II 

115TH CONGRESS 

2D SESSION S. 3014 

To amend title XVIII of the Social Security Act to support rural residency 

training funding that is equitable for all States, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 6, 2018 

Mr. GARDNER introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to support 

rural residency training funding that is equitable for 

all States, and for other purposes. 

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 ‘‘Rural Physician Work5 force Production Act of 2018’’. 


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1 SEC. 2. ALTERNATIVE NATIONAL PER RESIDENT PAYMENT 

2 FOR RESIDENTS TRAINING IN RURAL TRAIN3 ING LOCATIONS. 

4 (a) IN GENERAL.—Section 1886 of the Social Secu5 rity Act (42 U.S.C. 1395ww) is amended by adding at the 

6 end the following new subsection: 

7 ‘‘(u) ALTERNATIVE NATIONAL PER RESIDENT PAY8 MENT AMOUNT FOR RESIDENTS TRAINING IN RURAL

9 TRAINING LOCATIONS.— 

10 ‘‘(1) IN GENERAL.— 

11 ‘‘(A) ESTABLISHMENT.—The Secretary 

12 shall establish a national per resident payment 

13 (NPRP) amount for time spent by residents 

14 training in rural training locations in accord15 ance with paragraph (2). 

16 ‘‘(B) ELECTION.—For cost reporting peri17 ods beginning on or after the date that is 1 

18 year after the date of enactment of this sub19 section, an applicable hospital (as defined in 

20 paragraph (6)(A)), may elect to receive the pay21 ment amount under this subsection for each 

22 full-time-equivalent resident in an approved 

23 medical residency training program that re24 ceives training in a rural training location in 

25 accordance with paragraph (2). An applicable 

26 hospital may make an election under the preVerDate Sep 11 2014 01:43 Jun 08, 2018 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3014.IS S3014

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1 ceding sentence regardless of whether the appli2 cable hospital is otherwise eligible for a pay3 ment or adjustment for indirect and direct 

4 graduate medical education costs under sub5 sections (d)(5)(B) and (h) or section 1814(l), as 

6 applicable, with respect to such residents. If the 

7 applicable hospital is otherwise eligible for such 

8 a payment or adjustment, the national per resi9 dent payment amount under this subsection 

10 shall be in lieu of such payment or adjustment. 

11 ‘‘(C) APPLICATION.—The provisions of this 

12 subsection, or the application of such provisions 

13 to an applicable hospital, shall not result in or 

14 otherwise effect the following: 

15 ‘‘(i) The establishment of a limitation 

16 on the number of residents in allopathic or 

17 osteopathic medicine for purposes of sub18 sections (d)(5)(B) and (h) with respect to 

19 an approved medical residency training 

20 program of an applicable hospital (or be 

21 taken into account in determining such a 

22 limitation during the cap building period of 

23 an applicable hospital). 

24 ‘‘(ii) The determination of— 


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1 ‘‘(I) the additional payment 

2 amount under subsection (d)(5)(B); 

3 or 

4 ‘‘(II) hospital-specific approved 

5 FTE resident amounts under sub6 section (h). 

7 ‘‘(iii) The counting of any resident 

8 with respect to which the applicable hos9 pital receives a national per resident pay10 ment under this subsection towards the ap11 plication of the limitation described in 

12 clause (i) for purposes of subsections 

13 (d)(5)(B) and (h). 

14 ‘‘(2) PAYMENT AMOUNT.— 

15 ‘‘(A) BASE AMOUNT.—The national per 

16 resident payment amount, with respect to full17 time equivalent residents training in rural 

18 training locations, for cost reporting periods be19 ginning during the first year beginning on or 

20 after the date of enactment of this subsection 

21 shall be, based on the most recently available 

22 data with respect to cost reporting periods be23 ginning during a preceding year (referred to in 

24 this subparagraph as the ‘base cost reporting 

25 period’), equal to the sum of the following: 


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1 ‘‘(i) DIRECT GME.—The amount that, 

2 out of all of the payment amounts (deter3 mined on a per resident basis) received by 

4 hospitals under subsection (h) for such 

5 base cost reporting period, is equal to the 

6 national 85th percentile of such payment 

7 amounts. 

8 ‘‘(ii) INDIRECT GME.—The amount 

9 that, out of all of the additional payment 

10 amounts (determined on a per resident 

11 basis) received by hospitals under sub12 section (d)(5)(B) for such base cost report13 ing period, is equal to the national 85th 

14 percentile of such payment amounts. 

15 ‘‘(B) UPDATING FOR SUBSEQUENT COST

16 REPORTING PERIODS.—For each subsequent 

17 cost reporting period, the national per resident 

18 payment amount is equal to such amount deter19 mined under this paragraph for the previous 

20 cost reporting period updated, through the mid21 point of the period, by projecting the estimated 

22 percentage change in the consumer price index 

23 during the 12-month period ending at that mid24 point, with appropriate adjustments to reflect 

25 previous under- or over-estimations under this 


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1 subparagraph in the projected percentage 

2 change in the consumer price index. 

