PPSE)(EMPT HOSPITALS.

SEC 4005. PPSE)(EMPT HOSPITALS. (a) Adjustment to Payment Amounts.— (1) In general.—Section 1886(b)(l)(B) (42 U.S.C. 1395ww(b)(l)(B)) is amended by striking “(ii) in the case of’ and all that follows through the semicolon and inserting the following; “(ii) in the case of cost reporting periods beginning on or after October 1, 1991, an additional amount equal to 50 percent of the amount by which the operating costs exceed the target amount (except that such additional amount may not exceed 10 percent of the target amount) after any exceptions or adjustments are made to such target amount for the cost reporting period;”. (2) Effective date.—The amendment made by paragraph (1) shall apply to cost reporting periods beginning on or after October 1, 1991. (b) Development of National Prospective Payment Rates for Current Non-PPS Hospitals.— (1) Development of proposal.— The Secretary of Health and Human Services shall develop a proposal to modify the current system under which hospitals that are not subsection (d) hos-104 STAT. 1388–41pitals (as defined in section 1886(d)(D(B) of the Social Security Act) receive payment for the operating and capital-related costs of inpatient hospital services under part A of the medicare program or a proposal to replace such system with a system under which such payments would be made on the basis of nationally-determined average standardized amounts. In developing any proposal under this paragraph to replace the current system with a prospective payment system, the Secretary snail— (A) take into consideration the need to provide for appropriate limits on increases in expenditures under the medicare program; (B) provide for adjustments to prospectively determined rates to account for changes in a hospital’s case mix, severity of illness of patients, volume of cases, and the development of new technologies and standards of medical practice; (C) take into consideration the need to increase the payment otherwise made under such system in the case of services provided to patients whose length of stay or costs of treatment greatly exceed the length of stay or cost of treatment provided for under the applicable prospectively determined payment rate; (D) take into consideration the need to adjust payments under the system to take into account factors such as a disproportionate share of low-income patients, costs related to graduate medical education programs, differences in wages and wage-related costs among hospitals located in various geographic areas, and other factors the Secretary considers appropriate; and (E) provide for the appropriate allocation of operating and capital-related costs of hospitals not subject to the new prospective payment system and distinct units of such hospitals that would be paid under such system. (2) Reports.— (A) By not later than April 1, 1992, the Secretary shall submit the proposal developed under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. (B) By not later than June 1, 1992, the Prospective Payment Assessment Commission shall submit an analysis of and comments on the proposal developed under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. (c) Appeals of Target Amounts.— (1) Deadlines for review and decision.— (A) Section 1816(f) (42 U.S.C. 1395h(f)) is amended— (i) by striking “(1)” and “(2)” and inserting “(A)” and “(B)”; (ii) by striking “(f)” and inserting “(f)(1)”; and (iii) by striking “Such standards and criteria” and all that follows and inserting the following: “(2) The standards and criteria established under paragraph (1) shall include— “(A) with respect to claims for services furnished under this part by any provider of services other than a hospital— “(i) whether such agency or organization is able to process 75 percent of reconsiderations within 60 days (except in 104 STAT. 1388–42the case of fiscal year 1989, 66 percent of reconsiderations) and 90 percent of reconsiderations within 90 days, and “(ii) the extent to which such agency or organization’s determinations are reversed on appeal; and “(B) with respect to applications for an exemption from or exception or adjustment to the target amount applicable under section 1886(b) to a hospital that is not a subsection (d) hospital (as defined in section 1886(d)(D(B))— 44So in original. Probably should be “ “(i)”.“(i) if such agency or organization receives a completed application, whether such agency or organization is able to process such application not later than 75 days after the application is filed, and “(ii) if such agency or organization receives an incomplete application, whether such agency or organization is able to return the application with instructions on how to complete the application not later than 60 days after the application is filed.”. (B) Section 1886(b)(4)(A) (42 U.S.C. 1395ww(b)(4)(A)) is amended by adding at the end the following new sentence: “The Secretary shall announce a decision on any request for an exemption, exception, or adjustment under this paragraph not later than 180 days after receiving a completed application from the intermediary for such exemption, exception, or adjustment, and shall include in such decision a detailed explanation of the grounds on which such request was approved or denied.”. (2) Standards for assignment of new base period.— Section 1886(b)(4) (42 U.S.C. 1395ww(b)(4)) is amended— (A) by redesignating subparagraph (B) as subparagraph (C); and (B) by inserting after subparagraph (A) the following new subparagraph: “(B) In determining under subparagraph (A) whether to assign a new base period which is more representative of the reasonable and necessary cost to a hospital of providing inpatient services, the Secretary shall take into consideration— “(i) changes in applicable technologies and medical practices, or differences in the severity of illness among patients, that increase the hospital’s costs; “(ii) whether increases in wages and wage-related costs for hospitals located in the geographic area in which the hospital is located exceed the average of the increases in such costs paid by hospitals in the United States; and “(iii) such other factors as the Secretary considers appropriate in determining increases in the hospital’s costs of providing inpatient services.”. (3) Guidance to intermediaries and hospitals.—The Administrator of the Health Care Financing Administration shall provide guidance to agencies and organizations performing functions pursuant to section 1816 of the Social Security Act and to hospitals that are not subsection (d) hospitals (as defined in section 1886(d)(lKB) of such Act) to assist such agencies, organizations, and hospitals in filing complete applications with the Administrator for exemptions, exceptions, and adjustments under section 1886(b)(4)(A) of such Act. (4) Effective dates.—The amendments made by paragraph (1) shall take effect on the date of the enactment of this Act, and the amendments made by paragraph (2) shall take effect as if 104 STAT. 1388–43 included in the enactment of the Omnibus Budget Reconciliation Act of 1989.