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1 ‘‘(A) PROCESS.—
2 ‘‘(i) ESTABLISHMENT.—The Secretary
3 shall establish and implement a process
4 under which a hospital may apply for an
5 exception from the requirement under
6 paragraph (1)(C).
7 ‘‘(ii) OPPORTUNITY FOR COMMUNITY

8 INPUT.—The process under clause (i) shall

9 provide persons and entities in the commu-
10 nity in which the hospital applying for an
11 exception is located with the opportunity to
12 provide input with respect to the applica-
13 tion.
14 ‘‘(iii) TIMING FOR IMPLEMENTA-

15 TION.—The Secretary shall implement the

16 process under clause (i) on the date that is
17 one month after the promulgation of regu-
18 lations described in clause (iv).
19 ‘‘(iv) REGULATIONS.—Not later than
20 the first day of the month beginning 18
21 months after the date of the enactment of
22 this subsection, the Secretary shall promul-
23 gate regulations to carry out the process
24 under clause (i). The Secretary may issue

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1 such regulations as interim final regula-
2 tions.
3 ‘‘(B) FREQUENCY.—The process described
4 in subparagraph (A) shall permit a hospital to
5 apply for an exception up to once every 2 years.
6 ‘‘(C) PERMITTED INCREASE.—

7 ‘‘(i) IN GENERAL.—Subject to clause

8 (ii) and subparagraph (D), a hospital
9 granted an exception under the process de-
10 scribed in subparagraph (A) may increase
11 the number of operating rooms, procedure
12 rooms, or beds of the hospital above the
13 baseline number of operating rooms, proce-
14 dure rooms, or beds, respectively, of the
15 hospital (or, if the hospital has been grant-
16 ed a previous exception under this para-
17 graph, above the number of operating
18 rooms, procedure rooms, or beds, respec-
19 tively, of the hospital after the application
20 of the most recent increase under such an
21 exception).
22 ‘‘(ii) 100 PERCENT INCREASE LIMITA-

23 TION.—The Secretary shall not permit an

24 increase in the number of operating rooms,
25 procedure rooms, or beds of a hospital

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1 under clause (i) to the extent such increase
2 would result in the number of operating
3 rooms, procedure rooms, or beds of the
4 hospital exceeding 200 percent of the base-
5 line number of operating rooms, procedure
6 rooms, or beds of the hospital.
7 ‘‘(iii) BASELINE NUMBER OF OPER-

8 ATING ROOMS, PROCEDURE ROOMS, OR

9 BEDS.—In this paragraph, the term ‘base-

10 line number of operating rooms, procedure
11 rooms, or beds’ means the number of oper-
12 ating rooms, procedure rooms, or beds of a
13 hospital as of the date of enactment of this
14 subsection.
15 ‘‘(D) INCREASE LIMITED TO FACILITIES

16 ON THE MAIN CAMPUS OF THE HOSPITAL.—

17 Any increase in the number of operating rooms,

18 procedure rooms, or beds of a hospital pursuant
19 to this paragraph may only occur in facilities on
20 the main campus of the hospital.
21 ‘‘(E) CONDITIONS FOR APPROVAL OF AN

22 INCREASE IN FACILITY CAPACITY.—The Sec-

23 retary may grant an exception under the proc-
24 ess described in subparagraph (A) only to a
25 hospital—

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1 ‘‘(i) that is located in a county in
2 which the percentage increase in the popu-
3 lation during the most recent 5-year period
4 for which data are available is estimated to
5 be at least 150 percent of the percentage
6 increase in the population growth of the
7 State in which the hospital is located dur-
8 ing that period, as estimated by Bureau of
9 the Census and available to the Secretary;
10 ‘‘(ii) whose annual percent of total in-
11 patient admissions that represent inpatient
12 admissions under the program under title
13 XIX is estimated to be equal to or greater
14 than the average percent with respect to
15 such admissions for all hospitals located in
16 the county in which the hospital is located;
17 ‘‘(iii) that does not discriminate
18 against beneficiaries of Federal health care
19 programs and does not permit physicians
20 practicing at the hospital to discriminate
21 against such beneficiaries;
22 ‘‘(iv) that is located in a State in
23 which the average bed capacity in the
24 State is estimated to be less than the na-
25 tional average bed capacity;

