PUBLIC LAW 105-33—AUG. 5, 1997 111 STAT. 445 (b) REDUCTION IN PAYMENTS FOR OTHER COSTS.— Section 1861(v)(l)(S)(ii)(II) (42 U.S.O. 1395x(v)(l)(S)(ii)(II)) is amended by striking "through 1998" and inserting "through 1999 and during fiscal year 2000 before January 1, 2000". SEC. 4523. PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUT- PATIENT DEPARTMENT SERVICES. (a) IN GENERAL.—Section 1833 (42 U.S.C. 13951) is amended by adding at the end the following: " (t) PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES. — "(1) AMOUNT OF PAYMENT. — "(A) IN GENERAL. —With respect to covered OPD services (as defined in subparagraph (B)) furnished during a year beginning with 1999, the amount of payment under this part shall be determined under a prospective payment system established by the Secretary in accordance with this subsection. "(B) DEFINITION OF COVERED OPD SERVICES.—For purposes of this subsection, the term 'covered OPD services'— "(i) means hospital outpatient services designated by the Secretary; "(ii) subject to clause (iii), includes inpatient hospital services designated by the Secretary that are covered under this part and furnished to a hospital inpatient who (I) is entitled to benefits under part A but has exhausted benefits for inpatient hospital services during a spell of illness, or (II) is not so entitled; but "(iii) does not include any therapy services described in subsection (a)(8) or ambulance services, for which payment is made under a fee schedule described in section 1834(k) or section 1834(1). "(2) SYSTEM REQUIREMENTS. —Under the payment system— "(A) the Secretary shall develop a classification system for covered OPD services; "(B) the Secretary may establish groups of covered OPD services, within the classification system described in subparagraph (A), so that services classified within each group are comparable clinically and with respect to the use of resources; "(C) the Secretary shall, using data on claims from 1996 and using data from the most recent available cost reports, establish relative payment weights for covered OPD services (and any groups of such services described in subparagraph (B)) based on median hospital costs and shall determine projections of the frequency of utilization of each such service (or group of services) in 1999; "(D) the Secretary shall determine a wage adjustment factor to adjust the portion of payment and coinsurance attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions in a budget neutral manner; "(E) the Secretary shall establish other adjustments, in a budget neutral manner, as determined to be necessary to ensure equitable payments, such as outlier adjustments or adjustments for certain classes of hospitals; and
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