Document: GOP Payroll Tax Bill - Summary, Text Of Health Care Sections

Dec 11, 2011

On Friday, Dec. 9, House Republicans unveiled a bill, titled the Middle Class Tax Relief and Job Creation Act, which would extend the payroll-tax cut scheduled to expire at the end of 2011, extend unemployment insurance and avoid the scheduled cut to Medicare reimbursement rates for physicians - the "doc fix."

According to The Hill, the House Rules Committee "scheduled a hearing on the legislation for Monday to craft procedures for its consideration on the floor. A vote could then come as early as Tuesday. The 369-page bill ... is sponsored by Rep. Dave Camp (R-Mich.), chairman of the tax-writing Ways and Means Committee."

Below is the section of a summary of the bill that deals with health care policy, as released by Speaker John Boehner's office. It is followed by the language in the bill itself that deals with health care:

SUMMARY

Includes Two-Year “Doc Fix,” Further Defunds ObamaCare

The bill provides a two-year “doc fix” and savings to offset the cost, including further defunding the President’s health care law. A two-year “doc fix” extension is the longest stretch of time in nearly a decade. Bringing this level of stability to physicians will pave the way for a permanent solution. Specifically, the bill:

Extends certain Medicare payment policies, including a two-year “doc fix” to protect Medicare physicians from large reimbursement cuts scheduled to take place next year.

Repeals $8 billion in ObamaCare mandatory funding from the unaccountable “prevention and public health fund,” which the House voted to defund earlier this year (saves $8 billion).

Forces greater repayment of improper taxpayer-funded subsidies in ObamaCare to reduce waste, fraud and abuse in the Democrats’ health care law (reduces deficit by $13.4 billion).

Updates certain provider payment methodologies to reduce wasteful spending (saves $21.5 billion). ...

Spending Cuts – Not Tax Hikes on Job Creators – to Offset Payroll/UI Extension

The bill includes spending cuts in government programs – not tax increases on job creators – to fully pay for extending current payroll tax relief and unemployment insurance benefits. This includes extending the current pay freeze for federal workers, including Members of Congress, eliminating government benefits for millionaires & billionaires, targeting fraud and abuse, and reforming entitlement programs – many ideas for which President Obama has already expressed support. Specifically, the bill ... Gradually increases Medicare premiums for high income beneficiaries (saves $31 billion).

THE BILL

Subtitle C—Medicare Extensions; Other Health Provisions

PART 1—MEDICARE EXTENSIONS

SEC. 2201. Physician payment update.

(a) In general.—Section 1848(d) of the Social Security Act (42 U.S.C. 1395w–4(d)) is amended by adding at the end the following new paragraph:

“(13) UPDATE FOR 2012 AND 2013.—

“(A) IN GENERAL.—Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), and (12)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2012 and for 2013, the update to the single conversion factor shall be 1.0 percent for the year.

“(B) NO EFFECT ON COMPUTATION OF CONVERSION FACTOR FOR 2014 AND SUBSEQUENT YEARS.—The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2014 and subsequent years as if subparagraph (A) had never applied.”

(b) Mandated Studies on Physician Payment Reform.—

(1) STUDY BY SECRETARY ON OPTIONS FOR BUNDLED OR EPISODE-BASED PAYMENT.—

(A) IN GENERAL.—The Secretary of Health and Human Services shall conduct a study that examines options for bundled or episode-based payments, to cover physicians’ services currently paid under the physician fee schedule under section 1848 of the Social Security Act (42 U.S.C. 1395w–4), for one or more prevalent chronic conditions (such as cancer, diabetes, and congestive heart failure) or episodes of care for one or more major procedures (such as medical device implantation). In conducting the study the Secretary shall consult with medical professional societies and other relevant stakeholders. The study shall include an examination of related private payer payment initiatives.

(B) REPORT.—Not later than January 1, 2013, the Secretary shall submit to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance in the Senate a report on the study conducted under this paragraph. The Secretary shall include in the report recommendations on suitable alternative payment options for services paid under such fee schedule and on associated implementation requirements (such as timelines, operational issues, and interactions with other payment reform initiatives).

