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[House Report 110-872]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-872

======================================================================

 
              PHYSICIAN WORKFORCE ENHANCEMENT ACT OF 2008

                                _______
                                

 September 23, 2008.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Dingell, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2583]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 2583) to amend title VII of the Public Health 
Service Act to establish a loan program for eligible hospitals 
to establish residency training programs, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Hearings.........................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     4
Statement of General Performance Goals and Objectives............     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmarks and Tax and Tariff Benefits.............................     5
Committee Cost Estimate..........................................     5
Congressional Budget Office Estimate.............................     5
Federal Mandates Statement.......................................     6
Advisory Committee Statement.....................................     6
Constitutional Authority Statement...............................     6
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     7

                               Amendment

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Physician Workforce Enhancement Act of 
2008''.

SEC. 2. HOSPITAL RESIDENCY LOAN PROGRAM.

  Subpart 2 of part E of title VII of the Public Health Service Act is 
amended by adding at the end the following new section:

``SEC. 771. HOSPITAL RESIDENCY LOAN PROGRAM.

  ``(a) Establishment.--Not later than October 1, 2010, the Secretary, 
acting through the Administrator of the Health Resources and Services 
Administration, shall establish a hospital residency loan program that 
provides loans to eligible hospitals to establish a residency training 
program.
  ``(b) Application.--No loan may be provided under this section to an 
eligible hospital except pursuant to an application that is submitted 
and approved in a time, manner, and form specified by the Administrator 
of the Health Resources and Services Administration. A loan under this 
section shall be on such terms and conditions and meet such 
requirements as the Administrator determines appropriate, in accordance 
with the provisions of this section.
  ``(c) Eligibility; Preference for Rural Areas.--
          ``(1) Eligible hospital defined.--For purposes of this 
        section, an `eligible hospital' means, with respect to a loan 
        under this section, a public or non-profit hospital that, as of 
        the date of the submission of an application under subsection 
        (b), meets, to the satisfaction of the Administrator of the 
        Health Resources and Services Administration, each of the 
        following criteria:
                  ``(A) The hospital does not operate a residency 
                training program and has not previously operated such a 
                program.
                  ``(B) The hospital has secured initial accreditation 
                by the American Council for Graduate Medical Education 
                or the American Osteopathic Association.
                  ``(C) The hospital provides assurances to the 
                satisfaction of the Administrator of the Health 
                Resources and Services Administration that such loan 
                shall be used, consistent with subsection (d), only for 
                the purposes of establishing and conducting an 
                allopathic or osteopathic physician residency training 
                program in at least one of the following, or a 
                combination of the following:
                          ``(i) Family medicine.
                          ``(ii) Internal medicine.
                          ``(iii) Obstetrics or gynecology.
                          ``(iv) Behavioral or Mental health.
                          ``(v) Pediatrics.
                  ``(D) The hospital enters into an agreement with the 
                Administrator that certifies the hospital will provide 
                for the repayment of the loan in accordance with 
                subsection (e).
          ``(2) Preference for rural areas.--In making loans under this 
        section, the Administrator of the Health Resources and Services 
        Administration shall create guidelines that give preference to 
        rural areas (as such term is defined in section 1886(d)(2)(D) 
        of the Social Security Act).
  ``(d) Permissible Uses of Loan Funds.--A loan provided under this 
section shall be used, with respect to a residency training program, 
only for costs directly attributable to the residency training program, 
except as otherwise provided by the Administrator of the Health 
Resources and Services Administration.
  ``(e) Repayment of Loans.--
          ``(1) Repayment plans.--For purposes of subsection (c)(1)(D), 
        a repayment plan for an eligible hospital is in accordance with 
        this subsection if it provides for the repayment of the loan 
        amount in installments, in accordance with a schedule that is 
        agreed to by the Administrator of the Health Resources and 
        Services Administration and the hospital and that is in 
        accordance with paragraphs (2), (3), and (4).
          ``(2) Commencement of repayment.--Repayment by an eligible 
        hospital of a loan under this section shall commence not later 
        than the date that is 18 months after the date on which the 
        loan amount is disbursed to such hospital.
          ``(3) Repayment period.--A loan made under this section shall 
        be fully repaid not later than the date that is 24 months after 
        the date on which the repayment is required to commence.
          ``(4) Loan payable in full if residency training program 
        canceled.--In the case that an eligible hospital borrows a loan 
        under this section, with respect to a residency training 
        program, and terminates such program before the date on which 
        such loan has been fully repaid in accordance with a plan under 
        paragraph (1), such loan shall be payable by the hospital not 
        later than 45 days after the date of such termination.
  ``(f) No Interest Charged.--The Administrator of the Health Resources 
and Services Administration may not charge or collect interest on any 
loan made under this section.
  ``(g) Limitation on Total Amount of Loan.--The cumulative annual 
dollar amount of a loan made to an eligible hospital under this section 
may not exceed $250,000.
  ``(h) Penalties.--The Administrator of the Health Resources and 
Services Administration shall establish penalties to which an eligible 
hospital receiving a loan under this section would be subject if such 
hospital is in violation of any of the criteria described in subsection 
(c)(1). Such penalties shall include the charge or collection of 
interest, at a rate to be determined by the Administrator of the Health 
Resources and Services Administration. Except as otherwise provided, 
penalties collected under this subsection shall be paid to the 
Administrator of the Health Resources and Services Administration and 
shall, subject to appropriation Acts, be available until expended for 
the purpose of enforcing the provisions of this section.
  ``(i) Reports.--Not later than January 1, 2012, and annually 
thereafter (before January 2, 2014), the Administrator of the Health 
Resources and Services Administration shall submit to Congress a report 
on the efficacy of the program under this section in increasing the 
number of residents practicing in each medical specialty described in 
subsection (c)(1)(C) during such year and the extent to which the 
program resulted in an increase in the number of available 
practitioners in each of such medical specialties that serve medically 
underserved populations.
  ``(j) Funding.--
          ``(1) Authorization of appropriations.--For the purpose of 
        providing amounts for loans under this section, there are 
        authorized to be appropriated such sums as may be necessary to 
        provide--
                  ``(A) $8,000,000 in loans for fiscal year 2010;
                  ``(B) $8,400,000 in loans for fiscal year 2011;
                  ``(C) $8,820,000 in loans for fiscal year 2012;
                  ``(D) $9,261,000 in loans for fiscal year 2013; and
                  ``(E) $9,724,050 in loans for fiscal year 2014.
          ``(2) Availability.--Amounts appropriated under paragraph (1) 
        shall remain available until expended.
  ``(k) Termination of Program.--No loan may be made under this section 
after December 31, 2013.''.

