Ill STAT. 410 PUBLIC LAW 105-33 —AUG. 5, 1997 1395ww(b)(4)), as amended by subsection (a), ending during the previous fiscal year. Subchapter B—Prospective Payment System for PPS- Exempt Hospitals SEC. 4421. PROSPECTIVE PAYMENT FOR INPATIENT REHABILITATION HOSPITAL SERVICES. (a) IN GENERAL.—Section 1886 (42 U.S.C. 1395ww) is amended by adding at the end the following new subsection: " (j) PROSPECTIVE PAYMENT FOR INPATIENT REHABILITATION SERVICES.— " (1) PAYMENT DURING TRANSITION PERIOD.— "(A) IN GENERAL. — Notwithstanding section 1814(b), but subject to the provisions of section 1813, the amount of the payment with respect to the operating and capital costs of inpatient hospital services of a rehabilitation hospital or a rehabilitation unit (in this subsection referred to as a 'rehabilitation facility), in a cost reporting period beginning on or after October 1, 2000, and before October 1, 2002, is equal to the sum of— "(i) the TEFRA percentage (as defined in subparagraph (O) of the amount that would have been paid under part A with respect to such costs if this subsection did not apply, and "(ii) the prospective payment percentage (as defined in subparagraph (C)) of the product of (I) the per unit payment rate established under this subsection for the fiscal year in which the payment unit of service occurs, and (II) the number of such payment units occurring in the cost reporting period. " (B) FULLY IMPLEMENTED SYSTEM. —Notwithstanding section 1814(b), but subject to the provisions of section 1813, the amount of the payment with respect to the operating and capital costs of inpatient hospital services of a rehabilitation facility for a payment unit in a cost reporting period beginning on or after October 1, 2002, is equal to the per unit payment rate established under this subsection for the fiscal year in which the payment unit of service occurs. "(C) TEFRA AND PROSPECTIVE PAYMENT PERCENTAGES SPECIFIED.—For purposes of subparagraph (A), for a cost reporting period beginning— "(i) on or after October 1, 2000, and before October 1, 2001, the 'TEFRA percentage' is 66% percent and the 'prospective payment percentage' is 33Vs percent; and "(ii) on or after October 1, 2001, and before October 1, 2002, the 'TEFRA percentage' is 33 Vs percent and the 'prospective payment percentage' is 66% percent. "(D) PAYMENT UNIT. —For purposes of this subsection, the term 'payment unit' means a discharge, day of inpatient hospital services, or other unit of payment defined by the Secretary. " (2) PATIENT CASE MIX GROUPS.— " (A) ESTABLISHMENT.— The Secretary shall establish—
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