Social Security Amendments of 1983

(Conference report filed in House, H. Rept. 98-47)

Social Security Amendments of 1983 - Title I: Provisions Affecting the Financing of the Social Security System - Part A: Coverage - Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act and the Internal Revenue Code to provide mandatory coverage under the Old Age, Survivors and Disability Insurance program as of January 1, 1984, for: (1) all Federal employees hired on or after January 1, 1984; (2) the President; (3) the Vice President; (4) all elected officials and political appointees; (5) judges; (6) Members of Congress; and (7) all legislative branch employees who are not participating in the Civil Service Retirement System as of December 31, 1983.

Provides that salaries of Federal judges under age 70 shall be considered "wages" for purposes of title II.

Extends mandatory coverage under the Old Age, Survivors and Disability Insurance program to all employees of nonprofit organizations for service performed after December 31, 1983. Provides that employees of nonprofit organizations who are age 55 or older as of January 1, 1984, shall be considered fully insured individuals under title II if they acquire a specified number of quarters of coverage according to their age.

Prohibits the termination of State coverage agreements (under which State and local government employees may be covered under title II) on or after the enactment of this Act. Makes such prohibition applicable to any agreements in effect on the date of the enactment of this Act, notwithstanding pending termination notices. (Currently, coverage under such an agreement may be terminated if the State gives two years' written notice of such intent, following at least five years of coverage of the State or local group involved.)

Part B: Computation of Benefit Amounts - Delays the June 1983 cost of living adjustment in OASDI benefits until December 1983. Provides that subsequent cost of living adjustments shall be provided on a calendar year basis beginning in 1984.

Requires that the cost of living adjustments to OASDI benefits be based upon the lower of the Consumer Price Index increase or the wage increase percentage, beginning in 1988, whenever the reserves in the Federal Old-Age and Survivors Insurance Trust Fund and in the Federal Disability Insurance Trust Fund fall below a certain amount. Requires the payment of additional benefits to beneficiaries when the reserves in the trust funds have increased above a certain amount.

Reduces the old-age and disability benefits of individuals who reach age 62 after 1985 and who are eligible for a pension based on non-covered employment.

Increases gradually the delayed retirement credit received by workers who delay retirement beyond age 65.

Part C: Revenue Provisions - Amends the Internal Revenue Code to include in gross income the lesser of: (1) one-half of the social security benefits received by a taxpayer during the taxable year; or (2) one-half of the amount by which the sum of a taxpayer's modified adjusted gross income plus one-half of the social security benefits received by the taxpayer during the taxable year exceeds a base amount. Defines "modified adjusted gross income" as adjusted gross income: (1) determined without regard to this part or to certain deductions and exemptions; and (2) increased by any tax-exempt interest received by the taxpayer during the taxable year. Defines the base amount as: (1) $25,000 for an individual; (2) $32,000 for married persons filing a joint return; and (3) zero for married persons filing separate returns. Defines as "social security benefits" OASDI benefits and tier 1 railroad retirement benefits.

Requires the Secretary of Health and Human Services and the Railroad Retirement Board to file information returns indicating: (1) the aggregate amount of benefits paid to any individual during a calendar year; (2) the aggregate amount of benefits repaid by such individual during the calendar year; (3) the aggregate reductions in benefits because of amounts received under a workmen's compensation act; and (4) such individual's name and address. Requires that such information be furnished to the individuals in the returns.

Includes in the gross income of a nonresident alien one-half of any social security benefits received by such individual. Permits the Secretary of the Treasury to disclose return information from the Internal Revenue Service files on the address and status of such a nonresident alien or a U.S. citizen or resident to the Social Security Administration or the Railroad Retirement Board for purposes of withholding tax from social security benefits.

Provides for the treatment of social security benefits as income from sources within the United States for purposes of the tax on nonresident aliens.

Appropriates to the Federal Old-Age and Survivors Insurance Trust Fund and to the Federal Disability Insurance Trust Fund the revenues generated under this title. Requires that such appropriations be transferred at least quarterly from the Treasury to the trust funds. Requires the Secretary of the Treasury to report to Congress, the Secretary of Health and Human Services, and the Railroad Retirement Board on such transfers.

