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PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 577 first 12-month cost reporting period that begins after April 1, 1992, and ends on the date of the enactment oi tiiis Act. (£) EXTENSION OP REGIONAL FLOOR.-—Section 1886(dXlXAXiii) (42 U.S.C. 1395ww(dXlXAXiii)) is amended to read as follows: "(iii) beginning on or after April 1, 1988, is equal to— "(I) the national adjusted DRG prospective payment rate determined under paragraph (3) for such discharges, or ''(II) for discharges occurring during a fiscal year end- ing on or before September 30, 1996, the simi of 85 percent of the national adjusted DRG prospective payment rate determined under paragraph (3) for such discnarges and 15 percent of the regional adjusted DRG prospective pay- ment rate determined under such paragraph, but only if the average standardized amount (described in clause (iXD or clause (iiXI) of paragraph (3XD)) for hospitals within the region of, and in the same large urban or other area (or, for discharges occurring during a fiscal year ending on or before September 30, 1994, the same rural, large urban, or other urban area) as, the hospital is greater than the average standardized amount (described in the respective clause) for hospitals within the United States in that type of area for discharges occurring during such fiscal year.". SEC. 13502. REDUCTIONS IN PAYMENTS FOR PPS-EXEMPT HOSPITALS. (a) IN GENERAL.—Section 1886(bX3XB) (42 U.S.C. 1395ww(bX3XB)), as amended by section 13501(aX2XBXi), is amended— (1) in clause (ii)— (A) by striking "and" at the end of subclause (III); (B) in subclause (IV)— (i) by striking "subsequent fiscal years" and insert- ing "a subsequent fiscal year ending on or before September 30,1993,", and (ii) by striking the period at the end and inserting a comma; and (C) by adding at the end the following new subclauses: "(V) fiscal years 1994 through 1997, is the market basket percentage increase minus the applicable reduction (as defined in clause (vXID), or in the case of a hospital for a fiscal year for which the hospital's update a^ustment percentage (as defined in clause (vXD) is at least 10 percent, the market basket percentage increase, and "(VI) subsequent fiscal years is the market basket percent- age increase."; and (2) by ad(Ung at the end the following new clause: "(v) For purposes of clause (ii)(V)— "(I) a hospital's 'update a4justment percentage' for a fiscal year is the percentage by which the hospital's allowable operat- ing costs of inpatient hospital services recognized under this tiUe for the cost reporting period beginning in fiscal ye£ir 1990 exceeds the hospital's target amoimt (as determined under subparagraph (A)) for such cost reporting period, increased for each fiscal year (beginning with fiscal year 1994) by the