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Subtitle B--Direct Graduate Medical Education

SEC. 311. USE OF NATIONAL AVERAGE PAYMENT METHODOLOGY IN COMPUTING DIRECT GRADUATE MEDICAL EDUCATION (DGME) PAYMENTS.

(a) IN GENERAL- Section 1886(h)(2) (42 U.S.C. 1395ww(h)(2)) is amended--

(1) in subparagraph (D)(i), by striking `clause (ii)' and inserting `a subsequent clause';

(2) by adding at the end of subparagraph (D) the following new clauses:

`(iii) FLOOR IN FISCAL YEAR 2001 AT 70 PERCENT OF LOCALITY ADJUSTED NATIONAL AVERAGE PER RESIDENT AMOUNT- The approved FTE resident amount for a hospital for the cost reporting period beginning during fiscal year 2001 shall not be less than 70 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for the hospital and period.

`(iv) ADJUSTMENT IN RATE OF INCREASE FOR HOSPITALS WITH FTE APPROVED AMOUNT ABOVE 140 PERCENT OF LOCALITY ADJUSTED NATIONAL AVERAGE PER RESIDENT AMOUNT-

`(I) FREEZE FOR FISCAL YEARS 2001 AND 2002- For a cost reporting period beginning during fiscal year 2001 or fiscal year 2002, if the approved FTE resident amount for a hospital for the preceding cost reporting period exceeds 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for that hospital and period, subject to subclause (III), the approved FTE resident amount for the period involved shall be the same as the approved FTE resident amount for the hospital for such preceding cost reporting period.

`(II) 2 PERCENT DECREASE IN UPDATE FOR FISCAL YEARS 2003, 2004, AND 2005- For a cost reporting period beginning during fiscal year 2003, fiscal year 2004, or fiscal year 2005, if the approved FTE resident amount for a hospital for the preceding cost reporting period exceeds 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for that hospital and preceding period, the approved FTE resident amount for the period involved shall be updated in the manner described in subparagraph (D)(i) except that, subject to subclause (III), the consumer price index applied for a 12-month period shall be reduced (but not below zero) by 2 percentage points.

`(III) NO ADJUSTMENT BELOW 140 PERCENT- In no case shall subclause (I) or (II) reduce an approved FTE resident amount for a hospital for a cost reporting period below 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for such hospital and period.';

(3) by redesignating subparagraph (E) as subparagraph (F); and

(4) by inserting after subparagraph (D) the following new subparagraph:

`(E) DETERMINATION OF LOCALITY ADJUSTED NATIONAL AVERAGE PER RESIDENT AMOUNT- The Secretary shall determine a locality adjusted national average per resident amount with respect to a cost reporting period of a hospital beginning during a fiscal year as follows:

`(i) DETERMINING HOSPITAL SINGLE PER RESIDENT AMOUNT- The Secretary shall compute for each hospital operating an approved graduate medical education program a single per resident amount equal to the average (weighted by number of full-time equivalent residents, as determined under paragraph (4)) of the primary care per resident amount and the non-primary care per resident amount computed under paragraph (2) for cost reporting periods ending during fiscal year 1997.

`(ii) STANDARDIZING PER RESIDENT AMOUNTS- The Secretary shall compute a standardized per resident amount for each such hospital by dividing the single per resident amount computed under clause (i) by an average of the 3 geographic index values (weighted by the national average weight for each of the work, practice expense, and malpractice components) as applied under section 1848(e) for 1999 for the fee schedule area in which the hospital is located.

`(iii) COMPUTING OF WEIGHTED AVERAGE- The Secretary shall compute the average of the standardized per resident amounts computed under clause (ii) for such hospitals, with the amount for each hospital weighted by the average number of full-time equivalent residents at such hospital (as determined under paragraph (4)).

`(iv) COMPUTING NATIONAL AVERAGE PER RESIDENT AMOUNT- The Secretary shall compute the national average per resident amount, for a hospital's cost reporting period that begins during fiscal year 2001, equal to the weighted average computed under clause (iii) increased by the estimated percentage increase in the consumer price index for all urban consumers during the period beginning with the month that represents the midpoint of the cost reporting periods described in clause (i) and ending with the midpoint of the hospital's cost reporting period that begins during fiscal year 2001.

