A bill to establish a medical education trust fund, and for other purposes.

Summary: Graduate Medical Education Reform Act of 2010 - Amends title XVIII (Medicare) of the Social Security Act to direct the Secretary of Health and Human Services (HHS) to establish and implement procedures under which the amount of payments that a hospital would otherwise receive for indirect medical education (IME) costs for discharges occurring during an applicable period is adjusted based on the performance of the hospital on specified measures of health care work force priorities.

 Requires bonus payments to a hospital if at least 33% of its full-time equivalent residents were enrolled in medical residency programs in primary care during the applicable period.

Directs the Secretary to establish a program of payments to eligible hospitals for direct and indirect expenses associated with operating graduate medical residency training programs.

 Directs the Secretary to report to Congress and the National Health Care Workforce Commission on the graduate medical education (GME) payments that hospitals receive under the Medicare program.

Establishes in the Treasury the Medical Education Trust Fund.

Amends the Internal Revenue Code to increase the fees on insured and self-insured health plans to provide partial financing for the Trust Fund.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Graduate Medical 
Education Reform Act of 2010''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Medicare indirect medical education performance adjustment and 
                            primary care training bonus.
Sec. 3. Payments for graduate medical education to hospitals not 
                            otherwise eligible for payments under the 
                            Medicare program.
Sec. 4. Increasing graduate medical education transparency.
Sec. 5. Establishment of trust fund.
Sec. 6. Partial financing for trust fund from fees on insured and self-
                            insured health plans.

SEC. 2. MEDICARE INDIRECT MEDICAL EDUCATION PERFORMANCE ADJUSTMENT AND 
              PRIMARY CARE TRAINING BONUS.

    Section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 
1395ww(d)(1)(B)) is amended--
            (1) by redesignating the clause (x) as added by section 
        5505(b) of the Patient Protection and Affordable Care Act as 
        clause (xi); and
            (2) by adding at the end the following new clauses:
            ``(xii) Adjustment for performance.--
                    ``(I) In general.--The Secretary shall establish 
                and implement procedures under which the amount of 
                payments that a hospital would otherwise receive for 
                indirect medical education costs under this 
                subparagraph for discharges occurring during an 
                applicable period is adjusted based on the performance 
                of the hospital on measures of health care work force 
                priorities specified by the Secretary.
                    ``(II) Measures.--The measures of health care 
                workforce priorities specified by the Secretary under 
                this clause shall include the extent of training 
                provided in--
                            ``(aa) primary care (as defined in 
                        subclause (VII)), excluding fellowships;
                            ``(bb) a variety of settings and systems;
                            ``(cc) the coordination of patient care 
                        across settings;
                            ``(dd) the relevant cost and value of 
                        various diagnostic and treatment options;
                            ``(ee) interprofessional and 
                        multidisciplinary care teams;
                            ``(ff) methods for identifying system 
                        errors and implementing system solutions; and
                            ``(gg) the use of health information 
                        technology.
                    ``(III) Measure development procedures.--
                            ``(aa) In general.--The measures of health 
                        care workforce priorities specified by the 
                        Secretary under this clause shall be measures 
                        that have been adopted or endorsed by a 
                        consensus organization (such as the 
                        Accreditation Council for Graduate Medical 
                        Education or the Commission on Osteopathic 
                        College Accreditation), that include measures 
                        that have been submitted by teaching hospitals 
                        and medical schools, and that the Secretary 
                        identifies as having used a consensus-based 
                        process for developing such measures.
                            ``(bb) Proposed set of measures.--Not later 
                        than January 1, 2013, the Secretary shall 
                        publish in the Federal Register a proposed set 
                        of measures for use under this clause. The 
                        Secretary shall provide for a period of public 
                        comment on such measures.
                            ``(cc) Final set of measures.--Not later 
                        than June 30, 2013, the Secretary shall publish 
                        in the Federal Register the set of measures to 
                        be specified by the Secretary for use under 
                        this clause.
                    ``(IV) Adjustment.--Subject to subclause (V), the 
                Secretary shall determine the amount of any adjustment 
                under this clause to payments to a hospital under this 
                subparagraph in an applicable period. Such adjustment 
                may not exceed an amount equal to 3 percent of the 
                total amount that the hospital would otherwise receive 
                under this subparagraph in such period.
                    ``(V) Budget neutral.--In making adjustments under 
                this clause, the Secretary shall ensure that the total 
                amount of payments made to all hospitals under this 
                subparagraph for an applicable period is equal to the 
                total amount of payments that would have been made to 
                such hospitals under this subparagraph in such period 
                if this clause and clause (xii)(III) had not been 
                enacted.
                    ``(VI) Primary care defined.--In this clause, the 
                term `primary care' means family medicine, general 
                internal medicine, general pediatrics, preventive 
                medicine, obstetrics and gynecology, and psychiatry.
                    ``(VII) Applicable period defined.--In this clause, 
                the term `applicable period' means the 12-month period 
                beginning on July 1 of each year (beginning with 2013).
            ``(xiii) Bonus payment for training in primary care.--
                    ``(I) In general.--Subject to subclause (III), in 
                the case of discharges occurring during an applicable 
                period, in addition to the amount of payments that a 
                hospital receives for indirect medical education costs 
                under this subparagraph for such discharges (determined 
                after any adjustment under clause (xii)), there shall 
                also be paid to the hospital an amount equal to 1 
                percent of such payments if, during such applicable 
                period, at least 33 percent of full-time equivalent 
                residents (excluding fellowships) enrolled in the 
                hospital's medical residency training programs were 
                enrolled in medical residency training programs in 
                primary care (as defined in clause (xii)(VI)).
                    ``(II) Payments from medical education trust 
                fund.--Payments to hospitals under subclause (I) shall 
                be made from the Medical Education Trust Fund under 
                section 9512 of the Internal Revenue Code of 1986.
                    ``(III) Limitation.--The total of the payments made 
                to eligible hospitals under subclause (I) with respect 
                to an applicable period shall not exceed an amount 
                equal to the funds appropriated to such Trust Fund 
                under subsection (b)(1) of such section 9512 for the 
                fiscal year ending on September 30 of such applicable 
                period.''.

