REDUCTIONS IN PAYMENTS FOR SKILLED NURSING FACILITY SERVICES.

SEC. 13503. REDUCTIONS IN PAYMENTS FOR SKILLED NURSING FACILITY SERVICES. (a) Payments Based on Cost Limits.— (1) No changes in cost limits.— The Secretary of Health and Human Services may not provide for any change in the limits on per diem routine service costs for extended care services under section 1888 of the Social Security Act for cost reporting periods beginning during fiscal years 1994 and 1995, except as may be necessary to take into account the amendments made by paragraph (3)(A). The effect of the preceding sentence shall not be considered by the Secretary in making adjustments pursuant to section 1888(c) of such Act to the payment limits for such services during such fiscal years. (2) Delay in updates.— The last sentence of section 1888(a) (42 U.S.C. 1395yy(a)) is amended by inserting after “October 1, 1992” the following: “, on or after October 1, 1995,”. (3) Repeal of excess overhead allocations for hospital-based facilities.— (A) In general.— Section 1888(b) (42 U.S.C. 1395yy(b)) is amended— (i) by striking “shall recognize” and inserting “may not recognize”; and (ii) by striking “(as determined by” and all that follows and inserting a period. (B) Effective date.— The amendments made by subparagraph (A) shall apply to cost reporting periods beginning on or after October 1, 1993. (b) Payments Determined on Prospective Basis.— The Secretary of Health and Human Services may not change the amount of any prospective payment paid to a skilled nursing facility under section 1888(d) of the Social Security Act for services furnished during cost reporting periods beginning during fiscal years 1994 and 1995, except as may be necessary to take into account the amendment made by subsection (c)(1)(A). (c) Elimination of Return on Equity for Proprietary Skilled Nursing Facilities.— (1) Repeal of requirement for return on equity.— (A) Section 1861(v)(1)(B) (42 U.S.C. 1395x(v)(1)(B)) is amended to read as follows: “(B) In the case of extended care services, the regulations under subparagraph (A) shall not include provision for specific recognition of a return on equity capital.”. 107 STAT. 579 (B) Section 1878(f)(2) (42 U.S.C. 1395oo(f)(2)) is amended by striking “the rate of return on equity capital established by regulation pursuant to section 1861(v)(1)(B) and in effect at the time” and inserting “the rate of interest on obligations issued for purchase by the Federal Hospital Insurance Trust Fund for the month in which”. (2) Effective date.— The amendments made by paragraph (1) shall take effect October 1, 1993.