SEC. 406. MEDICARE INPATIENT HOSPITAL PAYMENT ADJUSTMENT
FOR LOW-VOLUME HOSPITALS.
(a) IN GENERAL- Section 1886(d) (42 U.S.C.
1395ww(d)) is amended by adding at the end the following new paragraph:
`(12) PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS-
`(A) IN GENERAL- In addition to any payments calculated under this
section for a subsection (d) hospital, for discharges occurring during a
fiscal year (beginning with fiscal year 2005), the Secretary shall provide
for an additional payment amount to each low-volume hospital (as defined
in subparagraph (C)(i)) for discharges occurring during that fiscal year
that is equal to the applicable percentage increase (determined under
subparagraph (B) for the hospital involved) in the amount paid to such
hospital under this section for such discharges (determined without regard
to this paragraph).
`(B) APPLICABLE PERCENTAGE INCREASE- The Secretary shall determine an
applicable percentage increase for purposes of subparagraph (A) as
follows:
`(i) The Secretary shall determine the empirical relationship for
subsection (d) hospitals between the standardized cost-per-case for such
hospitals and the total number of discharges of such hospitals and the
amount of the additional incremental costs (if any) that are associated
with such number of discharges.
`(ii) The applicable percentage increase shall be determined based
upon such relationship in a manner that reflects, based upon the number
of such discharges for a subsection (d) hospital, such additional
incremental costs.
`(iii) In no case shall the applicable percentage increase exceed 25
percent.
`(C) DEFINITIONS-
`(i) LOW-VOLUME HOSPITAL- For purposes of this paragraph, the term
`low-volume hospital' means, for a fiscal year, a subsection (d)
hospital (as defined in paragraph (1)(B)) that the Secretary determines
is located more than 25 road miles from another subsection (d) hospital
and has less than 800 discharges during the fiscal year.
`(ii) DISCHARGE- For purposes of subparagraph (B) and clause (i),
the term `discharge' means an inpatient acute care discharge of an
individual regardless of whether the individual is entitled to benefits
under part A.'.
(b) JUDICIAL REVIEW- Section 1886(d)(7)(A)
(42 U.S.C. 1395ww(d)(7)(A)) is amended by inserting after `to subsection (e)(1)'
the following: `or the determination of the applicable percentage increase under
paragraph (12)(A)(ii)'.
