104 STAT. 1388-120 PUBLIC LAW 101-508—NOV. 5, 1990 replace such system with a system under which such payments would be made on the basis of prospectively determined rates. In developing any proposal under this paragraph to replace the current system with a prospective payment system, the Secretary shall— (A) take into consideration the need to provide for appropriate limits on increases in expenditures under the medicare program; (B) provide for adjustments to prospectively determined rates to account for changes in a provider's case mix, severity of illness of patients, volume of cases, and the development of new technologies and standards of medical practice; (C) take into consideration the need to increase the pay- ment otherwise made under such system in the case of services provided to patients whose length of treatment or costs of treatment greatly exceed the length or cost of treatment provided for under the applicable prospectively determined payment rate; (D) take into consideration the need to adjust payments under the system to take into account factors such as differences in wages and wage-related costs among agencies located in various geographic areas and other factors the Secretary considers appropriate; and (E) analyze the feasibility and appropriateness of establishing the episode of illness as the basic unit for making payments under the system. (2) REPORTS. — (A) By not later than April 1, 1993, the Secretary of Health and Human Services shall submit the research findings upon which the proposal described in paragraph (1) shall be based to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. (B) By not later than September 1, 1993, the Secretary shall submit the proposal developed under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. (C) By not later than March 1, 1994, the Prospective Payment Assessment Commission shall submit an analysis of and comments on the proposal developed under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. (d) HOME HEALTH WAGE INDEX.— (1) IN GENERAL.— Section 1861(v)(l)(L)(iii) (42 U.S.C. 1395x(v)(l)(L)(iii)) is amended to read as follows: "(iii) Not later than July 1, 1991, and annually thereafter, the Secretary shall establish limits under this subparagraph for cost reporting periods beginning on or after such date by utilizing the area wage index applicable under section 1886(d)(3)(E) as of such date to hospitals located in the geographic area in which the home health agency is located (determined without regard to whether such hospitals have been reclassified to a new geographic area pursuant to section 1886(d)(8)(B), a decision of the Medicare Geographic Classification Review Board under section 1886(d)(10), or a decision of the Secretary).", ^^te ^^^^* ^^^ APPLICATION ON BUDGET-NEUTRAL BASIS. —In updating the ^°' wage index for establishing limits under section 1861(v)(l)(L)(iii)
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