                          Purpose and Summary

    The purpose of H.R. 2583, the Physician Workforce 
Enhancement Act of 2008, is to establish a loan program for 
eligible hospitals to establish residency training programs in 
allopathic and osteopathic medicine, with a preference for 
hospitals located in rural areas.

                  Background and Need for Legislation

    Recent trends in the physician workforce demonstrate that 
the growth in the physician workforce is not keeping pace with 
general population growth. Certain areas of practice, including 
primary care and pediatrics, are expected to have more critical 
shortages in the future. In 2006, the American College of 
Physicians released a report entitled ``The Impending Collapse 
of Primary Care Medicine and Its Implications for the State of 
the Nation's Health Care.'' According to that report, as the 
demand has grown for primary care due to growth in the number 
of people with chronic diseases and long-term care needs of an 
aging population, there has been a decline in the number of 
medical students and training opportunities for primary care. 
This problem will only be further exacerbated by the decline of 
the physician workforce in years to come.
    Residency training programs are an integral way to attract 
physicians, particularly in hard-to-serve areas such as rural 
areas. In the 16th report of the Council of Graduate Medical 
Education, entitled, ``Physician Workforce Policy Guidelines 
for the United States, 2000-2020,'' the Council recommended 
that the number of physicians entering residency training each 
year should be increased to 27,000 by 2015 to meet projected 
demand of medical services. The Council recommends a 
multifaceted approach to achieve this increase, and one 
important part of that plan is to facilitate a modest increase 
in medical education and training capacity over the next 
decade.
    One important source of funding for residency training 
programs is Medicare. The Medicare program, however, caps the 
number of residents and fellows eligible for Medicare 
reimbursement. This can narrow the number of resources 
available to some smaller hospitals that have the need for 
residents that will later serve the community as physicians. 
That cap was implemented at a time when it appeared that the 
physician workforce would enjoy surpluses for some time and 
that the use of managed health care services would reduce the 
demand for medical services. Both trends have significantly 
reversed in recent years, precipitating the need for a new 
strategy to improve the health and vitality of the U.S. 
physician workforce.

                                Hearings

    No hearings were held in connection with H.R. 2583.

                        Committee Consideration

    On Wednesday, September 17, 2008, the full Committee met in 
open markup session and ordered H.R. 2583 favorably reported to 
the House, amended, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken on amendments or in connection with 
ordering H.R. 2583 reported to the House. A motion by Mr. 
Dingell to order H.R. 2583 favorably reported to the House, 
amended, was agreed to by a voice vote.

                      Committee Oversight Findings

    Regarding clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the oversight findings of the 
Committee regarding H.R. 2583 are reflected in this report.

         Statement of General Performance Goals and Objectives

    The objective of H.R. 2583 is to expand and improve the 
distribution of the physician workforce by creating new 
opportunities for residency training programs, particularly in 
rural areas.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Regarding compliance with clause 3(c)(2) of rule XIII of 
the Rules of the House of Representatives, the Committee finds 
that H.R. 2583 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Earmarks and Tax and Tariff Benefits

    Regarding compliance with clause 9 of rule XXI of the Rules 
of the House of Representatives, H.R. 2583 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
2583 prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate on 
H.R. 2583 provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 23, 2008.
Hon. John D. Dingell,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2583, the 
Physician Workforce Enhancement Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kirstin 
Nelson.
            Sincerely,
                                          Peter A. Fontaine
                                   (For Peter R. Orszag, Director).
    Enclosure.

H.R. 2583--Physician Workforce Enhancement Act of 2008

    H.R. 2583, the Physician Workforce Enhancement Act of 2008, 
would allow eligible hospitals to receive a no-interest loan to 
establish a residency training program. Eligible hospitals are 
public or nonprofit hospitals that are not currently operating 
and have not previously operated a residency training program. 
Loans to individual hospitals could not exceed $250,000 
annually. Loans could only be for costs directly related to 
certain residency programs in one of (or a combination of) the 
following areas: family medicine, internal medicine, obstetrics 
and gynecology, behavioral or mental health, and pediatrics.
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing the bill would cost an additional 
$1 million in 2010 and $4 million over the 2010-2013 period. 
Enacting H.R. 2583 would not affect direct spending or 
revenues.
    H.R. 2583 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act. Public 
hospitals in rural areas that establish residency training 
programs would benefit from loans authorized in the bill.
    Under H.R. 2583, hospitals would be required to enter into 
an agreement with the Administrator of the Health Resources and 
Services Administration (HRSA) to repay the loan in 
installments beginning 18 months after the loan is disbursed. 
H.R. 2583 would require that loans be repaid no later than 24 
months after the loan repayment begins. Under the bill, if a 
hospital receives a loan and then terminates the residency 
training program before repaying the loan, the hospital would 
have 45 days to repay the loan after terminating the residency 
program. In making loans to eligible hospitals, the HRSA 
Administrator would be required to establish guidelines that 
give preference to hospitals in rural areas.
    Lastly, H.R. 2583 would establish the loan program no later 
than October 1, 2010. No loans could be made under this program 
after December 31, 2013.
    H.R. 2583 would authorize the appropriation of such sums as 
may be necessary to provide $8 million in loans for 2010 and 
$34 million in loans over the 2009-2013 period. Under the 
Federal Credit Reform Act of 1990, the cost of a loan program 
is measured as the net present value of cash flows over the 
life of the loan. Hospitals would begin to repay the loan 18 
months after disbursement and would repay the entire loan 
amount within 24 months after repayments begin. CBO estimates 
that the subsidy cost for the no-interest loans would total 
about $1 million per year over the 2010-2013 period.
    The estimated cost of H.R. 2583 is shown in the following 
table. The costs of this legislation fall within budget 
function 550 (health).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2009    2010    2011    2012    2013
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level.............       0       1       1       1       1
Estimated Outlays...............       0       1       1       1       1
------------------------------------------------------------------------

    The CBO staff contact for this estimate is Kirstin Nelson. 
This estimate was approved by Keith J. Fontenot, Deputy 
Assistant Director for Health and Human Resources, Budget 
Analysis Division.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 2583 prepared by the Director of the 
Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
2583.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for H.R. 2583 is provided in the 
provisions of Article I, section 8, clause 1, that relate to 
expending funds to provide for the general welfare of the 
United States.

                  Applicability to Legislative Branch

    The Committee finds that H.R. 2583 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act of 1995.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    Section 1 establishes the short title as the Physician 
Workforce Enhancement Act of 2008.

Section 2. Hospital residency loan program

    Section 2 establishes the date of establishment for the 
program as October 1, 2010; clarifies that an eligible hospital 
means a public or non-profit hospital; establishes the list of 
eligible professions as family medicine, internal medicine, 
obstetrics or gynecology, behavioral or mental health, 
pediatrics, or a combination of such professions; extends the 
preference for loans to be given to rural areas, as defined by 
section 1886(d)(2)(D) of the Social Security Act; makes clear 
that permissible uses of loan funds are only meant to cover 
direct costs that are determined by the Administrator of the 
Health Resources and Services Administration to be necessary to 
run the residency training program; establishes the date to 
commence repayment as 18 months and the repayment period as 24 
months; sets the limitation on the total amount of the loan, so 
that no annual dollar amount may exceed $250,000; establishes a 
penalties provision so that the Secretary may collect interest, 
together with any other penalties, on defaulted loans (thereby 
making the restriction in subsection (f) subject to the 
authority to collect interest); and establishes the 
authorization of appropriations ($8 million for fiscal year 
(FY) 2009, $8.4 million for FY 2010, $8.82 million for FY 2011, 
$9.261 million for FY 2012; and $9,724,050 for FY 2013); and 
terminates the program after December 31, 2013.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                       PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *
TITLE VII--HEALTH PROFESSIONS EDUCATION

           *       *       *       *       *       *       *

PART E--HEALTH PROFESSIONS AND PUBLIC HEALTH WORKFORCE

           *       *       *       *       *       *       *

Subpart 2--Public Health Workforce

           *       *       *       *       *       *       *

SEC. 771. HOSPITAL RESIDENCY LOAN PROGRAM.