Allows a tax credit in the case of an individual who retires on disability before the close of the taxable year and who, when retired, is permanently and totally disabled. Prohibits the extension of such credit to any nonresident alien.

Revises the OASDI tax rates on employees and employers so as to: (1) increase the tax rate for 1984; (2) keep the current tax rate for 1985 through 1987; and (3) increase the tax rate for 1988-1989.

Allows a one-time tax credit for the OASDI employee taxes and the tier 1 railroad retirement employee taxes paid during 1984.

Increases the OASDI tax rates and the hospital insurance tax rates on self-employment income for taxable years 1989 through 1990. Allows a tax credit for OASDI and hospital insurance taxes paid on self-employment income for taxable years 1984 through 1989. Allows a tax deduction for taxable years after 1989 equal to: (1) one-half of the OASDI and hospital insurance taxes paid on self-employment income; or (2) the product of the taxpayer's net self- employment earnings for the taxable year and one-half of the sum of the OASDI and hospital insurance taxes imposed on such earnings.

Provides that, for purposes of withholding OASDI taxes from the wages of individuals employed concurrently by two or more related corporations, the following entities shall be considered to be related corporations: (1) a State university which employs health professionals as faculty members at a medical school; and (2) a faculty practice plan which is a tax-exempt, charitable organization, which employs faculty members of such medical school, and 30 percent or more of the employees of which are concurrently employed by such medical school.

Amends title II of the Social Security Act to revise the allocations of wages and self-employment income from the Treasury to the Federal Disability Insurance Trust Fund, beginning in 1983.

Part D: Benefits for Certain Surviving, Divorced, and Disabled Spouses - Permits the continued payment of OASDI benefits to: (1) surviving divorced spouses who remarry after age 60; (2) disabled widows and disabled widowers who remarry after age 50; and (3) disabled surviving divorced wives who remarry after age 50.

Entitles the divorced wife of an individual who is not entitled to old-age or disability insurance benefits, but who is age 62 and is a fully insured individual, to wife's insurance benefits if such divorced wife meets the criteria for entitlement to wife's insurance benefits under title II and has been divorced from the insured individual for at least two years.

Makes deductions because of the outside income limitation inapplicable to a divorced spouse's benefits. Provides that the benefits of all other persons entitled to benefits on the basis of an individual's earnings record will be determined as if the divorced spouse of such individual were not entitled to wife's or husband's benefits based on such earnings record.

Provides that in the computation of benefits for a surviving spouse of an individual who dies before reaching age 62, such individual's primary insurance amount shall be determined based on the year in which the surviving spouse becomes entitled to benefits if it results in a higher benefit than the current method of determining such amount.

Increases OASDI benefits for disabled widows and widowers entitled before age 60 to the level of benefits payable to widows and widowers who become entitled at age 60.

Part E: Mechanisms to Assure Continued Benefits Payments in Unexpectedly Adverse Conditions - Amends title II and XVIII (Medicare) of the Social Security Act to require that OASDI tax receipts and hospital insurance tax receipts be transferred from the Treasury to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund (as appropriate) monthly on the first day of each calendar month. Sets forth investment requirements for such revenues.

Extends until January 1988 the authority for borrowing among the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund whenever the Managing Trustee of the trust funds determines that additional funds are needed to pay benefits from one of the funds. (Currently, interfund borrowing is authorized through December 31, 1982.) Sets forth loan conditions and requirements.

Amends title VII (Administration) of the Social Security Act to require the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, and the Federal Supplementary Medical Insurance Trust Fund to recommend to Congress the statutory adjustments necessary whenever the balance of one of the trust funds become inadequate to provide timely payment of benefits.

Part F: Other Financing Amendments - Amends title II of the Social Security Act to require the lump sum reimbursement of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund by the Treasury for the cost of past and future benefits attributable to noncontributory military wage credits for service before 1957. Provides for lump sum reimbursement to such trust funds of amounts equal to the OASDI and hospital insurance employee and employer taxes that would have been paid after 1956 and before 1984 if military wage credits were treated as "wages" under title II. Provides for annual reimbursement to such trust funds of amounts equal to the OASDI and hospital insurance employee and employer taxes that would be paid after 1983 if military wage credits were treated as "wages" under title II.

