PUBLIC LAW 99-272—APR. 7, 1986
100 STAT. 157
purposes of sections 1886(d)(2)(C)(ii), 1886(d)(2)(H), and 1886(d)(3)(E) of the Social Security Act, in order to more accurately reflect hospital 42 USC 1395WW. labor markets, by taking into account variations in wages and wagerelated costs between the central city portion of urban areas and other parts of urban areas. (2) The Secretary shall report to Congress on the information Reports. collected and the methodologies developed under paragraph (1) not later than May 1, 1987. The report shall include a recommendation as to the feasibility and desirability of implementing such methodologies. SEC. 9104. PAYMENTS TO HOSPITALS FOR INDIRECT COSTS OF MEDICAL EDUCATION. (a) PAYMENT FOR INDIRECT COSTS OF MEDICAL EDUCATION.—Section
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended to read as follows: "(B) The Secretary shall provide for an additional payment amount for subsection (d) hospitals with indirect costs of medical education, in an amount computed in the same manner as the adjustment for such costs under regulations (in effect as of January 1, 1983) under subsection (a)(2), except as follows: "(i) The amount of such additional payment shall be determined by multiplying (I) the sum of the amount determined under paragraph (l)(A)(ii)(II) (or, if applicable, the amount determined under paragraph (l)(A)(iii)) and the amount paid to the hospital under subparagraph (A), by (II) the indirect teaching adjustment factor described in clause (ii). "(ii) For purposes of clause (i)(II), the indirect teaching adjustment factor for discharges occurring— "(I) on or after May 1, 1986, and before October 1, 1988, is equal to 2 X (d + r)- ""S-1), or "(II) on or after October 1, 1988, is equal to 1.5x((l + r) " ^ ^ - l), where 'r' is the ratio of the hospital's full-time equivalent interns and residents to beds. "(iii) In determining such adjustment the Secretary shall not distinguish between those interns and residents who are employees of a hospital and those interns and residents who furnish services to a hospital but are not employees of such hospital. "(iv) In determining such adjustment, the Secretary shall ^ continue to count interns and residents assigned to outpatient services of the hospital as part of the calculation of the fulltime-equivalent number of interns and residents.". (b) ADJUSTMENT OF PAYMENT AMOUNTS.— (1) RESTANDARDIZING DRG PAYMENT AMOUNTS TO REFLECT CHANGE IN FORMULA.—Section 1886(d)(2)(C)(i) of such Act is
amended by inserting "(taking into account, for discharges occurring after September 30, 1986, the amendments made by section 9104(a) of the Medicare and Medicaid Budget Reconciliation Amendments of 1985)" after "medical education costs". (2) PROVIDING FOR SYSTEM SAVINGS FROM CHANGE IN FOR-
MULA.—Subparagraph (C) of section 1886(d)(3) of such Act is amended— (A) by inserting "(i)" after "(C)", (B) by inserting "FOR FISCAL YEAR 1985" after "NEUTRALITY",
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