(2) GAO STUDY OF PRIVATE PAYER INITIATIVES.—

(A) IN GENERAL.—The Comptroller General of the United States shall conduct a study that examines initiatives of private entities offering or administering health insurance coverage, group health plans, or other private health benefit plans to base or adjust physician payment rates under such coverage or plans for performance on quality and efficiency as well as demonstration of care delivery improvement activities (such as adherence to evidence based guidelines and patient shared decision making programs). In conducting such study, the Comptroller General shall consult, to the extent appropriate, with medical professional societies and other relevant stakeholders.

(B) REPORT.—Not later than January 1, 2013, the Comptroller General shall submit to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance in the Senate a report on the study conducted under this paragraph. Such report shall include an assessment of applicability of the payer initiatives described in subparagraph (A) to the Medicare program and recommendations on modifications to existing Medicare performance-based payment initiatives.

(3) MEDPAC STUDY OF ALIGNING PAYMENT INCENTIVES.—Not later than March 1, 2013, the Medicare Payment Advisory Commission shall conduct a study, and submit to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance in the Senate a report, that examines the feasibility of aligning private payer quality and efficiency programs with those in the Medicare program. In conducting such study, the Medicare Payment Advisory Commission shall consult with medical professional societies and other relevant stakeholders. Such report shall include recommendations on how to achieve such alignment.

(4) COLLABORATION.—The Secretary, Comptroller General, and Commission may collaborate to the extent beneficial in conducting their respective studies and submitting their respective reports under this subsection.

(c) Study and review of measures to improve physician payments, health outcomes, and efficiency.—During the 112th Congress, the Committees on Energy and Commerce and Ways and Means of the House of Representatives and the Committee on Finance in the Senate shall each study and review value-based measures and practice arrangements which may improve health outcomes and efficiency in the Medicare program to the end of replacing the Medicare sustainable growth rate in a fiscally responsible manner and establishing a sustainable payment system. In conducting such study and review, the committees shall solicit comments from stakeholder physician groups, including State medical associations.

SEC. 2202. Ambulance add-ons.

(a) Ground ambulance.—Section 1834(l)(13)(A) of the Social Security Act (42 U.S.C. 1395m(l)(13)(A)), as amended by section 106(a) of the Medicare and Medicaid Extenders Act of 2010 (Public Law 111–309), is amended—

(1) in the matter preceding clause (i), by striking “2012” and inserting “2013”; and

(2) in each of clauses (i) and (ii), by striking “2012” and inserting “2013” each place it appears.

(b) Super rural ambulance.—Section 1834(l)(12)(A) of the Social Security Act (42 U.S.C. 1395m(l)(12)(A)), as amended by section 106(c) of the Medicare and Medicaid Extenders Act of 2010 (Public Law 111–309), is amended in the first sentence by striking “2012” and inserting “2013”.

(c) GAO report update.—Not later than October 1, 2012, the Comptroller General of the United States shall update the GAO report GAO-07-383 (relating to Ambulance Providers: Costs and Expected Medicare Margins Vary Greatly) to reflect current costs for ambulance providers.

(d) MedPAC report.—The Medicare Payment Advisory Commission shall conduct a study of—

(1) the appropriateness of the add-on payments for ambulance providers under paragraphs (12)(A) and (13)(A) of section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l));

(2) the effect these additional payments have on the Medicare margins of ambulance providers; and

(3) whether there is a need to reform the Medicare ambulance fee schedule under such section and, if so, what should such reforms be, including rolling the add-on payments into the base rate.

Not later than July 1, 2012, the Commission shall submit to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate a report on such study and shall include in the report such recommendations as the Commission deems appropriate.

(e) Effective date.—The amendments made by subsections (a) and (b) shall apply to ambulance services furnished on or after January 1, 2012.

SEC. 2203. Medicare payment for outpatient therapy services.

