(2)No hospital orcritical access hospital that presents a claim or request for paymentunder this part for services described in section 1861(s)(2)(K)(ii) may treat any uncollected coinsurance amount imposed under thispart with respect to such services as a bad debt of such hospitalfor purposes of this title.(s)The Secretary maynot provide for payment under subsection (a)(1)(A) with respect toan organization unless the organization provides assurances satisfactoryto the Secretary that the organization meets the requirement of section 1866(f) (relatingto maintaining written policies and procedures respecting advancedirectives).(t)[112]Prospective Payment System forHospital Outpatient Department Services.(1)Amountof payment.(A)In general.With respect to coveredOPD services (as defined in subparagraph (B)) furnished during a yearbeginning with 1999, the amount of payment under this part shall bedetermined under a prospective payment system established by the Secretaryin accordance with this subsection.(B)Definition of covered opd services.For purposes of this subsection, the term covered OPD services(i)means hospitaloutpatient services designated by the Secretary;(ii)subject toclause (iv), includes inpatient hospital services designated by theSecretary that are covered under this part and furnished to a hospitalinpatient who (I) is entitled to benefits under part A but has exhaustedbenefits for inpatient hospital services during a spell of illness,or (II) is not so entitled;(iii)includesimplantable items described in paragraph (3), (6), or (8) of section 1861(s);(iv)does not includeany therapy services described in subsection (a)(8) or ambulance services,for which payment is made under a fee schedule described in section 1834(k) or section 1834(l) and does notinclude screening mammography (as defined in section 1861(jj)), diagnosticmammography, or personalized prevention plan services (as definedin section 1861(hhh)(1));and(v)[113]does not include applicable items and services(as defined in subparagraph (A) of paragraph (21)) that are furnishedon or after January 1, 2017, by an off-campus outpatient departmentof a provider (as defined in subparagraph (B) of such paragraph).(2)Systemrequirements.Under the payment system(A)the Secretaryshall develop a classification system for covered OPD services;(B)the Secretarymay establish groups of covered OPD services, within the classificationsystem described in subparagraph (A), so that services classifiedwithin each group are comparable clinically and with respect to theuse of resources and so that an implantable item is classified tothe group that includes the service to which the item relates;(C)the Secretaryshall, using data on claims from 1996 and using data from the mostrecent available cost reports, establish relative payment weightsfor covered OPD services (and any groups of such services describedin subparagraph (B)) based on median (or, at the election of the Secretary,mean) hospital costs and shall determine projections of the frequencyof utilization of each such service (or group of services) in 1999;(D)subject toparagraph (19), the Secretary shall determine a wage adjustment factorto adjust the portion of payment and coinsurance attributable to labor-relatedcosts for relative differences in labor and labor-related costs acrossgeographic regions in a budget neutral manner;(E)the Secretaryshall establish, in a budget neutral manner, outlier adjustments underparagraph (5) and transitional passthrough payments under paragraph(6) and other adjustments as determined to be necessary to ensureequitable payments, such as adjustments for certain classes of hospitals;(F)the Secretaryshall develop a method for controlling unnecessary increases in thevolume of covered OPD services;(G)the Secretaryshall create additional groups of covered OPD services that classifyseparately those procedures that utilize contrast agents from thosethat do not; and(H)with respectto devices of brachytherapy consisting of a seed or seeds (or radioactivesource), the Secretary shall create additional groups of covered OPDservices that classify such devices separately from the other services(or group of services) paid for under this subsection in a mannerreflecting the number, isotope, and radioactive intensity of suchdevices furnished, including separate groups for palladium103and iodine125 devices.For purposes of subparagraph (B), items and services withina group shall not be treated as comparable with respect tothe use of resources if the highest median cost (or mean cost,if elected by the Secretary under subparagraph (C)) for an item orservice within the group is more than 2 times greater than the lowestmedian cost (or mean cost, if so elected) for an item or service withinthe group; except that the Secretary may make exceptions in unusualcases, such as low volume items and services, but may not make suchan exception in the case of a drug or biological that has been designatedas an orphan drug under section 526 of the Federal Food, Drug andCosmetic Act.(3)Calculationof base amounts.(A)Aggregate amounts that would be payable if deductibles were disregarded.The Secretary shall estimate the sum of(i)the total amountsthat would be payable from the Trust Fund under this part for coveredOPD services in 1999, determined without regard to this subsection,as though the deductible under section 1833(b) did not apply, and(ii)the total amountsof copayments estimated to be paid under this subsection by beneficiariesto hospitals for covered OPD services in 1999, as though the deductibleunder section 1833(b) did not apply.(B)Unadjusted copayment amount.(i)Ingeneral.For purposes of this subsection,subject to clause (ii), the unadjusted copayment amount applicable to a covered OPD service (or group of such services)is 20 percent of the national median of the charges for the service(or services within the group) furnished during 1996, updated to 1999using the Secretarys estimate of charge growth during the period.(ii)Adjustedto be 20 percent when fully phased in.If the predeductible payment percentage for a covered OPDservice (or group of such services) furnished in a year would be equalto or exceed 80 percent, then the unadjusted copayment amount shallbe 20 percent of amount determined under subparagraph (D).