1. Short title This Act may be cited as the Fair Medicare Hospital Payments Act of 2017 . 2. Ensuring fairness in Medicare hospital payments in a budget neutral manner (a) Hospital inpatient services Section 1886(d)(3)(E) of the Social Security Act ( 42 U.S.C. 1395www(d)(3)(E) ) is amended— (1) in clause (i), by striking clause (ii) or (iii) and inserting clause (ii), (iii), or (iv) ; and (2) by adding at the end the following new clause: (iv) Floor on area wage index for hospitals in certain other areas (I) In general For discharges occurring on or after October 1, 2017, the area wage index applicable under this subparagraph to any hospital which is not located in a frontier State (as defined in clause (iii)(II)) may not be less than 0.874. (II) Ensuring budget neutrality In order to ensure that the aggregate payments made under this subsection for a fiscal year (beginning with fiscal year 2018) are not greater than the aggregate payments that would have been made under this subsection for such fiscal year without the application of subclause (I), as estimated by the Secretary, the Secretary shall establish pursuant to rulemaking a maximum area wage index to apply under this subparagraph to any hospital which is not located in a frontier State (as defined in clause (iii)(II)). (III) No impact for hospitals with an area wage index between the floor and the maximum index Subclauses (I) and (II) shall have no affect on the area wage index applicable in a fiscal year to a hospital with an area wage index that is greater than the floor under subclause (I) but less than the maximum area wage index established under subclause (II) for the fiscal year. . (b) Hospital outpatient department services Section 1833(t) of the Social Security Act ( 42 U.S.C. 1395l(t) ), is amended— (1) in paragraph (2)(D), by striking paragraph (19), the Secretary and inserting paragraphs (19) and (22), the Secretary