721
Subtitle E, Part 1
‘‘(A) the total amount of payments
received by the hospital under sec-
tion 1886(d)(5)(B) for discharges oc-
curring during the fiscal year in-
volved; to
‘‘(B) the sum of the respective
amounts determined under subpara-
graph (A) for the fiscal year for all
teaching hospitals.
‘‘(c) AVAILABILITY OF DATA.—If a teaching
hospital received the payments specified in
subsection (b)(3)(A) during the applicable pe-
riod but a complete set of the relevant data
is not available to the Secretary for purposes
of determining an amount under such sub-
section for the fiscal year involved, the Sec-
retary shall for purposes of such subsection
make an estimate on the basis of such data as
are available to the Secretary for the applica-
ble period.
‘‘SEC. 2222. INDIRECT COSTS; SPECIAL RULES REGARDING
DETERMINATION 
OF 
HOSPITAL-SPECIFIC
PERCENTAGE.
‘‘(a) SPECIAL
RULE
REGARDING
FISCAL
YEARS 1995 AND 1996.—
722
Subtitle E, Part 1
‘‘(1) IN
GENERAL.—In the case of a
teaching hospital whose first payments
under 1886(d)(5)(B) were for discharges
occurring in fiscal year 1995 or in fiscal
year 1996 (referred to in this subsection
individually as a ‘first payment year’), the
percentage determined under paragraph
(2) for the hospital is deemed to be the
percentage 
applicable 
under 
section
2221(b) to the hospital, except that the
percentage under paragraph (2) shall be
adjusted 
in 
accordance 
with 
section
2221(b)(1) to the extent determined by
the Secretary to be necessary with re-
spect to a sum that equals 100 percent.
‘‘(2) DETERMINATION OF PERCENTAGE.—
For purposes of paragraph (1), the per-
centage determined under this paragraph
for a teaching hospital is the percentage
constituted by the ratio of the amount de-
termined under subparagraph (A) to the
amount determined under subparagraph
(B), as follows:
‘‘(A)(i) If the first payment year
for the hospital is fiscal year 1995, the
723
Subtitle E, Part 1
amount determined under this sub-
paragraph is the total amount of pay-
ments received by the hospital under
section 1886(d)(5)(B) for discharges
occurring during fiscal year 1995.
‘‘(ii) If the first payment year for
the hospital is fiscal year 1996, the
amount determined under this sub-
paragraph is an amount equal to an
estimate by the Secretary of the total
amount of payments that would have
been paid to the hospital under sec-
tion 1886(d)(5)(B) for discharges oc-
curring during fiscal year 1995 if
such section, as in effect for fiscal
year 1996, had applied to the hospital
for discharges occurring during fiscal
year 1995.
‘‘(B)(i) If the first payment year
for the hospital is fiscal year 1995, the
amount determined under this sub-
paragraph is the aggregate total of
the payments received by teaching
hospitals under section 1886(d)(5)(B)
724
Subtitle E, Part 1
for discharges occurring during fiscal
year 1995.
‘‘(ii) If the first payment year for
the hospital is fiscal year 1996—
‘‘(I) the Secretary shall make
an estimate in accordance with
subparagraph (A)(ii) for all teach-
ing hospitals; and
‘‘(II) the amount determined
under this subparagraph is the
sum of the estimates made by the
Secretary under subclause (I).
‘‘(b) NEW TEACHING HOSPITALS.—
‘‘(1) IN
GENERAL.—In the case of a
teaching hospital that did not receive
payments under section 1886(d)(5)(B) for
any of the fiscal years 1992 through 1996,
the percentage determined under para-
graph (3) for the hospital is deemed to be
the percentage applicable under section
2221(b) to the hospital, except that the
percentage under paragraph (3) shall be
adjusted 
in 
accordance 
with 
section
2221(b)(1) to the extent determined by
the Secretary to be necessary with re-
725
Subtitle E, Part 1
spect to a sum that equals 100 percent.
This subsection does not apply to a teach-
ing hospital described in the preceding
sentence if the hospital is in a State for
which a demonstration project under sec-
tion 1814(b)(3) is in effect.
‘‘(2) DESIGNATED FISCAL YEAR REGARD-
ING
DATA.—The 
determination 
under
paragraph (3) of a percentage for a teach-
ing hospital described in paragraph (1)
shall be made for the most recent fiscal
year for which the Secretary has suffi-
cient data to make the determination (re-
ferred to in this subsection as the ‘des-
ignated fiscal year’).
‘‘(3) DETERMINATION OF PERCENTAGE.—
For purposes of paragraph (1), the per-
centage determined under this paragraph
for the teaching hospital involved is the
percentage constituted by the ratio of the
amount determined under subparagraph
(A) to the amount determined under sub-
paragraph (B), as follows:
‘‘(A) 
The 
amount 
determined
under 
this 
subparagraph 
is 
an
726
Subtitle E, Part 1
amount equal to an estimate by the
Secretary of the total amount of pay-
ments that would have been paid to
the 
hospital 
under 
section
1886(d)(5)(B) for the designated fiscal
year if such section, as in effect for
the first fiscal year for which pay-
ments pursuant to this subsection are
to be made to the hospital, had ap-
plied to the hospital for the des-
ignated fiscal year.
‘‘(B) The Secretary shall make an
estimate in accordance with subpara-
graph (A) for all teaching hospitals.
The amount determined under this
subparagraph is the sum of the esti-
mates made by the Secretary under
the preceding sentence.
‘‘(c) CONSOLIDATIONS AND MERGERS.—In the
case of two or more teaching hospitals that
have each received payments pursuant to sec-
tion 2221 for one or more fiscal years and that
undergo a consolidation or merger, the per-
centage applicable to the resulting teaching
hospital for purposes of section 2221(b) is the
727
Subtitle E, Part 1
sum of the respective percentages that would
have applied pursuant to such section if the
hospitals had not undergone the consolida-
tion or merger.
‘‘SEC. 2223. INDIRECT COSTS; ALTERNATIVE PAYMENTS RE-
GARDING TEACHING HOSPITALS IN CERTAIN
STATES.
‘‘(a) IN GENERAL.—In the case of a teaching
hospital in a State for which a demonstration
project under section 1814(b)(3) is in effect,
this section applies in lieu of section 2221. For
purposes of section 2211(a)(1), the amount de-
termined for a teaching hospital for a fiscal
year is the product of—
‘‘(1) the amount in the Indirect-Costs
Medical Education Account for the fiscal
year pursuant to the allocation under
section 2201(d)(3)(A) for the year; and
‘‘(2) the percentage determined under
subsection (b) for the hospital.
‘‘(b) DETERMINATION OF PERCENTAGE.—For
purposes of subsection (a)(2):
‘‘(1) The Secretary shall make an esti-
mate of the total amount of payments
that would have been received under sec-
728
Subtitle E, Part 1
tion 1886(d)(5)(B) by the hospital in-
volved with respect to each of the fiscal
years of the applicable period if such sec-
tion (as in effect for such fiscal years)
had applied to the hospital for such
years.
‘‘(2) 
The 
percentage 
determined
under this subsection for the hospital for
a fiscal year is a mean average percent-
age determined for the hospital in ac-
cordance with the methodology of section
2221(b)(1), except that the estimate made
by the Secretary under paragraph (1) of
this subsection for a fiscal year of the ap-
plicable period is deemed to be the
amount that applies for purposes of sec-
tion 2221(b)(3)(A) for such year.
‘‘(c) RULE REGARDING PAYMENTS FROM CER-
TAIN AMOUNTS.—In the case of a teaching hos-
pital in a State for which a demonstration
project under section 1814(b)(3) is in effect,
this section does not provide any payment to
the hospital from amounts transferred to the
Fund under section 1886(j).
729
Subtitle E, Part 1
‘‘(d) ADJUSTMENT REGARDING PAYMENTS TO
OTHER HOSPITALS.—In the case of a fiscal year
for which payments pursuant to subsection
(a) are made to one or more teaching hos-
pitals, the following applies:
‘‘(1) The Secretary shall determine a
percentage equal to the sum of the re-
spective percentages determined for the
hospitals under subsection (b).
‘‘(2) The Secretary shall determine an
amount equal to the product of—
‘‘(A) the percentage determined
under paragraph (1); and
‘‘(B) the amount in the Indirect-
Costs Medical Education Account for
the fiscal year pursuant to the trans-
fer under section 1886(j)(1).
‘‘(3) The Secretary shall, for each hos-
pital (other than hospitals described in
subsection (a)), make payments to the
hospital whose sum is equal to the prod-
uct of—
‘‘(A) 
the 
amount 
determined
under paragraph (2); and
741
Subtitle E, Part 1
‘‘(2) The members of the consortium
have agreed to participate in the pro-
grams of graduate medical education that
are operated by the teaching hospitals in
the consortium.
‘‘(3) With respect to the receipt by the
consortium of payments made pursuant
to this section, the members of the con-
sortium have agreed on a method for al-
locating the payments among the mem-
bers.
‘‘(4) The consortium meets such addi-
tional requirements as the Secretary may
establish.
‘‘(c) PAYMENTS FROM ACCOUNTS.—
‘‘(1) IN
GENERAL.—Subject to sub-
section (d), the total of payments to a
qualifying consortium for a fiscal year
pursuant to subsection (a) shall be the
sum of—
‘‘(1) the aggregate amount determined
for the teaching hospitals of the consor-
tium pursuant to paragraph (1) of section
2231(a); and