Title IV, SEC. 4104. REVISIONS TO PAYMENT ADJUSTMENTS FOR DISPROPORTIONATE SHARE HOSPITALS IN PARTICIPATING STATES. (a) Application of Alternative Adjustments. Section 1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is amended (1) by redesignating subparagraphs (H) and (I) as subparagraphs (I) and (J); and (2) by inserting after subparagraph (G) the following new subparagraph: ``(H)(i) In accordance with this subparagraph, the Secretary shall provide for an additional payment for each subsection (d) hospital that is located in a participating State under subtitle C of title I of the Health Security Act during a cost reporting period and that meets the eligibility requirements described in clause (iii). ``(ii) The amount of the additional payment made under clause (i) for each discharge shall be determined by multiplying ``(I) the sum of the amount determined under paragraph (1)(A)(ii)(II) (or, if applicable, the amount determined under paragraph (1)(A)(iii)) and the amount paid to the hospital under subparagraph (A) for the discharge, by ``(II) the SSI adjustment percentage for the cost reporting period in which the discharge occurs (as defined in clause (iv)). ``(iii) A hospital meets the eligibility requirements described in this clause with respect to a cost reporting period if ``(I) in the case of a hospital that is located in an urban area and that has more than 100 beds, the hospital's SSI patient percentage (as defined in clause (v)) for the cost reporting period is not less than 5 percent; ``(II) in the case of a hospital that is located in an urban area and that has less than 100 beds, the hospital's SSI patient percentage is not less than 17 percent; ``(III) in the case of a hospital that is classified as a rural referral center under subparagraph (C) or a sole community hospital under subparagraph (D), the hospital's SSI patient percentage for the cost reporting period is not less than 23 percent; and ``(IV) in the case of any other hospital, the hospital's SSI patient percentage is not less than 23 percent. ``(iv) For purposes of clause (ii), the `SSI adjustment percentage' applicable to a hospital for a cost reporting period is equal to ``(I) in the case of a hospital described in clause (iii)(I), the percentage determined in accordance with the following formula: e to the nth power, where `e' is the natural antilog of 1 and where `n' is equal to (.5642 * (the hospital's SSI patient percentage for the cost reporting period - .055)) - 1; ``(II) in the case of a hospital described in clause (iii)(II) or clause (iii)(IV), 2 percent; and ``(III) in the case of a hospital described in clause (iii)(III), the sum of 2 percent and .30 percent of the difference between the hospital's SSI patient percentage for the cost reporting period and 23 percent. ``(v) In this subparagraph, a hospital's `SSI patient percentage' with respect to a cost reporting period is equal to the fraction (expressed as a percentage) ``(I) the numerator of which is the number of the hospital's patient days for such period which were made up of patients who (for such days) were entitled to benefits under part A and were entitled to supplementary security income benefits (excluding State supplementation) under title XVI; and ``(II) the denominator of which is the number of the hospital's patient days for such period which were made up of patients who (for such days) were entitled to benefits under part A.''. (b) No Standardization Resulting From Reduction. Section 1886(d)(2)(C)(iv) (42 U.S.C. 1395ww(d)(2)(C)(iv)) is amended (1) by striking ``exclude additional payments'' and inserting ``adjust such estimate for changes in payments''; (2) by striking ``1989 or'' and inserting ``1989,''; and (3) by striking the period at the end and inserting the following: ``, or the enactment of section 4104 of the Health Security Act.''. (c) Conforming Amendment. Section 1886(d)(5)(F)(i) (42 U.S.C. 1395ww(d)(5)(F)(i)) is amended in the matter preceding subclause (I) by inserting after ``hospital'' the following: ``that is not located in a State that is a participating State under subtitle C of title I of the Health Security Act''.