`(v) ADJUSTING FOR LOCALITY- The Secretary shall compute the product of--

`(I) the national average per resident amount computed under clause (iv) for the hospital, and

`(II) the geographic index value average (described and applied under clause (ii)) for the fee schedule area in which the hospital is located.

`(vi) COMPUTING LOCALITY ADJUSTED AMOUNT- The locality adjusted national per resident amount for a hospital for--

`(I) the cost reporting period beginning during fiscal year 2001 is the product computed under clause (v); or

`(II) each subsequent cost reporting period is equal to the locality adjusted national per resident amount for the hospital for the previous cost reporting period (as determined under this clause) updated, through the midpoint of the period, by projecting the estimated percentage change in the consumer price index for all urban consumers during the 12-month period ending at that midpoint.'.

(b) CONFORMING AMENDMENTS- Section 1886(h)(2)(D) (42 U.S.C. 1395ww(h)(2)(D)) is further amended--

(1) in clause (i)--

(A) by striking `PERIODS- (i)' and inserting the following (and conforming the indentation of the succeeding matter accordingly): `PERIODS-

`(i) IN GENERAL- '; and

(B) by striking `the amount determined' and inserting `the approved FTE resident amount determined'; and

(2) in clause (ii)--

(A) by indenting the clause 2 ems to the right; and

(B) by inserting `FREEZE IN UPDATE FOR FISCAL YEARS 1994 AND 1995- ' after `(ii)'.

SEC. 312. INITIAL RESIDENCY PERIOD FOR CHILD NEUROLOGY RESIDENCY TRAINING PROGRAMS.

(a) IN GENERAL- Section 1886(h)(5) (42 U.S.C. 1395ww(h)(5)) is amended--

(1) in the last sentence of subparagraph (F), by striking `The initial residency period' and inserting `Subject to subparagraph (G)(v), the initial residency period'; and

(2) in subparagraph (G)--

(A) in clause (i) by striking `and (iv)' and inserting `(iv), and (v)'; and

(B) by adding at the end the following new clause:

`(v) CHILD NEUROLOGY TRAINING PROGRAMS- In the case of a resident enrolled in a child neurology residency training program, the period of board eligibility and the initial residency period shall be the period of board eligibility for pediatrics plus 2 years.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply on and after July 1, 2000, to residency programs that began before, on, or after the date of the enactment of this Act.

(c) MEDPAC REPORT- The Medicare Payment Advisory Commission shall include in its report submitted to Congress in March of 2001 recommendations regarding the appropriateness of the initial residency period used under section 1886(h)(5)(F) of the Social Security Act (42 U.S.C. 1395ww(h)(5)(F)) for other residency training programs in a specialty that require preliminary years of study in another specialty.

Subtitle C--Technical Corrections

SEC. 321. BBA TECHNICAL CORRECTIONS.

(a) SECTION 4201- Section 1820(c)(2)(B)(i) (42 U.S.C. 1395i-4(c)(2)(B)(i)) is amended by striking `and is located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D)) that' and inserting `that is located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D)), and that'.

(b) SECTION 4204- (1) Section 1886(d)(5)(G) (42 U.S.C. 1395ww(d)(5)(G)) is amended--

(A) in clause (i), by striking `or beginning on or after October 1, 1997, and before October 1, 2001,' and inserting `or discharges occurring on or after October 1, 1997, and before October 1, 2001,'; and

(B) in clause (ii)(II), by striking `or beginning on or after October 1, 1997, and before October 1, 2001,' and inserting `or discharges occurring on or after October 1, 1997, and before October 1, 2001,'.

(2) Section 1886(b)(3)(D) (42 U.S.C. 1395ww(b)(3)(D)) is amended in the matter preceding clause (i) by striking `and for cost reporting periods beginning on or after October 1, 1997, and before October 1, 2001,' and inserting `and for discharges beginning on or after October 1, 1997, and before October 1, 2001,'.

(c) SECTION 4319- Section 1847(b)(2) (42 U.S.C. 1395w-3(b)(2)) is amended by inserting `and' after `specified by the Secretary'.