(a) Application of additional requirements.—Section 1833(g)(5) of the Social Security Act (42 U.S.C. 1395l(g)(5)) is amended—

(1) by inserting “(A)” after “(5)”;

(2) by striking “December 31, 2011” and inserting “December 31, 2013”;

(3) in the first sentence, by inserting “and if the requirement of subparagraph (B) is met” after “medically necessary”;

(4) in the second sentence, by inserting “made in accordance with such requirement” after “receipt of the request”; and

(5) by adding at the end the following new subparagraphs:

“(B) In the case of outpatient therapy services for which an exception is requested under the first sentence of subparagraph (A), the claim for such services contains an appropriate modifier (such as the KX modifier used as of the date of the enactment of this subparagraph) indicating that such services are medically necessary as justified by appropriate documentation in the medical record involved.

“(C)(i) In applying this paragraph with respect to a request for an exception with respect to expenses that would be incurred for outpatient therapy services (including services described in subsection (a)(8)(B)) that would exceed the threshold described in clause (ii) for a year, the request for such an exception, for services furnished on or after July 1, 2012, shall be subject to a manual medical review process that is similar to the manual medical review process used for certain exceptions under this paragraph in 2006.

“(ii) The threshold under this clause for a year is $3,700. Such threshold shall be applied separately—

“(I) for physical therapy services and speech-language pathology services; and

“(II) for occupational therapy services.”

(b) Application of therapy cap to therapy furnished as part of hospital outpatient services.—Paragraphs (1) and (3) of section 1833(g) of such Act are each amended by striking “but not described in section 1833(a)(8)(B)” and inserting “but (with respect to services furnished before July 1, 2012) not described in subsection (a)(8)(B)”.

(c) Requirement for inclusion on claims of NPI of physician who reviews therapy plan.—Section 1842(t) of such Act (42 U.S.C. 1395u(t)) is amended—

(1) by inserting “(1)” after “(t)”; and

(2) by adding at the end the following new paragraph:

“(2) Each request for payment, or bill submitted, for therapy services described in paragraph (1) or (3) of section 1833(g) furnished on or after July 1, 2012, for which payment may be made under this part shall include the national provider identifier of the physician who periodically reviews the plan for such services under section 1861(p)(2).”

(d) Implementation.—The Secretary of Health and Human Services shall implement such claims processing edits and issue such guidance as may be necessary to implement the amendments made by this section in a timely manner. Notwithstanding any other provision of law, the Secretary may implement the amendments made by this section by program instruction. Of the amount of funds made available to the Secretary for fiscal year 2012 for program management for the Centers for Medicare & Medicaid Services, not to exceed $7,500,000 shall be available for such fiscal year to carry out section 1833(g)(5)(C) of the Social Security Act (relating to manual medical review), as added by subsection (a). Of the amount of funds made available to the Secretary for fiscal year 2013 for such program management, not to exceed $7,500,000 shall be available for such fiscal year to carry out such section.

(e) Effective date.—The amendments made by subsection (a) shall apply to services furnished on or after January 1, 2012.

(f) MedPAC report on improved Medicare therapy benefits.—Not later than March 1, 2013, the Medicare Payment Advisory Commission shall submit to the Committees on Energy and Commerce and Ways and Means of the House of Representatives and to the Committee on Finance of the Senate a report making recommendations on how to improve the outpatient therapy benefit under part B of title XVIII of the Social Security Act. The report shall include recommendations on how to reform the payment system for such outpatient therapy services under such part so that the benefit is better designed to reflect individual acuity, condition, and therapy needs of the patient. Such report shall include an examination of private sector initiatives relating to outpatient therapy benefits.

(g) Collection of additional data.—

(1) STRATEGY.—The Secretary of Health and Human Services shall implement, beginning on January 1, 2013, a claims-based data collection strategy that is designed to assist in reforming the Medicare payment system for outpatient therapy services subject to the limitations of section 1833(g) of the Social Security Act. Such strategy shall be designed to provide for the collection of data on patient function during the course of therapy services in order to better understand patient condition and outcomes.

(2) CONSULTATION.—In proposing and implementing such strategy, the Secretary shall consult with relevant stakeholders.

(h) GAO report on manual medical review process implementation.—Not later than May 1, 2013, the Comptroller General of the United States shall submit to the Committees on Energy and Commerce and Ways and Means of the House of Representatives and to the Committee on Finance of the Senate a report on the implementation of the manual medical review process referred to in section 1833(g)(5)(C) of the Social Security Act. Such report shall include aggregate data on the number of individuals and claims subject to such process, the number of reviews conducted under such process, and the outcome of such reviews.

