To amend title XVIII of the Social Security Act to provide special treatment of certain cancer hospitals under the Medicare Program.

SECTION 1. MEDICARE TREATMENT FOR CERTAIN CANCER HOSPITALS.

    (a) In General.--Section 1886(d)(1)(B) of the Social Security Act 
(42 U.S.C. 1395ww(d)(1)(B)) is amended--
            (1) by striking ``or'' at the end of clause (iv);
            (2) by striking the semicolon at the end of clause (v) and 
        inserting ``, or''; and
            (3) by inserting after clause (v) the following new clause:
            ``(vi) a hospital that--
                    ``(I) is located in a State which ranks (according 
                to the National Cancer Institute's statistics published 
                in May 2005 for 2001 and 2002) first among all States 
                in the incidence of prostate cancer, third in the 
                incidence rate for non-Hodgkins lymphoma, fourth in the 
                incidence rates for thyroid cancer and ovarian cancer, 
                and third in the highest death rates from uterine 
                cancer and breast cancer;
                    ``(II) is located in a State that, as of December 
                31, 2005, had only one center under section 414 of the 
                Public Health Service Act that has been designated by 
                the National Cancer Institute as a comprehensive center 
                currently serving all 21 counties in the most densely 
                populated State in the nation, serving more than 70,000 
                patient visits annually;
                    ``(III) as of December 31, 2005, 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;
                    ``(IV) as of December 31, 2005, served as a core 
                and essential element in such Center which conducts 
                more than 130 clinical trial activities, national 
                cooperative group studies, investigator-initiated and 
                peer review studies and received during 2003 at least 
                $80,000,000 in research grant awards;
                    ``(V) as of December 31, 2005, can demonstrate that 
                it has been a unique and an integral component of such 
                Center since such Center's inception;
                    ``(VI) as of December 31, 2005, 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 contains a radiation oncology department 
                as well as specialized emergency services for oncology 
                patients;
                    ``(VII) as of December 31, 2003, is identified as 
                the focus of the Center's inpatient activities in the 
                Center's application as an NCI-designated comprehensive 
                cancer center and shares the NCI comprehensive cancer 
                designation with the Center; and
                    ``(VIII) as of December 31, 2005, has been 
                recognized with a certificate of approval by the 
                American College of Surgeons Commission on Cancer;''.
    (b) Conforming Amendment.--Section 1886(d)(3)(E) of such Act (42 
U.S.C. 1395ww(d)(3)(E)) is amended by striking ``clause (v)'' and 
inserting ``clauses (v) and (vi)''.
    (c) Payment.--
            (1) Application to cost reporting periods.--Any 
        classification by reason of section 1886(d)(1)(B)(vi) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(vi)) (as added 
        by subsection (a)) shall apply to all cost reporting periods 
        beginning on or after January 1, 2005.
            (2) Base target amount.--Notwithstanding section 
        1886(b)(3)(E) of the Social Security Act (42 U.S.C. 
        1395ww(b)(3)(E), in the case of a hospital described in section 
        1886(d)(1)(B)(vi) of the Social Security Act, as added by 
        subsection (a), such hospital shall be permitted to resubmit 
        the 2005 Medicare 2552 cost report incorporating a cancer 
        hospital sub-provider number, and apply the Medicare ratio-of-
        cost-to-charge settlement methodology for outpatient cancer 
        services. In the case of such hospital the PPS cancer exemption 
        under section 1886(b)(3)(E)(i) of such Act for the first cost 
        reporting period beginning on or after January 1, 2005, shall 
        be the allowable operating costs of inpatient hospital services 
        (referred to in subclause (I) of such section) for such first 
        cost reporting period.
            (3) Deadline for payments.--Any payments owed to a hospital 
        as a result of this section for periods occurring before the 
        date of the enactment of this Act shall be made expeditiously, 
        but in no event later than 1 year after such date of enactment.
    (d) Maintenance of Exemption.--Once admitted as a PPS cancer-exempt 
hospital, a hospital described in section 1886(d)(1)(B)(vi) of the 
Social Security Act shall retain that status as long as the Center 
referred to in such section remains a comprehensive cancer center.

Summary: Amends title XVIII (Medicare) of the Social Security Act, with respect to inpatient hospital service payments to certain hospitals (subsection (d) hospitals) on the basis of prospective rates, to exclude certain cancer hospitals from the meaning of subsection (d) hospital.