96 STAT. 332
Cost reporting period, limitation.
"Operating costs of inpatient hospital services." 42 USC 1395f. 42 USC 1395e.
PUBLIC LAW 97-248—SEPT. 3, 1982 medical cases with respect to which such, hospital provides services for which payment may be made under this title. "(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 "(11) 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 title 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. "(2) The Secretary shall provide for such exemptions from, and exceptions and adjustments to, the limitation established under paragraph (I)(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 disportionate number of patients who have low income or are entitled to benefits under part A of this title, 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 the date of the enactment of this section. "(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 and such costs are determined on an average per admission or per discharge basis (as determined by the Secretary). "(b)(1) Notwithstanding sections 1814(b) but subject to the provisions of sections 1813, if the operating costs of inpatient hospital services (as defined in subsection (a)(4)) of a hospital for a cost reporting period subject to this paragraph— "(A) are less than or equal to the target amount (as defined in paragraph (3)) for that hospital for that period, the amount of the payment with respect to such operating costs payable under part A on a per discharge or per admission basis (as the case may be) shall be equal to the amount of such operating costs, plus—
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