To require the Medicare Payment Advisory Commission to conduct a study regarding disproportionate share hospital payments under the medicare program.

1. Adds SEC. __. CARVING OUT DSH PAYMENTS FROM PAYMENTS TO MEDICARE+CHOICE AND MEDICAREADVANTAGE ORGANIZATIONS AND PAYING THE AMOUNTS DIRECTLY TO DSH HOSPITALS ENROLLING MEDICARE+ CHOICE AND MEDICAREADVANTAGE ENROLLEES at the end of subtitle C of title II

   Adds a section

   In S. 1 · Reported to Senate

   (c) Effective Date.--The amendments made by this section shall apply on and after January 1, 2004.

   Inserted: SEC. __. CARVING OUT DSH PAYMENTS FROM PAYMENTS TO MEDICARE+CHOICE AND MEDICAREADVANTAGE ORGANIZATIONS AND PAYING THE AMOUNTS DIRECTLY TO DSH HOSPITALS ENROLLING MEDICARE+ CHOICE AND MEDICAREADVANTAGE ENROLLEES.

   Inserted: (a) Removal of DSH Payments From Calculation of Adjusted Average Per Capita Cost.--

   Inserted: (1) Under medicare+choice.--Section 1853(c)(3) (42 U.S.C. 1395w-23(c)(3) and as amended by section 203) is amended--

   Inserted: (A) in subparagraph (A), by striking "subparagraph (B)" and inserting "subparagraphs (B) and (E)",

   Inserted: (B) by adding at the end the following new subparagraph:

   Inserted: "(E) Removal of payments attributable to disproportionate share payments from calculation of adjusted average per capita cost.--For each year (beginning with 2004), the area-specific Medicare+Choice capitation rate under subparagraph (A)(ii) shall be adjusted to exclude from such rate the portion of such rate that the Secretary estimates is attributable to additional payment amounts described in section 1886(d)(5)(F) (treating hospitals reimbursed under section 1814(b)(3) as if such hospitals were reimbursed under section 1886).".

   Inserted: (2) Under medicareadvantage.--Section 1853(a)(5) (as amended by section 203) is amended by adding at the end the following new subparagraph:

   Inserted: "(C) Removal of payments attributable to disproportionate share payments from calculation of adjusted average per capita cost.--For each year (beginning with 2004), the area-specific Medicare+Choice capitation rate under subparagraph (A)(ii) shall be adjusted to exclude from such rate the portion of such rate that the Secretary estimates is attributable to additional payment amounts described in section 1886(d)(5)(F) (treating hospitals reimbursed under section 1814(b)(3) as if such hospitals were reimbursed under section 1886).".

   Inserted: (3) Effective dates.--The amendments made--

   Inserted: (A) by paragraph (1) shall apply to plan years beginning on and after January 1, 2004 and shall continue to apply to plan years beginning on and after January 1, 2006; and

   Inserted: (B) by paragraph (2) shall apply to plan years beginning on and after January 1, 2006.

   Inserted: (b) Additional DSH Payments for Managed Care Enrollees.--Section 1886(d)(5)(F) ((42 U.S.C. 1395ww(d)(5)(F)) is amended--

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   Inserted: (1) in clause (ii), by striking "clause (ix)" and inserting "clauses (ix) and (xvi)"; and

   Inserted: (2) by adding at the end the following new clause:

   Inserted: "(xvi)(I) For portions of cost reporting periods occurring on or after January 1, 2004, the Secretary shall provide for an additional payment amount for each applicable discharge of any subsection (d) hospital that is a disproportionate share hospital (as described in clause (i)).

   Inserted: "(II) For purposes of this clause the term 'applicable discharge' means the discharge of any individual who is enrolled under a risk-sharing contract with a eligible organization under section 1876 and who is entitled to benefits under part A and any individual who is enrolled with a Medicare+Choice organization or a MedicareAdvantage organization under part C.

   Inserted: "(III) The amount of the payment under this clause with respect to any applicable discharge shall be equal to the estimated average per discharge amount that would otherwise have been paid under this subparagraph if the individuals had not been enrolled as described in subclause (II).

   Inserted: "(IV) The Secretary shall establish rules for paying an additional amount for any hospital reimbursed under a reimbursement system authorized under 1814(b)(3) if such hospital would qualify as a disproportionate share hospital under clause (i) were it not so reimbursed. Such payment shall be determined in the same manner as the amount of payment is determined under this clause for disproportionate share hospitals.".

   Original wording

   At the end of subtitle C of title II, add the following:

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As printed