SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nursing and Allied Health Education 
Preservation Act of 2008''.

SEC. 2. PRESERVATION OF PROVIDER OPERATED NURSING AND ALLIED HEALTH 
              EDUCATION PROGRAMS.

    (a) In General.--Section 1861(v) of the Social Security Act (42 
U.S.C. 1395x(v)) is amended by adding at the end the following new 
paragraph:
    ``(9) Preservation of Provider-Operated Nursing and Allied Health 
Education Programs.--
            ``(A) In general.--The Secretary shall not deny provider-
        operated status for a nursing and allied health education 
        program that substantially meets requirements in effect under 
        paragraphs (e) and (f) of section 413.85 of title 42, Code of 
        Federal Regulations, as of October 1, 2006, on the basis of an 
        organizational structure, contractual arrangements, or legal 
        structure of the program, or a change in such a structure or 
        arrangement, such as those described in subparagraph (B), so 
        long as a hospital, hospitals, or health system continues to 
        substantially control the nursing or allied health program.
            ``(B) Examples of arrangements and structures.--The 
        following are examples of an organizational structure, 
        contractual arrangement, legal structure, or a change in such a 
        structure or arrangement, referred to in subparagraph (A) of a 
        provider-operated program:
                    ``(i) The students enrolled in the program are 
                concurrently enrolled in a college, community college, 
                or university or receive degrees, diplomas, or other 
                certificates or credentials upon graduation from both 
                the nursing or allied health education and the college, 
                community college, or university.
                    ``(ii) The program enters into an agreement with a 
                third-party to provide classroom, administrative, or 
                financial services if the contract is related to the 
                nursing or allied health education activity and the 
                hospital or other provider retains the authority to 
                modify, amend, rescind, or renew the agreement.
                    ``(iii) The program fails to comply with 
                regulations or requirements promulgated for such a 
                program because such compliance would result in direct 
                conflict with requirements--
                            ``(I) of the State Board of Nursing or 
                        other regulatory agency in the State in which 
                        the program is located; or
                            ``(II) of a national nursing or allied 
                        health accreditation body or a regional, 
                        institutional accrediting body that is 
                        recognized by the Department of Education or 
                        such a State Board or regulatory agency.
                    ``(iv) The program which is offered by a for profit 
                college or university is wholly owned by a hospital or 
                health system, or by a nonprofit college or university 
                that is operated by a hospital or health system, and 
                collectively the college or university and the hospital 
                or health system meets all the requirements in effect 
                under paragraphs (e) and (f) of section 413.85 of title 
                42, Code of Federal Regulations.
                    ``(v) The nursing or allied health education 
                program is operated by one or more hospitals, or a 
                health system or chain organization, or any combination 
                of a hospital or hospitals and providers or entities 
                whose principal business is providing hospital 
                services.
            ``(C) Limitation on payment denials.--The Secretary--
                    ``(i) shall not recoup, withhold, offset, disallow, 
                or deny reasonable cost, pass-through payment for the 
                costs of approved educational activities for a nursing 
                or allied health education program described in 
                subparagraph (A) on a ground for which a denial of 
                provider-operated status is not permitted under such 
                subparagraph;
                    ``(ii) shall not reopen any cost reporting year of 
                any hospital for the purpose of effecting any 
                recoupment or other denial of payment described in 
                clause (i) and shall withdraw and discontinue any such 
                reopening effected before the date of the enactment of 
                this paragraph; and
                    ``(iii) shall restore to a hospital any such 
                recoupment or denial effected for a previous cost 
                reporting year by not later than the hospital's cost 
                reporting year beginning after such date of enactment.
            ``(D) Construction.--This paragraph shall not affect 
        payment--
                    ``(i) with respect to a provider-operated program 
                which is in compliance with regulations and guidance 
                issued as of the date of the enactment of this 
                paragraph; or
                    ``(ii) to a hospital or provider with respect to 
                reasonable cost, pass-through reimbursement pursuant to 
                section 4004(b) of the Omnibus Budget Reconciliation 
                Act of 1990 (Public Law 101-508; 104 Stat. 1388-39).''.
Nursing and Allied Health Education Preservation Act of 2008 - Amends title XVIII (Medicare) of the Social Security Act to prohibit the Secretary of Health and Human Services from denying provider-operated status for a nursing and allied education program that substantially meets certain requirements pertaining to the cost of approved activities for such programs, in effect as of October 1, 2006, on the basis of an organizational structure, contractual arrangements, or legal structure of the program, or a change in such a structure or arrangement, so long as a hospital, hospitals, or health system continues to substantially control the nursing or allied program.

Prohibits denial of payments for the costs of approved educational activities for a nursing or allied health education program. Requires restoration to a hospital of any recoupment or denial effected for a previous cost reporting year.
A bill to amend title XVIII of the Social Security Act to continue the ability of hospitals to supply a needed workforce of nurses and allied health professionals by preserving funding for hospital operated nursing and allied health education programs.