PAYMENTS FOR OUTPATIENT HOSPITAL SERVICES.

SEC. 4151. PAYMENTS FOR OUTPATIENT HOSPITAL SERVICES. (a) Reduction in Payments for Capital-Related Costs.— (1) In general.—Section 1861(v)(l)(S)(ii)(I) (42 U.S.C. 1395x(v)(l)(S)(ii)(D) is amended by inserting before the period at the end the following: “, by 15 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1991, and by 10 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1992, 1993, 1994, or 1995”. 104 STAT. 1388–72 (2) Exemption for rural primary care hospitals.—Section 1861(v)(l)(S)(n)(n) (42 U.S.C. 1395x(v)(l)(S)(ii)(ID) is amended by striking “1886(d)(5)(D)(iii)).” and inserting “1886(d)(5)(D)(iii) or a rural primary care hospital (as defined in section 1861(mm)(D).” (b) Reduction in Reasonable Costs of Hospital Outpatient Services— (1) In general.— Section 1861(v)(l)(S)(ii) (42 U.S.C. I395x(v)(l)(S)(ii)) is amended— (A) in subclause (ID— (i) by striking “Subclause (I)” and inserting “Subclauses (I) and (II)”, and (ii) by striking “capital-related costs of any hospital” and inserting “costs of hospital outpatient services provided by any hospital”; (B) in subclause (IID— (i) by striking “subclause (I)” and inserting “subclauses (I) and (II)”, and (ii) by striking “capital-related” and inserting “the”; (C) by redesignating subclauses (II) and (III) as subclauses (HI) and (IV); and (D) by inserting after subclause (I) the following new subclause: “(II) The Secretary shall reduce the reasonable cost of outpatient hospital services (other than the capital-related costs of such services) otherwise determined pursuant to section 1833(a)(2)(B)(i)(D by 5.8 percent for payments attributable to portions of cost reporting periods occurring during fiscal years 1991, 1992, 1993, 1994, or 1995.”. (2) Prospective payment system for hospital outpatient services.— (A) Development of proposal.— The Secretary of Health and Human Services shall develop a proposal to replace the current system under which payment is made for hospital outpatient services under title XVIII of the Social Security Act with a system under which such payments would be made on the basis of prospectively determined rates. In developing any proposal under this paragraph, the Secretary shall consider— (i) the need to provide for appropriate limits on increases in expenditures under the medicare program; (ii) the need to adjust prospectively determined rates to account for changes in a hospital’s outpatient case mix, severity of illness of patients, volume of cases, and the development of new technologies and standards of medical practice; (iii) providing hospitals with incentives to control the costs of providing outpatient services; (iv) the feasibility and appropriateness of including payment for outpatient services not currently paid on a cost-related basis under the medicare program (including clinical diagnostic laboratory tests and dialysis services) in the system; (v) the need to increase payments under the system to hospitals that treat a disproportionate share of low-income patients, teaching hospitals, and hospitals located in geographic areas with high wages and wage-related costs; 104 STAT. 1388–73 (vi) the feasibility and appropriateness of bundling services into larger units, such as episodes or visits, in establishing the basic unit for making payments under the system; and (vii) the feasibility and appropriateness of varying payments under the system on the basis of whether services are provided in a free-standing or hospital based facility. (B) Reports.— (i) By not later than January 1, 1991, the Administrator of the Health Care Financing Administration shall submit research findings relating to prospective payments for hospital outpatient services to the Committee on Finance of the Senate and the Committees on Ways and Means and Energy and Commerce of the House of Representatives. (ii) By not later than September 1, 1991, the Secretary shall submit the proposal developed under subparagraph (A) to such Committees. (iii) By not later than March 1, 1992, the Prospective Payment Assessment Commission shall submit an analysis of and comments on the proposal developed under subparagraph (A) to such Committees. (c) Payments for Ambulatory Surgical Procedures and Radiology Services.— (1) Modification of cost and asc proportions of asc blend amounts.— (A) In general.— Section 1833(i)(3)(B)(ii) (42 U.S.C. 13951(i)(3)(B)(ii)) is amended— (i) in subclause (I), by striking “and 50 percent for other cost reporting periods.” and inserting “50 percent for reporting periods beginning on or after October 1, 1988, and on or before December 31, 1990, and 42 percent for portions of cost reporting periods beginning on or after January 1, 1991.”; and (ii) in subclause (II), by striking “and 50 percent for other cost reporting periods.” and inserting “50 percent for reporting periods beginning on or after October 1, 1988, and on or before December 31, 1990, and 58 percent for portions of cost reporting periods beginning on or after January 1, 1991.”. (B) Extension of asc blend amounts for eye and eye and ear specialty hospitals.—The last sentence of section 1833(i)(3)(B)(ii) (42 U.S.C. 13951(i)(3)(B)(ii)) is amended by striking “in fiscal year 1989 or fiscal year 1990” and inserting “on or after October 1, 1988, and before January 1, 1995”. (2) Modification of cost and charge proportions for radiology services.—Section 1833(n)(l)(B)(ii)(I) (42 U.S.C. 13951(n)(l)(B)(ii)(D) is amended by striking the period at the end and inserting “, and such term means 42 percent in the case of outpatient radiology services for portions of cost reporting periods beginning on or after January 1, 1991.”. (3) 2-year freeze in allowance for intraocular lenses.—Notwithstanding section 1833(i)(2)(A)(iii) of the Social Security Act, the amount of payment determined under such section for the insertion of an intraocular lens during or subsequent to cataract surgery furnished to an individual in an ambulatory 104 STAT. 1388–74surgical center on or after the date of the enactment of this Act and on or before December 31, 1992, shall be equal to $200.