SEC. 2204. Work geographic adjustment.

(a) In general.—Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w–4(e)(1)(E)) is amended by striking “January 1, 2012” and inserting “January 1, 2013”.

(b) Report.—Not later than June 1, 2012, the Medicare Payment Advisory Commission shall submit to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate a report that assesses whether any geographic adjustment is needed under section 1848 of the Social Security Act (42 U.S.C. 1395w–4) to distinguish the difference in work effort by geographic area and, if so, what that level should be and where it should be applied. The report shall also assess the impact of the work geographic adjustment under such section, including the extent to which the floor impacts access to care.

PART 2—OTHER HEALTH PROVISIONS

SEC. 2211. Qualifying individual (QI) program.

(a) Extension.—Section 1902(a)(10)(E)(iv) of the Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking “December 2011” and inserting “December 2012”.

(b) Extending total amount available for allocation.—Section 1933(g) of such Act (42 U.S.C. 1396u-3(g)) is amended—

(1) in paragraph (2)—

(A) by striking “and” at the end of subparagraph (O);

(B) in subparagraph (P), by striking the period at the end and inserting a semicolon; and

(C) by adding at the end the following new subparagraphs:

“(Q) for the period that begins on January 1, 2012, and ends on September 30, 2012, the total allocation amount is $450,000,000; and

“(R) for the period that begins on October 1, 2012, and ends on December 31, 2012, the total allocation amount is $280,000,000.”; and

(2) in paragraph (3), in the matter preceding subparagraph (A), by striking “or (P)” and inserting “(P), or (R)”.

SEC. 2212. Extension of Transitional Medical Assistance (TMA).

(a) Extension.—Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)) are each amended by striking “December 31, 2011” and inserting “December 31, 2012”.

(b) Extending application of termination of eligibility based on income to initial extension period.—

(1) INCOME REPORTING REQUIREMENTS.—Subsection (b)(2)(B)(i) of section 1925 of such Act (42 U.S.C. 1396r–6) is amended—

(A) by striking “additional extended assistance under this subsection” and inserting “continued extended assistance under subsection (a)”; and

(B) by inserting “(and, in the case of a State that makes an election under subsection (a)(5), the 7th month and the 11th month)” after “4th month”.

(2) TERMINATION.—Subsection (a)(3) of such section is amended—

(A) in subparagraph (B)—

(i) by inserting “or (D)” after “subparagraph (A)”; and

(ii) by striking the period at the end and inserting the following: “, which notice shall include (in the case of termination under subparagraph (D)(ii), relating to no continued earnings) a description of how the family may reestablish eligibility for medical assistance under the State plan. No termination shall be effective under subparagraph (D) earlier than 10 days after the date of mailing of such notice.”;

(B) in subparagraph (C)—

(i) by designating the matter beginning with “With respect to” as a clause (i) with the heading “Dependent children.—” and appropriate indentation; and

(ii) by adding at the end the following new clause:

“(ii) MEDICALLY NEEDY.—With respect to an individual who would cease to receive medical assistance because of subparagraph (D) but who may be eligible for assistance under the State plan because the individual is within a category of person for which medical assistance under the State plan is available under section 1902(a)(10)(C) (relating to medically needy individuals), the State may not discontinue such assistance under such subparagraph until the State has determined that the individual is not eligible for assistance under the plan.”; and

(C) by adding at the end the following new subparagraph:

“(D) QUARTERLY INCOME REPORTING AND TEST.—Subject to subparagraphs (B) and (C), extension of assistance during the 6-month period described in paragraph (1) to a family shall terminate (during the period) at the close of the 4th month of the 6-month period (or 4th, 7th, or 11th month in case of a State that makes an election under paragraph (5)) if—

“(i) the family fails to report to the State, by the 21st day of such month, the information required under subsection (b)(2)(B)(i), unless the family has established, to the satisfaction of the State, good cause for the failure to report on a timely basis;

“(ii) the caretaker relative had no earnings in one or more of the previous 3 months, unless such lack of any earnings was due to an involuntary loss of employment, illness, or other good cause, established to the satisfaction of the State; or

“(iii) the State determines that the family's average gross monthly earnings (less such costs for such child care as is necessary for the employment of the caretaker relative) during the immediately preceding 3-month period exceed 185 percent of the official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved.

