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[House Report 109-508]
[From the U.S. Government Publishing Office]

109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-508

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

 
      CHILDREN'S HOSPITAL GME SUPPORT REAUTHORIZATION ACT OF 2006

                                _______
                                

 June 20, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Barton of Texas, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5574]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 5574) to amend the Public Health Service Act to 
reauthorize support for graduate medical education programs in 
children's hospitals, 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
Committee Cost Estimate..........................................     5
Congressional Budget Office Estimate.............................     5
Federal Mandates Statement.......................................     6
Advisory Committee Statement.....................................     7
Constitutional Authority Statement...............................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     8

                               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 ``Children's Hospital GME Support 
Reauthorization Act of 2006''.

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

  (a) In General.--Section 340E of the Public Health Service Act (42 
U.S.C. 256e) is amended--
          (1) in subsection (a), by inserting ``and each of fiscal 
        years 2007 through 2011'' after ``for each of fiscal years 2000 
        through 2005'';
          (2) in subsection (f)(1)(A)--
                  (A) in clause (ii), by striking ``and'' at the end;
                  (B) in clause (iii), by striking the period at the 
                end and inserting ``; and''; and
                  (C) by adding at the end the following:
                          ``(iv) for each of fiscal years 2007 through 
                        2011, $100,000,000.''; and
          (3) in subsection (f)(2)--
                  (A) in the matter before subparagraph (A), by 
                striking ``subsection (b)(1)(A)'' and inserting 
                ``subsection (b)(1)(B)'';
                  (B) in subparagraph (B), by striking ``and'' at the 
                end;
                  (C) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                  (D) by adding at the end the following:
                  ``(D) for each of fiscal years 2007 through 2011, 
                $200,000,000.''.
  (b) Reduction in Payments for Failure to File Annual Report.--
Subsection (b) of section 340E of the Public Health Service Act (42 
U.S.C. 256e) is amended--
          (1) in paragraph (1), in the matter before subparagraph (A), 
        by striking ``paragraph (2)'' and inserting ``paragraphs (2) 
        and (3)''; and
          (2) by adding at the end the following:
          ``(3) Annual reporting required.--
                  ``(A) Reduction in payment for failure to report.--
                          ``(i) In general.--The amount payable under 
                        this section to a children's hospital for a 
                        fiscal year (beginning with fiscal year 2008 
                        and after taking into account paragraph (2)) 
                        shall be reduced by 25 percent if the Secretary 
                        determines that--
                                  ``(I) the hospital has failed to 
                                provide the Secretary, as an addendum 
                                to the hospital's application under 
                                this section for such fiscal year, the 
                                report required under subparagraph (B) 
                                for the previous fiscal year; or
                                  ``(II) such report fails to provide 
                                the information required under any 
                                clause of such subparagraph.
                          ``(ii) Notice and opportunity to provide 
                        missing information.--Before imposing a 
                        reduction under clause (i) on the basis of a 
                        hospital's failure to provide information 
                        described in clause (i)(II), the Secretary 
                        shall provide notice to the hospital of such 
                        failure and the Secretary's intention to impose 
                        such reduction and shall provide the hospital 
                        with the opportunity to provide the required 
                        information within a period of 30 days 
                        beginning on the date of such notice. If the 
                        hospital provides such information within such 
                        period, no reduction shall be made under clause 
                        (i) on the basis of the previous failure to 
                        provide such information.
                  ``(B) Annual report.--The report required under this 
                subparagraph for a children's hospital for a fiscal 
                year is a report that includes (in a form and manner 
                specified by the Secretary) the following information 
                for the residency academic year completed immediately 
                prior to such fiscal year:
                          ``(i) The types of resident training programs 
                        that the hospital provided for residents 
                        described in subparagraph (C), such as general 
                        pediatrics, internal medicine/pediatrics, and 
                        pediatric subspecialties, including both 
                        medical subspecialties certified by the 
                        American Board of Pediatrics (such as pediatric 
                        gastroenterology) and non-medical 
                        subspecialties approved by other medical 
                        certification boards (such as pediatric 
                        surgery).
                          ``(ii) The number of training positions for 
                        residents described in subparagraph (C), the 
                        number of such positions recruited to fill, and 
                        the number of such positions filled.
                          ``(iii) The types of training that the 
                        hospital provided for residents described in 
                        subparagraph (C) related to the health care 
                        needs of different populations, such as 
                        children who are underserved for reasons of 
                        family income or geographic location, including 
                        rural and urban areas.
                          ``(iv) The changes in residency training for 
                        residents described in subparagraph (C) which 
                        the hospital has made during such residency 
                        academic year (except that the first report 
                        submitted by the hospital under this 
                        subparagraph shall be for such changes since 
                        the first year in which the hospital received 
                        payment under this section), including--
                                  ``(I) changes in curricula, training 
                                experiences, and types of training 
                                programs, and benefits that have 
                                resulted from such changes; and
                                  ``(II) changes for purposes of 
                                training the residents in the 
                                measurement and improvement of the 
                                quality and safety of patient care.
                          ``(v) The numbers of residents described in 
                        subparagraph (C) who completed their residency 
                        training at the end of such residency academic 
                        year and care for children within the borders 
                        of the service area of the hospital or within 
                        the borders of the State in which the hospital 
                        is located. Such numbers shall be disaggregated 
                        with respect to residents who completed 
                        residencies in general pediatrics or internal 
                        medicine/pediatrics, subspecialty residencies, 
                        and dental residencies.
                  ``(C) Residents.--The residents described in this 
                subparagraph are those who--
                          ``(i) are in full-time equivalent resident 
                        training positions in any training program 
                        sponsored by the hospital; or
                          ``(ii) are in a training program sponsored by 
                        an entity other than the hospital, but who 
                        spend more than 75 percent of their training 
                        time at the hospital.
                  ``(D) Report to congress.--Not later than the end of 
                fiscal year 2011, the Secretary, acting through the 
                Administrator of the Health Resources and Services 
                Administration, shall submit a report to the Congress--
                          ``(i) summarizing the information submitted 
                        in reports to the Secretary under subparagraph 
                        (B);
                          ``(ii) describing the results of the program 
                        carried out under this section; and
                          ``(iii) making recommendations for 
                        improvements to the program.''.
  (c) Technical Amendments.--Section 340E of the Public Health Service 
Act (42 U.S.C. 256e) is further amended--
          (1) in subsection (c)(2)(E)(ii), by striking ``described in 
        subparagraph (C)(ii)'' and inserting ``applied under section 
        1886(d)(3)(E) of the Social Security Act for discharges 
        occurring during the preceding fiscal year'';
          (2) in subsection (e)(2), by striking the first sentence; and
          (3) in subsection (e)(3), by striking ``made to pay'' and 
        inserting ``made and pay''.

