To amend title XVIII of the Social Security Act to protect certain hospitals from the unintended effects of geographic reclassification in determining the amount of payments to such hospitals for the operating costs of inpatient hospital services under part A of the medicare program, to clarify the criteria used for the geographic reclassification of hospitals under the program, and to permit certain hospitals to be treated as regional referral centers under the program.

Amends title XVIII (Medicare) of the Social Security Act to prohibit reductions in payments to certain geographically reclassified hospitals for the operating costs of inpatient hospital services. Provides for application of a separate wage index with respect to certain hospitals in an urban area from which other hospitals have been reclassified. Makes changes with respect to criteria for geographic reclassification. Provides for the exclusion of certain payments in determining the eligibility of rural hospitals for urban reclassification.

Amends the Omnibus Budget Reconciliation Act of 1989 to permit certain hospitals to be treated as regional referral centers under the Medicare program.