A bill to amend section 2316 of the Deficit Reduction Act of 1984 to make the application of the revised wage index developed under that section prospective and to provide for periodic updating of that index.

Amends the Deficit Reduction Act of 1984 to direct the Secretary of Health and Human Services, with respect to the prospective payment system of title XVIII (Medicare) of the Social Security Act, to adjust the payment amounts to hospitals for discharges occurring on or after October 1, 1985, to reflect any changes made in the hospital wage index. Provides that for discharges occurring during FY 1986, any changes in the wage index shall be derived from total gross hospital wages. Directs the Secretary to periodically adjust the hospital wage index as necessary.