I
105TH CONGRESS
1ST SESSION
H. R. 1248
To amend title XVIII of the Social Security Act to permit classification
of certain hospitals as rural referral centers, to permit reclassification
of certain hospitals for disproportionate share payments, and to permit
sole community hospitals to rebase Medicare payments based upon fiscal
year 1994 and 1995 costs.
IN THE HOUSE OF REPRESENTATIVES
APRIL 8, 1997
Mr. NEY (for himself, Mr. WICKER, Mr. HOSTETTLER, Mr. NORWOOD, Mr.
DICKEY, Mr. RAHALL, Mr. MCHUGH, Mr. STUPAK, Mr. ROEMER, Mr.
WISE, Mr. SOLOMON, Mr. THOMPSON, Mr. FALEOMAVAEGA, Mr.
CLYBURN, Mr. SPRATT, Mr. BARRETT of Nebraska, Mr. INGLIS of South
Carolina, and Mr. ENGLISH of Pennsylvania) introduced the following
bill; which was referred to the Committee on Ways and Means
A BILL
To amend title XVIII of the Social Security Act to permit
classification of certain hospitals as rural referral cen-
ters, to permit reclassification of certain hospitals for
disproportionate share payments, and to permit sole com-
munity hospitals to rebase Medicare payments based
upon fiscal year 1994 and 1995 costs.
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 ‘‘Rural Health Care
Protection Act of 1997’’.
SEC. 2. CLASSIFICATION AS RURAL REFERRAL CENTERS.
(a) PROHIBITING DENIAL OF REQUEST FOR RECLAS-
SIFICATION ON BASIS OF COMPARABILITY OF WAGES.—
(1) IN GENERAL.—Section 1886(d)(10)(D) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395ww(d)(10)(D)) is amended—
(A) by redesignating clause (iii) as clause
(iv); and
(B) by inserting after clause (ii) the follow-
ing new clause:
‘‘(iii) Under the guidelines published by the Secretary
under clause (i), in the case of a hospital which has ever
been classified by the Secretary as a rural referral center
under paragraph (5)(C), the Board may not reject the ap-
plication of the hospital under this paragraph on the basis
of any comparison between the average hourly wage of the
hospital and the average hourly wage of hospitals in the
area in which it is located.’’.
(2) EFFECTIVE
DATE.—Notwithstanding sec-
tion 1886(d)(10)(C)(ii) of the Social Security Act, a
hospital may submit an application to the Medicare
Geographic Classification Review Board during the
60-day period beginning on the date of the enact-
ment of this Act requesting a change in its classi-
fication for purposes of determining the area wage
index applicable to the hospital under section
1886(d)(3)(D) of such Act for fiscal year 1998 if the
hospital would be eligible for such a change in its
classification under the standards described in sec-
tion 1886(d)(10)(D) (as amended by paragraph (1))
but for its failure to meet the deadline for applica-
tions under section 1886(d)(10)(C)(ii).
(3) REFERENCE TO BUDGET NEUTRALITY PRO-
VISION.—For a requirement that the Secretary of
Health and Human Services make a proportional
adjustment in the Medicare standardized payment
amounts for inpatient hospital services to assure
that geographic reclassifications of hospitals result-
ing from this subsection do not result in an increase
in aggregate payments under section 1886 of the So-
cial Security Act, see subsection (d)(8)(D) of such
section.
(b) CONTINUING TREATMENT OF PREVIOUSLY DES-
IGNATED CENTERS.—
(1) IN GENERAL.—Any hospital classified as a
rural referral center by the Secretary of Health and
Human Services under section 1886(d)(5)(C) of the
Social Security Act for fiscal year 1991 shall be clas-
(b) EFFECTIVE
DATE.—Notwithstanding section
1886(d)(10)(C)(ii) of the Social Security Act, a hospital
may submit an application to the Medicare Geographic
Classification Review Board during the 60-day period be-
ginning on the date of the enactment of this Act request-
ing a change in its classification for purposes of determin-
ing the disproportionate share hospital payment applicable
to the hospital under section 1886(d)(5)(F) of such Act
for fiscal year 1998 if the hospital would be eligible for
such a change in its classification under the guidelines de-
scribed in subsection (c) of this section but for its failure
to meet the deadline for applications under section
1886(d)(10(C)(ii).
(c) APPLICABLE GUIDELINES.—Such Board shall
apply the guidelines established for reclassification under
subclause (I) of section 1886(d)(10)(C)(i) of such Act to
reclassification under subclause (III) of such section until
the Secretary of Health and Human Services promulgates
separate guidelines for reclassification under such sub-
clause (III).
(d) REFERENCE TO BUDGET NEUTRALITY PROVI-
SION.—For a requirement that the Secretary of Health
and Human Services make a proportional adjustment in
the medicare standardized payment amounts for inpatient
hospital services to assure that geographic reclassifications
of hospitals resulting from this section do not result in
an increase in aggregate payments under section 1886 of
the Social Security Act, see subsection (d)(8)(D) of such
section.
SEC. 4. PERMITTING REBASING OF PAYMENT FOR SOLE
COMMUNITY 
HOSPITALS 
USING 
FISCAL
YEARS 1994 AND 1995 COSTS.
Section 1886(b)(3) of the Social Security Act (42
U.S.C. 1395ww(b)(3)) is amended—
(1) in subparagraph (C), by inserting ‘‘subject
to 
subparagraph 
(F),’’ 
after 
‘‘subsection
(d)(5)(D)(iii)),’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(F) In applying subparagraph (C) with respect to
discharges occurring in fiscal year 1998 and each subse-
quent fiscal year, in no case shall the target amount for
a hospital for fiscal year 1998 be less than the average
of—
‘‘(i) the allowable operating costs of inpatient
hospital services recognized under this title for the
hospital’s 12-month cost reporting period (if any)
beginning during fiscal year 1994 increased (in a
compounded manner) by the applicable percentage
increase under subparagraph (B)(iv) for each of fis-
cal years 1995, 1996, 1997, and 1998, and
‘‘(ii) the allowable operating costs of inpatient
hospital services recognized under this title for the
hospital’s 12-month cost reporting period (if any)
beginning during fiscal year 1995 increased (in a
compounded manner) by the applicable percentage
increase under subparagraph (B)(iv) for each of fis-
cal years 1996, 1997, and 1998.’’.
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