I

106TH CONGRESS

1ST SESSION H. R. 1579

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

education programs.

IN THE HOUSE OF REPRESENTATIVES

APRIL 27, 1999

Mrs. JOHNSON of Connecticut (for herself, Mr. BROWN of Ohio, Mr. THOMAS,

Mr. GREENWOOD, Mr. BILIRAKIS, Mr. DINGELL, Mr. PORTER, Mr.

YOUNG of Florida, Mr. STARK, Mr. CAMP, Mr. RAMSTAD, Ms. DUNN, Mr.

NEAL of Massachusetts, Mr. PORTMAN, Mr. KLECZKA, Mr. ENGLISH,

Mr. LEWIS of Georgia, Mr. WELLER, Mr. MCINNIS, Mr. BILBRAY, Mr.

WAXMAN, Mr. HALL of Texas, Mr. CALLAHAN, Mr. GREEN of Texas, Mr.

DIXON, Mr. OLVER, Ms. KILPATRICK, Mr. BACHUS, Mr. BAIRD, Mr.

BALADACCI, Mr. BENTSEN, Mr. BLAGOJEVICH, Mr. CAPUANO, Mr. COOK,

Mr. DAVIS of Illinois, Mr. DELAHUNT, Mr. FRANK of Massachusetts, Mr.

GEJDENSON, Mr. HILLIARD, Mr. INSLEE, Ms. EDDIE BERNICE JOHNSON

of Texas, Mrs. JONES of Ohio, Mr. KUCINICH, Mr. LAFALCE, Mr.

LATOURETTE, Mr. LARSON, Mrs. MALONEY of New York, Mr. MALONEY

of Connecticut, Mr. MCGOVERN, Mr. MOAKLEY, Mr. NEY, Mr. OBERSTAR, Ms. PRYCE of Ohio, Mr. RILEY, Mr. RODRIGUEZ, Mr. RUSH, Mr.

SESSIONS, Ms. SCHAKOWSKY, Mr. TANCREDO, Mr. TRAFICANT, Mr.

SANDLIN, Mr. SHOWS, Mr. VENTO, Mr. WEYGAND, and Mr. BECERRA)

introduced the following bill; which was referred to the Committee on

Commerce, and in addition to the Committee on Ways and Means, for

a period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide for payments to children’s hospitals that operate

graduate medical education programs.
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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 1999’’.

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

8 EDUCATION PROGRAMS.

9 (a) PAYMENTS.—The Secretary shall make two pay10 ments under this section to each children’s hospital for

11 each of fiscal years 2000 and 2001, one for the direct ex12 penses and the other for indirect expenses associated with

13 operating approved graduate medical residency training

14 programs.

15 (b) AMOUNT OF PAYMENTS.—

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

17 the amounts payable under this section to a chil18 dren’s hospital for an approved graduate medical

19 residency training program for a fiscal year are each

20 of the following amounts:

21 (A) DIRECT EXPENSE AMOUNT.—The

22 amount determined under subsection (c) for di23 rect expenses associated with operating ap24 proved graduate medical residency training pro25 grams.
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1 (B) INDIRECT EXPENSE AMOUNT.—The

2 amount determined under subsection (d) for in3 direct expenses associated with the treatment of

4 more severely ill patients and the additional

5 costs relating to teaching residents in such pro6 grams.

7 (2) CAPPED AMOUNT.—

8 (A) IN GENERAL.—The total of the pay9 ments made to children’s hospitals under para10 graph (1)(A) or paragraph (1)(B) in a fiscal

11 year shall not exceed the funds appropriated

12 under paragraph (1) or (2), respectively, of sub13 section (f) for such payments for that fiscal

14 year.

15 (B) PRO RATA REDUCTIONS OF PAYMENTS

16 FOR DIRECT EXPENSES.—If the Secretary de17 termines that the amount of funds appropriated

18 under subsection (f)(1) for a fiscal year is in19 sufficient to provide the total amount of pay20 ments otherwise due for such periods under

21 paragraph (1)(A), the Secretary shall reduce

22 the amounts so payable on a pro rata basis to

23 reflect such shortfall.

