103 STAT. 2176 PUBLIC LAW 101-239—DEC. 19, 1989 "(iii) the data and analyses underlying the update (or updates) recommended. "(E) COMPUTATION OF BUDGET-NEUTRAL ADJUSTMENT. — "(i) IN GENERAL.—The Secretary shall include in the report made under subparagraph (A) in a year a state- ment of the percentage by which (I) the actual expendi- tures for physicians' services under this part (during the fiscal year ending in the preceding year, as set forth in most recent annual report made pursuant to v;]: section 1841(b)(2)), exceeded, or was less than (II) the expenditures projected for the fiscal year under clause (ii). "(ii) PROJECTED EXPENDITURES.— For purposes of clause (i), the expenditures projected under this clause for a fiscal year is the actual expenditures for physi- s cians' services made under this part in the second preceding fiscal year— "(I) increased by the weighted average percent- age increase permitted under this part for physi- cians'services in the preceding fiscal year; "(II) adjusted to reflect the percentage change in the average number of individuals enrolled under this p£U^ (who are not enrolled with a risk-sharing contract under section 1876) for the preceding fiscal year compared with the second preceding fiscal year; "(III) adjusted to reflect the average annual percentage growth in the volume and intensity of physicians' services under this part for the five- fiscal-year period ending with the second preceding fiscal year; and "(IV) adjusted to reflect the percentage change in expenditures for physicians' services under this i-. part in the preceding fiscal year (compared with the second preceding fiscal year) which result from changes in law or regulations. Reports. "(F) COMMISSION REVIEW. — The Physician Payment Review Commission shall review the report submitted under subparagraph (A) in a year and shall submit to the Congress, by not later than May 15 of the year, a report including ite recommendations respecting the update (or updates) in the conversion factor (or factors) for the follow- ing year. "(3) UPDATE. — "(A) BASED ON INDEX. — "(i) IN GENERAL.—Unless Congress otherwise pro- vides, subject to subparagraph (B), for purposes of this section the update for a year is equal to the Secretary's estimate of the percents^e increase in the appropriate update index (as defined in clause (ii)) for the year, "(ii) APPROPRIATE UPDATE INDEX DEFINED.— In clause (i), the term 'appropriate update index' means— "(I) for services for which prevailing charges in 1989 were subject to a limit under the fourth sen- tence of section 1842(b)(3), the medicare economic index (referred to in that sentence), and
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