HR 4040 — Protecting Access to Spinal Surgeries Act

(a) Determination of costs for inpatient hospital services; limitations; exemptions; “operating costs of inpatient hospital services” defined (1) (A) (i) The Secretary, in determining the amount of the payments that may be made under this subchapter with respect to operating costs of inpatient hospital services (as defined in paragraph (4)) shall not recognize as reasonable (in the efficient delivery of health services) costs for the provision of such services by a hospital for a cost reporting period to the extent such costs exceed the applicable percentage (as determined under clause (ii)) of the average of such costs for all hospitals in the same grouping as such hospital for comparable time periods. (ii) For purposes of clause (i), the applicable percentage for hospital cost reporting periods beginning— (I) on or after October 1, 1982, and before October 1, 1983, is 120 percent; (II) on or after October 1, 1983, and before October 1, 1984, is 115 percent; and (III) on or after October 1, 1984, is 110 percent. (B) (i) For purposes of subparagraph (A) the Secretary shall establish case mix indexes for all short-term hospitals, and shall set limits for each hospital based upon the general mix of types of medical cases with respect to which such hospital provides services for which payment may be made under this subchapter. (ii) The Secretary shall set such limits for a cost reporting period of a hospital— (I) by updating available data for a previous period to the immediate preceding cost reporting period by the estimated average rate of change of hospital costs industry-wide, and (II) by projecting for the cost reporting period by the applicable percentage increase (as defined in subsection (b)(3)(B)). (C) The limitation established under subparagraph (A) for any hospital shall in no event be lower than the allowable operating costs of inpatient hospital services (as defined in paragraph (4)) recognized under this subchapter for such hospital for such hospital’s last cost reporting period prior to the hospital’s first cost reporting period for which this section is in effect. (D) Subparagraph (A) shall not apply to cost reporting periods beginning on or after October 1, 1983. (2) The Secretary shall provide for such exemptions from, and exceptions and adjustments to, the limitation established under paragraph (1)(A) as he deems appropriate, including those which he deems necessary to take into account— (A) the special needs of sole community hospitals, of new hospitals, of risk based health maintenance organizations, and of hospitals which provide atypical services or essential community services, and to take into account extraordinary circumstances beyond the hospital’s control, medical and paramedical education costs, significantly fluctuating population in the service area of the hospital, and unusual labor costs, (B) the special needs of psychiatric hospitals and of public or other hospitals that serve a significantly disproportionate number of patients who have low income or are entitled to benefits under part A of this subchapter, and (C) a decrease in the inpatient hospital services that a hospital provides and that are customarily provided directly by similar hospitals which results in a significant distortion in the operating costs of inpatient hospital services. (3) The limitation established under paragraph (1)(A) shall not apply with respect to any hospital which— (A) is located outside of a standard metropolitan statistical area, and (B) (i) has less than 50 beds, and (ii) was in operation and had less than 50 beds on September 3, 1982. (4) For purposes of this section, the term “operating costs of inpatient hospital services” includes all routine operating costs, ancillary service operating costs, and special care unit operating costs with respect to inpatient hospital services as such costs are determined on an average per admission or per discharge basis (as determined by the Secretary), and includes the c...