Requires the Secretary of the Treasury to credit either the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund, as appropriate, for the amount of all benefit checks issued under title II which have not been negotiated within a reasonable length of time, not to exceed 12 months, after issuance.

Requires the Secretary of Health and Human Services and the Secretary of the Treasury to jointly undertake a study on the maintenance and adjustment of the float periods (time periods) between the issuance of title II benefit checks from the general fund in the Treasury and the transfer of amounts to reimburse the general fund from the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund, whichever is appropriate. Requires the Secretaries to report their findings to the President and Congress. Provides for the Secretary of the Treasury to adjust procedures with respect to the float periods based upon the study.

Amends titles II and XVIII of the Social Security Act to require that the Board of Trustees' annual report on the status and operation of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, and the Federal Supplementary Medical Insurance Trust Fund include an actuarial opinion by the Chief Actuary of the Social Security Administration or by the Chief Actuarial Officer of the Health Care Financing Administration, as appropriate, certifying that the techniques and methodologies used are generally accepted within the actuarial profession and that the assumptions and cost estimates used are reasonable.

Title II: Additional Provisions Relating to Long-Term Financing of the Social Security System - Amends title II of the Social Security Act to gradually raise the age at which full OASDI benefits are payable from 65 to 67, beginning with individuals who reach the early retirement age (62 for old-age or wife's or husband's insurance beneficiaries, 60 for widow's or widower's insurance beneficiaries) in the year 2000.

Requires the Secretary of Health and Human Services to study and report to Congress by January 1, 1986, on the implications of the change in retirement age made by this title in the case of individuals who, because they are engaged in physical work or are unable to extend their employment because of health reasons, may not benefit from such change. Requires the Secretary to recommend protective legislation with respect to the risks associated with early retirement due to health considerations.

Title III: Miscellaneous and Technical Provisions -Part A: Elimination of Gender-Based Distinctions - Enables a divorced man to qualify for husband's insurance benefits under title II on the same basis as a divorced woman may qualify for wife's benefits. (Currently, a man's entitlement to husband's benefits ceases upon his divorce.)

Enables a widower to qualify for survivor's benefits based upon a deceased first wife's earnings if he remarries before age 60 but is widowed or divorced from his second wife when he applies for benefits. (Currently, a widower cannot qualify for widower's benefits based on a first wife's earnings if he has remarried.)

Permits methods used to establish paternity to be used to establish maternity in order to determine whether an applicant for benefits qualifies as a child of the insured.

Enables husbands and widowers of women who have transitional insured status to receive benefits based on their wives' records. (Currently, only wives and widows of men who have such status may receive such benefits.)

Equalizes benefit amounts for husbands and wives who both qualify for the special benefits for individuals who reached age 72 before 1968.

Extends benefits to a widowed or surviving divorced father while caring for a child.

Repeals the requirement that an individual's wife's, child's, widow's, mother's, or parent's insurance benefit entitlement be terminated if such individual marries a person entitled to child's insurance benefits and such person ceases to be so entitled.

Permits widowers of veterans to waive payment of a civil service survivor's annuity based on credit for military service which may be used to enable such widowers to qualify for survivor's benefits. (Currently, only widows may waive such payment.)

Requires deductions from old age and survivors insurance benefits in the case of husbands or widowers who do not have children in their care. (Currently, deductions from benefits are made only in the case of wives or widows who do not have children in their care.)

Part B: Coverage - Amends the Internal Revenue Code and title II of the Social Security Act to permit any American employer to enter into agreements with the Secretary of Health and Human Services to extend OASDI coverage to U.S. citizens or residents employed by foreign affiliates of such employers. (Currently, such coverage may be extended only to U.S. citizens employed by foreign subsidiaries of domestic corporations.)

Includes as "employment" for purposes of title II any service which is designated as employment or recognized as the equivalent of employment under an international social security agreement pursuant to which an individual may be entitled to social security benefits based on periods of coverage under both the U.S. social security system and under the social security system of a foreign country. Provides social security coverage for non-resident aliens who are covered under such an agreement.

Provides for OASDI coverage of U.S. residents who perform services outside the United States for American employers.

