-
mination. 
(C) BASE
PERIOD.—Notwithstanding the 
provisions of section 1886(b)(3)(E) of the So-
cial Security Act (42 U.S.C. 1395ww(b)(3)(E)) 
or any other provision of law, the base cost re-
porting period for purposes of determining the 
target amount for any hospital for which a de-
termination described in subparagraph (B) has 
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been made shall be the first full 12-month cost 
reporting period beginning on or after the date 
of such determination. 
(D) RULE.—A hospital described in sub-
clause (V) of section 1886(b)(1)(B)(v) of the 
Social Security Act, as added by paragraph (1), 
shall not qualify as a hospital described in such 
subclause for any cost reporting period in which 
less than 50 percent of its total discharges have 
a principal finding of neoplastic disease. With 
respect to the first cost reporting period for 
which a determination described in subpara-
graph (B) has been made, the Secretary shall 
accept a self-certification by the hospital, which 
shall be applicable to such first cost reporting 
period, that the hospital intends to have total 
discharges during such first cost reporting pe-
riod of which 50 percent or more have a prin-
cipal finding of neoplastic disease. 
(c) MEDPAC REPORT
ON PPS-EXEMPT CANCER 
HOSPITALS.—Not later than March 1, 2009, the Medicare 
Payment Advisory Commission (established under section 
1805 of the Social Security Act (42 U.S.C. 1395b–6)) 
shall submit to the Secretary and Congress a report evalu-
ating the following: 
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(1) Measures of payment adequacy and Medi-
care margins for PPS-exempt cancer hospitals, as 
established under section 1886(d)(1)(B)(v) of the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(d)(1)(B)(v)). 
(2) To the extent a PPS-exempt cancer hospital 
was previously affiliated with another hospital, the 
margins of the PPS-exempt hospital and the other 
hospital as separate entities and the margins of such 
hospitals that existed when the hospitals were pre-
viously affiliated. 
(3) Payment adequacy for cancer discharges 
under the Medicare inpatient hospital prospective 
payment system. 
SEC. 506. SKILLED NURSING FACILITY PAYMENT UPDATE. 
(a) IN GENERAL.—Section 1888(e)(4)(E)(ii) of the 
Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is 
amended— 
(1) in subclause (III), by striking ‘‘and’’ at the 
end; 
(2) by redesignating subclause (IV) as sub-
clause (VI); and 
(3) by inserting after subclause (III) the fol-
lowing new subclauses: 
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