II 

Calendar No. 774 

108TH CONGRESS 

2D SESSION S. 2526 

[Report No. 108–388] 

To reauthorize the Children’s Hospitals Graduate Medical Education 

Program. 

IN THE SENATE OF THE UNITED STATES 

JUNE 16, 2004 

Mr. BOND (for himself, Mr. KENNEDY, Mr. DEWINE, Mrs. MURRAY, Mr. 

TALENT, Mr. BIDEN, Mr. KERRY, Mr. WARNER, Mr. CORNYN, Mr. DURBIN, Mrs. CLINTON, Mrs. BOXER, Ms. LANDRIEU, Mr. FITZGERALD, Mrs. 

LINCOLN, Mr. HATCH, Mr. SCHUMER, Mr. VOINOVICH, Mr. BENNETT, 

Mr. DODD, Mr. DAYTON, Mrs. FEINSTEIN, Mr. ALLEN, and Mr. CAMPBELL) introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

OCTOBER 7, 2004 

Reported by Mr. GREGG, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To reauthorize the Children’s Hospitals Graduate Medical 

Education Program. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2 

•S 2526 RS 

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Children’s Hospitals 

3 Educational Equity and Research Act’’ or the ‘‘CHEER 

4 Act’’. 

5 SEC. 2. REAUTHORIZATION OF CHILDREN’S HOSPITALS 

6 GRADUATE MEDICAL EDUCATION PROGRAM. 

7 (a) EXTENSION OF PROGRAM.—Section 340E(a) of 

8 the Public Health Service Act (42 U.S.C. 256e(a)) is 

9 amended by striking ‘‘2005’’ and inserting ‘‘2010’’. 

10 (b) DESCRIPTION OF AMOUNT OF PAYMENTS.—Sec11 tion 340E(b) of the Public Health Service Act (42 U.S.C. 

12 256e(b)) is amended— 

13 (1) in paragraph (1)(B), by striking ‘‘relating 

14 to teaching residents in such’’ and inserting ‘‘associ15 ated with graduate medical residency training’’; and 

16 (2) in paragraph (2)(A), by inserting before the 

17 period at the end ‘‘, except as provided under para18 graphs (1)(A) and (2)(B) of subsection (f)’’. 

19 (c) DIRECT GRADUATE MEDICAL EDUCATION.—Sec20 tion 340E(c) of the Public Health Service Act (42 U.S.C. 

21 245e(c)) is amended— 

22 (1) in paragraph (1)— 

23 (A) in the matter preceding subparagraph 

24 (A), by striking ‘‘product’’ and inserting 

25 ‘‘sum’’; 
3 

•S 2526 RS 

1 (B) in subparagraph (A), by striking ‘‘(A) 

2 the updated per resident’’ and inserting the fol3 lowing: 

4 ‘‘(A) the product of— 

5 ‘‘(i) the updated per resident’’. 

6 (C) by redesignating subparagraph (B) as 

7 clause (ii) and indenting appropriately; 

8 (D) in subparagraph (A)(ii) (as so redesig9 nated)— 

10 (i) by inserting ‘‘but without giving 

11 effect to section 1886(h)(7) of such Act’’ 

12 after ‘‘section 1886(h)(4) of the Social Se13 curity Act’’; and 

14 (ii) by striking the period and insert15 ing ‘‘; and’’; and 

16 (E) by inserting after subparagraph (A) 

17 the following: 

18 ‘‘(B) amounts for other approved edu19 cation programs that are provider-operated, as 

20 defined for purposes of Medicare payment, lim21 ited to not more than 30 percent of costs that 

22 would be allowed for such programs under 

23 Medicare rules for hospitals reimbursed under 

24 section 1886(d) of the Social Security Act.’’; 

25 and 
4 

•S 2526 RS 

1 (2) in paragraph (2)(B), by inserting before the 

2 period at the end ‘‘, without giving effect to section 

3 1886(d)(3)(E)(ii) of the Social Security Act’’. 

4 (d) INDIRECT GRADUATE MEDICAL EDUCATION.— 

5 Section 340E(d) of the Public Health Service Act (42 

6 U.S.C. 256e(d)) is amended— 

7 (1) in paragraph (1), by striking ‘‘related to’’ 

8 and inserting ‘‘associated with’’; and 

9 (2) in paragraph (2)(A)— 

10 (A) by inserting ‘‘ratio of the’’ after ‘‘hos11 pitals and the’’; and 

12 (B) by inserting at the end before the 

13 semicolon ‘‘to beds (but excluding beds or bassi14 nets assigned to healthy newborn infants)’’. 