                          Purpose and Summary

    H.R. 5574 reauthorizes the Children's Hospitals Graduate 
Medical Education Program from 2007 until 2011 to fund 
residency programs in children's hospitals.

                  Background and Need for Legislation

    H.R. 5574 reauthorizes the Children's Hospital Graduate 
Medical Education program from fiscal year 2007 through fiscal 
year 2011.
    The Children's Hospital Graduate Medical Education (CHGME) 
program was established on December 16, 1999, as part of the 
Public Health Services Act (P.L. 106-129), and was later 
amended by the Children's Health Act of 2000 (P.L. 106-310). 
The authorization expired at the end of fiscal year 2005. The 
program is administered by the Health Resources and Service 
Administration (HRSA).
    The CHGME program is designed to help children's teaching 
hospitals that do not receive significant Federal support for 
their resident and intern training programs through the 
Medicare program because of their low Medicare patient volume. 
Graduate medical education is funded through Medicare payments 
to full service teaching hospitals. Prior to the enactment of 
this program, independent children's teaching hospitals did not 
have a similar program to fund resident training programs for 
physicians. Congress recognized this inequity and the financial 
disadvantage it placed on children's hospitals.

                                Hearings

    On May 9, 2006, the Subcommittee on Health held a hearing 
entitled ``Examining the Children's Hospital Graduate Medical 
Education Program.'' The Subcommittee received testimony from: 
Kerry Nesseler, Associate Administrator, Bureau of Health 
Professions, Health Resources and Services Administration, U.S. 
Department of Health and Human Services; Patrick Magoon, 
President and CEO, Children's Memorial Hospital, Chicago, 
Illinois; and Bill Considine, President and CEO, Akron 
Children's Hospital, Akron, Ohio.

                        Committee Consideration

    On Thursday, June 8, 2006, the Subcommittee on Health met 
in open markup session and approved H.R. 5573 for Full 
Committee consideration, without amendment, by a voice vote, a 
quorum being present. On Thursday, June 15, 2006, the Committee 
on Energy and Commerce met in open markup session and ordered 
H.R. 5573 reported to the House, amended, by a voice vote, a 
quorum being present.

