PUBLIC LAW 106-554—APPENDIX F 114 STAT. 2763A-497 XVIII of such Act required under section 123 of BBRA, the Secretary of Health and Human Services shall examine the feasibility and the impact of basing payment under such a system on the use of existing (or refined) hospital diagnosisrelated groups (DRGs) that have been modified to account for different resource use of long-term care hospital patients as well as the use of the most recently available hospital discharge data. The Secretary shall examine and may provide for appropriate adjustments to the long-term hospital payment system, including adjustments to DRG weights, area wage adjustments, geographic reclassification, outliers, updates, and a disproportionate share adjustment consistent with section 1886(d)(5)(F) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(F)). (2) DEFAULT IMPLEMENTATION OF SYSTEM BASED ON EXIST- ING DRG METHODOLOGY.— I f the Secretary is unable to implement the prospective payment system under section 123 of the BBRA by October 1, 2002, the Secretary shall implement a prospective payment system for such hospitals that bases payment under such a system using existing hospital diagnosisrelated groups (DRGs), modified where feasible to account for resource use of long-term care hospital patients using the most recently available hospital discharge data for such services furnished on or afl;er that date. Subtitle B—Adjustments to PPS Payments for Skilled Nursing Facilities SEC. 311. ELIMINATION OF REDUCTION IN SKILLED NURSING FACILITY (SNF) MARKET BASKET UPDATE IN 2001. (a) IN GENERAL.^ection 1888(e)(4)(E)(ii) (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended— (1) by redesignating subclauses (II) and (III) as subclauses (III) and (IV), respectively; (2) in subclause (III), as so redesignated— (A) by striking "each of fiscal years 2001 and 2002" and inserting "each of fiscal years 2002 and 2003"; and (B) by striking "minus 1 percentage point" and inserting "minus 0.5 percentage points"; and (3) by inserting after subclause (I) the following new subclause: "(II) for fiscal year 2001, the rate computed for the previous fiscal year increased by the skilled nursing facility market basket percentage change for the fiscal year;". (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR 2001. —Notwithstanding the amendments made by subsection (a), for purposes of making payments for covered skilled nursing facility services under section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)) for fiscal year 2001, the Federal per diem rate referred to in paragraph (4)(E)(ii) of such section— (1) for the period beginning on October 1, 2000, and ending on March 31, 2001, shall be the rate determined in accordance with the law as in effect on the day before the date of the enactment of this Act; and
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