I
106TH CONGRESS
1ST SESSION
H. R. 2979
To amend title XVIII of the Social Security Act to make refinements in
the medicare prospective payment system for outpatient hospital services.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 30, 1999
Mr. LAZIO introduced the following bill; which was referred to the Committee
on Commerce, and in addition to the Committee on Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To amend title XVIII of the Social Security Act to make
refinements in the medicare prospective payment system
for outpatient hospital services.
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 Hospital
Outpatient Payment Equality (HOPE) Act of 1999’’.
SEC. 2. REFINEMENTS TO MEDICARE PROSPECTIVE PAY-
MENT SYSTEM FOR OUTPATIENT HOSPITAL
SERVICES.
(a) SPECIAL PAYMENT ADJUSTMENT FOR CERTAIN
VISITS.—Section 1833(t) of the Social Security Act (42
U.S.C. 1395l(t)) is amended—
(1) by redesignating paragraph (9) as para-
graph (10) and inserting after paragraph (8) the fol-
lowing:
‘‘(9) SPECIAL PAYMENT ADJUSTMENT FOR CER-
TAIN VISITS.—
‘‘(A) IN
GENERAL.—Notwithstanding the
preceding paragraphs of this subsection, the
amount of payment made under this part for
covered OPD services that are classified within
an ambulatory patient classification group for—
‘‘(i) emergency room visits, or
‘‘(ii) clinic visits,
shall be equal to the product of the amount of
payment determined under paragraph (4) for
services classified within such group and the
adjustment factor determined under subpara-
graph (B) or (C).
‘‘(B) ADJUSTMENT FACTOR FOR ER VIS-
ITS.—The adjustment factor for covered OPD
services that are classified within ambulatory
patient classification groups for emergency
room visits shall be determined as follows:
‘‘(i) ESTIMATE OF AGGREGATE REA-
SONABLE COSTS.—The Secretary shall es-
timate the total amount that would be pay-
able under this part for all covered OPD
services that are classified within such
groups and furnished in 2000 if payment
for such services was based on the reason-
able costs incurred in furnishing such serv-
ices.
‘‘(ii) ESTIMATE OF AGGREGATE PAY-
MENTS UNDER OPD PPS.—The Secretary
shall estimate the total amount that would
be payable under this subsection for all
covered OPD services that are classified
within such groups and furnished in 2000,
determined without regard to this para-
graph.
‘‘(iii) DETERMINATION
OF
ADJUST-
MENT FACTOR.—The adjustment factor de-
termined under this subparagraph shall
equal the quotient obtained by dividing the
amount determined under clause (i) by the
amount determined under clause (ii).
‘‘(C) ADJUSTMENT
FACTOR
FOR
CLINIC
VISITS.—In determining the adjustment factor
for covered OPD services that are classified
within ambulatory patient classification groups
for clinic visits, subparagraph (B) shall be
applied—
‘‘(i) by substituting ‘clinic’ for ‘er’ and
‘emergency room’ each place either ap-
pears, and
‘‘(ii) by substituting ‘94.2 percent of
reasonable costs’ for ‘reasonable costs’ in
clause (i) of such subparagraph.
‘‘(D) RELATION TO OTHER RULES.—
‘‘(i) PART B, BLOOD DEDUCTIBLES.—
In applying the deductibles described in
subsection (b), the amount of payment de-
termined under this paragraph for a cov-
ered OPD service shall be substituted for
the amount determined under paragraph
(4) for such service.
‘‘(ii) INAPPLICABILITY
OF
BUDGET
NEUTRALITY REQUIREMENT.—The adjust-
ments required by this paragraph shall not
be subject to the budget neutrality require-
ments of paragraph (2)(E).
‘‘(iii) NO
EFFECT
ON
CERTAIN
DE-
TERMINATIONS.—The amounts payable by
reason of this paragraph shall not be taken
into account in determining—
‘‘(I) copayment amounts under
paragraph (3)(B),
‘‘(II) medicare OPD fee schedule
amounts under paragraph (3)(D),
‘‘(III) 
pre-deductible 
payment
percentages under paragraph (3)(E),
or
‘‘(IV) compliance with the volume
control mechanism established pursu-
ant to paragraph (2)(F).