                            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. 
There were no record votes taken in connection with ordering 
H.R. 5574 reported. A motion by Mr. Deal to order H.R. 5574 
reported to the House, amended, was agreed to by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held an oversight 
hearing and made findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    The goal of H.R. 5574 is to reauthorize the Children's 
Hospital Graduate Medical Education Program to provide 
independent children's hospitals with Federal assistance for 
their pediatric residency training programs.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
5574, the Children's Hospital GME Support Reauthorization Act 
of 2006, would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate 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 
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, June 19, 2006.
Hon. Joe Barton,
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. 5574, the 
Children's Hospital GME Support Reauthorization Act of 2006.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Camile 
Williams.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 5574--Children's Hospital GME Support Reauthorization Act of 2006

    Summary: H.R. 5574 would amend the Public Health Service 
Act to authorize payments to children's hospitals that operate 
graduate medical education programs. Payments would be made to 
such hospitals for both ``direct'' and ``indirect'' costs 
related to graduate medical education. Direct costs are related 
to the cost of operating a medical education program, such as 
the salaries of medical residents, while indirect costs are 
intended to compensate hospitals for patient care costs that 
are expected to be higher in teaching hospitals than in non-
teaching hospitals.
    H.R. 5574 would authorize the appropriation of $300 million 
a year over the 2007-2011 period for payments to children's 
hospitals. CBO estimates that implementing the bill would cost 
$225 million in 2007 and $1.4 billion over the 2007-2011 
period, assuming the appropriation of the authorized amounts.
    H.R. 5574 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Children's hospitals that are operated by government entities 
could benefit from grants authorized by the bill for graduate 
medical training.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5574 is shown in the following table. 
The costs of this legislation fall within budget function 550 
(health).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2006    2007    2008    2009    2010    2011
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law:
    Budget Authoritya...........................................     301       0       0       0       0       0
    Estimated Outlays...........................................     302      75       0       0       0       0
Proposed Changes:
    Authorization Level.........................................       0     300     300     300     300     300
    Estimated Outlays...........................................       0     225     300     300     300     300
Spending Under H.R. 5574:
    Authorization Levela........................................     301     300     300     300     300     300
    Estimated Outlays...........................................     302     300     300     300     300     300
----------------------------------------------------------------------------------------------------------------
aThe 2006 level is the amount appropriated for that year for payments to children's hospitals that operate
  graduate medical education programs.

    Basis of estimate: The Health Resources and Services 
Administration administers a program that provides payments to 
children's hospitals that operate graduate medical education 
programs. Authorization for that program expired in 2005. H.R. 
5574 would authorize funding for the program through 2011. For 
this estimate, CBO assumes that H.R. 5574 will be enacted 
before the end of this fiscal year and that the authorized 
amounts will be appropriated for each year.
    H.R. 5574 would authorize the appropriation of $100 million 
a year for 2007 through 2011 for payment towards the direct 
costs of graduate medical education in children's hospitals. 
Those funds would be allocated across eligible hospitals 
according to a formula that takes into account the number of 
residents each hospital employs and its cost per resident as 
reported in 1997.
    The bill also would authorize the appropriation of $200 
million a year for 2007 through 2011 for payment towards the 
indirect costs of graduate medical education programs. Those 
payments would be made to hospitals on the basis of a formula 
that takes into account the hospital's number of discharges, 
the relative costliness of those cases are measured by a case-
mix index, and the number of residents at the hospital.
    Based on historical patterns of spending for the graduate 
medical education program, CBO estimates that implementing the 
bill would cost $225 million in 2007 and $1.4 billion over the 
2007-2011 period, assuming appropriation of the specified 
amounts.
    Intergovernmental and private-sector impact: H.R. 5574 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Children's hospitals that are operated by 
governmental entities could benefit from grants authorized by 
the bill for graduate medical training.
    Estimate prepared by: Federal Costs: Camile Williams. 
Impact on State, Local, and Tribal Governments: Leo Lex. Impact 
on the Private Sector: Paige Shevlin.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates 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 were created by this 
legislation.

                   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 this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation 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.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    Section 1 establishes the short title of the Act as the 
``Children's Hospital GME Support Reauthorization Act of 
2006.''

