TITLE V--PROVISIONS RELATING TO PART A
Subtitle A--Inpatient Hospital Services
SEC. 505. WAGE INDEX ADJUSTMENT RECLASSIFICATION REFORM.
(a) IN GENERAL- Section 1886(d) (42 U.S.C.
1395ww(d)), as amended by section 406, is amended by adding at the end the following
new paragraph:
`(13)(A) In order to recognize commuting patterns among geographic areas,
the Secretary shall establish a process through application or otherwise for
an increase of the wage index applied under paragraph (3)(E) for subsection
(d) hospitals located in a qualifying county described in subparagraph (B) in
the amount computed under subparagraph (D) based on out-migration of hospital
employees who reside in that county to any higher wage index area.
`(B) The Secretary shall establish criteria for a qualifying county under
this subparagraph based on the out-migration referred to in subparagraph (A)
and differences in the area wage indices. Under such criteria the Secretary
shall, utilizing such data as the Secretary determines to be appropriate,
establish--
`(i) a threshold percentage, established by the Secretary, of the
weighted average of the area wage index or indices for the higher wage index
areas involved;
`(ii) a threshold (of not less than 10 percent) for minimum
out-migration to a higher wage index area or areas; and
`(iii) a requirement that the average hourly wage of the hospitals in
the qualifying county equals or exceeds the average hourly wage of all the
hospitals in the area in which the qualifying county is located.
`(C) For purposes of this paragraph, the term `higher wage index area'
means, with respect to a county, an area with a wage index that exceeds that
of the county.
`(D) The increase in the wage index under subparagraph (A) for a
qualifying county shall be equal to the percentage of the hospital employees
residing in the qualifying county who are employed in any higher wage index
area multiplied by the sum of the products, for each higher wage index area
of--
`(i) the difference between--
`(I) the wage index for such higher wage index area, and
`(II) the wage index of the qualifying county; and
`(ii) the number of hospital employees residing in the qualifying county
who are employed in such higher wage index area divided by the total number
of hospital employees residing in the qualifying county who are employed in
any higher wage index area.
`(E) The process under this paragraph may be based upon the process used
by the Medicare Geographic Classification Review Board under paragraph (10).
As the Secretary determines to be appropriate to carry out such process, the
Secretary may require hospitals (including subsection (d) hospitals and other
hospitals) and critical access hospitals, as required under section
1866(a)(1)(T), to submit data regarding the location of residence, or the
Secretary may use data from other sources.
`(F) A wage index increase under this paragraph shall be effective for a
period of 3 fiscal years, except that the Secretary shall establish procedures
under which a subsection (d) hospital may elect to waive the application of
such wage index increase.
`(G) A hospital in a county that has a wage index increase under this
paragraph for a period and that has not waived the application of such an
increase under subparagraph (F) is not eligible for reclassification under
paragraph (8) or (10) during that period.
`(H) Any increase in a wage index under this paragraph for a county shall
not be taken into account for purposes of--
`(i) computing the wage index for portions of the wage index area (not
including the county) in which the county is located; or
`(ii) applying any budget neutrality adjustment with respect to such
index under paragraph (8)(D).
`(I) The thresholds described in subparagraph (B), data on hospital
employees used under this paragraph, and any determination of the Secretary
under the process described in subparagraph (E) shall be final and shall not
be subject to judicial review.'.
(b) CONFORMING AMENDMENTS- Section 1866(a)(1)
(42 U.S.C. 1395cc(a)(1)) is amended--
(1) in subparagraph (R), by striking
`and' at the end;
(2) in subparagraph (S), by striking
the period at the end and inserting `, and'; and
(3) by inserting after subparagraph
(S) the following new subparagraph:
`(T) in the case of hospitals and critical access hospitals, to furnish
to the Secretary such data as the Secretary determines appropriate pursuant
to subparagraph (E) of section 1886(d)(12) to carry out such
section.'.
(c) EFFECTIVE DATE- The amendments made by
this section shall first apply to the wage index for discharges occurring on
or after October 1, 2004. In initially implementing such amendments, the Secretary
may modify the deadlines otherwise applicable under clauses (ii) and (iii)(I)
of section 1886(d)(10)(C) of the Social Security Act (42 U.S.C. 1395ww(d)(10)(C)),
for submission of, and actions on, applications relating to changes in hospital
geographic reclassification.
