I 

110TH CONGRESS 

1ST SESSION 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. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 6, 2007 

Mr. BURGESS (for himself and Mr. MATHESON) introduced the following bill; 

which was referred to the Committee on Energy and Commerce 

A BILL 

To amend title VII of the Public Health Service Act to 

establish a loan program for eligible hospitals to establish 

residency training programs. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Physician Workforce 

5 and Graduate Medical Education Enhancement Act of 

6 2007’’. 

7 SEC. 2. HOSPITAL RESIDENCY LOAN PROGRAM. 

8 Subpart 2 of part E of title VII of the Public Health 

9 Service Act is amended by adding at the end the following 

10 new section: 


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1 ‘‘SEC. 771. HOSPITAL RESIDENCY LOAN PROGRAM. 

2 ‘‘(a) ESTABLISHMENT.—Not later than January 1, 

3 2008, the Secretary, acting through the Administrator of 

4 the Health Resources and Services Administration, shall 

5 establish a loan program that provides loans to eligible 

6 hospitals to establish residency training programs. 

7 ‘‘(b) APPLICATION.—No loan may be provided under 

8 this section to an eligible hospital except pursuant to an 

9 application that is submitted and approved in a time, man10 ner, and form specified by the Administrator of the Health 

11 Resources and Services Administration. A loan under this 

12 section shall be on such terms and conditions and meet 

13 such requirements as the Administrator determines appro14 priate, in accordance with the provisions of this section. 

15 ‘‘(c) ELIGIBILITY; PREFERENCE FOR RURAL AND

16 SMALL URBAN AREAS.— 

17 ‘‘(1) ELIGIBLE HOSPITAL DEFINED.—For pur18 poses of this section, an ‘eligible hospital’ means, 

19 with respect to a loan under this section, a hospital 

20 that, as of the date of the submission of an applica21 tion under subsection (b), meets, to the satisfaction 

22 of the Administrator of the Health Resources and 

23 Services Administration, each of the following cri24 teria: 


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1 ‘‘(A) The hospital does not operate a resi2 dency training program and has not previously 

3 operated such a program. 

4 ‘‘(B) The hospital has secured initial ac5 creditation by the American Council for Grad6 uate Medical Education or the American Osteo7 pathic Association. 

8 ‘‘(C) The hospital provides assurances to 

9 the satisfaction of the Administrator that such 

10 loan shall be used, consistent with subsection 

11 (d), only for the purposes of establishing and 

12 conducting an allopathic or osteopathic resi13 dency program in at least one of the following 

14 medical specialities (or a combination of such 

15 specialties): 

16 ‘‘(i) Family medicine. 

17 ‘‘(ii) Internal medicine. 

18 ‘‘(iii) Emergency medicine. 

19 ‘‘(iv) Obstetrics or gynecology. 

20 ‘‘(v) General surgery. 

21 ‘‘(D) The hospital enters into an agree22 ment with the Administrator that certifies the 

23 hospital will provide for the repayment of the 

24 loan in accordance with subsection (e). 


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1 ‘‘(2) PREFERENCE FOR RURAL AND SMALL

2 URBAN AREAS.—In making loans under this section, 

3 the Administrator of the Health Resources and Serv4 ices Administration shall give preference to any ap5 plicant for such a loan that is a hospital located in 

6 a rural area (as such term is defined in section 

7 1886(d)(2)(D) of the Social Security Act) or an 

8 urban area that is not a large urban area (as such 

9 terms are respectively defined in such section). 

10 ‘‘(d) PERMISSIBLE USES OF LOAN FUNDS.—A loan 

11 provided under this section shall be used, with respect to 

12 a residency training program, for only the following pur13 poses: 

14 ‘‘(1) Stipends and benefits available to resi15 dents. 

16 ‘‘(2) Salaries of faculty. 

17 ‘‘(3) Any other costs directly attributable to the 

18 residency training program, as specified by the Ad19 ministrator of the Health Resources and Services 

20 Administration. 

21 ‘‘(e) REPAYMENT OF LOANS.— 

22 ‘‘(1) REPAYMENT PLANS.—Under the agree23 ment described in subsection (c)(1)(D), with respect 

24 to a loan under this section provided to an eligible 


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1 hospital, the hospital may select one of the following 

2 repayment plans: 

3 ‘‘(A) DIRECT PAYMENTS ON INSTALLMENT

4 BASIS PLAN.—The repayment plan under this 

5 subparagraph is a plan under which the eligible 

6 hospital provides for the repayment of the loan 

7 amount in installments, in accordance with a 

8 schedule agreed to by the Administrator and 

9 the hospital. 