Section 2. Program of payments to children's hospitals that operate 
        graduate medical education programs

    Section 2 amends Section 340E of the Public Health Service 
Act to extend the authorization of the CHGME program from 
fiscal year 2007 through fiscal year 2011. It also provides 
authorization of appropriations for direct medical education 
(DME) payments and indirect medical education (IME) payments 
under CHGME through fiscal year 2011, providing $100,000,000 
for DME and $200,000,000 for IME for each of fiscal years 2007 
through 2011.
    Section 2 also creates a mechanism by which hospitals may 
voluntarily provide the Secretary of Health and Human Services 
additional reporting information. In order to receive full 
funding, hospitals will be required to submit an annual report. 
If a hospital opts not to report this data, it will be able to 
access only 75% of what would have been its total amount 
awarded.
    The new information will include the (1) types of resident 
training programs that the hospital provided for residents; (2) 
number of training positions for residents; (3) types of 
training that the hospital provided for residents related to 
the health care needs of different populations; (4) changes in 
residency training for residents which the hospital has made 
during such residency academic year; and (4) number of 
residents who completed their residency training at the end of 
such residency academic year and care for children within the 
borders of the service area of the hospital or within the 
borders of the State in which the hospital is located.
    Finally, section 2 corrects a technical error in the 
underlying statute.

Section 3. Sense of the Senate

    Section 3 recognizes the importance of perinatal hospitals 
in both treating seriously ill newborns and training the 
providers who are essential to their care, as well as to the 
care of healthy mothers and babies.

         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):

             SECTION 340E OF THE PUBLIC HEALTH SERVICE ACT

SEC. 340E. 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 through 2005 and each of fiscal years 2007 through 
2011, one for the direct expenses and the other for indirect 
expenses associated with operating approved graduate medical 
residency training programs. The Secretary shall promulgate 
regulations pursuant to the rulemaking requirements of title 5, 
United States Code, which shall govern payments made under this 
subpart.
  (b) Amount of Payments.--
          (1) In general.--Subject to [paragraph (2)] 
        paragraphs (2) and (3), 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) * * *

           *       *       *       *       *       *       *

          (3) Annual reporting required.--
                  (A) Reduction in payment for failure to 
                report.--
                          (i) In general.--The amount payable 
                        under this section to a children's 
                        hospital for a fiscal year (beginning 
                        with fiscal year 2008 and after taking 
                        into account paragraph (2)) shall be 
                        reduced by 25 percent if the Secretary 
                        determines that--
                                  (I) the hospital has failed 
                                to provide the Secretary, as an 
                                addendum to the hospital's 
                                application under this section 
                                for such fiscal year, the 
                                report required under 
                                subparagraph (B) for the 
                                previous fiscal year; or
                                  (II) such report fails to 
                                provide the information 
                                required under any clause of 
                                such subparagraph.
                          (ii) Notice and opportunity to 
                        provide missing information.--Before 
                        imposing a reduction under clause (i) 
                        on the basis of a hospital's failure to 
                        provide information described in clause 
                        (i)(II), the Secretary shall provide 
                        notice to the hospital of such failure 
                        and the Secretary's intention to impose 
                        such reduction and shall provide the 
                        hospital with the opportunity to 
                        provide the required information within 
                        a period of 30 days beginning on the 
                        date of such notice. If the hospital 
                        provides such information within such 
                        period, no reduction shall be made 
                        under clause (i) on the basis of the 
                        previous failure to provide such 
                        information.
                  (B) Annual report.--The report required under 
                this subparagraph for a children's hospital for 
                a fiscal year is a report that includes (in a 
                form and manner specified by the Secretary) the 
                following information for the residency 
                academic year completed immediately prior to 
                such fiscal year:
                          (i) The types of resident training 
                        programs that the hospital provided for 
                        residents described in subparagraph 
                        (C), such as general pediatrics, 
                        internal medicine/pediatrics, and 
                        pediatric subspecialties, including 
                        both medical subspecialties certified 
                        by the American Board of Pediatrics 
                        (such as pediatric gastroenterology) 
                        and non-medical subspecialties approved 
                        by other medical certification boards 
                        (such as pediatric surgery).
                          (ii) The number of training positions 
                        for residents described in subparagraph 
                        (C), the number of such positions 
                        recruited to fill, and the number of 
                        such positions filled.
                          (iii) The types of training that the 
                        hospital provided for residents 
                        described in subparagraph (C) related 
                        to the health care needs of different 
                        populations, such as children who are 
                        underserved for reasons of family 
                        income or geographic location, 
                        including rural and urban areas.
                          (iv) The changes in residency 
                        training for residents described in 
                        subparagraph (C) which the hospital has 
                        made during such residency academic 
                        year (except that the first report 
                        submitted by the hospital under this 
                        subparagraph shall be for such changes 
                        since the first year in which the 
                        hospital received payment under this 
                        section), including--
                                  (I) changes in curricula, 
                                training experiences, and types 
                                of training programs, and 
                                benefits that have resulted 
                                from such changes; and
                                  (II) changes for purposes of 
                                training the residents in the 
                                measurement and improvement of 
                                the quality and safety of 
                                patient care.
                          (v) The numbers of residents 
                        described in subparagraph (C) who 
                        completed their residency training at 
                        the end of such residency academic year 
                        and care for children within the 
                        borders of the service area of the 
                        hospital or within the borders of the 
                        State in which the hospital is located. 
                        Such numbers shall be disaggregated 
                        with respect to residents who completed 
                        residencies in general pediatrics or 
                        internal medicine/pediatrics, 
                        subspecialty residencies, and dental 
                        residencies.
                  (C) Residents.--The residents described in 
                this subparagraph are those who--
                          (i) are in full-time equivalent 
                        resident training positions in any 
                        training program sponsored by the 
                        hospital; or
                          (ii) are in a training program 
                        sponsored by an entity other than the 
                        hospital, but who spend more than 75 
                        percent of their training time at the 
                        hospital.
                  (D) Report to congress.--Not later than the 
                end of fiscal year 2011, the Secretary, acting 
                through the Administrator of the Health 
                Resources and Services Administration, shall 
                submit a report to the Congress--
                          (i) summarizing the information 
                        submitted in reports to the Secretary 
                        under subparagraph (B);
                          (ii) describing the results of the 
                        program carried out under this section; 
                        and
                          (iii) making recommendations for 
                        improvements to the program.
  (c) Amount of Payment for Direct Graduate Medical 
Education.--
          (1) * * *
          (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) * * *

