I
103D CONGRESS
1ST SESSION
H. R. 3294
To amend title XVIII of the Social Security Act to include services provided
at any Federally-qualified health center by interns and residents in
a medical residency training program of a hospital in determining the
amount of payment to the hospital under the medicare program for
the costs of graduate medical education if the hospital incurs any of
the costs of providing the services, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 15, 1993
Mr. BARRETT of Wisconsin introduced the following bill; which was referred
jointly to the Committees on Ways and Means and Energy and Commerce
A BILL
To amend title XVIII of the Social Security Act to include
services provided at any Federally-qualified health center
by interns and residents in a medical residency training
program of a hospital in determining the amount of
payment to the hospital under the medicare program
for the costs of graduate medical education if the hos-
pital incurs any of the costs of providing the services,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Frontline Medical
Education Act’’.
SEC. 2. INCLUDING SERVICES OF INTERNS AND RESIDENTS
AT 
ANY 
FEDERALLY-QUALIFIED 
HEALTH
CENTER UNDER ANY PROGRAM PAID FOR BY
A HOSPITAL IN DETERMINING MEDICARE
PAYMENTS FOR GRADUATE MEDICAL EDU-
CATION.
(a) PAYMENT FOR DIRECT COSTS OF GRADUATE
MEDICAL EDUCATION.—Section 1886(h)(4)(E) of the So-
cial Security Act (42 U.S.C. 1395ww(h)(4)(E)) is amend-
ed by striking ‘‘setting.’’ and inserting the following: ‘‘set-
ting (or, in the case of activities performed at an Feder-
ally-qualified 
health 
center 
described 
in 
section
1861(aa)(4), if the hospital incurs any of the costs for the
training program at such center and reimburses the center
for any of the costs of the program that the center in-
curs).’’.
(b) PAYMENT FOR INDIRECT COSTS OF GRADUATE
MEDICAL
EDUCATION.—Section 1886(d)(5)(B)(iv) of
such Act (42 U.S.C. 1395ww(d)(5)(B)(iv)), as amended
by section 13506 of the Omnibus Budget Reconciliation
Act of 1993, is amended—
(1) by striking ‘‘entity receiving a grant’’ and
all that follows through ‘‘control of the hospital’’ and
inserting ‘‘Federally-qualified health center described
in section 1861(aa)(4)’’;
(2) by striking ‘‘all, or substantially all, of the
costs’’ and inserting ‘‘any of the costs’’; and
(3) by striking ‘‘residents)’’ and inserting ‘‘resi-
dents and reimburses the center for any of the costs
of the program that the center incurs)’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall apply to services furnished
during cost reporting periods beginning on or after Octo-
ber 1, 1994.
SEC. 3. MEDICARE PAYMENT FOR DIRECT MEDICAL EDU-
CATION COSTS OF FEDERALLY-QUALIFIED
HEALTH CENTERS.
(a) IN GENERAL.—Title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.) is amended by inserting after
section 1889 the following new section:
‘‘GRADUATE MEDICAL EDUCATION PAYMENTS FOR
FEDERALLY-QUALIFIED HEALTH CENTERS
‘‘SEC. 1890. (a) IN GENERAL.—Notwithstanding any
other provision of this title, in the case of any Federally-
qualified health center that participates in an approved
medical residency training program, in addition to any
other payments that may be made to the center under this
title, the Secretary shall provide for payment to the center
for direct graduate medical education costs in accordance
with subsection (b).
‘‘(b) DETERMINATION OF AMOUNT OF PAYMENT.—
‘‘(1) IN GENERAL.—Subject to paragraph (4),
the amount of payment made to a Federally-quali-
fied health center under this section for direct medi-
cal education for a fiscal year is equal to the product
of—
‘‘(A) the aggregate approved amount (as
defined in paragraph (2)) for the year; and
‘‘(B) the center’s medicare patient load (as
defined in subsection (d)(2)) for the year.
‘‘(2) 
AGGREGATE
APPROVED
AMOUNT.—In
paragraph (1), the term ‘aggregate approved
amount’ means, for a fiscal year, the product of—
‘‘(A) the approved FTE resident amount
(determined under paragraph (3)) for the year;
and
‘‘(B) the weighted average number of full-
time equivalent residents (as determined by the
Secretary in a manner similar to the manner
used to determine the number of such residents
under section 1886(h)(4)) providing services for
the center under the approved medical resi-
dency training program in which the center par-
ticipates during the year.
