# H.R. 3200/Division B/Title V
## TITLE V — MEDICARE GRADUATE MEDICAL EDUCATION
### Sec. 1501. Distribution of Unused Residency Positions.

    (a) In General.—
       Section 1886(h) of the Social Security Act (42 U.S.C. 1395ww(h)) is amended—
          (1) in paragraph (4)(F)(i), by striking ``paragraph (7)´´ and inserting ``paragraphs (7) and (8)´´;
          (2) in paragraph (4)(H)(i), by striking ``paragraph (7)´´ and inserting ``paragraphs (7) and (8)´´;
          (3) in paragraph (7)(E), by inserting ``and paragraph (8)´´ after ``this paragraph´´; and
          (4) by adding at the end the following new paragraph:
             ``(8) Additional redistribution of unused residency positions.—
                ``(A) Reductions in limit based on unused positions.—
                   ``(i) Programs subject to reduction.—If a hospital's reference resident level (specified in clause (ii)) is less than the otherwise applicable resident limit (as defined in subparagraph (C)(ii)), effective for portions of cost reporting periods occurring on or after July 1, 2011, the otherwise applicable resident limit shall be reduced by 90 percent of the difference between such otherwise applicable resident limit and such reference resident level.
                   ``(ii) Reference resident level.—
                      ``(I) In general.—Except as otherwise provided in a subsequent subclause, the reference resident level specified in this clause for a hospital is the highest resident level for any of the 3 most recent cost reporting periods (ending before the date of the enactment of this paragraph) of the hospital for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary.
                      ``(II) Use of most recent accounting period to recognize expansion of existing programs.—If a hospital submits a timely request to increase its resident level due to an expansion, or planned expansion, of an existing residency training program that is not reflected on the most recent settled or submitted cost report, after audit and subject to the discretion of the Secretary, subject to subclause (IV), the reference resident level for such hospital is the resident level that includes the additional residents attributable to such expansion or establishment, as determined by the Secretary. The Secretary is authorized to determine an alternative reference resident level for a hospital that submitted to the Secretary a timely request, before the start of the 2009–2010 academic year, for an increase in its reference resident level due to a planned expansion.
                      ``(III) Special provider agreement.—In the case of a hospital described in paragraph (4)(H)(v), the reference resident level specified in this clause is the limitation applicable under subclause (I) of such paragraph.
                      ``(IV) Previous redistribution.—The reference resident level specified in this clause for a hospital shall be increased to the extent required to take into account an increase in resident positions made available to the hospital under paragraph (7)(B) that are not otherwise taken into account under a previous subclause.
                   ``(iii) Affiliation.—The provisions of clause (i) shall be applied to hospitals which are members of the same affiliated group (as defined by the Secretary under paragraph (4)(H)(ii)) and to the extent the hospitals can demonstrate that they are filling any additional resident slots allocated to other hospitals through an affiliation agreement, the Secretary shall adjust the determination of available slots accordingly, or which the Secretary otherwise has permitted the resident positions (under section 402 of the Social Security Amendments of 1967) to be aggregated for purposes of applying the resident position limitations under this subsection.
                ``(B) Redistribution.—
                   ``(i) In general.—The Secretary shall increase the otherwise applicable resident limit for each qualifying hospital that submits an application under this subparagraph by such number as the Secretary may approve for portions of cost reporting periods occurring on or after July 1, 2011. The estimated aggregate number of increases in the otherwise applicable resident limit under this subparagraph may not exceed the Secretary’s estimate of the aggregate reduction in such limits attributable to subparagraph (A).
                   ``(ii) Requirements for qualifying hospitals.—A hospital is not a qualifying hospital for purposes of this paragraph unless the following requirements are met:
                      ``(I) Maintenance of primary care resident level.—The hospital maintains the number of primary care residents at a level that is not less than the base level of primary care residents increased by the number of additional primary care resident positions provided to the hospital under this subparagraph. For purposes of this subparagraph, the ‘base level of primary care residents’ for a hospital is the level of such residents as of a base period (specified by the Secretary), determined without regard to whether such positions were in excess of the otherwise applicable resident limit for such period but taking into account the application of subclauses (II) and (III) of subparagraph (A)(ii).
                      ``(II) Dedicated assignment of additional resident positions to primary care.—The hospital assigns all such additional resident positions for primary care residents.
                      ``(III) Accreditation.—The hospital’s residency programs in primary care are fully accredited or, in the case of a residency training program not in operation as of the base year, the hospital is actively applying for such accreditation for the program for such additional resident positions (as determined by the Secretary).
                   ``(iii) Considerations in redistribution.—In determining for which qualifying hospitals the increase in the otherwise applicable resident limit is provided under this subparagraph, the Secretary shall take into account the demonstrated likelihood of the hospital filling the positions within the first 3 cost reporting periods beginning on or after July 1, 2011, made available under this subparagraph, as determined by the Secretary.
                   ``(iv) Priority for certain hospitals.—In determining for which qualifying hospitals the increase in the otherwise applicable resident limit is provided under this subparagraph, the Secretary shall distribute the increase to qualifying hospitals based on the following criteria:
                      ``(I) The Secretary shall give preference to hospitals that had a reduction in resident training positions under subparagraph (A).
                      ``(II) The Secretary shall give preference to hospitals with 3-year primary care residency training programs, such as family practice and general internal medicine.
                      ``(III) The Secretary shall give preference to hospitals insofar as they have in effect formal arrangements (as determined by the Secretary) that place greater emphasis upon training in Federally qualified health centers, rural health clinics, and other nonprovider settings, and to hospitals that receive additional payments under subsection (d)(5)(F) and emphasize training in an outpatient department.
                      ``(IV) The Secretary shall give preference to hospitals with a number of positions (as of July 1, 2009) in excess of the otherwise applicable resident limit for such period.
                      ``(V) The Secretary shall give preference to hospitals that place greater emphasis upon training in a health professional shortage area (designated under section 332 of the Public Health Service Act) or a health professional needs area (designated under section 2211 of such Act).
                      ``(VI) The Secretary shall give preference to hospitals in States that have low resident-to-population ratios (including a greater preference for those States with lower resident-to-population ratios).
                   ``(v) Limitation.—In no case shall more than 20 full-time equivalent additional residency positions be made available under this subparagraph with respect to any hospital.
                   ``(vi) Application of per resident amounts for primary care.—With respect to additional residency positions in a hospital attributable to the increase provided under this subparagraph, the approved FTE resident amounts are deemed to be equal to the hospital per resident amounts for primary care and nonprimary care computed under paragraph (2)(D) for that hospital.
                   ``(vii) Distribution.—The Secretary shall distribute the increase in resident training positions to qualifying hospitals under this subparagraph not later than July 1, 2011.
                ``(C) Resident level and limit defined.—In this paragraph:
                   ``(i) The term ‘resident level’ has the meaning given such term in paragraph (7)(C)(i).
                   ``(ii) The term ‘otherwise applicable resident limit’ means, with respect to a hospital, the limit otherwise applicable under subparagraphs (F)(i) and (H) of paragraph (4) on the resident level for the hospital determined without regard to this paragraph but taking into account paragraph (7)(A).
                ``(D) Maintenance of primary care resident level.—In carrying out this paragraph, the Secretary shall require hospitals that receive additional resident positions under subparagraph (B)—
                   ``(i) to maintain records, and periodically report to the Secretary, on the number of primary care residents in its residency training programs; and
                   ``(ii) as a condition of payment for a cost reporting period under this subsection for such positions, to maintain the level of such positions at not less than the sum of—
                      ``(I) the base level of primary care resident positions (as determined under subparagraph (B)(ii)(I)) before receiving such additional positions; and
                      ``(II) the number of such additional positions.´´.
    (b) IME.—
          (1) In General.—
             Section 1886(d)(5)(B)(v) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, is amended—
                (A) by striking ``subsection (h)(7)´´ and inserting ``subsections (h)(7) and (h)(8)´´; and
                (B) by striking ``it applies´´ and inserting ``they apply´´.
          (2) Conforming Provision.—
             Section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following clause:
                   ``(x) For discharges occurring on or after July 1, 2011, insofar as an additional payment amount under this subparagraph is attributable to resident positions distributed to a hospital under subsection (h)(8)(B), the indirect teaching adjustment factor shall be computed in the same manner as provided under clause (ii) with respect to such resident positions.´´.
    (c) Conforming Amendment.—
       Section 422(b)(2) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173) is amended by striking ``section 1886(h)(7)´´ and all that follows and inserting ``paragraphs (7) and (8) of subsection (h) of section 1886 of the Social Security Act´´.

### Sec. 1502. Increasing Training in Nonprovider Settings.

    (a) Direct GME.—
       Section 1886(h)(4)(E) of the Social Security Act (42 U.S.C. 1395ww(h)) is amended—
          (1) by designating the first sentence as a clause (i) with the heading ``In general´´ and appropriate indentation;
          (2) by striking ``shall be counted and that all the time ´´ and inserting ``shall be counted and that—
             ``(I) effective for cost reporting periods beginning before July 1, 2009, all the time´´;
          (3) in subclause (I), as inserted by paragraph (1), by striking the period at the end and inserting ``; and´´; and
                (A) by inserting after subclause (I), as so inserted, the following:
                   ``(II) effective for cost reporting periods beginning on or after July 1, 2009, all the time so spent by a resident shall be counted towards the determination of full-time equivalency, without regard to the setting in which the activities are performed, if the hospital incurs the costs of the stipends and fringe benefits of the resident during the time the resident spends in that setting.
                ``Any hospital claiming under this subparagraph for time spent in a nonprovider setting shall maintain and make available to the Secretary records regarding the amount of such time and such amount in comparison with amounts of such time in such base year as the Secretary shall specify.´´.
    (b) IME.—
       Section 1886(d)(5)(B)(iv) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amended—
          (1) by striking ``(iv) Effective for discharges occurring on or after October 1, 1997´´ and inserting ``(iv)(I) Effective for discharges occurring on or after October 1, 1997, and before July 1, 2009´´; and
          (2) by inserting after subclause (I), as inserted by paragraph (1), the following new subclause:
             ``(II) Effective for discharges occurring on or after July 1, 2009, all the time spent by an intern or resident in patient care activities at an entity in a nonprovider setting shall be counted towards the determination of full-time equivalency if the hospital incurs the costs of the stipends and fringe benefits of the intern or resident during the time the intern or resident spends in that setting.´´.
    (c) OIG Study on Impact on Training.—
       The Inspector General of the Department of Health and Human Services shall analyze the data collected by the Secretary of Health and Human Services from the records made available to the Secretary under section 1886(h)(4)(E) of the Social Security Act, as amended by subsection (a), in order to assess the extent to which there is an increase in time spent by medical residents in training in nonprovider settings as a result of the amendments made by this section. Not later than 4 years after the date of the enactment of this Act, the Inspector General shall submit a report to Congress on such analysis and assessment.
    (d) Demonstration Project for Approved Teaching Health Centers.—
          (1) In General.—
             The Secretary of Health and Human Services shall conduct a demonstration project under which an approved teaching health center (as defined in paragraph (3)) would be eligible for payment under subsections (h) and (k) of section 1886 of the Social Security Act (42 U.S.C. 1395ww) of amounts for its own direct costs of graduate medical education activities for primary care residents, as well as for the direct costs of graduate medical education activities of its contracting hospital for such residents, in a manner similar to the manner in which such payments would be made to a hospital if the hospital were to operate such a program.
          (2) Conditions.—
             Under the demonstration project—
                (A) an approved teaching health center shall contract with an accredited teaching hospital to carry out the inpatient responsibilities of the primary care residency program of the hospital involved and is responsible for payment to the hospital for the hospital’s costs of the salary and fringe benefits for residents in the program;
                (B) the number of primary care residents of the center shall not count against the contracting hospital’s resident limit; and
                (C) the contracting hospital shall agree not to diminish the number of residents in its primary care residency training program.
          (3) Approved Teaching Health Center Defined.—
             In this subsection, the term ``approved teaching health center´´ means a nonprovider setting, such as a Federally qualified health center or rural health clinic (as defined in section 1861(aa) of the Social Security Act), that develops and operates an accredited primary care residency program for which funding would be available if it were operated by a hospital.

### Sec. 1503. Rules for Counting Resident Time for Didactic and Scholarly Activities and Other Activities.

    (a) Direct GME.—
       Section 1886(h) of the Social Security Act (42 U.S.C. 1395ww(h)) is amended—
          (1) in paragraph (4)(E), as amended by section 1502(a)—
                (A) in clause (i), by striking ``Such rules´´ and inserting ``Subject to clause (ii), such rules´´; and
                (B) by adding at the end the following new clause:
                   ``(ii) Treatment of certain nonprovider and didactic activities.—Such rules shall provide that all time spent by an intern or resident in an approved medical residency training program in a nonprovider setting that is primarily engaged in furnishing patient care (as defined in paragraph (5)(K)) in nonpatient care activities, such as didactic conferences and seminars, but not including research not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall be counted toward the determination of full-time equivalency.´´;
          (2) in paragraph (4), by adding at the end the following new subparagraph:
             ``(I) In determining the hospital’s number of full-time equivalent residents for purposes of this subsection, all the time that is spent by an intern or resident in an approved medical residency training program on vacation, sick leave, or other approved leave, as such time is defined by the Secretary, and that does not prolong the total time the resident is participating in the approved program beyond the normal duration of the program shall be counted toward the determination of full-time equivalency.´´; and
          (3) in paragraph (5), by adding at the end the following new subparagraph:
             ``(K) Nonprovider setting that is primarily engaged in furnishing patient care.—The term ‘nonprovider setting that is primarily engaged in furnishing patient care’ means a nonprovider setting in which the primary activity is the care and treatment of patients, as defined by the Secretary.´´.
    (b) IME Determinations.—
       Section 1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by section 1501(b), is amended by adding at the end the following new clause:
          ``(xi)(I) The provisions of subparagraph (I) of subsection (h)(4) shall apply under this subparagraph in the same manner as they apply under such subsection.
             ``(II) In determining the hospital’s number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in nonpatient care activities, such as didactic conferences and seminars, as such time and activities are defined by the Secretary, that occurs in the hospital shall be counted toward the determination of full-time equivalency if the hospital—
                ``(aa) is recognized as a subsection (d) hospital;
                ``(bb) is recognized as a subsection (d) Puerto Rico hospital;
                ``(cc) is reimbursed under a reimbursement system authorized under section 1814(b)(3); or
                ``(dd) is a provider-based hospital outpatient department.
             ``(III) In determining the hospital’s number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in research activities that are not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall not be counted toward the determination of full-time equivalency.´´.
    (c) Effective Dates; Application.—
          (1) In General.—
             Except as otherwise provided, the Secretary of Health and Human Services shall implement the amendments made by this section in a manner so as to apply to cost reporting periods beginning on or after January 1, 1983.
          (2) Direct GME.—
             Section 1886(h)(4)(E)(ii) of the Social Security Act, as added by subsection (a)(1)(B), shall apply to cost reporting periods beginning on or after July 1, 2008.
          (3) IME.—
             Section 1886(d)(5)(B)(x)(III) of the Social Security Act, as added by subsection (b), shall apply to cost reporting periods beginning on or after October 1, 2001. Such section, as so added, shall not give rise to any inference on how the law in effect prior to such date should be interpreted.
          (4) Application.—
             The amendments made by this section shall not be applied in a manner that requires reopening of any settled hospital cost reports as to which there is not a jurisdictionally proper appeal pending as of the date of the enactment of this Act on the issue of payment for indirect costs of medical education under section 1886(d)(5)(B) of the Social Security Act or for direct graduate medical education costs under section 1886(h) of such Act.

### Sec. 1504. Preservation of Resident Cap Positions from Closed Hospitals.

    (a) Direct GME.—
       Section 1886(h)(4)(H) of the Social Security Act (42 U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the following new clause:
          ``(vi) Redistribution of residency slots after a hospital closes.—
             ``(I) In general.—The Secretary shall, by regulation, establish a process consistent with subclauses (II) and (III) under which, in the case where a hospital (other than a hospital described in clause (v)) with an approved medical residency program in a State closes on or after the date that is 2 years before the date of the enactment of this clause, the Secretary shall increase the otherwise applicable resident limit under this paragraph for other hospitals in the State in accordance with this clause.
             ``(II) Process for hospitals in certain areas.—In determining for which hospitals the increase in the otherwise applicable resident limit described in subclause (I) is provided, the Secretary shall establish a process to provide for such increase to one or more hospitals located in the State. Such process shall take into consideration the recommendations submitted to the Secretary by the senior health official (as designated by the chief executive officer of such State) if such recommendations are submitted not later than 180 days after the date of the hospital closure involved (or, in the case of a hospital that closed after the date that is 2 years before the date of the enactment of this clause, 180 days after such date of enactment).
             ``(III) Limitation.—The estimated aggregate number of increases in the otherwise applicable resident limits for hospitals under this clause shall be equal to the estimated number of resident positions in the approved medical residency programs that closed on or after the date described in subclause (I).´´.
    (b) No Effect on Temporary FTE Cap Adjustments.—
       The amendments made by this section shall not effect any temporary adjustment to a hospital's FTE cap under section 413.79(h) of title 42, Code of Federal Regulations (as in effect on the date of enactment of this Act) and shall not affect the application of section 1886(h)(4)(H)(v) of the Social Security Act.
    (c) Conforming Amendments.—
          (1) Section 422(b)(2) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173), as amended by section 1501(c), is amended by striking ``(7) and´´ and inserting ``(4)(H)(vi), (7), and´´.
          (2) Section 1886(h)(7)(E) of the Social Security Act (42 U.S.C. 1395ww(h)(7)(E)) is amended by inserting ``or under paragraph (4)(H)(vi)´´ after ``under this paragraph´´.

### Sec. 1505. Improving Accountability for Approved Medical Residency Training.

    (a) Specification of Goals for Approved Medical Residency Training Programs.—
       Section 1886(h)(1) of the Social Security Act (42 U.S.C. 1395ww(h)(1)) is amended—
          (1) by designating the matter beginning with ``Notwithstanding´´ as a subparagraph (A) with the heading ``In general.—´´ and with appropriate indentation; and
          (2) by adding at the end the following new paragraph:
             ``(B) Goals and accountability for approved medical residency training programs.—The goals of medical residency training programs are to foster a physician workforce so that physicians are trained to be able to do the following:
                ``(i) Work effectively in various health care delivery settings, such as nonprovider settings.
                ``(ii) Coordinate patient care within and across settings relevant to their specialties.
                ``(iii) Understand the relevant cost and value of various diagnostic and treatment options.
                ``(iv) Work in inter-professional teams and multi-disciplinary team-based models in provider and nonprovider settings to enhance safety and improve quality of patient care.
                ``(v) Be knowledgeable in methods of identifying systematic errors in health care delivery and in implementing systematic solutions in case of such errors, including experience and participation in continuous quality improvement projects to improve health outcomes of the population the physicians serve.
                ``(vi) Be meaningful EHR users (as determined under section 1848(o)(2)) in the delivery of care and in improving the quality of the health of the community and the individuals that the hospital serves.´´
    (b) GAO Study on Evaluation of Training Programs.—
          (1) In General.—
             The Comptroller General of the United States shall conduct a study to evaluate the extent to which medical residency training programs—
                (A) are meeting the goals described in section 1886(h)(1)(B) of the Social Security Act, as added by subsection (a), in a range of residency programs, including primary care and other specialties; and
                (B) have the appropriate faculty expertise to teach the topics required to achieve such goals.
          (2) Report.—
             Not later than 18 months after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report on such study and shall include in such report recommendations as to how medical residency training programs could be further encouraged to meet such goals through means such as—
                (A) development of curriculum requirements; and
                (B) assessment of the accreditation processes of the Accreditation Council for Graduate Medical Education and the American Osteopathic Association and effectiveness of those processes in accrediting medical residency programs that meet the goals referred to in paragraph (1)(A).