Medicare Rural Hospital Amendments of 1987

Medicare Rural Hospital Amendments of 1987 - Amends title XVIII (Medicare) of the Social Security Act to direct the Secretary of Health and Human Services to extend, until October 1990, the adjustment of payments made to sole community hospitals which experience a five percent decrease in patient volume over two successive cost reporting periods, unless such decrease in patient volume is due to hospital actions taken to reduce capacity or case load. Requires the Prospective Payment Assessment Commission (Commission) to report to the Congress on March 1, 1988, on a study into the appropriateness of the criteria used in designating hospitals as sole community hospitals.

Directs the Secretary to report to the Congress on a study into the feasibility and impact of eliminating separate urban and rural prospective payment rates for hospital services. Requires the Commission to collect information and report to the Congress on March 1, 1988, concerning whether an adjustment to the area wage index (used to adjust prospective payment rates to account for the wage differential between urban and rural areas) is warranted to account for variations in the occupational mix of hospital employees. Requires information on the wages and hours of employment for employees in hospital occupational categories to be collected for purposes of the annual update of the area wage index.

Bases outlier payments for a fiscal year on a percentage of the total prospective payment system (PPS) payments made for the second previous fiscal year. (Currently, outlier payments represent a percentage of the total PPS payments estimated to be made for the same fiscal year). Directs the Commission to report to the Congress by FY 1989 on a study into the impact on urban and rural hospitals of the criteria used to determine eligibility for outlier payments.

Requires the Secretary to analyze the appropriateness of different annual percentage changes in prospective payment rates for urban and rural hospitals. Authorizes the Secretary, beginning in FY 1989, to provide for different annual percentage changes in prospective payment rates for urban and rural hospitals.

Sets forth certain factors that a rural hospital which is adjacent to an urban area must establish in order to have the urban wage index applied in the determination of its prospective payments.

Sets aside 25 percent of the funds appropriated pursuant to the Social Security Act, beginning with FY 1988, for research and demonstration projects relating to the delivery of or access to health care, to projects relating to the delivery of or access to health care in rural areas.