SEC. 3. PAYMENTS FOR GRADUATE MEDICAL EDUCATION TO HOSPITALS NOT 
              OTHERWISE ELIGIBLE FOR PAYMENTS UNDER THE MEDICARE 
              PROGRAM.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by adding at the end the following new section:

   ``graduate medical education payments for hospitals not otherwise 
                                eligible

    ``Sec. 1899B.  (a) Program.--
            ``(1) In general.--The Secretary shall establish a program 
        under which payments are made to eligible hospitals for each 
        applicable period for direct expenses and indirect expenses 
        associated with operating approved graduate medical residency 
        training programs.
            ``(2) Requirements.--Under the program under paragraph (1), 
        the provisions of section 340E of the Public Health Service Act 
        shall apply to payments to eligible hospitals in a similar 
        manner as such provisions apply to payments to children's 
        hospitals under such section 340E, except that--
                    ``(A) payments to eligible hospitals under the 
                program shall be made from the Medical Education Trust 
                Fund under section 9512 of the Internal Revenue Code of 
                1986; and
                    ``(B) the total of the payments made to eligible 
                hospitals under the program in an applicable period 
                shall not exceed an amount equal to--
                            ``(i) the funds appropriated to such Trust 
                        Fund under subsection (b)(1) of such section 
                        9512 for the fiscal year ending on September 30 
                        of such applicable period; minus
                            ``(ii) the total amount of payments made to 
                        hospitals under section 1886(d)(5)(B)(xiii) in 
                        applicable period.
    ``(b) Eligible Hospital Defined.--In this section, the term 
`eligible hospital' means the following hospitals:
            ``(1) A children's hospital (as defined in section 
        340E(g)(2) of the Public Health Service Act).
            ``(2) A freestanding psychiatric hospital that has--
                    ``(A) 90 percent or more inpatients under the age 
                of 18;
                    ``(B) its own Medicare provider number as of 
                December 6, 1999; and
                    ``(C) an accredited residency program.
            ``(3) A hospital--
                    ``(A) that annually has at least 3,000 births;
                    ``(B) for which less than 4 percent of the total 
                annual discharges from the hospital are Medicare 
                discharges of individuals who, as of the time of the 
                discharge--
                            ``(i) were entitled to, or enrolled for, 
                        benefits under part A; and
                            ``(ii) were not enrolled in--
                                    ``(I) a Medicare Advantage plan 
                                under part C;
                                    ``(II) an eligible organization 
                                under section 1876; or
                                    ``(III) a PACE program under 
                                section 1894;
                    ``(C) that has its own Medicare provider number; 
                and
                    ``(D) that has an accredited residency program.
    ``(c) Applicable Period Defined.--In this section, the term 
`applicable period' has the meaning given that term in section 
1886(d)(5)(B)(xii)(VII).
    ``(d) Regulations.--The Secretary shall promulgate regulations to 
carry out this section.''.

