Allows the agency to modify the reimbursement methodology for hospital operating payments. The existing methodology can no longer be used after the required implementation of the ICD-10 code set (used for diagnosis codes and inpatient procedures) on October 1, 2014. The new methodology will improve reimbursement since it better recognizes severity and will likely result in payments better aligned with expected costs. The budget language has a transition methodology to limit the financial impact on individual hospitals. This action is embedded in budget bill language.