Section 3137

SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT.

[a] Extension of Section 508 Hospital Reclassifications-

[1] IN GENERAL- Subsection [a] of section 106 of division B of the Tax Relief and Health Care Act of 2006 [42 U.S.C. 1395 note], as amended by section 117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 [Public Law 110-173] and section 124 of the Medicare Improvements for Patients and Providers Act of 2008 [Public Law 110-275], is amended by striking 'September 30, 2009' and inserting 'September 30, 2010'.

[2] USE OF PARTICULAR WAGE INDEX IN FISCAL YEAR 2010- For purposes of implementation of the amendment made by this subsection during fiscal year 2010, the Secretary shall use the hospital wage index that was promulgated by the Secretary in the Federal Register on August 27, 2009 [74 Fed. Reg. 43754], and any subsequent corrections.

[b] Plan for Reforming the Medicare Hospital Wage Index System-

[1] IN GENERAL- Not later than December 31, 2011, the Secretary of Health and Human Services [in this section referred to as the 'Secretary'] shall submit to Congress a report that includes a plan to reform the hospital wage index system under section 1886 of the Social Security Act.

[2] DETAILS- In developing the plan under paragraph [1], the Secretary shall take into account the goals for reforming such system set forth in the Medicare Payment Advisory Commission June 2007 report entitled 'Report to Congress: Promoting Greater Efficiency in Medicare', including establishing a new hospital compensation index system that--

[A] uses Bureau of Labor Statistics data, or other data or methodologies, to calculate relative wages for each geographic area involved;

[B] minimizes wage index adjustments between and within metropolitan statistical areas and statewide rural areas;

[C] includes methods to minimize the volatility of wage index adjustments that result from implementation of policy, while maintaining budget neutrality in applying such adjustments;

[D] takes into account the effect that implementation of the system would have on health care providers and on each region of the country;

[E] addresses issues related to occupational mix, such as staffing practices and ratios, and any evidence on the effect on quality of care or patient safety as a result of the implementation of the system; and

[F] provides for a transition.

[3] CONSULTATION- In developing the plan under paragraph [1], the Secretary shall consult with relevant affected parties.

[c] Use of Particular Criteria for Determining Reclassifications- Notwithstanding any other provision of law, in making decisions on applications for reclassification of a subsection [d] hospital [as defined in paragraph [1][B] of section 1886[d] of the Social Security Act [42 U.S.C. 1395ww[d]] for the purposes described in paragraph [10][D][v] of such section for fiscal year 2011 and each subsequent fiscal year [until the first fiscal year beginning on or after the date that is 1 year after the Secretary of Health and Human Services submits the report to Congress under subsection [b]], the Geographic Classification Review Board established under paragraph [10] of such section shall use the average hourly wage comparison criteria used in making such decisions as of September 30, 2008. The preceding sentence shall be effected in a budget neutral manner.