Title: Fair Medicare Hospital Payments Act of 2017
Policy area: Health

Summary:
Fair Medicare Hospital Payments Act of 2017
This bill amends title XVIII (Medicare) of the Social Security Act to establish, with respect to hospitals not located in a frontier state, a floor on the area wage adjustment factor for hospital inpatient and outpatient services covered under Medicare. (Such a floor already applies with respect to hospitals located in frontier states.)

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 397 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 397

 To amend title XVIII of the Social Security Act to ensure fairness in 
 Medicare hospital payments by establishing a floor for the area wage 
            index applied with respect to certain hospitals.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 15, 2017

  Mr. Isakson (for himself, Mr. Warner, Mr. Alexander, Mr. Brown, Mr. 
 Shelby, and Mr. Kaine) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend title XVIII of the Social Security Act to ensure fairness in 
 Medicare hospital payments by establishing a floor for the area wage 
            index applied with respect to certain hospitals.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Medicare Hospital Payments Act 
of 2017''.

SEC. 2. ENSURING FAIRNESS IN MEDICARE HOSPITAL PAYMENTS IN A BUDGET 
              NEUTRAL MANNER.

    (a) Hospital Inpatient Services.--Section 1886(d)(3)(E) of the 
Social Security Act (42 U.S.C. 1395www(d)(3)(E)) is amended--
            (1) in clause (i), by striking ``clause (ii) or (iii)'' and 
        inserting ``clause (ii), (iii), or (iv)''; and
            (2) by adding at the end the following new clause:
            ``(iv) Floor on area wage index for hospitals in certain 
        other areas.--
                    ``(I) In general.--For discharges occurring on or 
                after October 1, 2017, the area wage index applicable 
                under this subparagraph to any hospital which is not 
                located in a frontier State (as defined in clause 
                (iii)(II)) may not be less than 0.874.
                    ``(II) Ensuring budget neutrality.--In order to 
                ensure that the aggregate payments made under this 
                subsection for a fiscal year (beginning with fiscal 
                year 2018) are not greater than the aggregate payments 
                that would have been made under this subsection for 
                such fiscal year without the application of subclause 
                (I), as estimated by the Secretary, the Secretary shall 
                establish pursuant to rulemaking a maximum area wage 
                index to apply under this subparagraph to any hospital 
                which is not located in a frontier State (as defined in 
                clause (iii)(II)).
                    ``(III) No impact for hospitals with an area wage 
                index between the floor and the maximum index.--
                Subclauses (I) and (II) shall have no affect on the 
                area wage index applicable in a fiscal year to a 
                hospital with an area wage index that is greater than 
                the floor under subclause (I) but less than the maximum 
                area wage index established under subclause (II) for 
                the fiscal year.''.
    (b) Hospital Outpatient Department Services.--Section 1833(t) of 
the Social Security Act (42 U.S.C. 1395l(t)), is amended--
            (1) in paragraph (2)(D), by striking ``paragraph (19), the 
        Secretary'' and inserting ``paragraphs (19) and (22), the 
        Secretary''; and
            (2) by adding at the end the following new paragraph:
            ``(22) Floor on area wage adjustment factor for hospital 
        outpatient department services in areas other than in frontier 
        states.--
                    ``(A) In general.--With respect to covered OPD 
                services furnished on or after January 1, 2018, the 
                area wage adjustment factor applicable under the 
                payment system established under this subsection to any 
                hospital outpatient department which is not located in 
                a frontier State (as defined in section 
                1886(d)(3)(E)(iii)(II)) may not be less than 0.874.
                    ``(B) Ensuring budget neutrality.--In order to 
                ensure that the aggregate payments made under this 
                subsection for a year (beginning with 2018) are not 
                greater than the aggregate payments that would have 
                been made under this subsection for such year without 
                the application of subparagraph (A), as estimated by 
                the Secretary, the Secretary shall establish pursuant 
                to rulemaking a maximum area wage adjustment factor to 
                apply under the payment system established under this 
                subsection to any hospital outpatient department which 
                is not located in a frontier State (as defined in 
                clause (iii)(II)).
                    ``(C) No impact for hospitals with an area wage 
                adjustment factor between the floor and the maximum 
                factor.--Subparagraphs (A) and (B) shall have no affect 
                on the area wage adjustment factor applicable in a year 
                to a hospital with an area wage adjustment factor that 
                is greater than the floor under subparagraph (A) but 
                less than the maximum area wage adjustment factor 
                established under subparagraph (B) for the year.''.
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