II

105TH CONGRESS

2D SESSION S. 2049

To provide for payments to children’s hospitals that operate graduate medical

education programs.

IN THE SENATE OF THE UNITED STATES

MAY 7, 1998

Mr. KERREY (for himself, Mr. BOND, Mr. DURBIN, Mr. KENNEDY, Mr.

DEWINE, and Mr. MOYNIHAN) introduced the following bill; which was

read twice and referred to the Committee on Finance

A BILL

To provide for payments to children’s hospitals that operate

graduate medical education 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 ‘‘Children’s Hospitals

5 Education and Research Act of 1998’’.

6 SEC. 2. PROGRAM OF PAYMENTS TO CHILDREN’S HOS7 PITALS THAT OPERATE GRADUATE MEDICAL

8 EDUCATION PROGRAMS.

9 (a) PAYMENTS.—
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1 (1) IN GENERAL.—The Secretary shall make

2 payment under this section to each children’s hos3 pital for each hospital cost reporting period begin4 ning after fiscal year 1998 and before fiscal year

5 2003 for the direct and indirect expenses associated

6 with operating approved medical residency training

7 programs.

8 (2) CAPPED AMOUNT.—The payment to chil9 dren’s hospitals established in this subsection for

10 cost reporting periods ending in a fiscal year is lim11 ited to the extent of funds appropriated under sub12 section (d) for that fiscal year.

13 (3) PRO RATA REDUCTIONS.—If the Secretary

14 determines that the amount of funds appropriated

15 under subsection (d) for cost reporting periods end16 ing in a fiscal year is insufficient to provide the total

17 amount of payments otherwise due for such periods,

18 the Secretary shall reduce the amount payable under

19 this section for such period on a pro rata basis to

20 reflect such shortfall.

21 (b) AMOUNT OF PAYMENT.—

22 (1) IN GENERAL.—The amount payable under

23 this section to a children’s hospital for direct and in24 direct expenses relating to approved medical resi-
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1 dency training programs for a cost reporting period

2 is equal to the sum of—

3 (A) the product of—

4 (i) the per resident rate for direct

5 medical education, as determined under

6 paragraph (2), for the cost reporting pe7 riod; and

8 (ii) the weighted average number of

9 full-time equivalent residents in the hos10 pital’s approved medical residency training

11 programs (as determined under section

12 1886(h)(4) of the Social Security Act) for

13 the cost reporting period; and

14 (B) the product of—

15 (i) the per resident rate for indirect

16 medical education, as determined under

17 paragraph (3), for the cost reporting pe18 riod; and

19 (ii) the number of full-time equivalent

20 residents in the hospital’s approved medi21 cal residency training programs for the

22 cost reporting period.

23 (2) PER RESIDENT RATE FOR DIRECT MEDICAL

24 EDUCATION.—
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1 (A) IN GENERAL.—The per resident rate

2 for direct medical education for a hospital for

3 a cost reporting period ending in or after fiscal

4 year 1999 is the updated rate determined under

5 subparagraph (B), as adjusted for the hospital

6 under subparagraph (C).

7 (B) COMPUTATION OF UPDATED RATE.—

8 The Secretary shall—

9 (i) compute a base national DME av10 erage per resident rate equal to the aver11 age of the per resident rates computed

12 under section 1886(h)(2) of the Social Se13 curity Act for cost reporting periods end14 ing during fiscal year 1998; and

15 (ii) update such rate by the applicable

16 percentage increase determined under sec17 tion 1886(b)(3)(B)(i) of such Act for the

18 fiscal year involved.

19 (C) ADJUSTMENT FOR VARIATIONS IN

20 LABOR-RELATED COSTS.—The Secretary shall

21 adjust for each hospital the portion of such up22 dated rate that is related to labor and labor-re23 lated costs to account for variations in wage

24 costs in the geographic area in which the hos25 pital is located using the factor determined
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1 under section 1886(d)(3)(E) of the Social Secu2 rity Act.

3 (3) PER RESIDENT RATE FOR INDIRECT MEDI4 CAL EDUCATION.—

5 (A) IN GENERAL.—The per resident rate

6 for indirect medical education for a hospital for

7 a cost reporting period ending in or after fiscal

8 year 1999 is the updated amount determined

9 under subparagraph (B).

10 (B) COMPUTATION OF UPDATED

11 AMOUNT.—The Secretary shall—

12 (i) determine, for each hospital with a

13 graduate medical education program which

14 is paid under section 1886(d) of the Social

15 Security Act, the amount paid to that hos16 pital pursuant to section 1886(d)(5)(B) of

17 such Act for the equivalent of a full twelve18 month cost reporting period ending during

19 the preceding fiscal year and divide such

20 amount by the number of full-time equiva21 lent residents participating in its approved

22 residency programs and used to calculate

23 the amount of payment under such section

24 in that cost reporting period;
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1 (ii) take the sum of the amounts de2 termined under clause (i) for all the hos3 pitals described in such clause and divide

4 that sum by the number of hospitals so de5 scribed; and

6 (iii) update the amount computed

7 under clause (ii) for a hospital by the ap8 plicable percentage increase determined

9 under section 1886(b)(3)(B)(i) of such Act

10 for the fiscal year involved.

11 (c) MAKING OF PAYMENTS.—

12 (1) INTERIM PAYMENTS.—The Secretary shall

13 estimate, before the beginning of each cost reporting

14 period for a hospital for which a payment may be

15 made under this section, the amount of payment to

16 be made under this section to the hospital for such

17 period and shall make payment of such amount, in

18 26 equal interim installments during such period.

19 (2) FINAL PAYMENT.—At the end of each such

20 period, the hospital shall submit to the Secretary

21 such information as the Secretary determines to be

22 necessary to determine the final payment amount

23 due under this section for the hospital for the pe24 riod. Based on such determination, the Secretary

25 shall recoup any overpayments made, or pay any
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1 balance due. The final amount so determined shall

2 be considered a final intermediary determination for

3 purposes of applying section 1878 of the Social Se4 curity Act and shall be subject to review under that

5 section in the same manner as the amount of pay6 ment under section 1886(d) is subject to review

7 under such section.

8 (d) LIMITATION ON EXPENDITURES.—

9 (1) IN GENERAL.—Subject to paragraph (2),

10 there are hereby appropriated, out of any money in

11 the Treasury not otherwise appropriated, for pay12 ments under this section for cost reporting periods

13 beginning in—

14 (A) fiscal year 1999 $100,000,000;

15 (B) fiscal year 2000, $285,000,000;

16 (C) fiscal year 2001, $285,000,000; and

17 (D) fiscal year 2002, $285,000,000.

18 (2) CARRYOVER OF EXCESS.—If the amount of

19 payments under this section for cost reporting peri20 ods ending in fiscal year 1999, 2000, or 2001 is less

21 than the amount provided under this subsection for

22 such payments for such periods, then the amount

23 available under this subsection for cost reporting pe24 riods ending in the following fiscal year shall be in25 creased by the amount of such difference.
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1 (e) RELATION TO MEDICARE AND MEDICAID PAY2 MENTS.—Notwithstanding any other provision of law,

3 payments under this section to a hospital for a cost report4 ing period—

5 (1) are in lieu of any amounts otherwise pay6 able to the hospital under section 1886(h) or

7 1886(d)(5)(B) of the Social Security Act to the hos8 pital for such cost reporting period, but

9 (2) shall not affect the amounts otherwise pay10 able to such hospitals under a State medicaid plan

11 under title XIX of such Act.

12 (f) DEFINITIONS.—In this section:

13 (1) APPROVED MEDICAL RESIDENCY TRAINING

14 PROGRAM.—The term ‘‘approved medical residency

15 training program’’ has the meaning given such term

16 in section 1886(h)(5)(A) of the Social Security Act

17 (42 U.S.C. 1395ww(h)(5)(A)).

18 (2) CHILDREN’S HOSPITAL.—The term ‘‘chil19 dren’s hospital’’ means a hospital described in sec20 tion 1886(d)(1)(B)(iii) of the Social Security Act

21 (42 U.S.C. 1395ww(d)(1)(B)(iii)).

22 (3) DIRECT GRADUATE MEDICAL EDUCATION

23 COSTS.—The term ‘‘direct graduate medical edu24 cation costs’’ has the meaning given such term in
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1 section 1886(h)(5)(C) of the Social Security Act (42

2 U.S.C. 1395ww(h)(5)(C)).

3 (4) SECRETARY.—The term ‘‘Secretary’’ means

4 the Secretary of Health and Human Services.

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