  (a) Establishment.--Not later than October 1, 2010, the 
Secretary, acting through the Administrator of the Health 
Resources and Services Administration, shall establish a 
hospital residency loan program that provides loans to eligible 
hospitals to establish a residency training program.
  (b) Application.--No loan may be provided under this section 
to an eligible hospital except pursuant to an application that 
is submitted and approved in a time, manner, and form specified 
by the Administrator of the Health Resources and Services 
Administration. A loan under this section shall be on such 
terms and conditions and meet such requirements as the 
Administrator determines appropriate, in accordance with the 
provisions of this section.
  (c) Eligibility; Preference for Rural Areas.--
          (1) Eligible hospital defined.--For purposes of this 
        section, an ``eligible hospital'' means, with respect 
        to a loan under this section, a public or non-profit 
        hospital that, as of the date of the submission of an 
        application under subsection (b), meets, to the 
        satisfaction of the Administrator of the Health 
        Resources and Services Administration, each of the 
        following criteria:
                  (A) The hospital does not operate a residency 
                training program and has not previously 
                operated such a program.
                  (B) The hospital has secured initial 
                accreditation by the American Council for 
                Graduate Medical Education or the American 
                Osteopathic Association.
                  (C) The hospital provides assurances to the 
                satisfaction of the Administrator of the Health 
                Resources and Services Administration that such 
                loan shall be used, consistent with subsection 
                (d), only for the purposes of establishing and 
                conducting an allopathic or osteopathic 
                physician residency training program in at 
                least one of the following, or a combination of 
                the following:
                          (i) Family medicine.
                          (ii) Internal medicine.
                          (iii) Obstetrics or gynecology.
                          (iv) Behavioral or Mental health.
                          (v) Pediatrics.
                  (D) The hospital enters into an agreement 
                with the Administrator that certifies the 
                hospital will provide for the repayment of the 
                loan in accordance with subsection (e).
          (2) Preference for rural areas.--In making loans 
        under this section, the Administrator of the Health 
        Resources and Services Administration shall create 
        guidelines that give preference to rural areas (as such 
        term is defined in section 1886(d)(2)(D) of the Social 
        Security Act).
  (d) Permissible Uses of Loan Funds.--A loan provided under 
this section shall be used, with respect to a residency 
training program, only for costs directly attributable to the 
residency training program, except as otherwise provided by the 
Administrator of the Health Resources and Services 
Administration.
  (e) Repayment of Loans.--
          (1) Repayment plans.--For purposes of subsection 
        (c)(1)(D), a repayment plan for an eligible hospital is 
        in accordance with this subsection if it provides for 
        the repayment of the loan amount in installments, in 
        accordance with a schedule that is agreed to by the 
        Administrator of the Health Resources and Services 
        Administration and the hospital and that is in 
        accordance with paragraphs (2), (3), and (4).
          (2) Commencement of repayment.--Repayment by an 
        eligible hospital of a loan under this section shall 
        commence not later than the date that is 18 months 
        after the date on which the loan amount is disbursed to 
        such hospital.
          (3) Repayment period.--A loan made under this section 
        shall be fully repaid not later than the date that is 
        24 months after the date on which the repayment is 
        required to commence.
          (4) Loan payable in full if residency training 
        program canceled.--In the case that an eligible 
        hospital borrows a loan under this section, with 
        respect to a residency training program, and terminates 
        such program before the date on which such loan has 
        been fully repaid in accordance with a plan under 
        paragraph (1), such loan shall be payable by the 
        hospital not later than 45 days after the date of such 
        termination.
  (f) No Interest Charged.--The Administrator of the Health 
Resources and Services Administration may not charge or collect 
interest on any loan made under this section.
  (g) Limitation on Total Amount of Loan.--The cumulative 
annual dollar amount of a loan made to an eligible hospital 
under this section may not exceed $250,000.
  (h) Penalties.--The Administrator of the Health Resources and 
Services Administration shall establish penalties to which an 
eligible hospital receiving a loan under this section would be 
subject if such hospital is in violation of any of the criteria 
described in subsection (c)(1). Such penalties shall include 
the charge or collection of interest, at a rate to be 
determined by the Administrator of the Health Resources and 
Services Administration. Except as otherwise provided, 
penalties collected under this subsection shall be paid to the 
Administrator of the Health Resources and Services 
Administration and shall, subject to appropriation Acts, be 
available until expended for the purpose of enforcing the 
provisions of this section.
  (i) Reports.--Not later than January 1, 2012, and annually 
thereafter (before January 2, 2014), the Administrator of the 
Health Resources and Services Administration shall submit to 
Congress a report on the efficacy of the program under this 
section in increasing the number of residents practicing in 
each medical specialty described in subsection (c)(1)(C) during 
such year and the extent to which the program resulted in an 
increase in the number of available practitioners in each of 
such medical specialties that serve medically underserved 
populations.
  (j) Funding.--
          (1) Authorization of appropriations.--For the purpose 
        of providing amounts for loans under this section, 
        there are authorized to be appropriated such sums as 
        may be necessary to provide--
                  (A) $8,000,000 in loans for fiscal year 2010;
                  (B) $8,400,000 in loans for fiscal year 2011;
                  (C) $8,820,000 in loans for fiscal year 2012;
                  (D) $9,261,000 in loans for fiscal year 2013; 
                and
                  (E) $9,724,050 in loans for fiscal year 2014.
          (2) Availability.--Amounts appropriated under 
        paragraph (1) shall remain available until expended.
  (k) Termination of Program.--No loan may be made under this 
section after December 31, 2013.

           *       *       *       *       *       *       *

                                  
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