II 112th CONGRESS 1st Session S. 1900 IN THE SENATE OF THE UNITED STATES November 17, 2011 Mr. Menendez (for himself, Mr. Nelson of Florida, and Mr. Lautenberg) 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 preserve access to urban Medicare-dependent hospitals.

1.

Short title

This Act may be cited as the Urban Medicare-Dependent Hospitals Preservation Act of 2011.

2.

Criteria and payment for certain urban Medicare-dependent hospitals

(a)

In general

Section 1886(d)(5) of the Social Security Act (42 U.S.C. 1395ww(d)(5)) is amended by adding at the end the following new subparagraph: (M)(i)For cost reporting periods beginning on or after October 1, 2011, and before October 1, 2014, in the case of a subsection (d) hospital which is an urban Medicare-dependent hospital, payment under paragraph (1)(A) shall be equal to the sum of the amount determined under clause (ii) and the amount determined under paragraph (1)(A)(iii). (ii)The amount determined under this clause is, for discharges occurring during a cost reporting period that begins on or after October 1, 2011, and before October 1, 2014, 50 percent of the amount by which the hospital’s target amount for the cost reporting period (as defined in subsection (b)(3)(L)) exceeds the amount determined under paragraph (1)(A)(iii). (iii)For purposes of this subparagraph, the term urban Medicare-dependent hospital means, with respect to any cost reporting period to which clause (i) applies, any hospital— (I)located in an urban area or reclassified to an urban area for wage index purposes; (II)that does not receive payment— (aa)under subparagraph (C) as a rural referral center; (bb)under subparagraph (D) as a sole community hospital; (cc)under subparagraph (B) or under subsection (h); or (dd)under subparagraph (F); (III)that is not a physician-owned hospital, as defined in section 489.3 of title 42, Code of Federal Regulations (as in effect as of the date of the enactment of this subparagraph); and (IV)for which not less than 60 percent of its inpatient days or discharges during the cost reporting period beginning in fiscal year 2006, or two of the three most recently audited cost reporting periods for which the Secretary has a settled cost report, were attributable to inpatients entitled to benefits under part A and not enrolled in a Medicare Advantage plan under part C. . (b)

Target payment amount

Section 1886(b)(3) of the Social Security Act (42 U.S.C. 1395ww(b)(3)) is amended— (1)in subparagraph (B)(iv), by striking and (D) and inserting , (D), and (M); and (2)by adding at the end the following new subparagraph: (M)For cost reporting periods occurring on or after October 1, 2011, and before October 1, 2014, in the case of a hospital that is an urban Medicare-dependent hospital (as defined in subsection (d)(5)(M)), the term target amount means— (i)with respect to the first 12-month cost reporting period in which this subparagraph is applied to the hospital, the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this title for the hospital for the 12-month cost reporting period beginning during fiscal year 2002 or 2006 (whichever results in a higher target amount), increased by the applicable percentage increase under subparagraph (B)(iv) for each of fiscal years 2003 through 2011 or 2007 through 2011, respectively; and (ii)with respect to discharges occurring after the first 12-month cost reporting period in which this subparagraph is applied to the hospital, the target amount for the preceding year increased by the applicable percentage increase under subparagraph (B)(iv). .