'P.*"" PUBLIC LAW 105-33 —AUG. 5, 1997 111 STAT. 417 "(C) UPDATING TO APPLICABLE COST REPORTING PERIOD. — The Secretary shall update the amount determined under subparagraph (B) for each cost reporting period beginning with the first cost reporting period and up to and including the cost reporting period involved by a factor equal to the facility-specific update factor. "(D) FACILITY-SPECIFIC UPDATE FACTOR. —For purposes of this paragraph, the 'facility-specific update factor' for cost reporting periods beginning during— "(i) during each of fiscal years 1998 and 1999, is equal to the skilled nursing facility market basket percentage increase for such fiscal year minus 1 percentage point, and "(ii) during each subsequent fiscal year is equal to the skilled nursing facility market basket percentage increase for such fiscal year. "(4) FEDERAL PER DIEM RATE.— " (A) DETERMINATION OF HISTORICAL PER DIEM FOR FACILITIES. —For each skilled nursing facility that received payments for post-hospital extended care services during a cost reporting period beginning in fiscal year 1995 and that was subject to (and not exempted from) the per diem limits referred to in paragraph (1) or (2) of subsection (a) (and facilities described in subsection (d)), the Secretary shall estimate, on a per diem basis for such cost reporting period, the total of— "(i) the allowable costs of extended care services (excluding exceptions payments) for the facility for cost reporting periods beginning in 1995 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 copayinents) 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. "(B) UPDATE TO FIRST FISCAL YEAR.—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 reduced (on an annualized basis) by 1 percentage point. "(C) COMPUTATION OF STANDARDIZED PER DIEM RATE. — The Secretary shall standardize the amount updated under subparagraph (B) for each facility by— "(i) adjusting for variations among facilities by area in the average facility wage level per diem, and "(ii) adjusting for variations in case mix per diem among facilities. "(D) COMPUTATION OF WEIGHTED AVERAGE PER DIEM RATES. — " (i) ALL FACILITIES. —The Secretary shall compute a weighted average per diem rate for all facilities by
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