Information described in clause (i) shall be subject to the restrictions on use and disclosure of information provided under section 402(a)(9). Instead of terminating a family's extension under clause (i), a State, at its option, may provide for suspension of the extension until the month after the month in which the family reports information required under subsection (b)(2)(B)(i), but only if the family's extension has not otherwise been terminated under clause (ii) or (iii). The State shall make determinations under clause (iii) for a family each time a report under subsection (b)(2)(B)(i) for the family is received.”.

(3) EFFECTIVE DATE.—

(A) IN GENERAL.—The amendments made by this subsection shall, subject to subparagraph (B), apply to assistance furnished for months beginning with January 2012.

(B) TRANSITION FOR CURRENT BENEFICIARIES.—

(i) IN GENERAL.—Subject to clause (ii), such amendments shall not apply to any individual who is receiving extended assistance under subsection (a) of section 1925 of the Social Security Act for December 2011 during the period of assistance that includes such month.

(ii) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR 12 MONTHS EXTENDED ASSISTANCE.—In the case of a State that makes an election under paragraph (5) of such section, such amendments shall apply to an individual who is receiving such extended assistance for such month if such month is within the first 6 months of the 12-month period referred to in such paragraph but only with respect to the second 6 months of such 12-month period.

SEC. 2213. Modification to requirements for qualifying for exception to Medicare prohibition on certain physician referrals for hospitals.

(a) In general.—Section 1877(i) of the Social Security Act (42 U.S.C. 1395nn(i)) is amended—

(1) in paragraph (1)(A)—

(A) in the matter preceding clause (i), by striking “had”;

(B) in clause (i), by inserting “had” before “physician ownership”; and

(C) by amending clause (ii) to read as follows:

“(ii) either—

“(I) had a provider agreement under section 1866 in effect on such date; or

“(II) was under construction on such date.”; and

(2) in paragraph (3)—

(A) by amending subparagraph (E) to read as follows:

“(E) APPLICABLE HOSPITAL.—In this paragraph, the term ‘applicable hospital’ means a hospital that does not discriminate against beneficiaries of Federal health care programs and does not permit physicians practicing at the hospital to discriminate against such beneficiaries.”; and

(B) in subparagraph (F)(iii), by striking “subparagraph (E)(iii)” and inserting “subparagraph (E)”.

(b) Effective date.—The amendments made by subsection (a) shall be effective as if as if included in the enactment of subsection (i) of section 1877 of the Social Security Act (42 U.S.C. 1395nn).

PART 3—OFFSETS

SEC. 2221. Adjustments to maximum thresholds for recapturing overpayments resulting from certain Federally-subsidized health insurance.

The table specified in clause (i) of section 36B(f)(2)(B) of the Internal Revenue Code of 1986 is amended to read as follows:

“If the household income (expressed as a percent of poverty line) is: Less than 100 percent
The applicable dollar amount is: $600
At least 100 percent and less than 150 percent / $800
At least 150 percent but less than 200 percent / $1,000
At least 200 percent but less than 250 percent / $1,500
At least 250 percent but less than 300 percent / $2,200
At least 300 percent but less than 350 percent / $2,500
At least 350 percent but less than 400 percent / $3,200.”

SEC. 2222. Prevention and Public Health Fund.

Section 4002(b) of the Patient Protection and Affordable Care Act (42 U.S.C. 300u–11(b)) is amended—

(1) in paragraph (3), by adding at the end “and”; and

(2) by striking each of paragraphs (4) through (6) and inserting the following:

“(4) for fiscal year 2013 and each subsequent fiscal year, $640,000,000.”

SEC. 2223. Parity in Medicare payments for hospital outpatient department evaluation and management office visit services.

Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is amended—

(1) in paragraph (3)—

(A) in subparagraph (D), by striking “The Secretary” and inserting “Subject to subparagraph (H), the Secretary”; and

(B) by adding at the end the following new subparagraph:

“(H) PARITY IN FEE SCHEDULE AMOUNT FOR SPECIFIED EVALUATION AND MANAGEMENT SERVICES.—

“(i) IN GENERAL.—In the case of covered OPD services that are specified evaluation and management services furnished during 2012 or a subsequent year, there shall be substituted for the medicare OPD fee schedule amount established under subparagraph (D) for such services and year, before application of any geographic or other adjustment, an amount equal to the product of the conversion factor established under section 1848(d) for such year and the amount by which—

“(I) the non-facility practice expense relative value units under the fee schedule under section 1848 for such year for physicians’ services that are such specified evaluation and management services; exceeds

“(II) the facility practice expense relative value unit under such fee schedule for such year and services.

“(ii) BUDGET NEUTRALITY.—In determining the adjustments under paragraph (9)(B) for 2012 or a subsequent year, the Secretary shall not take into account under such paragraph or paragraph (2)(E) any changes in expenditures that result from the application of this subparagraph.

“(iii) SPECIFIED EVALUATION AND MANAGEMENT SERVICES DEFINED.—For the purposes of this subparagraph, the term ‘specified evaluation and management services’ means the HCPCS codes in the range 99201 through 99215 as of January 1, 2011 (and such codes as subsequently modified by the Secretary).”; and

(2) in paragraph (9)(B), by striking “If the Secretary” and inserting “Subject to paragraph (3)(H)(ii), if the Secretary”.

SEC. 2224. Reduction of bad debt treated as an allowable cost.

(a) Hospitals.—Section 1861(v)(1)(T) of the Social Security Act (42 U.S.C. 1395x(v)(1)(T)) is amended—

(1) in clause (iii), by striking “and” at the end;

(2) in clause (iv)—

(A) by striking “a subsequent fiscal year” and inserting “fiscal years 2001 through 2012”; and

(B) by striking the period at the end and inserting “, and”; and

(3) by adding at the end the following:

“(v) for cost reporting periods beginning during fiscal year 2013, by 35 percent of such amount otherwise allowable,

“(vi) for cost reporting periods beginning during fiscal year 2014, by 40 percent of such amount otherwise allowable, and

“(vii) for cost reporting periods beginning during a subsequent fiscal year, by 45 percent of such amount otherwise allowable.”

(b) Skilled nursing facilities.—Section 1861(v)(1)(V) of such Act (42 U.S.C. 1395x(v)(1)(V)) is amended—

(1) in the matter preceding clause (i), by striking “with respect to cost reporting periods beginning on or after October 1, 2005” and inserting “and (beginning with respect to cost reporting periods beginning during fiscal year 2013) for covered skilled nursing services described in section 1888(e)(2)(A) furnished by hospital providers of extended care services (as described in section 1883)”;

(2) in clause (i), by striking “reduced by” and all that follows through “allowable; and” and inserting the following: “reduced by—

“(I) for cost reporting periods beginning on or after October 1, 2005, but before fiscal year 2013, 30 percent of such amount otherwise allowable;

“(II) for cost reporting periods beginning during fiscal year 2013, by 35 percent of such amount otherwise allowable;

“(III) for cost reporting periods beginning during fiscal year 2014, by 40 percent of such amount otherwise allowable; and

“(IV) for cost reporting periods beginning during a subsequent fiscal year, by 45 percent of such amount otherwise allowable; and”; and

(3) in clause (ii), by striking “such section shall not be reduced.” and inserting “such section—

“(I) for cost reporting periods beginning on or after October 1, 2005, but before fiscal year 2013, shall not be reduced;

“(II) for cost reporting periods beginning during fiscal year 2013, shall be reduced by 15 percent of such amount otherwise allowable;

“(III) for cost reporting periods beginning during fiscal year 2014, shall be reduced by 30 percent of such amount otherwise allowable; and

“(IV) for cost reporting periods beginning during a subsequent fiscal year, shall be reduced by 45 percent of such amount otherwise allowable.”

