DISPROPORTIONATE SHARE HOSPITALS: ALTERNATIVE STATE PAYMENT ADJUSTMENTS AND SYSTEMS.

SEC. 4703. DISPROPORTIONATE SHARE HOSPITALS: ALTERNATIVE STATE PAYMENT ADJUSTMENTS AND SYSTEMS. (a) Alternative State Payment Adjustments.— Section 1923(c) (42 U.S.C. 1396r–4(c)) is amended— (1) by striking “or” at the end of paragraph (1); (2) by adding “or” at the end of paragraph (2); and (3) by inserting after paragraph (2) the following new paragraph: (3) provide for a minimum specified additional payment amount (or increased percentage payment) that varies according to type of hospital under a methodology that— “(A) applies equally to all hospitals of each type; and “(B) results in an adjustment for each type of hospital that is reasonably related to the costs, volume, or proportion of services provided to patients eligible for medical assistance under a State plan approved under this title or to low-income patients.”. (b) Clarification of Special Rule for State Using Health Insuring Organization.—Section 1923(e)(2) (42 U.S.C. 1396r–4(e)(2)) is amended by striking “during the 3-year period”. (c) Conforming Amendment.—Section 1923(c)(2) (42 U.S.C. 1396r–4(c)(2)) is amended by inserting after “State” “or the hospital’s low-income utilization rate (as defined in paragraph (b)(3))”. (d) Effective Date.—The amendments made by this section shall take effect as if included in the enactment of section 412(a)(2) of the Omnibus Budget Reconcifiation Act of 1987.