(d) SECTION 4401- Section 4401(b)(1)(B) of BBA (42 U.S.C. 1395ww note) is amended by striking `section 1886(b)(3)(B)(i)(XIII) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XIII)))' and inserting `section 1886(b)(3)(B)(i)(XIV) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XIV)))'.

(e) SECTION 4402- The last sentence of section 1886(g)(1)(A) (42 U.S.C. 1395ww(g)(1)(A)) is amended by striking `September 30, 2002,' and inserting `October 1, 2002,'.

(f) SECTION 4419- The first sentence of section 1886(b)(4)(A)(i) (42 U.S.C. 1395ww(b)(4)(A)(i)) is amended by striking `or unit'.

(g) SECTION 4432- (1) Section 1888(e)(8)(B) (42 U.S.C. 1395yy(e)(8)(B)) is amended by striking `January 1, 1999,' and inserting `July 1, 1999'.

(2) Section 1833(h)(5)(A)(iii) (42 U.S.C. 1395l(h)(5)(A)(iii)) is amended--

(A) by striking `or critical access hospital,' and inserting `, critical access hospital, or skilled nursing facility,'; and

(B) by inserting `or skilled nursing facility' before the period.

(h) SECTION 4416- Section 1886(b)(7)(A)(i)(II) (42 U.S.C. 1395ww(b)(7)(A)(i)(II)) is amended by inserting `(as estimated by the Secretary)' after `median'.

(i) SECTION 4442- Section 4442(b) of BBA (42 U.S.C. 1395f note) is amended by striking `applies to cost reporting periods beginning' and inserting `applies to items and services furnished'.

(j) HIPAA SECTION 201-

(1) IN GENERAL- Section 1817(k)(2)(C)(i) (42 U.S.C. 1395i(k)(2)(C)(i)) is amended by striking `section 982(a)(6)(B)' and inserting `section 24(a)'.

(2) EFFECTIVE DATE- The amendment made by this subsection shall take effect as if included in the amendment made by section 201 of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191; 110 Stat. 1992).

(k) OTHER TECHNICAL AMENDMENTS-

(1) SECTION 4611- Section 1812(b) (42 U.S.C. 1395d(b)) is amended in the matter following paragraph (3) by inserting `during' after `100 visits'.

(2) SECTION 4511- Section 1833(a)(1)(O) (42 U.S.C. 1395l(a)(1)(O)) is amended by striking the semicolon and inserting a comma.

(3) SECTION 4551- Section 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended--

(A) in clause (i), by striking the comma at the end and inserting a semicolon; and

(B) in clause (v), by striking `, and' and inserting `; and'.

(4) SECTION 4315- Section 1842(s)(2)(E) (42 U.S.C. 1395u(s)(2)(E)) is amended by inserting a period at the end.

(5) SECTIONS 4103, 4104, AND 4106-

(A) SECTION 4103- Section 1848(j)(3) (42 U.S.C. 1395w-4(j)(3)) is amended by striking `1861(oo)(2),' and inserting `1861(oo)(2))'.

(B) SECTION 4104- Such section is further amended by striking `(B) ,' and inserting `(B),'.

(C) SECTION 4106- Such section is further amended by striking `and (15)' and inserting `, and (15)'.

(6) SECTION 4001- (A) Section 1851(i)(2) (42 U.S.C. 1395w-21(i)(2)) is amended by striking `and' after `1857(f)(2),'.

(B) Section 1852 (42 U.S.C. 1395w-22) is amended--

(i) in subsection (a)(3)(A)--

(I) by striking the comma after `MSA plan'; and

(II) by inserting a comma after `the coverage)';

(ii) in subsection (g)--

(I) in paragraph (1)(B), by inserting `or' after `in whole'; and

(II) in paragraph (3)(B)(ii), by inserting a period at the end;

(iii) in subsection (h)(2), by striking the comma and inserting a semicolon; and

(iv) in subsection (k)(2)(C)(ii), by striking `balancing' and inserting `balance'.

(C) Section 1854(a) (42 U.S.C. 1395w-24(a)) is amended--

(i) in paragraph (2)--

(I) in subparagraph (A), in the matter preceding clause (i), by inserting `section' before `1852(a)(1)(A)'; and

(II) in subparagraph (B), in the matter preceding clause (i), by inserting `section' after `described in';

(ii) in paragraph (3)--

(I) in subparagraph (A), by inserting `section' after `described in'; and

(II) in subparagraph (B), by inserting `section' after `described in'; and

(iii) in paragraph (4)--

(I) in the matter preceding subparagraph (A), by inserting `section' after `described in';

(II) in subparagraph (A), in the matter preceding clause (i), by inserting `section' after `described in'; and

(III) in subparagraph (B), by inserting `section' after `described in'.