‘‘(3) DETERMINATION OF APPROVED FTE RESI-
DENT AMOUNT.—
‘‘(A) IN
GENERAL.—For each approved
medical residency training program, the Sec-
retary shall determine an approved FTE resi-
dent amount for each fiscal year (beginning
with fiscal year 1995) equal to 250 percent of
the national average salary for the year (as de-
fined in subparagraph (B)(ii)).
‘‘(B) DETERMINATION OF NATIONAL AV-
ERAGE SALARY.—
‘‘(i) 
DETERMINATION
OF
BASE
AMOUNT.—The Secretary shall determine a
base salary amount equal to the Sec-
retary’s estimate (using the most recent
available audited cost reports) of the na-
tional average salary, including fringe ben-
efits, for a full-time-equivalent resident in
an approved medical residency training
program during fiscal year 1990, increased
(in a compounded manner) by the sum of
the estimated percentage changes in the
consumer price index during the 12-month
periods between the midpoint of fiscal year
1990 and the midpoint of fiscal year 1994.
‘‘(ii) NATIONAL AVERAGE SALARY DE-
FINED.—In this paragraph, the ‘national
average salary’ for a fiscal year is equal
to—
‘‘(I) for fiscal year 1995, the
base amount determined under clause
(i) updated through the midpoint of
the year by projecting the estimated
percentage change in the consumer
price index during the 12-month pe-
riod ending at that midpoint (with ap-
propriate adjustments to reflect pre-
vious under- or over-estimations under
this subparagraph in the projected
percentage change in the consumer
price index); and
‘‘(II) for a subsequent fiscal year,
the amount determined under this
clause for the previous fiscal year up-
dated through the midpoint of the
year by projecting the estimated per-
centage change in the consumer price
index during the 12-month period
ending at that midpoint (with appro-
priate adjustments to reflect previous
under- or over-estimations under this
subparagraph in the projected per-
centage change in the consumer price
index).
‘‘(4) OFFSET FOR REIMBURSEMENT RECEIVED
DIRECTLY
THROUGH
HOSPITALS.—The amount of
payment made to a Federally-qualified health center
under this subsection with respect to costs incurred
by the center shall be reduced by the amount of any
payment received by the center from a hospital
under 
section 
1886(d)(5)(B)(iv) 
or 
section
1886(h)(4)(E) as reimbursement for such costs.
‘‘(c) ALLOCATION
OF PAYMENTS AMONG TRUST
FUNDS.—In providing for payments under this section,
the Secretary shall provide for an allocation of such pay-
ments between part A and part B (and the trust funds
established under the respective parts) as reasonably re-
flects the proportion of direct graduate medical costs of
Federally-qualified health centers associated with the pro-
vision of services under each respective part.
‘‘(d) DEFINITIONS.—In this section:
‘‘(1) The terms ‘approved medical residency
training program’, ‘consumer price index’, ‘direct
graduate medical education costs’, and ‘resident’
have the meaning given such terms under section
1886(h)(5).
‘‘(2) The term ‘Federally-qualified health cen-
ter’ has the meaning given such term under section
1861(aa)(4).
‘‘(3) The term ‘medicare patient load’ means,
with respect to a Federally-qualified health center
for a year, the fraction of the center’s services dur-
ing the year which are attributable to individuals en-
titled to benefits under this title (based on such
measure of services as the Secretary determines to
be appropriate for purposes of this section).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to services furnished during cost
reporting periods beginning on or after October 1, 1994.
SEC. 4. REPEAL OF APPLICATION OF PRODUCTIVITY
SCREENS FOR CENTERS RECEIVING PAY-
MENTS FOR MEDICAL EDUCATION.
Section 1861(aa) of the Social Security Act (42
U.S.C. 1395x(aa)) is amended by adding at the end the
following new paragraph:
‘‘(8)(A) In the case of a Federally-qualified health
center receiving any medical education payment described
in subparagraph (B) during a cost reporting period, the
Secretary shall waive the application of any screening
guideline used to determine the productivity of practition-
ers providing services at the center for purposes of para-
graph (3) or (4).
‘‘(B) A medical education payment described in this
subparagraph is a payment made to a Federally-qualified
health center—
‘‘(i) by a hospital as reimbursement to the cen-
ter for medical education costs, as described in sec-
tion 1886(d)(5)(B)(iv) or section 1886(h)(4)(E); or
‘‘(ii) by the Secretary under section 1890.’’.
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