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<PRE>[DOCID: f:s1001is.txt]






107th CONGRESS
  1st Session
                                S. 1001

To amend title XVIII of the Social Security Act to establish a floor on 
   area wage adjustment factors used under the medicare prospective 
     payment system for inpatient and outpatient hospital services.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 7, 2001

 Mr. Sessions (for himself, Mr. Hutchinson, and Mr. Shelby) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
To amend title XVIII of the Social Security Act to establish a floor on 
   area wage adjustment factors used under the medicare prospective 
     payment system for inpatient and outpatient hospital services.

    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 ``Wage Index Fairness Act of 2001''.

SEC. 2. FLOOR ON AREA WAGE ADJUSTMENT FACTORS USED UNDER MEDICARE PPS 
              FOR INPATIENT AND OUTPATIENT HOSPITAL SERVICES.

    (a) Inpatient PPS.--Section 1886(d)(3)(E) of the Social Security 
Act (42 U.S.C. 1395ww(d)(3)(E)) is amended--
            (1) by inserting ``(i) In general.--'' before ``The 
        Secretary'', and adjusting the margin two ems to the right;
            (2) by striking ``The Secretary'' and inserting ``Subject 
        to clause (ii), the Secretary''; and
            (3) by adding at the end the following new clause:
                    ``(ii) Floor on area wage adjustment factor.--
                Notwithstanding clause (i), in determining payments 
                under this subsection for discharges occurring on or 
                after October 1, 2001, the Secretary shall substitute a 
                factor of .925 for any factor that would otherwise 
                apply under such clause that is less than .925. Nothing 
                in this clause shall be construed as authorizing--
                            ``(I) the application of the last sentence 
                        of clause (i) to any substitution made pursuant 
                        to this clause, or
                            ``(II) the application of the preceding 
                        sentence of this clause to adjustments for area 
                        wage levels made under other payment systems 
                        established under this title (other than the 
                        payment system under section 1833(t)) to which 
                        the factors established under clause (i) 
                        apply.''.
    (b) Outpatient PPS.--Section 1833(t)(2) of the Social Security Act 
(42 U.S.C. 1395l(t)(2)) is amended by adding at the end the following: 
``For purposes of subparagraph (D) for items and services furnished on 
or after October 1, 2001, if the factors established under clause (i) 
of section 1886(d)(3)(E) are used to adjust for relative differences in 
labor and labor-related costs under the payment system established 
under this subsection, the provisions of clause (ii) of such section 
(relating to a floor on area wage adjustment factor) shall apply to 
such factors, as used in this subsection, in the same manner and to the 
same extent (including waiving the applicability of the requirement for 
such floor to be applied in a budget neutral manner) as they apply to 
factors under section 1886.''.
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