INCREASE IN DISPROPORTIONATE SHARE ADJUSTMENT AND REDUCTION IN INDIRECT MEDICAL EDUCATION PAYMENTS.

SEC. 4003. INCREASE IN DISPROPORTIONATE SHARE ADJUSTMENT AND REDUCTION IN INDIRECT MEDICAL EDUCATION PAYMENTS. (a) Reduction in Indirect Medical Education Payments.— (1) Section 1886(d)(5)(B)(ii) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(ii)) is amended— (A) in subclause (I), by striking “2” and inserting in lieu thereof “1.89”; and (B) in subclause (II), by striking “1.5” and inserting in lieu thereof “1.43”. (2) Section 1886(d)(3)(C)(ii) of such Act (42 U.S.C. 1395ww(d)(3)(C)(ii)) is amended by inserting “and by section 4003(a)(1) of the Omnibus Budget Reconciliation Act of 1987” after “1985” each place it appears in subclauses (I) and (II). (b) Increase in Disproportionate Share Adjustment.— Section 1886(d)(5)(F) of such Act (42 U.S.C. 1395ww(d)(5)(B))— (1) in clause (iii), by striking “15 percent“ and inserting “25 percent”, and (2) in clause (iv)(I), by striking “the lesser of 15 percent, or”. (c) Extension of Disproportionate Share Adjustment.— Sections 1886(d)(2)(C)(iv) (42 U.S.C. 1395ww(d)(2)(C)(iv)), 1886(d)(3)(C)(ii)(I) (42 U.S.C. 1395ww(d)(3)(C)(ii)(I)), 1886(d)(3)(C)(ii)(II) (42 U.S.C. 1395ww(d)(3)(C)(ii)(II)), 1886(d)(5)(B)(ii)(I) (42 U.S.C. 1395ww(d)(5)(B)(ii)(I)), 1886(d)(5)(B)(ii)(II) (42 U.S.C. 1395ww(d)(5)(B)(ii)(II)), and 1886(d)(5)(F)(i) (42 U.S.C. 1395ww(d)(5)(F)(i)) of the Social Security Act are each amended by striking “1989” and inserting in lieu thereof “1990”. (d) Special Rule.— In the case of a hospital which— (1) consists of 2 inpatient hospital facilities which are more than 4 miles apart and each of which is in a separate political jurisdiction within the same State and one of which meets the criteria under section 1886(d)(5)(F) of the Social Security Act for serving a significantly disproportionate number of low-income patients as if that facility were a separate hospital; and 101 STAT. 1330–47 (2) receives payments for inpatient hospital services under title XVIII of the Social Security Act which are less than the hospital’s reasonable costs, the Secretary of Health and Human Services, upon application by the hospital, may treat each of the facilities of hospital as separate hospitals for purposes of applying section 1886(d)(5)(F) of the Social Security Act, for discharges occurring on or after October 1, 1988. (e) Effective Date.— The amendments made by this section shall apply to payments for discharges occurring on or after October 1, 1988.