3 ‘‘(C) CLARIFICATION.—The national per 

4 resident payment amount shall not be dis5 counted or otherwise adjusted based on the 

6 Medicare patient load (as defined in subsection 

7 (h)(3)(C)) of an applicable hospital or dis8 charges in a diagnosis-related group. 

9 ‘‘(3) ALLOCATION OF PAYMENTS.—In providing 

10 for payments under this subsection, the Secretary 

11 shall provide for an allocation of such payments be12 tween parts A and part B (and the trust funds es13 tablished under the respective parts) as reasonably 

14 reflects the proportion of such costs associated with 

15 the provision of services under each respective part. 

16 ‘‘(4) ELIGIBILITY FOR PAYMENT.— 

17 ‘‘(A) IN GENERAL.—An applicable hospital 

18 shall be eligible for payment of the national per 

19 resident payment amount under this subsection 

20 for time spent by a resident training in a rural 

21 training location if the following requirements 

22 are met: 

23 ‘‘(i) The resident spends the equiva24 lent of at least 8 weeks over the course of 

25 their training in a rural training location. 


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1 ‘‘(ii) The hospital pays the salary and 

2 benefits of the resident for the time spent 

3 training in a rural training location. 

4 ‘‘(B) TREATMENT OF TIME SPENT IN

5 RURAL TRACKS.—An applicable hospital shall 

6 be eligible for payment of the national per resi7 dent payment amount under this subsection for 

8 all time spent by residents in an approved med9 ical residency program (or separately defined 

10 track within a program) that provides 50 per11 cent or more of the total residency training 

12 time in rural training locations (as defined in 

13 paragraph (6)(C)), regardless of where the 

14 training occurs and regardless of specialty. 

15 ‘‘(5) DETERMINATION OF FULL-TIME-EQUIVA16 LENT RESIDENTS.—The determination of full-time17 equivalent residents for purposes of this subsection 

18 shall be made in the same manner as the determina19 tion of full-time-equivalent residents under sub20 section (h)(4). 

21 ‘‘(6) DEFINITIONS.—In this subsection: 

22 ‘‘(A) APPLICABLE HOSPITAL.—The term 

23 ‘applicable hospital’ means a hospital or critical 

24 access hospital. 


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1 ‘‘(B) APPROVED MEDICAL RESIDENCY

2 TRAINING PROGRAM; DIRECT GRADUATE MED3 ICAL EDUCATION COSTS; RESIDENT.—The 

4 terms ‘approved medical residency training pro5 gram’, ‘direct graduate medical education 

6 costs’, and ‘resident’ have the meanings given 

7 those terms in subsection (h)(5). 

8 ‘‘(C) RURAL TRAINING LOCATION.—The 

9 term ‘rural training location’ means a location 

10 in which training occurs that, based on the 

11 2010 census or any subsequent census adjust12 ment, meets one or more of the following cri13 teria: 

14 ‘‘(i) The training occurs in a location 

15 that is a rural area (as defined in section 

16 1886(d)(2)(D)). 

17 ‘‘(ii) The training occurs in a location 

18 that has a rural-urban commuting area 

19 code equal to or greater than 4.0. 

20 ‘‘(iii) The training occurs in a location 

21 that is within 10 miles of a sole community 

22 hospital (as defined in subsection 

23 (d)(5)(D)(iii))). 

24 ‘‘(7) BUDGET NEUTRALITY REQUIREMENT.— 

25 The Secretary shall ensure that aggregate payments 


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1 for direct medical education costs and indirect med2 ical education costs under this title, including any 

3 payments under this subsection, for each year (effec4 tive beginning on or after the date that is 1 year 

5 after the date of enactment of this subsection) are 

6 not greater than the aggregate payments for such 

7 costs that would have been made under this title for 

8 the year without the application of this subsection. 

9 For purposes of carrying out the budget neutrality 

10 requirement under the preceding sentence, the Sec11 retary may make appropriate adjustments to the 

12 amount of such payments for direct graduate med13 ical education costs and indirect medical education 

14 costs under subsections (h) and (d)(5)(B), respec15 tively.’’. 

16 (b) TREATMENT OF CRITICAL ACCESS HOSPITALS

17 AND SOLE COMMUNITY HOSPITALS.— 

18 (1) CRITICAL ACCESS HOSPITALS.—Section 

19 1814(l) of the Social Security Act (42 U.S.C. 

20 1395f(l)) is amended by adding at the end the fol21 lowing new paragraph: 

22 ‘‘(6) For cost reporting periods beginning on or after 

23 the date that is 1 year after the date of enactment of this 

24 paragraph, the following shall apply: 


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1 ‘‘(A) A critical access hospital may elect to be 

2 treated as a hospital or as a non-provider setting for 

3 purposes of counting resident time for indirect med4 ical education costs and direct graduate medical edu5 cation costs for the time spent by the resident in 

6 that setting under subsections (d)(5)(B) and (h), re7 spectively, of section 1886. 

