SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Graduate Medical Education Trust 
Fund Act of 1996''.

SEC. 2. TEACHING HOSPITAL AND GRADUATE MEDICAL EDUCATION TRUST FUND.

    (a) In General.--The Social Security Act (42 U.S.C. 300 et seq.) is 
amended by adding at the end the following title:

  ``TITLE XXI--TEACHING HOSPITAL AND GRADUATE MEDICAL EDUCATION TRUST 
                                  FUND

                    ``Part A--Establishment of Fund

``SEC. 2101. ESTABLISHMENT OF FUND.

    ``(a) In General.--There is established in the Treasury of the 
United States a fund to be known as the Teaching Hospital and Graduate 
Medical Education Trust Fund (in this title referred to as the `Fund'), 
consisting of amounts transferred to the Fund under subsection (c), 
amounts appropriated to the Fund pursuant to subsections (d) and 
(e)(3), and such gifts and bequests as may be deposited in the Fund 
pursuant to subsection (f). Amounts in the Fund are available until 
expended.
    ``(b) Expenditures From Fund.--Amounts in the Fund are available to 
the Secretary for making payments under section 2111.
    ``(c) Transfers to Fund.--
            ``(1) In general.--From the Federal Hospital Insurance 
        Trust Fund and the Federal Supplementary Medical Insurance 
        Trust Fund, the Secretary shall, for fiscal year 1998 and each 
        subsequent fiscal year, transfer to the Fund an amount 
        determined by the Secretary for the fiscal year involved in 
        accordance with paragraph (2).
            ``(2) Determination of amounts.--For purposes of paragraph 
        (1), the amount determined under this paragraph for a fiscal 
        year is an estimate by the Secretary of an amount equal to 75 
        percent of the difference between--
                    ``(A) the nationwide total of the amounts that 
                would have been paid under section 1876 during the year 
                but for the operation of subsection (a)(1)(C)(ii)(II) 
                of such section; and
                    ``(B) the nationwide total of the amounts paid 
                under such section during the year.
            ``(3) Allocation between medicare trust funds.--In 
        providing for a transfer under paragraph (1) for a fiscal year, 
        the Secretary shall provide for an allocation of the amounts 
        involved between part A and part B of title XVIII (and the 
        trust funds established under the respective parts) as 
        reasonably reflects the proportion of payments for the indirect 
        costs of medical education and direct graduate medical 
        education costs of hospitals associated with the provision of 
        services under each respective part.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Fund such sums as may be necessary for each of the 
fiscal years 1997 through 2003.
    ``(e) Investment.--
            ``(1) In general.--The Secretary of the Treasury shall 
        invest such amounts of the Fund as such Secretary determines 
        are not required to meet current withdrawals from the Fund. 
        Such investments may be made only in interest-bearing 
        obligations of the United States. For such purpose, such 
        obligations may be acquired on original issue at the issue 
        price, or by purchase of outstanding obligations at the market 
        price.
            ``(2) Sale of obligations.--Any obligation acquired by the 
        Fund may be sold by the Secretary of the Treasury at the market 
        price.
            ``(3) Availability of income.--Any interest derived from 
        obligations acquired by the Fund, and proceeds from any sale or 
        redemption of such obligations, are hereby appropriated to the 
        Fund.
    ``(f) Acceptance of Gifts and Bequests.--The Fund may accept on 
behalf of the United States money gifts and bequests made 
unconditionally to the Fund for the benefit of the Fund or any activity 
financed through the Fund.

                ``Part B--Payments to Teaching Hospitals

``SEC. 2111. FORMULA PAYMENTS TO TEACHING HOSPITALS.

