[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 817 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 817

       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 SENATE OF THE UNITED STATES

                              May 23, 1997

 Mr. Grassley 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 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.

    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 ``Rural Health Care Protection Act of 
1997''.

SEC. 2. CLASSIFICATION AS RURAL REFERRAL CENTERS.

    (a) Prohibiting Denial of Request for Reclassification 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 following 
                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 application 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 section 
        1886(d)(10)(C)(ii) of the Social Security Act (42 U.S.C. 
        1395ww(d)(10)(C)(ii)), a hospital may submit an application to 
        the Medicare Geographic Classification Review Board during the 
        60-day period beginning on the date of the enactment of this 
        Act requesting a change in its classification for purposes of 
        determining the area wage index applicable to the hospital 
        under section 1886(d)(3)(D) of such Act (42 U.S.C. 
        1395ww(d)(3)(D)) for fiscal year 1998 if the hospital would be 
        eligible for such a change in its classification under the 
        standards described in section 1886(d)(10)(D) of such Act (42 
        U.S.C. 1395ww(d)(10)(D)) (as amended by paragraph (1)) but for 
        its failure to meet the deadline for applications under section 
        1886(d)(10)(C)(ii) of such Act (42 U.S.C. 
        1395ww(d)(10)(C)(ii)).
            (3) Reference to budget neutrality provision.--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 ensure that 
        geographic reclassifications of hospitals resulting from this 
        subsection 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 (42 U.S.C. 1395ww(d)(8)(D)).
    (b) Continuing Treatment of Previously Designated 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 (42 
        U.S.C. 1395ww(d)(5)(C)) for fiscal year 1991 shall be 
        classified as such a rural referral center for fiscal year 1998 
        and each subsequent fiscal year.
            (2) Budget neutrality.--The provisions of section 
        1886(d)(8)(D) of the Social Security Act (42 U.S.C. 
        1395ww(d)(8)(D)) shall apply to reclassifications made pursuant 
        to paragraph (1) in the same manner as such provisions apply to 
        a reclassification under section 1886(d)(10) of such Act (42 
        U.S.C. 1395ww(d)(10)).

SEC. 3. HOSPITAL GEOGRAPHIC RECLASSIFICATION PERMITTED FOR PURPOSES OF 
              DISPROPORTIONATE SHARE PAYMENT ADJUSTMENTS.

    (a) In General.--Section 1886(d)(10)(C)(i) of the Social Security 
Act (42 U.S.C. 1395ww(d)(10)(C)(i)) is amended--
            (1) by striking ``or'' at the end of subclause (I);
            (2) by striking the period at the end of subclause (II) and 
        inserting ``, or'';
            (3) by inserting after subclause (II) the following:
            ``(III) eligibility for and amount of additional payment 
        amounts under paragraph (5)(F).''; and
            (4) by adding at the end the following:
``Any application approved for purposes of subclause (I) for a fiscal 
year is deemed to be approved for purposes of subclause (III) for that 
fiscal year.''.
    (b) Effective Date.--Notwithstanding section 1886(d)(10)(C)(ii) of 
the Social Security Act (42 U.S.C. 1395ww(d)(10)(C)(ii)), a hospital 
may submit an application to the Medicare Geographic Classification 
Review Board during the 60-day period beginning on the date of the 
enactment of this Act requesting a change in its classification for 
purposes of determining the disproportionate share hospital payment 
applicable to the hospital under section 1886(d)(5)(F) of such Act (42 
U.S.C. 1395ww(d)(5)(F)) for fiscal year 1998 if the hospital would be 
eligible for such a change in its classification under the guidelines 
described in subsection (c) of this section but for its failure to meet 
the deadline for applications under section 1886(d)(10(C)(ii) of such 
Act (42 U.S.C. 1395ww(d)(10)(C)(ii)).
    (c) Applicable Guidelines.--The Medicare Geographic Classification 
Review Board shall apply the guidelines established for 
reclassification under subclause (I) of section 1886(d)(10)(C)(i) of 
the Social Security Act (42 U.S.C. 1395ww(d)(10)(C)(i)(I)) to 
reclassification under subclause (III) of such section of such Act 
until the Secretary of Health and Human Services promulgates separate 
guidelines for reclassification under such subclause (III).
    (d) Reference to Budget Neutrality Provision.--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 ensure 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 of such Act (42 U.S.C. 
1395ww(d)(8)(D)).

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 subparagraph:
    ``(F) In applying subparagraph (C) with respect to discharges 
occurring in fiscal year 1998 and each subsequent 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 
        fiscal 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 
        fiscal years 1996, 1997, and 1998.''.
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