Makes the foreign earned income exclusion from gross income inapplicable in the determination of the net earnings from self-employment with respect to a U.S. citizen or resident whose tax home is in a foreign country and who is present in a foreign country or countries for at least 330 full days of a 12-month period. (Currently, such exclusion does not apply in the case of an individual who has been a resident of the United States during the entire taxable year.)

Prohibits the exclusion of employer contributions from "wages" for purposes of OASDI coverage if such contributions are: (1) under a qualified cash or deferred compensation plan; or (2) treated as employer contributions under a State or local plan. Requires the one-time taxation for OASDI purposes of amounts deferred under a nonqualified deferred compensation plan. Excludes from "wages" for purposes of OASDI coverage those payments made to, or on behalf of, an employee: (1) under or to an annuity contract (other than a payment for the purchase of such a contract); (2) under or to an exempt governmental deferred compensation plan; or (3) as cost of living adjustments to a pension plan. Exempts from the amendments made under this part with respect to employer contributions certain contributions made during 1984 for services performed during 1983 under a qualified cash or deferred compensation plan.

Prohibits the OASDI coverage of State and local employees in Utah from being affected by any change in the name of an employee group.

Revises the effective dates for international social security agreements.

Excludes from "wages" for purposes of OASDI coverage the value of meals or lodging furnished by or on behalf of an employer if it is reasonable to believe that the employee will be able to exclude such items from gross income.

Makes the employee contribution to a simplified employee pension taxable for OASDI purposes. Excludes from "wages" for purposes of OASDI coverage employer contributions to a simplified employee pension if, at the time of payment, it is reasonable to believe that the employee will be entitled to a deduction from adjusted gross income for such payment.

Part C: Other Amendments - Amends title II of the Social Security Act to revise the method for computing maximum insurance benefits.

Revises the insured status requirements for disability insurance benefit applications.

Provides that an acknowledgment, court decree, or court order with respect to illegitimate children of disabled beneficiaries shall be treated as occurring on the first day of the month in which it actually occurs for purposes of determining eligibility for disability benefits.

Permits entitlement to widow's and widower's benefits for the month immediately preceding the month of application if the insured individual died in that preceding month.

Requires the Secretary of Health and Human Services to establish a program under which States voluntarily contract with the Secretary to periodically furnish the Secretary with information on the death certificates filed with them so that necessary corrections may be made to the beneficiary records maintained under the social security program.

Requires the Secretary, to the extent feasible, in the case of individuals whose benefits are provided by a Federal or State agency other than under the Social Security Act, to provide such agency with the corrected beneficiary records from the social security program.

Amends title II of the Social Security Act to decrease the amount by which the OASDI benefits payable to a spouse, surviving spouse, or mother must be reduced on account of any monthly benefits which such an individual may receive from a Federal or State pension plan from the full amount of such pension to two-thirds of the amount of such pension.

Establishes the Joint Study Panel on the Social Security Administration, which shall study and report to specified congressional committees on the implementation of removing the Social Security Administration from the Department of Health and Human Services and establishing it as an independent agency. Authorizes the appropriations necessary for the Panel to carry out its functions from the general fund of the Treasury. Provides for the termination of the Panel and all authority with respect to such Panel 30 days after the Panel files its report.

Amends title II of the Social Security Act to prohibit the payment of OASDI benefits to an incarcerated felon, unless such individual is actively and satisfactorily participating in a court-approved rehabilitation program and is expected to be able to engage in substantial gainful activity upon release and within a reasonable time. Makes benefits to which an individual would be entitled on the basis of the wages and self-employment income of an incarcerated felon payable as though such felon were receiving benefits. Requires Federal, State, and local agencies to make available to the Secretary of Health and Human Services, upon written request, the name and social security number of all incarcerated felons under their jurisdiction.

Permits an alien's entitlement to wife's, husband's, widow's, widower's parent's and mother's insurance benefits only if such individual has resided in the United States for not less than five years and, while so residing, had the required relationship (spouse, parent, or mother) to the person on whose wages and self-employment income such entitlement is based. Permits any alien's entitlement to child's insurance benefits if such individual has resided in the United States for not less than five years or if such individual's parents have met such residency requirements.

