Ill STAT. 416 PUBLIC LAW 105-33—AUG. 5, 1997 "(D) FIRST COST REPORTING PERIOD.— The term 'first cost reporting period' means, with respect to a skilled nursing facility, the first cost reporting period of the facility beginning on or after July 1, 1998. " (E) TRANSITION PERIOD.— "(i) IN GENERAL.— The term 'transition period' means, with respect to a skilled nursing facility, the 3 cost reporting periods of the facility beginning with the first cost reporting period. " (ii) TREATMENT OF NEW SKILLED NURSING FACILI- TIES.— In the case of a skilled nursing facility that first received payment for services under this title on or after October 1, 1995, payment for such services shall be made under this subsection as if all services were furnished after the transition period. "(3) DETERMINATION OF FACILITY SPECIFIC PER DIEM RATES. — The Secretary shall determine a facility-specific per diem rate for each skilled nursing facility not described in paragraph (2)(E)(ii) for a cost reporting period as follows: "(A) DETERMINING BASE PAYMENTS.—The Secretary shall determine, on a per diem basis, the total of— "(i) the allowable costs of extended care services for the facility for cost reporting periods beginning in fiscal year 1995, including costs associated with facilities described in subsection (d), with appropriate adjustments (as determined by the Secretary) to nonsettled cost reports, and "(ii) an estimate of the amounts that would be payable under part B (disregarding any applicable deductibles, coinsurance, and copayments) for covered skilled nursing facility services described in paragraph (2)(A)(i)(II) furnished during such period to an individual who is a resident of the facility, regardless of ' whether or not the payment was made to the facility or to another entity. In making appropriate adjustments under clause (i), the Secretary shall take into account exceptions and shall take into account exemptions but, with respect to exemptions, only to the extent that routine costs do not exceed 150 percent of the routine cost limits otherwise applicable but for the exemption. " (B) UPDATE TO FIRST COST REPORTING PERIOD.— "(i) IN GENERAL.— Subject to clause (ii), the Secretary shall update the amount determined under subparagraph (A), for each cost reporting period after the cost reporting period described in subparagraph (A)(i) and up to the first cost reporting period by a factor equal to the skilled nursing facility market basket percentage increase minus 1 percentage point. " (ii) CERTAIN DEMONSTRATION PROJECTS. —In the case of a facility participating in the Nursing Home Case-Mix and Quality Demonstration (RUGS-III), there shall be substituted for the amount described in clause (i) the RUGS-III rate received by the facility for 1997.
�
