SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children's Hospitals Education and 
Research Act of 1999''.

SEC. 2. PROGRAM OF PAYMENTS TO CHILDREN'S HOSPITALS THAT OPERATE 
              GRADUATE MEDICAL EDUCATION PROGRAMS.

    (a) Payments.--The Secretary shall make two payments under this 
section to each children's hospital for each of fiscal years 2000 and 
2001, one for the direct expenses and the other for indirect expenses 
associated with operating approved graduate medical residency training 
programs.
    (b) Amount of Payments.--
            (1) In general.--Subject to paragraph (2), the amounts 
        payable under this section to a children's hospital for an 
        approved graduate medical residency training program for a 
        fiscal year are each of the following amounts:
                    (A) Direct expense amount.--The amount determined 
                under subsection (c) for direct expenses associated 
                with operating approved graduate medical residency 
                training programs.
                    (B) Indirect expense amount.--The amount determined 
                under subsection (d) for indirect expenses associated 
                with the treatment of more severely ill patients and 
                the additional costs relating to teaching residents in 
                such programs.
            (2) Capped amount.--
                    (A) In general.--The total of the payments made to 
                children's hospitals under paragraph (1)(A) or 
                paragraph (1)(B) in a fiscal year shall not exceed the 
                funds appropriated under paragraph (1) or (2), 
                respectively, of subsection (f) for such payments for 
                that fiscal year.
                    (B) Pro rata reductions of payments for direct 
                expenses.--If the Secretary determines that the amount 
                of funds appropriated under subsection (f)(1) for a 
                fiscal year is insufficient to provide the total amount 
                of payments otherwise due for such periods under 
                paragraph (1)(A), the Secretary shall reduce the 
                amounts so payable on a pro rata basis to reflect such 
                shortfall.
    (c) Amount of Payment for Direct Graduate Medical Education.--
            (1) In general.--The amount determined under this 
        subsection for payments to a children's hospital for direct 
        graduate expenses relating to approved graduate medical 
        residency training programs for a fiscal year is equal to the 
        product of--
                    (A) the updated per resident amount for direct 
                graduate medical education, as determined under 
                paragraph (2)); and
                    (B) the average number of full-time equivalent 
                residents in the hospital's graduate approved medical 
                residency training programs (as determined under 
                section 1886(h)(4) of the Social Security Act (42 
                U.S.C. 1395ww(h)(4))) during the fiscal year.
            (2) Updated per resident amount for direct graduate medical 
        education.--The updated per resident amount for direct graduate 
        medical education for a hospital for a fiscal year is an amount 
        determined as follows:
                    (A) Determination of hospital single per resident 
                amount.--The Secretary shall compute for each hospital 
                operating an approved graduate medical education 
                program (regardless of whether or not it is a 
                children's hospital) a single per resident amount equal 
                to the average (weighted by number of full-time 
                equivalent residents) of the primary care per resident 
                amount and the non-primary care per resident amount 
                computed under section 1886(h)(2) of the Social 
                Security Act for cost reporting periods ending during 
                fiscal year 1997.
                    (B) Determination of wage and non-wage-related 
                proportion of the single per resident amount.--The 
                Secretary shall estimate the average proportion of the 
                single per resident amounts computed under subparagraph 
                (A) that is attributable to wages and wage-related 
                costs.
                    (C) Standardizing per resident amounts.--The 
                Secretary shall establish a standardized per resident 
                amount for each such hospital--
                            (i) by dividing the single per resident 
                        amount computed under subparagraph (A) into a 
                        wage-related portion and a non-wage-related 
                        portion by applying the proportion determined 
                        under subparagraph (B);
                            (ii) by dividing the wage-related portion 
                        by the factor applied under section 
                        1886(d)(3)(E) of the Social Security Act (42 
                        U.S.C. 1395ww(d)(3)(E)) for discharges 
                        occurring during fiscal year 1999 for the 
                        hospital's area; and
                            (iii) by adding the non-wage-related 
                        portion to the amount computed under clause 
                        (ii).
                    (D) Determination of national average.--The 
                Secretary shall compute a national average per resident 
                amount equal to the average of the standardized per 
                resident amounts computed under subparagraph (C) for 
                such hospitals, with the amount for each hospital 
                weighted by the average number of full-time equivalent 
                residents at such hospital.
                    (E) Application to individual hospitals.--The 
                Secretary shall compute for each such hospital that is 
                a children's hospital a per resident amount--
                            (i) by dividing the national average per 
                        resident amount computed under subparagraph (D) 
                        into a wage-related portion and a non-wage-
                        related portion by applying the proportion 
                        determined under subparagraph (B);
                            (ii) by multiplying the wage-related 
                        portion by the factor described in subparagraph 
                        (C)(ii) for the hospital's area; and
                            (iii) by adding the non-wage-related 
                        portion to the amount computed under clause 
                        (ii).
                    (F) Updating rate.--The Secretary shall update such 
                per resident amount for each such children's hospital 
                by the estimated percentage increase in the consumer 
                price index for all urban consumers during the period 
                beginning October 1997 and ending with the midpoint of 
                the hospital's cost reporting period that begins during 
                fiscal year 2000.
    (d) Amount of Payment for Indirect Medical Education.--
            (1) In general.--The amount determined under this 
        subsection for payments to a children's hospital for indirect 
        expenses associated with the treatment of more severely ill 
        patients and the additional costs related to the teaching of 
        residents for a fiscal year is equal to an amount determined 
        appropriate by the Secretary.
            (2) Factors.--In determining the amount under paragraph 
        (1), the Secretary shall--
                    (A) take into account variations in case mix among 
                children's hospitals and the number of full-time 
                equivalent residents in the hospitals' approved 
                graduate medical residency training programs; and
                    (B) assure that the aggregate of the payments for 
                indirect expenses associated with the treatment of more 
                severely ill patients and the additional costs related 
                to the teaching of residents under this section in a 
                fiscal year are equal to the amount appropriated for 
                such expenses for the fiscal year involved under 
                subsection (f)(2).
    (e) Making of Payments.--
            (1) Interim payments.--The Secretary shall determine, 
        before the beginning of each fiscal year involved for which 
        payments may be made for a hospital under this section, the 
        amounts of the payments for direct graduate medical education 
        and indirect medical education for such fiscal year and shall 
        (subject to paragraph (2)) make the payments of such amounts in 
        26 equal interim installments during such period.
            (2) Withholding.--The Secretary shall withhold up to 25 
        percent from each interim installment for direct graduate 
        medical education paid under paragraph (1).
            (3) Reconciliation.--At the end of each fiscal year for 
        which payments may be made under this section, the hospital 
        shall submit to the Secretary such information as the Secretary 
        determines to be necessary to determine the percent (if any) of 
        the total amount withheld under paragraph (2) that is due under 
        this section for the hospital for the fiscal year. Based on 
        such determination, the Secretary shall recoup any overpayments 
        made, or pay any balance due. The amount so determined shall be 
        considered a final intermediary determination for purposes of 
        applying section 1878 of the Social Security Act (42 U.S.C. 
        1395oo) and shall be subject to review under that section in 
        the same manner as the amount of payment under section 1886(d) 
        of such Act (42 U.S.C. 1395ww(d)) is subject to review under 
        such section.
    (f) Authorization of Appropriations.--
            (1) Direct graduate medical education.--
                    (A) In general.--There are hereby authorized to be 
                appropriated, out of any money in the Treasury not 
                otherwise appropriated, for payments under subsection 
                (b)(1)(A) --
                            (i) for fiscal year 2000, $90,000,000; and
                            (ii) for fiscal year 2001, $95,000,000.
                    (B) Carryover of excess.--The amounts appropriated 
                under subparagraph (A) for fiscal year 2000 shall 
                remain available for obligation through the end of 
                fiscal year 2001.
            (2) Indirect medical education.--There are hereby 
        authorized to be appropriated, out of any money in the Treasury 
        not otherwise appropriated, for payments under subsection 
        (b)(1)(A) --
                    (A) for fiscal year 2000, $190,000,000; and
                    (B) for fiscal year 2001, $190,000,000.
    (f) Relation to Medicare and Medicaid Payments.--Notwithstanding 
any other provision of law, payments under this section to a hospital 
for fiscal years 2000 and 2001--
            (1) are in lieu of any amounts otherwise payable to the 
        hospital under section 1886(h) or 1886(d)(5)(B) of the Social 
        Security Act (42 U.S.C. 1395ww(h); 1395ww(d)(5)B)) for portions 
        of cost reporting periods occurring during such fiscal years; 
        but
            (2) shall not affect the amounts otherwise payable to such 
        hospitals under a State medicaid plan under title XIX of such 
        Act (42 U.S.C. 1396 et seq.).
    (g) Definitions.--In this section:
            (1) Approved graduate medical residency training program.--
        The term ``approved graduate medical residency training 
        program'' has the meaning given the term ``approved medical 
        residency training program'' in section 1886(h)(5)(A) of the 
        Social Security Act (42 U.S.C. 1395ww(h)(5)(A)).
            (2) Children's hospital.--The term ``children's hospital'' 
        means a hospital described in section 1886(d)(1)(B)(iii) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iii)).
            (3) Direct graduate medical education costs.--The term 
        ``direct graduate medical education costs'' has the meaning 
        given such term in section 1886(h)(5)(C) of the Social Security 
        Act (42 U.S.C. 1395ww(h)(5)(C)).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
Children's Hospitals Education and Research Act of 1999 - Directs the Secretary of Health and Human Services to make payment as specified to each children's hospital for each hospital cost reporting period under Medicare (title XVIII of the Social Security Act (SSA)) for FY 2000 and 2001 for the direct and indirect expenses associated with operating approved medical residency training programs. 
Provides that such payments are in lieu of certain Medicare payments to hospitals for inpatient hospital services, but shall not affect the amounts otherwise payable to such hospitals under a State Medicaid (SSA title XIX) plan. 
Authorizes appropriations.
Children's Hospitals Education and Research Act of 1999