Amends titles II and XVIII of the Social Security Act to require the addition of two members of the public, not from the same political party, to the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, and the Federal Supplementary Medical Insurance Trust Fund.

Requires State and local governments to deposit social security taxes withheld pursuant to State coverage agreements in the Treasury on a biweekly basis. (Currently, such deposits are made within 30 days after the end of the month in which the applicable wages were paid.)

Requires the Secretary of Health and Human Services to develop and report to specified congressional committees on legislative proposals that the combined earnings of a husband and wife during the period of their marriage shall be divided equally between them for social security benefit purposes.

Provides that certain reorganization reporting requirements applicable to the Veterans' Administration shall not apply to the planned administrative reorganization of the Veterans' Administration Los Angeles Data Processing Center.

Amends title II of the Social Security Act to require the Secretary of Health and Human Services to issue new and replacement social security cards which are made of banknote paper and which cannot (to the maximum extent practicable) be counterfeited.

Amends title VII (Administration) of the Social Security Act to require that, for FY 1985 through 1992: (1) the disbursements of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, and the Federal Supplementary Medical Insurance Trust Fund be treated as a separate major functional category in the Federal budget submitted by the President and in the congressional budget; and (2) the receipts of such trust funds be set forth separately in the budgets. Provides that, for FY 1993 or thereafter: (1) the receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund shall not be included in the totals of the Federal budget or of the congressional budget and shall be exempt from general statutory budget limitations imposed on Federal expenditures and net lending; and (2) the disbursements of the Federal Supplementary Medical Insurance Trust Fund shall be treated as a separate major functional category in the Federal budget and in the congressional budget and the receipts of such trust fund shall be set forth separately in such budgets.

Amends title II of the Social Security Act to revise the limitation on the amount of income which a beneficiary may earn without incurring a reduction in benefits. Makes such revision applicable only in the case of individuals attaining retirement age after December 1989.

Title IV: Supplemental Security Income Benefits - Amends title XVI (Supplemental Security Income) of the Social Security Act to provide for a $20 increase in the Federal SSI benefit standard for an individual and a $30 increase in the Federal SSI benefit standard for a married couple.

Provides that in order to be eligible for Federal matching funds under title XIX (Medicaid) of the Social Security Act after March 1983, a State cannot reduce the combined level of its supplementary payments and the SSI benefits payable for a particular month below the combined level of such payments and benefits for March 1983 increased by the amount of all cost of living adjustments which have occurred after March 1983 and before that particular month.

Permits aged, blind, or disabled individuals living in public emergency shelters for the homeless to receive SSI benefits for up to three months during any 12-month period.

Amends title XVI and Part A (Aid to Families with Dependent Children) of title IV of the Social Security Act to exclude from "income" for purposes of the SSI and AFDC programs any support or maintenance assistance furnished to a family based on need, including home energy assistance.

Requires the Secretary of Health and Human Services, before July 1, 1984, to notify all elderly OASDI beneficiaries who may be eligible for supplemental security income benefits under title XVI of the Social Security Act of the availability of the SSI program and to encourage such individuals to contact the social security district office. Requires that such notification be included in the notification to OASDI beneficiaries of their eligibility for supplementary medical insurance.

Title V: Unemployment Compensation Provisions - Part A: Federal Supplemental Compensation - Amends the Federal Supplemental Compensation Act of 1982 to extend the Federal supplemental compensation program to September 30, 1983. (Currently, the program ends on March 31, 1983.) Sets forth the method for computing the amount which shall be established in Federal supplemental compensation accounts payable to individuals for weeks beginning after March 31, 1983.

Provides that in the case of an individual who received Federal supplemental compensation and exhausted his or her rights to such compensation before April 1, 1983, such individual's eligibility for additional compensation under this title shall not be affected by any event or failure to meet the requirements relating to unemployment compensation eligibility occurring after the date of exhaustion of rights and before April 1, 1983.

Provides for the modification of State agreements under the Federal Supplemental Compensation Act of 1982 to conform with the changes made by this title. Requires the Secretary of Labor to terminate a State's agreement if the State fails or refuses to enter into a modification of such agreement.