24 (c) AMOUNT OF PAYMENT FOR DIRECT GRADUATE

25 MEDICAL EDUCATION.—
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1 (1) IN GENERAL.—The amount determined

2 under this subsection for payments to a children’s

3 hospital for direct graduate expenses relating to ap4 proved graduate medical residency training pro5 grams for a fiscal year is equal to the product of—

6 (A) the updated per resident amount for

7 direct graduate medical education, as deter8 mined under paragraph (2)); and

9 (B) the average number of full-time equiv10 alent residents in the hospital’s graduate ap11 proved medical residency training programs (as

12 determined under section 1886(h)(4) of the So13 cial Security Act (42 U.S.C. 1395ww(h)(4)))

14 during the fiscal year.

15 (2) UPDATED PER RESIDENT AMOUNT FOR DI16 RECT GRADUATE MEDICAL EDUCATION.—The up17 dated per resident amount for direct graduate med18 ical education for a hospital for a fiscal year is an

19 amount determined as follows:

20 (A) DETERMINATION OF HOSPITAL SINGLE

21 PER RESIDENT AMOUNT.—The Secretary shall

22 compute for each hospital operating an ap23 proved graduate medical education program (re24 gardless of whether or not it is a children’s hos25 pital) a single per resident amount equal to the
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1 average (weighted by number of full-time equiv2 alent residents) of the primary care per resident

3 amount and the non-primary care per resident

4 amount computed under section 1886(h)(2) of

5 the Social Security Act for cost reporting peri6 ods ending during fiscal year 1997.

7 (B) DETERMINATION OF WAGE AND NON8 WAGE-RELATED PROPORTION OF THE SINGLE

9 PER RESIDENT AMOUNT.—The Secretary shall

10 estimate the average proportion of the single

11 per resident amounts computed under subpara12 graph (A) that is attributable to wages and

13 wage-related costs.

14 (C) STANDARDIZING PER RESIDENT

15 AMOUNTS.—The Secretary shall establish a

16 standardized per resident amount for each such

17 hospital—

18 (i) by dividing the single per resident

19 amount computed under subparagraph (A)

20 into a wage-related portion and a non21 wage-related portion by applying the pro22 portion determined under subparagraph

23 (B);

24 (ii) by dividing the wage-related por25 tion by the factor applied under section
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1 1886(d)(3)(E) of the Social Security Act

2 (42 U.S.C. 1395ww(d)(3)(E)) for dis3 charges occurring during fiscal year 1999

4 for the hospital’s area; and

5 (iii) by adding the non-wage-related

6 portion to the amount computed under

7 clause (ii).

8 (D) DETERMINATION OF NATIONAL AVER9 AGE.—The Secretary shall compute a national

10 average per resident amount equal to the aver11 age of the standardized per resident amounts

12 computed under subparagraph (C) for such hos13 pitals, with the amount for each hospital

14 weighted by the average number of full-time

15 equivalent residents at such hospital.

16 (E) APPLICATION TO INDIVIDUAL HOS17 PITALS.—The Secretary shall compute for each

18 such hospital that is a children’s hospital a per

19 resident amount—

20 (i) by dividing the national average

21 per resident amount computed under sub22 paragraph (D) into a wage-related portion

23 and a non-wage-related portion by applying

24 the proportion determined under subpara25 graph (B);
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1 (ii) by multiplying the wage-related

2 portion by the factor described in subpara3 graph (C)(ii) for the hospital’s area; and

4 (iii) by adding the non-wage-related

5 portion to the amount computed under

6 clause (ii).

7 (F) UPDATING RATE.—The Secretary shall

8 update such per resident amount for each such

9 children’s hospital by the estimated percentage

10 increase in the consumer price index for all

11 urban consumers during the period beginning

12 October 1997 and ending with the midpoint of

13 the hospital’s cost reporting period that begins

14 during fiscal year 2000.

15 (d) AMOUNT OF PAYMENT FOR INDIRECT MEDICAL

16 EDUCATION.—

17 (1) IN GENERAL.—The amount determined

18 under this subsection for payments to a children’s

19 hospital for indirect expenses associated with the

20 treatment of more severely ill patients and the addi21 tional costs related to the teaching of residents for

22 a fiscal year is equal to an amount determined ap23 propriate by the Secretary.

24 (2) FACTORS.—In determining the amount

25 under paragraph (1), the Secretary shall—
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1 (A) take into account variations in case

2 mix among children’s hospitals and the number

3 of full-time equivalent residents in the hospitals’

4 approved graduate medical residency training

5 programs; and

6 (B) assure that the aggregate of the pay7 ments for indirect expenses associated with the

8 treatment of more severely ill patients and the

9 additional costs related to the teaching of resi10 dents under this section in a fiscal year are

11 equal to the amount appropriated for such ex12 penses for the fiscal year involved under sub13 section (f)(2).