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1 ‘‘(v) that has an average bed occu-
2 pancy rate that is estimated to be greater
3 than the average bed occupancy rate in the
4 State in which the hospital is located; and
5 ‘‘(vi) that meets other conditions as
6 determined by the Secretary.
7 ‘‘(F) PROCEDURE ROOMS.—In this sub-
8 section, the term ‘procedure rooms’ includes
9 rooms in which catheterizations, angiographies,
10 angiograms, and endoscopies are furnished, but
11 such term shall not include emergency rooms or
12 departments (except for rooms in which cath-
13 eterizations, angiographies, angiograms, and
14 endoscopies are furnished).
15 ‘‘(G) PUBLICATION OF FINAL DECI-

16 SIONS.—Not later than 120 days after receiving

17 a complete application under this paragraph,
18 the Secretary shall publish on the public Inter-
19 net website of the Centers for Medicare & Med-
20 icaid Services the final decision with respect to
21 such application.
22 ‘‘(H) LIMITATION ON REVIEW.—There

23 shall be no administrative or judicial review

24 under section 1869, section 1878, or otherwise
25 of the exception process under this paragraph,

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1 including the establishment of such process,
2 and any determination made under such proc-
3 ess.
4 ‘‘(3) PHYSICIAN OWNER OR INVESTOR DE-

5 FINED.—For purposes of this subsection and sub-

6 section (f)(2), the term ‘physician owner or investor’
7 means a physician (or an immediate family member
8 of such physician) with a direct or an indirect own-
9 ership or investment interest in the hospital.
10 ‘‘(4) PATIENT SAFETY REQUIREMENT.—In the
11 case of a hospital to which the requirements of para-
12 graph (1) apply, insofar as the hospital admits a pa-
13 tient and does not have any physician available on
14 the premises 24 hours per day, 7 days per week, be-
15 fore admitting the patient—
16 ‘‘(A) the hospital shall disclose such fact to
17 the patient; and
18 ‘‘(B) following such disclosure, the hospital
19 shall receive from the patient a signed acknowl-
20 edgment that the patient understands such fact.
21 ‘‘(5) CLARIFICATION.—Nothing in this sub-
22 section shall be construed as preventing the Sec-
23 retary from terminating a hospital’s provider agree-
24 ment if the hospital is not in compliance with regu-
25 lations pursuant to section 1866.’’.

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1 (b) VERIFYING COMPLIANCE.—The Secretary of
2 Health and Human Services shall establish policies and
3 procedures to verify compliance with the requirements de-
4 scribed in subsections (i)(1) and (i)(4) of section 1877 of
5 the Social Security Act, as added by subsection (a)(5).
6 The Secretary may use unannounced site reviews of hos-
7 pitals and audits to verify compliance with such require-
8 ments.
9 (c) IMPLEMENTATION.—
10 (1) FUNDING.—For purposes of carrying out
11 the amendments made by subsection (a) and the
12 provisions of subsection (b), in addition to funds
13 otherwise available, out of any funds in the Treasury
14 not otherwise appropriated there are appropriated to
15 the Secretary of Health and Human Services for the
16 Centers for Medicare & Medicaid Services Program
17 Management Account $5,000,000 for each fiscal
18 year beginning with fiscal year 2010. Amounts ap-
19 propriated under this paragraph for a fiscal year
20 shall be available until expended.
21 (2) ADMINISTRATION.—Chapter 35 of title 44,
22 United States Code, shall not apply to the amend-
23 ments made by subsection (a) and the provisions of
24 subsection (b).

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1 SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEO-

2 GRAPHIC ADJUSTMENT FACTORS UNDER

3 MEDICARE.

4 (a) IN GENERAL.—The Secretary of Health and

5 Human Services shall enter into a contract with the Insti-
6 tute of Medicine of the National Academy of Science to
7 conduct a comprehensive empirical study, and provide rec-
8 ommendations as appropriate, on the accuracy of the geo-
9 graphic adjustment factors established under sections
10 1848(e) and 1886(d)(3)(E) of the Social Security Act (42
11 U.S.C. 1395w–4(e), 11395ww(d)(3)).
12 (b) MATTERS INCLUDED.—Such study shall include
13 an evaluation and assessment of the following with respect
14 to such adjustment factors:
15 (1) Empirical validity of the adjustment factors.
16 (2) Methodology used to determine the adjust-
17 ment factors.
18 (3) Measures used for the adjustment factors,
19 taking into account—
20 (A) timeliness of data and frequency of re-
21 visions to such data;
22 (B) sources of data and the degree to
23 which such data are representative of costs; and
24 (C) operational costs of providers who par-
25 ticipate in Medicare.

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