PUBLIC LAW 105-33 —AUG. 5, 1997 111 STAT. 433 "(B) UPDATE ADJUSTMENT FACTOR.—For purposes of subparagraph (A)(ii), the 'update adjustment factor' for a year is equal (as estimated by the Secretary) to— "(i) the difference between (I) the sum of the allowed expenditures for physicians' services (as determined under subparagraph (C)) for the period beginning April 1, 1997, and ending on March 31 of the year involved, and (II) the amount of actual expenditures for physicians' services furnished during the period beginning April 1, 1997, and ending on March 31 of the preceding year; divided by "(ii) the actual expenditures for physicians' services for the 12-month period ending on March 31 of the preceding year, increased by the sustainable growth rate under subsection (f) for the fiscal year which begins during such 12-month period. " (C) DETERMINATION OF ALLOWED EXPENDITURES.—For purposes of this paragraph, the allowed expenditures for physicians' services for the 12-month period ending with March 31 of— "(i) 1997 is equal to the actual expenditures for physicians' services furnished during such 12-month period, as estimated by the Secretary; or "(ii) a subsequent year is equal to the allowed expenditures for physicians' services for the previous year, increased by the sustainable growth rate under subsection (f) for the fiscal year which begins during such 12-month period. "(D) RESTRICTION ON VARIATION FROM MEDICARE ECO- NOMIC INDEX. —Notwithstanding the amount of the update adjustment factor determined under subparagraph (B) for a year, the update in the conversion factor under this paragraph for the year may not be— "(i) greater than 100 times the following amount: (1.03 + (MEI percentage/100)) -1; or "(ii) less than 100 times the following amount: (0.93 + (MEI percentage/100)) -1, where 'MEI percentage' means the Secretary's estimate of the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year involved.". (2) EFFECTIVE DATE.— The amendment made by this sub- 42 USC l395w-4 section shall apply to the update for years beginning with note. 1999. (b) ELIMINATION OF REPORT. — Section 1848(d) (42 U.S.C. 1395w-4(d)) is amended by striking paragraph (2). SEC. 4503. REPLACEMENT OF VOLUME PERFORMANCE STANDARD WITH SUSTAINABLE GROWTH RATE. (a) IN GENERAL.—Section 1848(f) (42 U.S.C. 1395w-4(f)) is amended by striking paragraphs (2) through (5) and inserting the following: "(2) SPECIFICATION OF GROWTH RATE.— The sustainable growth rate for all physicians' services for a fiscal year (beginning with fiscal year 1998) shall be equal to the product of— "(A) 1 plus the Secretary's estimate of the weighted average percentage increase (divided by 100) in the fees for all physicigms' services in the fiscal year involved.
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