(iii)Rules for new services.The Secretaryshall establish rules for establishment of an unadjusted copaymentamount for a covered OPD service not furnished during 1996, basedupon its classification within a group of such services.(C)Calculation of conversion factors.(i)For1999.(I)In general.The Secretary shall establisha 1999 conversion factor for determining the medicare OPD fee scheduleamounts for each covered OPD service (or group of such services) furnishedin 1999. Such conversion factor shall be established on the basisof the weights and frequencies described in paragraph (2)(C) and insuch a manner that the sum for all services and groups of the products(described in subclause (II) for each such service or group) equalsthe total projected amount described in subparagraph (A).(II)Product described.The Secretary shalldetermine for each service or group the product of the medicare OPDfee schedule amounts (taking into account appropriate adjustmentsdescribed in paragraphs (2)(D) and (2)(E)) and the estimated frequenciesfor such service or group.(ii)Subsequentyears.Subject to paragraph (8)(B), theSecretary shall establish a conversion factor for covered OPD servicesfurnished in subsequent years in an amount equal to the conversionfactor established under this subparagraph and applicable to suchservices furnished in the previous year increased by the OPD fee scheduleincrease factor specified under clause (iv) for the year involved.(iii)Adjustment for service mix changes.Insofar as the Secretary determines that the adjustments for servicemix under paragraph (2) for a previous year (or estimates that suchadjustments for a future year) did (or are likely to) result in achange in aggregate payments under this subsection during the yearthat are a result of changes in the coding or classification of coveredOPD services that do not reflect real changes in service mix, theSecretary may adjust the conversion factor computed under this subparagraphfor subsequent years so as to eliminate the effect of such codingor classification changes.(iv)OPDfee schedule increase factor.For purposesof this subparagraph, subject to paragraph (17) and subparagraph (F)of this paragraph the OPD fee schedule increase factor for services furnished in a year is equal to the market basket percentageincrease applicable under section 1886(b)(3)(B)(iii) to hospitaldischarges occurring during the fiscal year ending in such year, reducedby 1 percentage point for such factor for services furnished in eachof 2000 and 2002. In applying the previous sentence for years beginningwith 2000, the Secretary may substitute for the market basket percentageincrease an annual percentage increase that is computed and appliedwith respect to covered OPD services furnished in a year in the samemanner as the market basket percentage increase is determined andapplied to inpatient hospital services for discharges occurring ina fiscal year.(D)Calculation of medicare opd fee schedule amounts.The Secretary shall compute a medicare OPD fee schedule amountfor each covered OPD service (or group of such services) furnishedin a year, in an amount equal to the product of(i)the conversionfactor computed under subparagraph (C) for the year, and(ii)the relativepayment weight (determined under paragraph (2)(C)) for the serviceor group.(E)Predeductible payment percentage.The pre-deductible payment percentage for a covered OPD service (orgroup of such services) furnished in a year is equal to the ratioof(i)the medicareOPD fee schedule amount established under subparagraph (D) for theyear, minus the unadjusted copayment amount determined under subparagraph(B) for the service or group, to(ii)the medicareOPD fee schedule amount determined under subparagraph (D) for theyear for such service or group.(F)Productivity and other adjustment.After determining the OPD fee schedule increase factor under subparagraph(C)(iv), the Secretary shall reduce such increase factor(i)for 2012 andsubsequent years, by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II); and(ii)for each of2010 through 2019, by the adjustment described in subparagraph (G).The application of this subparagraph may result in the increasefactor under subparagraph (C)(iv) being less than 0.0 for a year,and may result in payment rates under the payment system under thissubsection for a year being less than such payment rates for the precedingyear.(G)Other adjustment.(i)For purposesof subparagraph (F)(ii), the adjustment described in this subparagraphis(I)for eachof 2010 and 2011, 0.25 percentage point;(II)  for each of 2012 and 2013, 0.1percentage point; and(III)subjectto clause (ii), for each of 2014 through 2019, 0.2 percentage point.(ii)Reductionof other adjustment.Clause (i)(II)shall be applied with respect to any of 2014 through 2019 by substituting 0.0 percentage points for 0.2 percentage point, if for such year(I)theexcess (if any) of(aa)the totalpercentage of the nonelderly insured population for the precedingyear (based on the most recent estimates available from the Directorof the Congressional Budget Office before a vote in either House onthe Patient Protection and Affordable Care Act that, if determinedin the affirmative, would clear such Act for enrollment); over (bb)the total percentage of the nonelderly insured population for suchpreceding year (as estimated by the Secretary); exceeds (II).(bb)the totalpercentage of the nonelderly insured population for such precedingyear (as estimated by the Secretary); exceeds(II)5 percentagepoints.(4)Medicarepayment amount.The amount of paymentmade from the Trust Fund under this part for a covered OPD service(and such services classified within a group) furnished in a yearis determined, subject to paragraph (7) as follows:(A)Fee schedule adjustments.The medicareOPD fee schedule amount (computed under paragraph (3)(D)) for theservice or group and year is adjusted for relative differences inthe cost of labor and other factors determined by the Secretary, ascomputed under paragraphs (2)(D) and (2)(E).(B)Subtract applicable deductible.Reducethe adjusted amount determined under subparagraph (A) by the amountof the deductible under section 1833(b), to the extent applicable.(C)