(7) SECTION 4557- Section 1861(s)(2)(T)(ii) (42 U.S.C. 1395x(s)(2)(T)(ii)) is amended by striking the period and inserting a semicolon.

(8) SECTION 4205- Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended--

(A) in subparagraph (I), by striking the comma at the end and inserting a semicolon; and

(B) by realigning subparagraph (I) so as to align the left margin of such subparagraph with the left margin of subparagraph (H); and

(9) SECTION 4454- Section 1861(ss)(1)(G)(i) (42 U.S.C. 1395x(ss)(1)(G)(i)) is amended--

(A) by striking `owed' and inserting `owned'; and

(B) by striking `of' and inserting `or'.

(10) SECTION 4103- Section 1862(a)(7) (42 U.S.C. 1395y(a)(7)) is amended by striking `subparagraphs' and inserting `subparagraph'.

(11) SECTION 4002- Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended--

(A) in subparagraph (I)(iii), by striking the semicolon and inserting a comma;

(B) in subparagraph (N)(iv), by striking `and' at the end; and

(C) in subparagraph (O), by striking the semicolon at the end and inserting a comma.

(12) SECTION 4321- Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended--

(A) in subparagraph (Q), by striking the semicolon at the end and inserting a comma; and

(B) in subparagraph (R), by inserting `, and' at the end.

(13) SECTION 4003- Section 1882(g)(1) (42 U.S.C. 1395ss(g)(1)) is amended by striking `or' after `does not include'.

(14) SECTION 4031- Section 1882(s)(2)(D) (42 U.S.C. 1395ss(s)(2)(D)), is amended in the matter preceding clause (i), by inserting `section' after `as defined in'.

(15) SECTION 4421- Section 1886(b) (42 U.S.C. 1395ww(b)) is amended--

(A) in paragraph (1), in the matter following subparagraph (C), by inserting a comma after `paragraph (2)'; and

(B) in paragraph (3)(B)(ii)--

(i) in subclause (VI), by striking the semicolon and inserting a comma; and

(ii) in subclause (VII), by striking the semicolon and inserting a comma.

(16) SECTION 4403- Section 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is amended by inserting a comma after `1986'.

(17) SECTION 4406- Section 1886(d)(9)(A)(ii) (42 U.S.C. 1395ww(d)(9)(A)(ii)) is amended by inserting a comma after `1987'.

(18) SECTION 4432- Section 1888(e)(4)(E) (42 U.S.C. 1395yy(e)(4)(E)) is amended--

(A) in clause (i), by striking `federal' and inserting `Federal'; and

(B) in clause (ii), in the matter preceding subclause (I), by striking `federal' each place it appears and inserting `Federal'.

(19) SECTION 4603- Section 1895(b)(1) (42 U.S.C. 1395fff(b)(1)) is amended by striking `the this section' and inserting `this section'.

(l) SECTION 1135 OF THE SOCIAL SECURITY ACT- Effective on the date of the enactment of this Act, section 1135 (42 U.S.C. 1320b-5) is repealed.

(m) EFFECTIVE DATE- Except as otherwise provided, the amendments made by this section shall take effect as if included in the enactment of BBA.

TITLE IV--RURAL PROVIDER PROVISIONS

Subtitle A--Rural Hospitals

SEC. 401. PERMITTING RECLASSIFICATION OF CERTAIN URBAN HOSPITALS AS RURAL HOSPITALS.

(a) IN GENERAL- Section 1886(d)(8) (42 U.S.C. 1395ww(d)(8)) is amended by adding at the end the following new subparagraph:

`(E)(i) For purposes of this subsection, not later than 60 days after the receipt of an application (in a form and manner determined by the Secretary) from a subsection (d) hospital described in clause (ii), the Secretary shall treat the hospital as being located in the rural area (as defined in paragraph (2)(D)) of the State in which the hospital is located.

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