‘‘(iv) HOLD HARMLESS.—The adjust-
ments required by this paragraph shall be
taken into account in applying the tem-
porary limits on payment reductions estab-
lished under subsection (e) of section 4523
of the Balanced Budget Act of 1997.’’.
(b) ELIMINATION OF REDUCTION IN MARKET BAS-
KET.—Section 1833(t)(3)(C)(iii) of the Social Security
Act (42 U.S.C. 1395l(t)(3)(C)(iii)) is amended by striking
‘‘, reduced by 1 percentage point for such factor for serv-
ices furnished in each of 2000, 2001, and 2002’’.
(c) TEMPORARY LIMITATION ON REDUCTIONS.—
(1) IN
GENERAL.—Section 4523 of the Bal-
anced Budget Act of 1997 is amended by adding at
the end the following:
‘‘(e) TEMPORARY LIMIT ON REDUCTIONS IN FED-
ERAL PAYMENTS.—
‘‘(1) IN
GENERAL.—Notwithstanding section
1833(t) of the Social Security Act (42 U.S.C.
1395l(t)), as added by subsection (a), the amount
that is paid from the Federal Supplementary Med-
ical Insurance Trust Fund for covered OPD services
furnished by a hospital during a calendar year (or
portion thereof) specified in paragraph (2)(A) may
not be less than the applicable percentage of the
case mix adjusted average amount that would have
been payable to such hospital for such services (in-
cluding cost sharing) if the prospective payment sys-
tem established under such section did not apply.
Such average amount may be determined on a pro-
spective basis using the Secretary’s best estimate of
the reasonable costs incurred in furnishing covered
OPD services or on a retrospective basis using cost
reports submitted by a hospital.
‘‘(2) DEFINITIONS.—For purposes of paragraph
(1):
‘‘(A) APPLICABLE PERCENTAGE.—Subject
to paragraph (3), the term ‘applicable percent-
age’ means—
‘‘(i) with respect to covered OPD
services furnished during the first full cal-
endar year (and any portion of the imme-
diately preceding calendar year) for which
the prospective payment system established
under section 1833(t) of such Act is in ef-
fect, 95 percent,
‘‘(ii) with respect to the second full cal-
endar year for which such system is in effect,
90 percent, and
‘‘(iii) with respect to the third full calendar
year for which such system is in effect, 85 per-
cent.
‘‘(B) COVERED OPD SERVICES.—The term
‘covered OPD services’ has the meaning given
to such term in section 1833(t)(1)(B) of such
Act.
‘‘(3) APPLICATION TO CERTAIN HOSPITALS.—In
the case of hospitals described in section 1833(t)(8)
of such Act, the ‘applicable percentage’ for a cal-
endar year (or portion thereof) shall be the same ap-
plicable percentage that applies to covered OPD
services furnished by hospitals that are not described
in such section during such calendar year (or portion
thereof).
‘‘(4) RULE
OF
CONSTRUCTION.—Nothing in
this subsection shall be construed as affecting the
amount of cost sharing paid by individuals enrolled
under part B of title XVIII of the Social Security
Act for covered OPD services.’’.
(2) 
CONFORMING
AMENDMENT.—Section
1833(t)(1)(A) of the Social Security Act (42 U.S.C.
1395l(t)(1)(A)) is amended by inserting ‘‘except as
provided in section 4523(e) of the Balanced Budget
Act of 1997,’’ after ‘‘1999,’’.
(d) EFFECTIVE DATE.—
(1) SPECIAL ADJUSTMENTS FOR CERTAIN VIS-
ITS.—The amendments made by subsection (a) shall
apply to items and services furnished on or after
January 1, 2000.
(2) MARKET BASKET; TEMPORARY LIMITS ON
REDUCTIONS.—The amendments made by sub-
sections (b) and (c) are effective as if included in the
enactment of the Balanced Budget Act of 1997.
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