MEDICAID DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS.

SEC. 1001. MEDICAID DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS.(a) Temporary Increase.—Section 1923(f)(3) (42 U.S.C. 1396r–4(f)(3)) is amended—117 STAT. 2429(1) in subparagraph (A), by striking “subparagraph (B)” and inserting “subparagraphs (B) and (C)”; and(2) by adding at the end the following new subparagraphs:“(C) Special, temporary increase in allotments on a one-time, non-cumulative basis.—The DSH allotment for any State (other than a State with a DSH allotment determined under paragraph (5))—“(i) for fiscal year 2004 is equal to 116 percent of the DSH allotment for the State for fiscal year 2003 under this paragraph, notwithstanding subparagraph (B); and“(ii) for each succeeding fiscal year is equal to the DSH allotment for the State for fiscal year 2004 or, in the case of fiscal years beginning with the fiscal year specified in subparagraph (D) for that State, the DSH allotment for the State for the previous fiscal year increased by the percentage change in the consumer price index for all urban consumers (all items; U.S. city average), for the previous fiscal year.“(D) Fiscal year specified.—For purposes of subparagraph (C)(ii), the fiscal year specified in this subparagraph for a State is the first fiscal year for which the Secretary estimates that the DSH allotment for that State will equal (or no longer exceed) the DSH allotment for that State under the law as in effect before the date of the enactment of this subparagraph.”.(b) Increase in Floor for Treatment as a Low DSH State.—Section 1923(f)(5) (42 U.S.C. 1396r–4(f)(5)) is amended—(1) in the paragraph heading, by striking “extremely”;(2) by striking “In the case of” and inserting the following:“(A) For fiscal years 2001 through 2003 for extremely low dsh states.—In the case of”; (3) by inserting “before fiscal year 2004” after “In subsequent years”; and (4) by adding at the end the following:“(B) For fiscal year 2004 and subsequent fiscal years.—In the case of a State in which the total expenditures under the State plan (including Federal and State shares) for disproportionate share hospital adjustments under this section for fiscal year 2000, as reported to the Administrator of the Centers for Medicare & Medicaid Services as of August 31, 2003, is greater than 0 but less than 3 percent of the State’s total amount of expenditures under the State plan for medical assistance during the fiscal year, the DSH allotment for the State with respect to—“(i) fiscal year 2004 shall be the DSH allotment for the State for fiscal year 2003 increased by 16 percent; “(ii) each succeeding fiscal year before fiscal year 2009 shall be the DSH allotment for the State for the previous fiscal year increased by 16 percent; and“(iii) fiscal year 2009 and any subsequent fiscal year, shall be the DSH allotment for the State for the previous year subject to an increase for inflation as provided in paragraph (3)(A).”.117 STAT. 2430(c) Allotment Adjustment.—Section 1923(f) (42 U.S.C. 1396r–4(f)) is amended—(1) in paragraph (3)(A), by striking “The DSH” and inserting “Except as provided in paragraph (6), the DSH”;(2) by redesignating paragraph (6) as paragraph (7); and(3) by inserting after paragraph (5) the following:“(6) Allotment adjustment.—Only with respect to fiscal year 2004 or 2005, if a statewide waiver under section 1115 is revoked or terminated before the end of either such fiscal year and there is no DSH allotment for the State, the Secretary shall—“(A) permit the State whose waiver was revoked or terminated to submit an amendment to its State plan that would describe the methodology to be used by the State (after the effective date of such revocation or termination) to identify and make payments to disproportionate share hospitals, including children’s hospitals and institutions for mental diseases or other mental health facilities (other than State-owned institutions or facilities), on the basis of the proportion of patients served by such hospitals that are low-income patients with special needs; and“(B) provide for purposes of this subsection for computation of an appropriate DSH allotment for the State for fiscal year 2004 or 2005 (or both) that would not exceed the amount allowed under paragraph (3)(B)(ii) and that does not result in greater expenditures under this title than would have been made if such waiver had not been revoked or terminated.In determining the amount of an appropriate DSH allotment under subparagraph (B) for a State, the Secretary shall take into account the level of DSH expenditures for the State for the fiscal year preceding the fiscal year in which the waiver commenced.”.(d) Increased Reporting and Other Requirements To Ensure the Appropriate Use of Medicaid DSH Payment Adjustments.—Section 1923 (42 U.S.C. 1396r–4) is amended by adding at the end the following new subsection:“(j) Annual Reports and Other Requirements Regarding Payment Adjustments.—With respect to fiscal year 2004 and each fiscal year thereafter, the Secretary shall require a State, as a condition of receiving a payment under section 1903(a)(1) with respect to a payment adjustment made under this section, to do the following:“(1) Report.—The State shall submit an annual report that includes the following:“(A) An identification of each disproportionate share hospital that received a payment adjustment under this section for the preceding fiscal year and the amount of the payment adjustment made to such hospital for the preceding fiscal year.“(B) Such other information as the Secretary determines necessary to ensure the appropriateness of the payment adjustments made under this section for the preceding fiscal year.“(2) Independent certified audit.—The State shall annually submit to the Secretary an independent certified audit that verifies each of the following:117 STAT. 2431“(A) The extent to which hospitals in the State have reduced their uncompensated care costs to reflect the total amount of claimed expenditures made under this section.“(B) Payments under this section to hospitals that comply with the requirements of subsection (g).“(C) Only the uncompensated care costs of providing inpatient hospital and outpatient hospital services to individuals described in paragraph (1)(A) of such subsection are included in the calculation of the hospital-specific limits under such subsection.“(D) The State included all payments under this title, including supplemental payments, in the calculation of such hospital-specific limits.“(E) The State has separately documented and retained a record of all of its costs under this title, claimed expenditures under this title, uninsured costs in determining payment adjustments under this section, and any payments made on behalf of the uninsured from payment adjustments under this section.”.(e) Clarification Regarding Non-Regulation of Transfers.—(1) In general.—Nothing in section 1903(w) of the Social Security Act (42 U.S.C. 1396b(w)) shall be construed by the Secretary as prohibiting a State’s use of funds as the non-Federal share of expenditures under title XIX of such Act where such funds are transferred from or certified by a publicly-owned regional medical center located in another State and described in paragraph (2), so long as the Secretary determines that such use of funds is proper and in the interest of the program under title XIX.(2) Center described.—A center described in this paragraph is a publicly-owned regional medical center that—(A) provides level 1 trauma and burn care services;(B) provides level 3 neonatal care services;(C) is obligated to serve all patients, regardless of State of origin;(D) is located within a Standard Metropolitan Statistical Area (SMSA) that includes at least 3 States, including the States described in paragraph (1);(E) serves as a tertiary care provider for patients residing within a 125 mile radius; and(F) meets the criteria for a disproportionate share hospital under section 1923 of such Act in at least one State other than the one in which the center is located.(3) Effective period.—This subsection shall apply through December 31, 2005.