8 ‘‘(B) Medical education costs shall not be con9 sidered reasonable costs of a critical access hospital 

10 for purposes of payment under paragraph (1), to the 

11 extent that the critical access hospital or another 

12 hospital receives payment for such costs for the time 

13 spent by the resident in that setting pursuant to 

14 subsection (d)(5)(B), subsection (h), or subsection 

15 (u) of section 1886.’’. 

16 (2) SOLE COMMUNITY HOSPITALS.—Section 

17 1886(d)(5)(D) of the Social Security Act (42 U.S.C. 

18 1395ww(d)(5)(D)) is amended by adding at the end 

19 the following new clause: 

20 ‘‘(vi) For cost reporting periods beginning on or after 

21 the date that is 1 year after the date of enactment of this 

22 paragraph, the hospital-specific payment amount deter23 mined under clause (i)(I) with respect to a sole community 

24 hospital shall not include medical education costs, to the 

25 extent that the sole community hospital receives payment 


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1 for such costs for the time spent by the resident in that 

2 setting pursuant to subsection (u).’’. 

3 (c) CONFORMING AMENDMENTS.— 

4 (1) Section 1886 of the Social Security Act (42 

5 U.S.C. 1395ww) is amended— 

6 (A) in subsection (d)(5)(B), in the matter 

7 preceding clause (i), by striking ‘‘The Sec8 retary’’ and inserting ‘‘Subject to subsection 

9 (u), the Secretary’’; and 

10 (B) in subsection (h)— 

11 (i) in paragraph (1), by inserting 

12 ‘‘subject to subsection (u)’’ after 

13 ‘‘1861(v),’’; and 

14 (ii) in paragraph (3), in the flush 

15 matter at the end, by striking ‘‘subsection 

16 (k)’’ and inserting ‘‘subsection (k) or sub17 section (u)’’. 

18 SEC. 3. SUPPORTING NEW, EXPANDING, AND EXISTING 

19 RURAL TRAINING TRACK RESIDENCIES. 

20 (a) DIRECT GRADUATE MEDICAL EDUCATION.—Sec21 tion 1886(h) of the Social Security Act (42 U.S.C. 

22 1395ww(h)) is amended— 

23 (1) in paragraph (4)— 

24 (A) in subparagraph (F)(i)— 


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1 (i) by striking ‘‘130 percent’’ and in2 serting ‘‘for cost reporting periods begin3 ning on or after October 1, 1997, and be4 fore the date that is 1 year after the date 

5 of enactment of the Rural Physician Work6 force Production Act of 2018, 130 per7 cent’’; and 

8 (ii) by adding at the end the fol9 lowing: ‘‘For cost reporting periods begin10 ning on or after the date that is 1 year 

11 after the date of enactment of the Rural 

12 Physician Workforce Production Act of 

13 2018, such rules shall provide that any 

14 full-time-equivalent resident in an ap15 proved medical residency program (or sep16 arately defined track within a program) 

17 that provides 50 percent or more of the 

18 total residency training time in rural train19 ing locations (as defined in subsection 

20 (u)(6)(C)), regardless of where the training 

21 occurs and regardless of specialty, shall 

22 not be taken into account for purposes of 

23 applying the limitation under this subpara24 graph.’’. ; and 

25 (B) in subparagraph (H)— 


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1 (i) in clause (i), in the second sen2 tence, by inserting the following before the 

3 period: ‘‘, in accordance with the second 

4 sentence of clause (i) of such subpara5 graph’’; and 

6 (ii) in clause (iv), by inserting the fol7 lowing before the period: ‘‘, in accordance 

8 with the second sentence of clause (i) of 

9 such subparagraph’’; and 

10 (2) in paragraph (5), by adding at the end the 

11 following new subparagraph: 

12 ‘‘(L) SPECIAL RULES REGARDING APPLICA13 TION OF NATIONAL PER RESIDENT PAYMENT

14 AMOUNT.—For special rules regarding applica15 tion of the national per resident payment 

16 amount under subsection (u), see paragraph 

17 (1)(C) of such subsection.’’. 

18 (b) INDIRECT MEDICAL EDUCATION.—Section 

19 1886(d)(5)(B)(v) is amended— 

20 (1) by striking ‘‘130 percent’’ and inserting 

21 ‘‘for cost reporting periods beginning on or after Oc22 tober 1, 1997, and before the date that is 1 year 

23 after the date of enactment of the Rural Physician 

24 Workforce Production Act of 2018, 130 percent’’; 

25 and 


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1 (2) by adding at the end the following: ‘‘For 

2 cost reporting periods beginning on or after the date 

3 that is 1 year after the date of enactment of the 

4 Rural Physician Workforce Production Act of 2018, 

5 such rules shall provide that any full-time-equivalent 

6 resident in an approved medical residency program 

7 (or separately defined track within a program) that 

8 provides 50 percent or more of the total residency 

9 training time in rural training locations (as defined 

10 in subsection (u)(6)(C)), regardless of where the 

11 training occurs and regardless of specialty, shall not 

12 be taken into account for purposes of applying the 

13 limitation under this subparagraph. For special rules 

14 regarding application of the national per resident 

15 payment amount under subsection (u), see para16 graph (1)(C) of such subsection.’’. 

Æ 


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