15 (e) NATURE OF PAYMENTS.—Section 340E(e) of the 

16 Public Health Service Act (42 U.S.C. 256e(e)) is amend17 ed— 

18 (1) in paragraph (2), by striking the first sen19 tence; 

20 (2) in paragraph (3)— 

21 (A) by striking ‘‘made to pay’’ and insert22 ing ‘‘made and pay’’; and 

23 (B) by striking ‘‘to the extent possible’’ 

24 and all that follows through the end of the 

25 paragraph and inserting the following: ‘‘. To 
5 

•S 2526 RS 

1 the greatest extent possible, amounts recouped 

2 from a hospital are to be distributed to other 

3 hospitals in the same fiscal year. Amounts re4 couped from a hospital and not disbursed to 

5 other hospitals in the same fiscal year shall re6 main available for distribution during the sub7 sequent fiscal year. Unless there is fraud, 

8 amounts paid to a hospital without a demand 

9 for recoupment by the end of the fiscal year 

10 shall be final and not subject to recoupment.’’; 

11 and 

12 (3) by adding at the end the following: 

13 ‘‘(4) APPEALS.— 

14 ‘‘(A) IN GENERAL.—A decision affecting 

15 the amount payable to a hospital pursuant to 

16 this section shall— 

17 ‘‘(i) be subject to review under section 

18 1878 of the Social Security Act in the 

19 same manner as a final determination of a 

20 fiscal intermediary of the amount of pay21 ment under 1886(d) of such Act is subject 

22 to review; and 

23 ‘‘(ii) be handled expeditiously so that 

24 the review decision is reflected in the final 
6 

•S 2526 RS 

1 reconciliation for the year in which the ap2 peal is made. 

3 ‘‘(B) LIMITATION.—A review decision pur4 suant to this section shall not affect payments 

5 for a fiscal year prior to the fiscal year in which 

6 the review decision is rendered. 

7 ‘‘(C) APPLICATION TO SUBSEQUENT FIS8 CAL YEARS.—The Secretary shall apply a re9 view decision in determining the amount of pay10 ment for the appealing hospital in the fiscal 

11 year in which the decision is rendered and in 

12 subsequent years, unless the law at issue in the 

13 review decision is amended or there are mate14 rial differences between the facts for the fiscal 

15 year for which the review decision is rendered 

16 and the year for which payment is made. Noth17 ing in this section shall be construed to prohibit 

18 a hospital from appealing similar determina19 tions in subsequent periods.’’. 

20 (f) AUTHORIZATION OF APPROPRIATIONS.—Section 

21 340E(f) of the Public Health Service Act (42 U.S.C. 

22 256e(f)) is amended— 

23 (1) in paragraph (1)— 

24 (A) in subparagraph (A)— 

25 (i) in clause (ii), by striking ‘‘and’’; 
7 

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1 (ii) in clause (iii), by striking the pe2 riod at the end and inserting a semicolon; 

3 and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(iv) for fiscal year 2006, 

7 $110,000,000; and 

8 ‘‘(v) for each of fiscal years 2007 

9 through 2010, such sums as may be nec10 essary, including an annual adjustment to 

11 reflect increases in the Consumer Price 

12 Index.’’; and 

13 (B) in subparagraph (B), by striking ‘‘for 

14 fiscal year 2000’’ and all that follows and in15 serting ‘‘for fiscal year 2006 and each subse16 quent fiscal year shall remain available for obli17 gation for the year appropriated and the subse18 quent fiscal year.’’; and 

19 (2) in paragraph (2)— 

20 (A) by redesignating subparagraphs (A), 

21 (B), and (C) as clauses (i), (ii), and (iii), re22 spectively, and indenting appropriately; 

23 (B) by striking ‘‘There are hereby author24 ized’’ and inserting the following: 
8 

•S 2526 RS 

1 ‘‘(A) IN GENERAL.—There are author2 ized’’; 

3 (C) in clause (ii) (as redesignated by this 

4 paragraph), by striking ‘‘and’’; 

5 (D) in clause (iii) (as redesignated by this 

6 paragraph), by striking the period at the end 

7 and inserting a semicolon; 

8 (E) by adding at the end of subparagraph 

9 (A) (as designated by this paragraph), the fol10 lowing: 

11 ‘‘(iv) for fiscal year 2006, 

12 $220,000,000; and 

13 ‘‘(v) for each of fiscal years 2007 

14 through 2010, such sums as may be nec15 essary, including an annual adjustment to 

16 reflect increases in the Consumer Price 

17 Index.’’; and 

18 (F) at the end of paragraph (2), by adding 

19 the following: 

20 ‘‘(B) CARRYOVER OF EXCESS.—To the ex21 tent that amounts are not expended in the year 

22 for which they are appropriated, the amounts 

23 appropriated under subparagraph (A) for fiscal 

24 year 2006 and each subsequent fiscal year shall 
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1 remain available for obligation through the end 

2 of the following fiscal year.’’. 