           *       *       *       *       *       *       *

                  (E) Application to individual hospitals.--The 
                Secretary shall compute for each such hospital 
                that is a children's hospital a per resident 
                amount--
                          (i) * * *
                          (ii) by multiplying the wage-related 
                        portion by the factor [described in 
                        subparagraph (C)(ii)] applied under 
                        section 1886(d)(3)(E) of the Social 
                        Security Act for discharges occurring 
                        during the preceding fiscal year for 
                        the hospital's area; and

           *       *       *       *       *       *       *

  (e) Making of Payments.--
          (1) * * *
          (2) Withholding.--[The Secretary shall withhold up to 
        25 percent from each interim installment for direct and 
        indirect graduate medical education paid under 
        paragraph (1).] The Secretary shall withhold up to 25 
        percent from each interim installment for direct and 
        indirect graduate medical education paid under 
        paragraph (1) as necessary to ensure a hospital will 
        not be overpaid on an interim basis.
          (3) Reconciliation.--Prior to the end of each fiscal 
        year, the Secretary shall determine any changes to the 
        number of residents reported by a hospital in the 
        application of the hospital for the current fiscal year 
        to determine the final amount payable to the hospital 
        for the current fiscal year for both direct expense and 
        indirect expense amounts. Based on such determination, 
        the Secretary shall recoup any overpayments [made to 
        pay] made and pay any balance due to the extent 
        possible. The final amount so determined shall be 
        considered a final intermediary determination for the 
        purposes of section 1878 of the Social Security Act and 
        shall be subject to administrative and judicial review 
        under that section in the same manner as the amount of 
        payment under section 1186(d) of such Act 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;
                          (ii) for fiscal year 2001, 
                        $95,000,000; [and]
                          (iii) for each of the fiscal years 
                        2002 through 2005, such sums as may be 
                        necessary[.]; and
                          (iv) for each of fiscal years 2007 
                        through 2011, $100,000,000.

           *       *       *       *       *       *       *

          (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)] (b)(1)(B)--
                  (A) * * *
                  (B) for fiscal year 2001, $190,000,000; [and]
                  (C) for each of the fiscal years 2002 through 
                2005, such sums as may be necessary[.]; and
                  (D) for each of fiscal years 2007 through 
                2011, $200,000,000.

           *       *       *       *       *       *       *

                                  
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