SEC. 4. INCREASING GRADUATE MEDICAL EDUCATION TRANSPARENCY.

    (a) In General.--Not later than 2 years after the date of the 
enactment of this Act, and annually thereafter, the Secretary of Health 
and Human Services shall submit to Congress and the National Health 
Care Workforce Commission under section 5101 of the Patient Protection 
and Affordable Care Act a report on the graduate medical education 
payments that hospitals receive under the Medicare program. The report 
shall include the following information with respect to each hospital 
that receives such payments:
            (1) The direct graduate medical education payments made to 
        the hospital under section 1886(h) of the Social Security Act 
        (42 U.S.C. 1395ww(h)).
            (2) The indirect medical education payments made to the 
        hospital under section 1886(d)(5)(B) of such Act (42 U.S.C. 
        1395ww(d)(1)(B)).
            (3) The number of residents counted for purposes of making 
        the payments described in paragraph (1).
            (4) The number of residents counted for purposes of making 
        the payments described in paragraph (2).
            (5) The number of residents, if any, that are not counted 
        for purposes of making payments described in paragraph (1).
            (6) The number of residents, if any, that are not counted 
        for purposes of making payments described in paragraph (2).
            (7) The percent that the payments described in paragraphs 
        (1) and (2) that are made to the hospital make up of the total 
        costs that the hospital incurs in providing graduate medical 
        education, including salaries, benefits, operational expenses, 
        and all other patient care costs.

SEC. 5. ESTABLISHMENT OF TRUST FUND.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 (relating to establishment of trust funds) is amended by 
adding at the end the following new section:

``SEC. 9512. MEDICAL EDUCATION TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Medical Education 
Trust Fund' (hereafter in this section referred to as the `Trust 
Fund'), consisting of such amounts as may be appropriated or credited 
to such Trust Fund as provided in this section and section 9602(b).
    ``(b) Transfers to Fund.--
            ``(1) Appropriations.--There are hereby appropriated to the 
        Trust Fund in each fiscal year (beginning with fiscal year 
        2013) the sum of an amount equivalent to one-half (or, in the 
        case of fiscal year 2013, two-thirds) of the net revenues 
        received in the Treasury from the fees imposed under subchapter 
        B of chapter 34 (relating to fees on health insurance and self-
        insured plans).
            ``(2) Limitation on transfers.--No amount may be 
        appropriated or transferred to the Trust Fund on and after the 
        date of any expenditure from the Trust Fund which is not an 
        expenditure permitted under this section. The determination of 
        whether an expenditure is so permitted shall be made without 
        regard to--
                    ``(A) any provision of law which is not contained 
                or referenced in this chapter or in a revenue Act; and
                    ``(B) whether such provision of law is a 
                subsequently enacted provision or directly or 
                indirectly seeks to waive the application of this 
                paragraph.
    ``(c) Trustee.--The Secretary of Health and Human Services shall be 
a trustee of the Trust Fund.
    ``(d) Expenditures From Trust Fund.--Amounts in the Trust Fund are 
available, without further appropriation, to the Secretary of Health 
and Human Services for making payments under sections 
1886(d)(5)(B)(xiii) and 1899B of the Social Security Act.
    ``(e) Net Revenues.--For purposes of this section, the term `net 
revenues' means the amount estimated by the Secretary of the Treasury 
based on the excess of--
            ``(1) the fees received in the Treasury under subchapter B 
        of chapter 34, over
            ``(2) the decrease in the tax imposed by chapter 1 
        resulting from the fees imposed by such subchapter.''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 98 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

``Sec. 9512. Medical Education Trust Fund.''.

SEC. 6. PARTIAL FINANCING FOR TRUST FUND FROM FEES ON INSURED AND SELF-
              INSURED HEALTH PLANS.

    (a) Imposition of Fee.--Section 4375(a) of the Internal Revenue 
Code of 1986 is amended--
            (1) by striking ``$2'' and inserting ``$4''; and
            (2) by striking ``$1'' and inserting ``$3''.
    (b) Conforming Amendment to the Patient-Centered Outcomes Research 
Trust Fund.--Section 9511(b)(1)(E) of the Internal Revenue Code of 1986 
is amended by inserting ``one-half (or, in the case of fiscal year 
2013, one-third) of'' after ``equivalent to''.