3 (g) DEFINITIONS.—Section 340E(g)(3) of the Public 

4 Health Service Act (42 U.S.C. 256e(g)(3)) is amended by 

5 striking ‘‘has’’ and all that follows through the end of the 

6 sentence and inserting the following: ‘‘includes— 

7 ‘‘(A) the meaning given such term in sec8 tion 1886(h)(5)(C) of the Social Security Act; 

9 and 

10 ‘‘(B) costs of approved educational activi11 ties, as such term is used in section 1886(a)(4) 

12 of the Social Security Act.’’. 

13 SECTION 1. SHORT TITLE. 

14 This Act may be cited as the ‘‘Children’s Hospitals 

15 Educational Equity and Research Act’’ or the ‘‘CHEER 

16 Act’’. 

17 SEC. 2. REAUTHORIZATION OF CHILDREN’S HOSPITALS 

18 GRADUATE MEDICAL EDUCATION PROGRAM. 

19 (a) EXTENSION OF PROGRAM.—Section 340E(a) of the 

20 Public Health Service Act (42 U.S.C. 256e(a)) is amended 

21 by striking ‘‘2005’’ and inserting ‘‘2010’’. 

22 (b) DIRECT GRADUATE MEDICAL EDUCATION.—Sec23 tion 340E(c) of the Public Health Service Act (42 U.S.C. 

24 256e(c)) is amended— 
10 

•S 2526 RS 

1 (1) in paragraph (1)(B), by inserting ‘‘but with2 out giving effect to section 1886(h)(7) of such Act)’’ 

3 after ‘‘section 1886(h)(4) of the Social Security Act’’; 

4 and 

5 (2) in paragraph (2)(E)(ii), by striking ‘‘de6 scribed in subparagraph (C)(ii)’’ and inserting ‘‘ap7 plied under section 1886(d)(3)(E) of the Social Secu8 rity Act for discharges occurring during the preceding 

9 fiscal year’’. 

10 (c) INDIRECT GRADUATE MEDICAL EDUCATION.—Sec11 tion 340E(d)(2)(A) of the Public Health Service Act (42 

12 U.S.C. 256e(d)(2)(A)) is amended— 

13 (1) by inserting ‘‘ratio of the’’ after ‘‘hospitals 

14 and the’’; and 

15 (2) by inserting before the semicolon the fol16 lowing: ‘‘to beds (excluding beds or bassinets assigned 

17 to healthy newborn infants)’’. 

18 (d) NATURE OF PAYMENTS.—Section 340E(e)(3) of the 

19 Public Health Service Act (42 U.S.C. 256e(e)(3)) is amend20 ed by striking ‘‘made to pay’’ and inserting ‘‘made and 

21 pay’’. 

22 (e) AUTHORIZATION OF APPROPRIATIONS.—Section 

23 340E(f) of the Public Health Service Act (42 U.S.C. 256e(f)) 

24 is amended— 

25 (1) in paragraph (1)(A)— 
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•S 2526 RS 

1 (A) in clause (ii), by striking ‘‘and’’; 

2 (B) in clause (iii), by striking the period 

3 and inserting a semicolon; and 

4 (C) by adding at the end the following: 

5 ‘‘(iv) for fiscal year 2006, 

6 $110,000,000; and 

7 ‘‘(v) for each of fiscal years 2007 

8 through 2010, such sums as may be nec9 essary.’’; and 

10 (2) in paragraph (2)— 

11 (A) in the matter preceding subparagraph 

12 (A)— 

13 (i) by striking ‘‘There are hereby au14 thorized’’ and inserting ‘‘There are author15 ized’’; and 

16 (ii) by striking ‘‘(b)(1)(A)’’ and insert17 ing ‘‘(b)(1)(B)’’; 

18 (B) in subparagraph (B), by striking 

19 ‘‘and’’; 

20 (C) in subparagraph (C), by striking the 

21 period and inserting a semicolon; and 

22 (D) by adding at the end the following: 

23 ‘‘(D) for fiscal year 2006, $220,000,000; 

24 and 
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1 ‘‘(E) for each of fiscal years 2007 through 

2 2010, such sums as may be necessary.’’. 

3 (f) TECHNICAL AMENDMENT.—Section 340E(e)(2) of 

4 the Public Health Service Act (42 U.S.C. 256e(e)(2)) is 

5 amended by striking the first sentence. 

6 SEC. 3. SENSE OF THE SENATE. 

7 It is the sense of the Senate that perinatal hospitals 

8 play an important role in providing quality care and en9 suring the best possible outcomes for thousands of seriously 

10 ill newborns each year, and that medical training programs 

11 at perinatal hospitals give providers essential training in 

12 treating healthy mothers and babies as well as patients in 

13 neonatal intensive care units. 

Calendar No. 774 

108TH CONGRESS 

2D SESSION S. 2526 

[Report No. 108–388] 

A BILL 

To reauthorize the Children’s Hospitals Graduate 

Medical Education Program. 

OCTOBER 7, 2004 

Reported with an amendment