(c) Certain other providers.—Section 1861(v)(1) of such Act (42 U.S.C. 1395x(v)(1)) is amended by adding at the end the following new subparagraph:

“(W)(i) In determining such reasonable costs for providers described in clause (ii), the amount of bad debts otherwise treated as allowable costs which are attributable to deductibles and coinsurance amounts under this title shall be reduced—

“(I) for cost reporting periods beginning during fiscal year 2013, by 15 percent of such amount otherwise allowable;

“(II) for cost reporting periods beginning during fiscal year 2014, by 30 percent of such amount otherwise allowable; and

“(III) for cost reporting periods beginning during a subsequent fiscal year, by 45 percent of such amount otherwise allowable.

“(ii) A provider described in this clause is a provider of services not described in subparagraph (T) or (V), a supplier, or any other type of entity that receives payment for bad debts under the authority under subparagraph (A).”

(d) Conforming amendment for hospital services.—Section 4008(c) of the Omnibus Budget Reconciliation Act of 1987, as amended by section 8402 of the Technical and Miscellaneous Revenue Act of 1988 and section 6023 of the Omnibus Budget Reconciliation Act of 1989, is amended by adding at the end the following new sentence: “Effective for cost reporting periods beginning on or after October 1, 2012, the provisions of the previous two sentences shall not apply.”

SEC. 2225. Rebasing of State DSH allotments for fiscal year 2021.

Section 1923(f) of the Social Security Act (42 U.S.C. 1396r-4(f)) is amended—

(1) by redesignating paragraph (8) as paragraph (9);

(2) in paragraph (3)(A) by striking “paragraphs (6) and (7)” and inserting “paragraphs (6), (7), and (8)”; and

(3) by inserting after paragraph (7) the following new paragraph:

“(8) REBASING OF STATE DSH ALLOTMENTS FOR FISCAL YEAR 2021.—With respect to fiscal 2021 and each subsequent fiscal year, for purposes of applying paragraph (3)(A) to determine the DSH allotment for a State, the amount of the DSH allotment for the State under paragraph (3) for fiscal year 2020 shall be treated as if it were such amount as reduced under paragraph (7).”.

Subtitle F—Health Care Provisions

SEC. 5501. Increase in applicable percentage used to calculate Medicare part B and part D premiums for high-income beneficiaries.

(a) In general.—Section 1839(i)(3)(C)(i) of the Social Security Act (42 U.S.C. 1395r(i)(3)(C)(i)) is amended—

(1) by striking “In general.—” and inserting “In general.—(I) For calendar years prior to 2017:”; and

(2) by adding at the end the following new subclause:

“(II) For calendar year 2017 and each subsequent calendar year:

“If the modified adjusted gross is: More than $80,000 but not more than $100,000
The applicable percentage is: 40.25 percent
More than $100,000 but not more than $150,000 / 57.5 percent
More than $150,000 but not more than $200,000 / 74.75 percent
More than $200,000 / 90 percent.”

(b) Conforming amendment.—Section 1839(i)(3)(A)(i) of the Social Security Act (42 U.S.C. 1395r(i)(3)(A)(i)) is amended, by inserting “and year” after “individual”.

SEC. 5502. Temporary adjustment to the calculation of Medicare part B and part D premiums.

(a) In general.—Section 1839(i)(6) of the Social Security Act (42 U.S.C. 1395r(i)(6)) is amended in the matter preceding subparagraph (A) by striking “December 31, 2019” and inserting “December 31 of the first year after the year in which at least 25 percent of individuals enrolled under this part are subject to a reduction under this subsection to the monthly amount of the premium subsidy applicable to the premium under this section.”

(b) Application of inflation adjustment.—Section 1839(i)(5) of the Social Security Act (42 U.S.C. 1395r(i)(5)) is amended—

(1) in subparagraph (A), by striking “In the case” and inserting “Subject to subparagraph (C), in the case”; and

(2) by adding at the end the following new subparagraph:

“(C) TREATMENT OF YEARS AFTER TEMPORARY ADJUSTMENT PERIOD.—In applying subparagraph (A) for the first year beginning after the period described in paragraph (6) and for each subsequent year, the 12-month period ending with August 2006 described in clause (ii) of such subparagraph shall be deemed to be the 12-month period ending with August of the last year of such period described in paragraph (6).”.