Provides that Federal supplemental compensation shall not be denied to any recipient because: (1) such recipient is in training or attending an accredited educational institution on a substantially full-time basis; or (2) State law requires that any such recipient be available for work, actively search for work, or not refuse any work during training, unless such training or education will not improve the recipient's employment opportunities.

Provides that the maximum amount of Federal supplemental compensation payable to an individual who received any trade readjustment allowances under the Trade Act of 1974 during a benefit year shall be reduced so that the aggregate amount of such individual's regular compensation, extended compensation, trade readjustment allowances, and Federal supplemental compensation for such year does not exceed the amount which would have been payable to such individual had he or she not been entitled to any trade readjustment allowances.

Part B: Provisions Relating to Interest and Credit Reductions - Amends title XII (Advances to State Unemployment Funds) of the Social Security Act to permit States to defer up to 80 percent of the interest due for FY 1983, 1984, and 1985 on Federal unemployment compensaton loans. Permits a State to pay such deferred interest in four annual installments of at least 20 percent beginning with the year after the year in which it is due if the State: (1) has not reduced its net unemployment tax effort or the net solvency of its unemployment system; and (2) has increased revenue liabilities and decreased State unemployment benefits for the calendar year in which the deferral is requested or has had, for taxable year 1982, an average unemployment tax rate of greater than or equal to two percent of the total of the wages attributable to such State. Permits any State to defer interest due in any calendar year after 1982 without the accrual of interest on the deferred interest if, for the most recent 12-month period before the due date of such interest, the State has an average total unemployment rate of 13.5 percent or greater.

Amends the Internal Revenue Code to revise the cap on credit reductions applied to employers in a State which defaults on loans from the Federal Unemployment Account made to help the State meet State unemployment compensation obligations. Provides for two lower annual credit reductions if a State cannot qualify for the full credit reduction cap.

Revises the method for calculating the average employer contribution rate for purposes of the Federal unemployment compensation tax credit.

Amends title XII of the Social Security Act to require States to pay the interest due on any advances made to their unemployment funds from the Unemployment Trust Fund before the first day of the next fiscal year. (Currently, such interest is due no later than the first day of the next fiscal year.)

Amends title III (Grants to States for Unemployment Compensation Administration) of the Social Security Act and the Internal Revenue Code to provide that if a State fails to pay interest on unemployment compensation loans when it is due: (1) the Secretary of Labor shall make no certification for payment of unemployment compensation administration funds to such State; and (2) such State's unemployment compensation program will lose its Federal certification.

Part C: Miscellaneous Provisions - Amends the Internal Revenue Code to require States to deny unemployment compensation benefits between academic terms or years to nonprofessional employees of educational institutions if they have a reasonable assurance of returning to work in the next academic term or year. Gives States the option of denying such benefits to individuals performing services for an educational institution or educational service agency although not employed by either one.

Amends the Federal-State Unemployment Compensation Act of 1970 to permit the payment of extended unemployment compensation to individuals who are not actively engaged in seeking work because they are on jury duty or because they are hospitalized for treatment of an emergency or life threatening condition.

Amends the Internal Revenue Code and title III of the Social Security Act to provide that no provision under current law shall be construed to prohibit States from deducting an amount from the unemployment compensation payable to an individual to pay for health insurance upon the election of the individual.

Allows a nonprofit organization which elects to switch from the contribution to the reimbursement method of financing unemployment benefits to apply any accumulated balance in its unemployment account to costs incurred after its election if: (1) the organization did not make such election before April 1, 1972, because as of such date it was treated as a nonprofit organization under the Internal Revenue Code; (2) the Internal Revenue Service subsequently determined that such organization was a charitable organization under the Code; and (3) such organization made the election before the earlier of 18 months after such election was available to it under State law or January 1, 1984.

Title VI: Prospective Payments for Medicare Inpatient Hospital Services - Amends title XVIII of the Social Security Act to eliminate the limits on operating costs of inpatient hospital services for cost reporting periods beginning on or after October 1, 1983.

Excludes from the term "operating costs of inpatient hospital services": (1) capital-related costs; and (2) costs of approved educational activities.

