SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Graduate Medical Education Equity 
Act''.

SEC. 2. PAYMENT AMOUNT FOR DIRECT GRADUATE MEDICAL EDUCATION COSTS FOR 
              CERTAIN HOSPITALS.

    Section 1886(h)(3) of the Social Security Act (42 U.S.C. 
1395ww(h)(3)) is amended--
            (1) in subparagraph (A), by striking ``The payment'' and 
        inserting ``Subject to subparagraph (E), the payment''; and
            (2) by adding at the end the following new subparagraph:
                    ``(E) Payment amount for certain hospitals.--
                            ``(i) In general.--Beginning on or after 
                        the date of enactment of this subparagraph, the 
                        payment amount for a qualified hospital (as 
                        defined in clause (ii)) for the hospital's cost 
                        reporting period beginning during the fiscal 
                        year that immediately follows the date on which 
                        the qualified hospital submits a letter of 
                        intent described in clause (iv) is equal to the 
                        product of--
                                    ``(I) the aggregate approved amount 
                                (as defined in subparagraph (B)) for 
                                that period, and
                                    ``(II) the hospital's Medicaid 
                                inpatient utilization rate (as defined 
                                in section 1923(b)(2)) for that period.
                            ``(ii) Qualified hospital defined.--In this 
                        subparagraph, the term `qualified hospital' 
                        means, with respect to a hospital cost 
                        reporting period, a hospital that--
                                    ``(I) is determined by the 
                                Secretary to meet the requirements 
                                described in clause (iii) for the 
                                preceding hospital cost reporting 
                                period; and
                                    ``(II) submits to the Secretary a 
                                letter of intent described in clause 
                                (iv) as part of its annual cost report 
                                for such preceding period.
                            ``(iii) Requirements described.--With 
                        respect to a qualified hospital, the following 
                        requirements are described in this clause:
                                    ``(I) The hospital has a 
                                participation agreement under this 
                                title.
                                    ``(II) The hospital has an approved 
                                medical residency training program (as 
                                defined in paragraph (5)(A)).
                                    ``(III) With respect to the 
                                hospital cost reporting period 
                                involved, the aggregate Medicare fee-
                                for-service and managed care inpatient 
                                load of the hospital does not exceed 10 
                                percent of the total inpatient days of 
                                the hospital.
                                    ``(IV) With respect to such period, 
                                the hospital does not receive payments 
                                for graduate medical education under 
                                either of the following:
                                            ``(aa) A State plan under 
                                        title XIX.
                                            ``(bb) The Children's 
                                        Hospitals Graduate Medical 
                                        Education Payment Program under 
                                        section 340E of the Public 
                                        Health Service Act.
                            ``(iv) Letter of intent described.--Not 
                        later than 6 months after the date of enactment 
                        of this subparagraph, the Secretary shall make 
                        available a model letter of intent on the 
                        Internet website of the Centers for Medicare & 
                        Medicaid Services. Such letter shall require 
                        the following information with respect to a 
                        hospital for the hospital cost reporting period 
                        involved:
                                    ``(I) A statement of intent for the 
                                hospital to be a qualified hospital 
                                under this subparagraph.
                                    ``(II) An attestation that the 
                                hospital does not receive payments for 
                                graduate medical education under a 
                                State plan under title XIX.
                            ``(v) Failure to meet requirements.--If a 
                        hospital does not meet one or more of the 
                        requirements described in clause (iii), the 
                        Secretary shall notify the hospital in writing 
                        not later than 60 days following the receipt of 
                        the hospital's letter of intent.
                            ``(vi) Ensuring no duplicate payments.--
                        With respect to a qualified hospital, the 
                        payment amount under this subparagraph for a 
                        hospital cost reporting period shall be in lieu 
                        of any other payment amount that would 
                        otherwise be applicable for direct graduate 
                        medical education costs for such period under 
                        this subsection.''.
Graduate Medical Education Equity Act This bill amends title XVIII (Medicare) of the Social Security Act to allow a qualified hospital to have its payment amount for direct graduation medical education costs calculated on the basis of its Medicaid inpatient utilization rate rather than on the basis of its Medicare patient load.
Graduate Medical Education Equity Act