97 STAT. 150 PUBLIC LAW 98-21 —APR. 20, 1983 26 USC 3111. 42 USC 1395mm. 42 USC 1395CC. 42 USC 1395y. inserting in lieu thereof "Notwithstanding section 1814(b) but subject to the provisions of section"; (2) by inserting "(other than a subsection (d) hospital, as defined in subsection (d)(1)(B))" in the matter before subpara- graph (A) of paragraph (1) after "of a hospital"; (3) by inserting, in the matter in paragraph (1) following subparagraph (B), "(other than on the basis of a DRG prospec- tive payment rate determined under subsection (d))" after "pay- able under this title"; (4) by repealing paragraph (2); (5) by inserting "and subsection (d) and except as provided in subsection (e)" in paragraph (3)(B) after "subparagraph (A)"; (6) by inserting "or fiscal year" after "cost reporting period" each place it appears in paragraph (3)(B); (7) by inserting "before the beginning of the period or year" in paragraph (3)(B) after "estimated by the Secretary"; (8) by striking out "exceeds" in paragraph (3)(B) and inserting in lieu thereof "will exceed"; and (9) by repealing paragraph (6), effective with respect to cost reporting periods beginning on or after October 1, 1982, and by inserting after paragraph (5), effective with respect to cost reporting periods beginning on or after October 1, 1983, the following new paragraph (6): "(6) In the case of any hospital which becomes subject to the taxes under section 3111 of the Internal Revenue Code of 1954, with respect to any or all of its employees, for part or all of a cost reporting period, and was not subject to such taxes with respect to any or all of its employees for all or part of the 12-month base cost reporting period referred to in subsection (b)(3)(A)(i), the Secretary shall provide for an adjustment by increasing the base period amount described in such subsection for such hospital by an amount equal to the amount of such taxes which would have been paid or accrued by such hospital for such base period if such hospital had been subject to such taxes for all of such base period with respect to all its employees, minus the amount of any such taxes actually paid or accrued for such base period.". (c)(1) Subsection (c)(1) of such section is amended— (A) by striking out "and" at the end of subparagraph (B), (B) by striking out the period at the end of subparagraph (C) and inserting in lieu thereof a semicolon, and (C) by adding at the end the following: "(D) the Secretary determines that the system will not pre- clude an eligible organization (as defined in section 1876(b)) from negotiating directly with hospitals with respect to the organization's rate of payment for inpatient hospital services; and "(E) the Secretary determines that the system requires hospi- tals to meet the requirement of section 1866(a)(1)(G) and the system provides for the exclusion of certain costs in accordance with section 1862(a)(14) (except for such waivers thereof as the Secretary provides by regulation). The Secretary cannot deny the application of a State under this subsection on the ground that the State's hospital reimbursement control system is based on a payment methodology other than on the bsisis of a diagnosis-related group or on the ground that the amount of payments made under this title under such system must be less than the amount of payments which would otherwise have
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