Provides as additional requirements for a hospital reimbursement control system that the Secretary of Health and Human Services shall determine that: (1) the system will not preclude an eligible health care organization from negotiating directly with hospitals with respect to the organization's rate of payment for inpatient hospital services; and (2) the system requires that hospitals meet certain requirements under agreements with providers of services and the system excludes specified costs.

Prohibits the Secretary from denying a State's application to use a hospital reimbursement control system on the ground that: (1) such system is based on a payment methodology other than on the basis of a diagnosis-related group; or (2) the amount of payments made under such system will be less than payments made not using such system.

Sets forth requirements with respect to the methods for projecting the allowable costs of inpatient hospital services under a State hospital reimbursement control system.

Requires the Secretary to approve a State's hospital reimbursement control system if: (1) the system is operated directly by the State or a State entity; (2) the system provides for the prospective determination of rates; (3) hospitals under the system will monitor the State's performance; (4) the system will not result in a significant reduction of or refusal to admit patients who cannot pay for hospital services; (5) significant changes in the system will take effect only upon 60 days' notice to the Secretary and hospitals affected; and (6) the State has consulted with local governmental officials on the impact of the system on public hospitals. Provides that these requirements shall be in addition to: (1) current law requirements that a hospital reimbursement system apply to substantially all non-Federal acute care hospitals and to at least 75 percent of hospital inpatient revenues or expenses, provide equitable treatment of all payors, hospital employees, and patients, and not allow expenses under the Medicare system to exceed amounts which would have been incurred without the system; and (2) the requirement under this Act that such a system not preclude a health care organization from negotiating with hospitals over costs.

Establishes a method for the payment of hospitals for operating costs of inpatient hospital services on the basis of DRG (diagnosis-related group) prospective rates. Specifies the hospitals to which such method would not apply. Requires the Secretary to establish a classification of inpatient hospital discharges by diagnosis-related groups and a methodology for classifying specific hospital discharges within these groups in order to compute DRG-specific payment rates.

Requires the Secretary to make additional payments to hospitals for cases which are significantly different in terms of length of stay or unusual costs from cases within the same diagnosis-related group and for indirect costs of medical education. Requires the Secretary to adjust payment amounts where appropriate in the case of hospitals which serve a disproportionate number of low-income patients, sole community hospitals, and hospitals in Alaska and Hawaii. Requires adjustments for certain inpatient hospital services which were, but are no longer, paid for under part B of title XVIII of the Social Security Act.

Requires the Secretary to publish yearly in the Federal Register the methods for computing the DRG prospective payment rates for the following fiscal year.

Prohibits administrative and judicial review of: (1) certain adjustments in payments made to maintain budget neutrality; and (2) the Secretary's establishment of diagnosis-related groups.

Requires that, for FY 1984 and 1985, expenditures under the Medicare system be equal to expenditures under the system before the enactment of this Act. Requires the Director of the Congressional Office of Technology Assessment to appoint a Prospective Payment Assessment Commission to review and report to the Secretary annually, beginning in FY 1986, on hospital costs and the appropriate increase in payments for hospitals. Requires the publication in the Federal Register of the Secretary's final determination of such increase for each fiscal year. Requires the Office to report to Congress annually on the functioning and progress of the Commission. Authorizes appropriations from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund for the Commission.

Requires the Secretary to maintain through at least September 30, 1988, a system for the reporting of expenses of hospitals receiving payments under this Act. Permits the Secretary to deny Medicare payments or to require a hospital to take corrective actions if such hospital has taken actions which result in inappropriate admissions or unnecessary multiple admissions or other inappropriate medical practices.

Prohibits the payment under this title of capital expenditures for inpatient hospital services in a State after three years following the enactment of this Act, unless the State has a capital expenditure review agreement with the Secretary under this Act and has recommended approval of such expenditures pursuant to such agreement.

Requires the Secretary to phase out the allowance for return on equity capital for hospitals receiving payments under the DRG prospective rate system.

Prohibits Medicare payments for inpatient hospital services not provided by a physician or a hospital unless the services are furnished under arrangements with the entity providing such services made by the hospital pursuant to title XVIII of the Social Security Act.

Requires hospitals receiving Medicare payments to maintain an agreement with a utilization and quality control peer review organization under which such organization will review quality care, admissions, and discharges, with respect to Medicare patients.

