To amend title XVIII of the Social Security Act to extend and improve protections for sole community hospitals under the Medicare Program.

June 17, 2005

Mr. WALDEN of Oregon (for himself and Mr. TANNER) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend title XVIII of the Social Security Act to extend and improve protections for sole community hospitals under the Medicare Program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Sole Community Hospital Preservation Act of 2005'.

SEC. 2. PERMANENT HOLD HARMLESS FOR SOLE COMMUNITY HOSPITALS UNDER THE PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES UNDER THE MEDICARE PROGRAM.

Section 1833(t)(7)(D) of the Social Security Act (42 U.S.C. 1395l(t)(7)(D)) is amended by adding at the end the following new clause:

`(iii) PERMANENT HOLD HARMLESS FOR SOLE COMMUNITY HOSPITALS- In the case of a sole community hospital (as defined in section 1886(d)(5)(D)(iii)), for covered OPD services furnished after December 31, 2005, for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount of such difference.'.

SEC. 3. ESTABLISHMENT OF MINIMUM BASE PAYMENT-TO-COST RATIO FOR DETERMINATION OF PRE-BBA AMOUNT FOR SOLE COMMUNITY HOSPITALS.

(a) Minimum Base Payment-to-Cost Ratio- Section 1833(t)(7)(F)(ii) of the Social Security Act (42 U.S.C. 1395l(t)(7)(F)(ii)) is amended by adding at the end the following new sentence: `Notwithstanding the previous sentence, in determining the pre-BBA amount for covered OPD services furnished by a sole community hospital (as defined in section 1886(d)(5)(D)(iii)), the Secretary shall substitute a minimum base payment-to-cost ratio if such substitution results in a greater amount of payment for such services under this subsection furnished by the sole community hospital. For purposes of the preceding sentence, a minimum base payment-to-cost ratio is equal to the 75th percentile of the payment-to-cost ratios for fiscal year 1996 of all hospitals with a designation as a sole community hospital in effect during fiscal year 2004 (as determined by the Secretary).'.

(b) Effective Date- The amendment made by subsection (a) shall apply to covered OPD services furnished on or after January 1, 2006.

SEC. 4. REBASING FOR SOLE COMMUNITY HOSPITALS.

(a) Rebasing Permitted- Section 1886(b)(3) of the Social Security Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at the end the following new subparagraph:

`(K)(i) For cost reporting periods beginning on or after October 1, 2005, in the case of a sole community hospital there shall be substituted for the amount otherwise determined under subsection (d)(5)(D)(i) of this section, if such substitution results in a greater amount of payment under this section for the hospital--

`(I) with respect to discharges occurring in fiscal year 2006, 75 percent of the subsection (d)(5)(D)(i) amount (as described in subparagraph (I)(i)(I)) and 25 percent of the subparagraph (K) rebased target amount (as defined in clause (ii));

`(II) with respect to discharges occurring in fiscal year 2007, 50 percent of the subsection (d)(5)(D)(i) amount and 50 percent of the subparagraph (K) rebased target amount;

`(III) with respect to discharges occurring in fiscal year 2008, 25 percent of the subsection (d)(5)(D)(i) amount and 75 percent of the subparagraph (K) rebased target amount; and

`(IV) with respect to discharges occurring after fiscal year 2008, 100 percent of the subparagraph (K) rebased target amount.

`(ii) For purposes of this subparagraph, the `subparagraph (K) rebased target amount' has the meaning given the term `target amount' in subparagraph (C), except that--

`(I) there shall be substituted for the base cost reporting period the 12-month cost reporting period beginning during fiscal year 2000 or 2001, whichever results in the greater amount of payment under this section for the hospital;

`(II) any reference in subparagraph (C)(i) to the `first cost reporting period' described in such subparagraph is deemed a reference to the first cost reporting period beginning on or after October 1, 2005; and

`(III) the applicable percentage increase shall only be applied under subparagraph (C)(iv) for discharges occurring in fiscal years beginning with fiscal year 2007.'.

(b) Conforming Amendments- Section 1886(b)(3) of such Act (42 U.S.C. 1395ww(b)(3)) is amended--

(1) in subparagraph (C), by inserting `and subparagraph (K)' after `subject to subparagraph (I)' in the matter preceding clause (i); and

(2) in subparagraph (I)(i)--

(A) by striking `For' in the matter preceding subclause (I) and inserting `Subject to subparagraph (K), for'; and

(B) in subclause (I), by inserting `and subparagraph (K)' after `referred to in this clause'.

END