14 (e) MAKING OF PAYMENTS.—

15 (1) INTERIM PAYMENTS.—The Secretary shall

16 determine, before the beginning of each fiscal year

17 involved for which payments may be made for a hos18 pital under this section, the amounts of the pay19 ments for direct graduate medical education and in20 direct medical education for such fiscal year and

21 shall (subject to paragraph (2)) make the payments

22 of such amounts in 26 equal interim installments

23 during such period.

24 (2) WITHHOLDING.—The Secretary shall with25 hold up to 25 percent from each interim installment
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1 for direct graduate medical education paid under

2 paragraph (1).

3 (3) RECONCILIATION.—At the end of each fis4 cal year for which payments may be made under this

5 section, the hospital shall submit to the Secretary

6 such information as the Secretary determines to be

7 necessary to determine the percent (if any) of the

8 total amount withheld under paragraph (2) that is

9 due under this section for the hospital for the fiscal

10 year. Based on such determination, the Secretary

11 shall recoup any overpayments made, or pay any

12 balance due. The amount so determined shall be

13 considered a final intermediary determination for

14 purposes of applying section 1878 of the Social Se15 curity Act (42 U.S.C. 1395oo) and shall be subject

16 to review under that section in the same manner as

17 the amount of payment under section 1886(d) of

18 such Act (42 U.S.C. 1395ww(d)) is subject to review

19 under such section.

20 (f) AUTHORIZATION OF APPROPRIATIONS.—

21 (1) DIRECT GRADUATE MEDICAL EDUCATION.—

22 (A) IN GENERAL.—There are hereby au23 thorized to be appropriated, out of any money

24 in the Treasury not otherwise appropriated, for

25 payments under subsection (b)(1)(A) —
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1 (i) for fiscal year 2000, $90,000,000;

2 and

3 (ii) for fiscal year 2001, $95,000,000.

4 (B) CARRYOVER OF EXCESS.—The

5 amounts appropriated under subparagraph (A)

6 for fiscal year 2000 shall remain available for

7 obligation through the end of fiscal year 2001.

8 (2) INDIRECT MEDICAL EDUCATION.—There

9 are hereby authorized to be appropriated, out of any

10 money in the Treasury not otherwise appropriated,

11 for payments under subsection (b)(1)(A) —

12 (A) for fiscal year 2000, $190,000,000;

13 and

14 (B) for fiscal year 2001, $190,000,000.

15 (f) RELATION TO MEDICARE AND MEDICAID PAY16 MENTS.—Notwithstanding any other provision of law,

17 payments under this section to a hospital for fiscal years

18 2000 and 2001—

19 (1) are in lieu of any amounts otherwise pay20 able to the hospital under section 1886(h) or

21 1886(d)(5)(B) of the Social Security Act (42 U.S.C.

22 1395ww(h); 1395ww(d)(5)B)) for portions of cost

23 reporting periods occurring during such fiscal years;

24 but
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1 (2) shall not affect the amounts otherwise pay2 able to such hospitals under a State medicaid plan

3 under title XIX of such Act (42 U.S.C. 1396 et

4 seq.).

5 (g) DEFINITIONS.—In this section:

6 (1) APPROVED GRADUATE MEDICAL RESIDENCY

7 TRAINING PROGRAM.—The term ‘‘approved graduate

8 medical residency training program’’ has the mean9 ing given the term ‘‘approved medical residency

10 training program’’ in section 1886(h)(5)(A) of the

11 Social Security Act (42 U.S.C. 1395ww(h)(5)(A)).

12 (2) CHILDREN’S HOSPITAL.—The term ‘‘chil13 dren’s hospital’’ means a hospital described in sec14 tion 1886(d)(1)(B)(iii) of the Social Security Act

15 (42 U.S.C. 1395ww(d)(1)(B)(iii)).

16 (3) DIRECT GRADUATE MEDICAL EDUCATION

17 COSTS.—The term ‘‘direct graduate medical edu18 cation costs’’ has the meaning given such term in

19 section 1886(h)(5)(C) of the Social Security Act (42

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

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

22 the Secretary of Health and Human Services.

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