vious sentence, in determining the pre-BBA amount for 
covered OPD services furnished by a sole community hos-
pital (as defined in section 1886(d)(5)(D)(iii)), the Sec-
retary shall substitute a minimum base payment-to-cost 
ratio if such substitution results in a greater amount of 
payment for such services under this subsection furnished 
by the sole community hospital. For purposes of the pre-
ceding sentence, a minimum base payment-to-cost ratio is 
equal to the 75th percentile of the payment-to-cost ratios 
for fiscal year 1996 of all hospitals with a designation as 
a sole community hospital in effect during fiscal year 2004 
(as determined by the Secretary).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to covered OPD services fur-
nished on or after January 1, 2006. 
SEC. 4. REBASING FOR SOLE COMMUNITY HOSPITALS. 
(a) REBASING PERMITTED.—Section 1886(b)(3) of 
the Social Security Act (42 U.S.C. 1395ww(b)(3)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(K)(i) For cost reporting periods beginning on or 
after October 1, 2005, in the case of a sole community 
hospital there shall be substituted for the amount other-
wise determined under subsection (d)(5)(D)(i) of this sec-
tion, if such substitution results in a greater amount of 
payment under this section for the hospital— 
‘‘(I) with respect to discharges occurring in fis-
cal year 2006, 75 percent of the subsection 
(d)(5)(D)(i) amount (as described in subparagraph 
(I)(i)(I)) and 25 percent of the subparagraph (K) 
rebased target amount (as defined in clause (ii)); 
‘‘(II) with respect to discharges occurring in fis-
cal year 2007, 50 percent of the subsection 
(d)(5)(D)(i) amount and 50 percent of the subpara-
graph (K) rebased target amount; 
‘‘(III) with respect to discharges occurring in 
fiscal year 2008, 25 percent of the subsection 
(d)(5)(D)(i) amount and 75 percent of the subpara-
graph (K) rebased target amount; and 
‘‘(IV) with respect to discharges occurring after 
fiscal year 2008, 100 percent of the subparagraph 
(K) rebased target amount. 
‘‘(ii) For purposes of this subparagraph, the ‘sub-
paragraph (K) rebased target amount’ has the meaning 
given the term ‘target amount’ in subparagraph (C), ex-
cept that— 
‘‘(I) there shall be substituted for the base cost 
reporting period the 12-month cost reporting period 
beginning during fiscal year 2000 or 2001, which-
ever results in the greater amount of payment under 
this section for the hospital; 
‘‘(II) any reference in subparagraph (C)(i) to 
the ‘first cost reporting period’ described in such 
subparagraph is deemed a reference to the first cost 
reporting period beginning on or after October 1, 
2005; and 
‘‘(III) the applicable percentage increase shall 
only be applied under subparagraph (C)(iv) for dis-
charges occurring in fiscal years beginning with fis-
cal year 2007.’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
1886(b)(3) of such Act (42 U.S.C. 1395ww(b)(3)) is 
amended— 
(1) in subparagraph (C), by inserting ‘‘and sub-
paragraph (K)’’ after ‘‘subject to subparagraph (I)’’ 
in the matter preceding clause (i); and 
(2) in subparagraph (I)(i)— 
(A) by striking ‘‘For’’ in the matter pre-
ceding subclause (I) and inserting ‘‘Subject to 
subparagraph (K), for’’; and 
(B) in subclause (I), by inserting ‘‘and 
subparagraph (K)’’ after ‘‘referred to in this 
clause’’. 
Æ