114 STAT. 2763A-496 PUBLIC LAW 106-554—APPENDIX F "(F) ELECTION TO APPLY FULL PROSPECTIVE PAYMENT SYSTEM. —^A rehabilitation facility may elect, not later than 30 days before its first cost reporting period for which the payment methodology under this subsection applies to the facility, to have payment made to the facility under this subsection under the provisions of subparagraph (B) (rather than subparagraph (A)) for each cost reporting period to which such payment methodology applies.". (2) CLARIFICATION.—Paragraph (3)(B) of such section is amended by inserting "but not taking into account any payment adjustment resulting from an election permitted under paragraph (1)(F)" after "paragraphs (4) and (6)". (c) EFFECTIVE DATE. —The amendments made by this section take effect as if included in the enactment of BBA. SEC. 306. PAYMENT FOR INPATIENT SERVICES OF PSYCHIATRIC HOS- PITALS. With respect to hospitals described in clause (i) of section 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(l)(B)) and psychiatric units described in the matter following clause (v) of such section, in making incentive payments to such hospitals under section 1886(b)(1)(A) of such Act (42 U.S.C. 1395ww(b)(l)(A)) for cost reporting periods beginning on or after October 1, 2000, and before October 1, 2001, the Secretary of Health and Human Services, in clause (ii) of such section, shall substitute "3 percent" for "2 percent". SEC. 307. PAYMENT FOR INPATIENT SERVICES OF LONG-TERM CARE HOSPITALS. (a) INCREASED TARGET AMOUNTS AND CAPS FOR LONG-TERM CARE HOSPITALS BEFORE IMPLEMENTATION OF THE PROSPECTIVE PAYMENT SYSTEM. — (1) IN GENERAL.— Section 1886(b)(3) (42 U.S.C. 1395ww(b)(3)) is amended— (A) in subparagraph (H)(ii)(III), by inserting "subject to subparagraph (J)," after "2002,"; and (B) by adding at the end the following new subparagraph: "(J) For cost reporting periods beginning during fiscal year 2001, for a hospital described in subsection (d)(l)(B)(iv)— "(i) the limiting or cap amount otherwise determined under subparagraph (H) shall be increased by 2 percent; and "(ii) the target amount otherwise determined under subparagraph (A) shall be increased by 25 percent (subject to the limiting or cap amount determined under subparagraph (H), as increased by clause (i)).". (2) APPLICATION.— The amendments made by subsection (a) and by section 122 of BBRA (113 Stat. 1501A-331) shall not be taken into account in the development and implementation of the prospective pa3niient system under section 123 of BBRA (113 Stat. 1501A-331). (b) IMPLEMENTATION OF PROSPECTIVE PAYMENT SYSTEM FOR LONG-TERM CARE HOSPITALS. — (1) MODIFICATION OF REQUIREMENT.— In developing the prospective payment system for payment for inpatient hospital services provided in long-term care hospitals described in section 1886(d)(l)(B)(iv) of the Social Security Act (42 U.S.C. 1395ww(d)(l)(B)(iv)) under the medicare program under title
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