10 ‘‘(B) DEDUCTION IN MEDICARE REIM11 BURSEMENT PLAN.— 

12 ‘‘(i) IN GENERAL.—Subject to clause 

13 (ii), the repayment plan under this sub14 paragraph is a plan established by the Ad15 ministrator of the Health Resources and 

16 Services Administration, in consultation 

17 with the Administrator of the Centers for 

18 Medicare & Medicaid Services, with respect 

19 to an eligible hospital receiving a loan 

20 under this section, under which the loan is 

21 repaid through deductions from the 

22 amounts otherwise payable to the hospital 

23 under title XVIII of the Social Security 

24 Act, in accordance with a formula and 


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1 schedule agreed to by the Administrator 

2 and the hospital. 

3 ‘‘(ii) LIMITATION.—A deduction de4 scribed in clause (i) applicable to an eligi5 ble hospital for a fiscal year may not ex6 ceed 2 percent of the total amounts other7 wise payable to the hospital under title 

8 XVIII of the Social Security Act during 

9 such year. 

10 ‘‘(C) COMBINATION PLAN.—The repay11 ment plan under this subparagraph is a plan, 

12 agreed to by the Administrator and the eligible 

13 hospital involved, that provides for a combina14 tion of the repayment elements of the plans de15 scribed in subparagraphs (A) and (B), in ac16 cordance with the provisions of this subsection. 

17 ‘‘(2) CHANGES IN SELECTION.—An eligible hos18 pital that borrows a loan made under this section 

19 may change the selection made by the hospital of a 

20 repayment plan under paragraph (1) under such 

21 terms and conditions as may be established by the 

22 Administrator of the Health Resources and Services 

23 Administration and with the approval of the Admin24 istrator. 


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1 ‘‘(3) COMMENCEMENT OF REPAYMENT.—Re2 payment by an eligible hospital of a loan under this 

3 section shall commence not later than the date that 

4 is 24 months after the date on which the loan 

5 amount is disbursed to such hospital. 

6 ‘‘(4) REPAYMENT PERIOD.—A loan made under 

7 this section shall be fully repaid not later than the 

8 date that is five years after the date on which the 

9 repayment is required to commence under paragraph 

10 (3). 

11 ‘‘(5) LOAN PAYABLE IN FULL IF RESIDENCY

12 TRAINING PROGRAM CANCELED.—In the case that 

13 an eligible hospital borrows a loan under this sec14 tion, with respect to a residency training program, 

15 and terminates such program before the date on 

16 which such loan has been fully repaid in accordance 

17 with a plan under paragraph (1), such loan shall be 

18 payable by the hospital within 90 days of the date 

19 of such termination. 

20 ‘‘(f) NO INTEREST CHARGED.—The Administrator of 

21 the Health Resources and Services Administration may 

22 not charge or collect interest on any loan made under this 

23 section. 


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1 ‘‘(g) LIMITATION ON TOTAL AMOUNT OF LOAN.— 

2 The cumulative dollar amount of a loan made to an eligible 

3 hospital under this section may not exceed $1,000,000. 

4 ‘‘(h) PENALTIES.—The Administrator of the Health 

5 Resources and Services Administration shall establish pen6 alties to which an eligible hospital receiving a loan under 

7 this section would be subject if such hospital is in violation 

8 of any of the criteria described in subsection (c)(1). 

9 ‘‘(i) REPORTS.—Not later than January 1, 2012, and 

10 annually thereafter (before January 2, 2018), the Admin11 istrator of the Health Resources and Services Administra12 tion shall submit to Congress a report on the efficacy of 

13 the program under this section in increasing the number 

14 of residents practicing in each medical specialty described 

15 in subsection (c)(1)(C) during such year and the extent 

16 to which the program resulted in an increase in the num17 ber of available practitioners in each of such medical spe18 cialties that serve medically underserved populations. 

19 ‘‘(j) FUNDING.— 

20 ‘‘(1) AUTHORIZATION FOR APPROPRIATIONS.— 

21 For the purpose of carrying out the loan program 

22 under this section, there are authorized to be appro23 priated $25,000,000 for the period of fiscal years 

24 2008 through 2018. 


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1 ‘‘(2) AVAILABILITY.—Amounts appropriated 

2 under paragraph (1) shall remain available until ex3 pended. 

4 ‘‘(3) REPAID LOAN AMOUNTS.—Any amount re5 paid by, or recovered from, an eligible hospital under 

6 this section on or before the date of termination de7 scribed in subsection (j) shall be credited to the ap8 propriation account from which the loan amount in9 volved was originally paid. Any amount so credited 

10 shall be available only for the purpose of carrying 

11 out the loan program under this section. Any 

12 amount repaid by, or recovered from, such a hospital 

13 under this section after such date shall be credited 

14 to the general fund in the Treasury. 

15 ‘‘(k) TERMINATION OF PROGRAM.—No loan may be 

16 made under this section after December 31, 2017.’’. 

Æ 


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