    ``(a) In General.--In the case of each teaching hospital that in 
accordance with subsection (b) submits to the Secretary a payment 
document for fiscal year 1997 or any subsequent fiscal year, the 
Secretary shall make payments for the year to the teaching hospital for 
the direct and indirect costs of operating approved medical residency 
training programs. Such payments shall be made from the Fund, and shall 
be made in accordance with a formula established by the Secretary.
    ``(b) Payment Document.--For purposes of subsection (a), a payment 
document is a document containing such information as may be necessary 
for the Secretary to make payments under such subsection to a teaching 
hospital for a fiscal year. The document is submitted in accordance 
with this subsection if the document is submitted not later than the 
date specified by the Secretary, and the document is in such form and 
is made in such manner as the Secretary may require. The Secretary may 
require that information under this subsection be submitted to the 
Secretary in periodic reports.''.
    (b) Adjustments in Medicare Payments.--
            (1) Removal of medical education and disproportionate share 
        hospital payments from calculation of adjusted average per 
        capita cost.--Section 1876(a)(1)(C) of such Act (42 U.S.C. 
        1395mm(a)(1)(C)) is amended--
                    (A) by striking ``(C) The annual'' and inserting 
                ``(C)(i) Subject to clause (ii), the annual'', and
                    (B) by adding at the end the following new clause:
    ``(ii) In determining the average annual per capita rate of payment 
for a year (beginning with 1998), such rate shall be determined as 
though the Secretary had excluded from such rate any amounts which the 
Secretary estimated would have been payable under this title during the 
year for--
            ``(I) payment adjustments under section 1886(d)(5)(F) for 
        hospitals serving a disproportionate share of low-income 
        patients; and
            ``(II) the indirect costs of medical education under 
        section 1886(d)(5)(B) or for direct graduate medical education 
        costs under section 1886(h).''.
            (2) Payments to hospitals of amounts attributable to dsh.--
        Section 1886 of such Act (42 U.S.C. 1395ww) is amended by 
        adding at the end the following new subsection:
    ``(j)(1) In addition to amounts paid under subsection (d)(5)(F), 
the Secretary is authorized to pay hospitals which are eligible for 
such payments for a fiscal year (beginning with fiscal year 1998) 
supplemental amounts that do not exceed the limit provided for in 
paragraph (2).
    ``(2) The sum of the aggregate amounts paid pursuant to paragraph 
(1) for a fiscal year shall not exceed the Secretary's estimate of 75 
percent of the amount of reductions in payments under section 1876 that 
are attributable to the operation of subsection (a)(1)(C)(ii)(I) of 
such section during such fiscal year.''.

SEC. 3. NATIONAL ADVISORY COUNCIL ON POSTGRADUATE MEDICAL EDUCATION.

    (a) In General.--There is established within the Department of 
Health and Human Services an advisory council to be known as the 
National Advisory Council on Postgraduate Medical Education (in this 
section referred to as the ``Council'').
    (b) Duties.--The Council shall provide advice to the Secretary on 
appropriate policies for making payments for the support of 
postgraduate medical education in order to assure an adequate supply of 
physicians trained in various specialities, consistent with the health 
care needs of the United States.
    (c) Composition.--
            (1) In general.--The Secretary shall appoint to the Council 
        15 individuals who are not officers or employees of the United 
        States. Such individuals shall include not less than 1 
        individual from each of the following categories of individuals 
        or entities:
                    (A) Organizations representing consumers of health 
                care services.
                    (B) Physicians who are faculty members of medical 
                schools, or who supervise approved physician training 
                programs.
                    (C) Physicians in private practice who are not 
                physicians described in subparagraph (B).
                    (D) Practitioners in public health.
                    (E) Advanced-practice nurses.
                    (F) Other health professionals who are not 
                physicians.
                    (G) Medical schools.
                    (I) Teaching hospitals.
                    (J) The Accreditation Council on Graduate Medical 
                Education.
                    (K) The American Board of Medical Specialities.
                    (L) The Council on Postdoctoral Training of the 
                American Osteopathic Association.
                    (M) The Council on Podiatric Medical Education of 
                the American Podiatric Medical Association.
            (2) Requirements regarding representative membership.--To 
        the greatest extent feasible, the membership of the Council 
        shall represent the various geographic regions of the United 
        States, shall reflect the racial, ethnic, and gender 
        composition of the population of the United States, and shall 
        be broadly representative of medical schools and teaching 
        hospitals in the United States.
            (3) Ex officio members; other federal officers or 
        employees.--The membership of the Council shall include 
        individuals designated by the Secretary to serve as members of 
        the Council from among Federal officers or employees who are 
        appointed by the President, or by the Secretary (or by other 
        Federal officers who are appointed by the President with the 
        advice and consent of the Senate). Individuals designated under 
        the preceding sentence shall include each of the following 
        officials (or a designee of the official):
                    (A) The Secretary of Health and Human Services.
                    (B) The Secretary of Veterans Affairs.
                    (C) The Secretary of Defense.
    (d) Chair.--The Secretary shall, from among members of the Council 
appointed under subsection (c)(1), designate an individual to serve as 
the chair of the Council.
    (e) Termination.--The Council terminates December 31, 2000.
Graduate Medical Education Trust Fund Act of 1996 - Amends the Social Security Act (SSA) to add a new title XXI (Teaching Hospital and Graduate Medical Education Trust Fund), which establishes in the Treasury the Teaching Hospital and Graduate Medical Education Trust Fund for formula payments to teaching hospitals for the direct and indirect costs of operating approved medical residency training programs.  Authorizes appropriations. 
Provides for certain adjustments in Medicare payments under SSA title XVIII, removing medical education and disproportionate share hospital payments from calculation of adjusted average per capita cost. 
Establishes within the Department of Health and Human Services a National Advisory Council on Postgraduate Medical Education to advise the Secretary on appropriate policies for making postgraduate medical education support payments in order to assure an adequate supply of physicians trained in various specialties, consistent with the health care needs of the United States.
Graduate Medical Education Trust Fund Act of 1996