Prohibits such hospitals from charging for inpatient hospital services for which payment is denied because of inappropriate admission or medical practices.

Requires that all items and services furnished to a patient of a hospital receiving Medicare payments be furnished only by such hospital or under arrangements made by the hospital.

Permits health maintenance organizations which have risk-sharing contracts with the Secretary to elect to have hospital payments made directly to hospitals and subtracted from Medicare payments to be made to the organizations.

Requires the Provider Reimbursement Review Board to review complaints with respect to the Secretary's final determination of Medicare payments to hospitals.

Permits a hospital which has followed a practice since before October 1, 1982, of allowing direct billing under part B of title XVIII of the Social Security Act for services to continue such practice under certain conditions. Requires that the Medicare payments to such a hospital under part A of title XVIII of such Act be reduced by the amount of the billings under part B.

Requires the Secretary to report to Congress on the method by which capital-related costs associated with inpatient hospital services can be included in the prospective payment amounts computed under this Act.

Requires the Secretary to report annually to Congress on: (1) the impact of the Medicare payment methodology under this Act on individual hospitals, classes of hospitals, beneficiaries, and other payors for inpatient hospital services; and (2) the impact of computing DRG prospective payment rates by census division rather than on a national average basis. Specifies particular studies which the Secretary shall include in the annual report to Congress for 1984, 1985, and 1986.

Requires the Secretary to study and report to Congress by April 1, 1985, on: (1) an equitable method of reimbursing sole community hospitals; (2) ways to coordinate an information transfer between parts A and B of title XVIII of the Social Security Act; (3) the appropriate treatment of uncompensated care costs and appropriate adjustments for large teaching hospitals located in rural areas; and (4) the advisability of having hospitals make available information on the cost of patient care financed by both public programs and private payors.

Requires the Secretary to study and make recommendations to Congress before April 1, 1984, with respect to a method for including hospitals outside of the 50 States and the District of Columbia under a prospective payment system.

Requires the Secretary to modify certain Medicare demonstration projects entered into by States after August 1982 and in effect as of March 1, 1983, so that the projects are not required to maintain the rate of increase in Medicare hospital costs in those States below the national rate of increase in Medicare hospital costs.

Directs the Secretary to approve within the 30 days after the enactment of this Act: (1) the risk-sharing application of On Lok Senior Health Services for waivers of certain requirements under title XVIII of the Social Security Act in order to carry out a long-term care demonstration project; and (2) the application of the Department of Health Services of California for the waiver of certain requirements under title XIX (Medicaid) of the Social Security Act in order to carry out a demonstration project for capitated reimbursement for comprehensive long-term care services involving On Lok Senior Health Services.

Requires the Secretary to conduct demonstrations with hospitals in areas with critical shortages of skilled nursing facilities to study the feasibility of providing alternative systems of care or methods of payment.

Amends the Tax Equity and Fiscal Responsibility Act of 1982 to delay the effective date for the single reimbursement limit for hospital-based and free-standing skilled nursing facilities from cost reporting periods beginning on or after October 1, 1982, to cost reporting periods beginning on or after October 1, 1983. Requires the Secretary to study and report to Congress before December 31, 1983, on: (1) the effect of the single reimbursement limit on hospital-based skilled nursing facilities; and (2) the impact on such facilities of hospital prospective payment systems and recommendations with respect to payment of such facilities.

Amends title XVIII of the Social Security Act to require the Secretary of Health and Human Services to promulgate the monthly actuarial rates and premiums for Medicare enrollees in September of each year, beginning in 1983.

Amends part A (General Provisions) of title XI of the Social Security Act to require that reimbursement to States of capital expenditures be made out of the general fund of the Treasury rather than out of the Federal Hospital Insurance Trust Fund. Increases from $100,000 to $600,000 the maximum threshold for determining which capital projects are subject to the review process under title XI of such Act. Sets forth conditions which must be met in order for a health care facility, where 75 percent of the patients are enrolled in health maintenance organizations, to be exempt from such review process because needed services and facilities are not otherwise available.

Amends title XVIII of the Social Security Act to require hospitals to make their overall expenditure plans and capital budgets available to a reviewing agency designated under title XI of such Act or an appropriate State health planning agency.