I
104TH CONGRESS
2D SESSION
H. R. 4069
To amend the Social Security Act to establish the Teaching Hospital and
Graduate Medical Education Trust Fund, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 12, 1996
Mr. BENTSEN introduced the following bill; which was referred to the Commit-
tee on Ways and Means, and in addition to the Committee on Commerce,
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 amend the Social Security Act to establish the Teaching
Hospital and Graduate Medical Education Trust Fund,
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 ‘‘Graduate Medical Edu-
cation Trust Fund Act of 1996’’.
SEC. 2. TEACHING HOSPITAL AND GRADUATE MEDICAL
EDUCATION TRUST FUND.
(a) IN GENERAL.—The Social Security Act (42
U.S.C. 300 et seq.) is amended by adding at the end the
following title:
‘‘TITLE XXI—TEACHING HOSPITAL AND
GRADUATE MEDICAL EDUCATION TRUST FUND
‘‘PART A—ESTABLISHMENT OF FUND
‘‘SEC. 2101. ESTABLISHMENT OF FUND.
‘‘(a) IN GENERAL.—There is established in the
Treasury of the United States a fund to be known as the
Teaching Hospital and Graduate Medical Education Trust
Fund (in this title referred to as the ‘Fund’), consisting
of amounts transferred to the Fund under subsection (c),
amounts appropriated to the Fund pursuant to sub-
sections (d) and (e)(3), and such gifts and bequests as
may be deposited in the Fund pursuant to subsection (f).
Amounts in the Fund are available until expended.
‘‘(b) EXPENDITURES FROM FUND.—Amounts in the
Fund are available to the Secretary for making payments
under section 2111.
‘‘(c) TRANSFERS TO FUND.—
‘‘(1) IN GENERAL.—From the Federal Hospital
Insurance Trust Fund and the Federal Supple-
mentary Medical Insurance Trust Fund, the Sec-
retary shall, for fiscal year 1998 and each subse-
quent fiscal year, transfer to the Fund an amount
determined by the Secretary for the fiscal year in-
volved in accordance with paragraph (2).
‘‘(2) DETERMINATION OF AMOUNTS.—For pur-
poses of paragraph (1), the amount determined
under this paragraph for a fiscal year is an estimate
by the Secretary of an amount equal to 75 percent
of the difference between—
‘‘(A) the nationwide total of the amounts
that would have been paid under section 1876
during the year but for the operation of sub-
section (a)(1)(C)(ii)(II) of such section; and
‘‘(B) the nationwide total of the amounts
paid under such section during the year.
‘‘(3) ALLOCATION BETWEEN MEDICARE TRUST
FUNDS.—In providing for a transfer under para-
graph (1) for a fiscal year, the Secretary shall pro-
vide for an allocation of the amounts involved be-
tween part A and part B of title XVIII (and the
trust funds established under the respective parts)
as reasonably reflects the proportion of payments for
the indirect costs of medical education and direct
graduate medical education costs of hospitals associ-
ated with the provision of services under each re-
spective part.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to the Fund such sums
as may be necessary for each of the fiscal years 1997
through 2003.
‘‘(e) INVESTMENT.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury shall invest such amounts of the Fund as
such Secretary determines are not required to meet
current withdrawals from the Fund. Such invest-
ments may be made only in interest-bearing obliga-
tions of the United States. For such purpose, such
obligations may be acquired on original issue at the
issue price, or by purchase of outstanding obliga-
tions at the market price.
‘‘(2) SALE
OF
OBLIGATIONS.—Any obligation
acquired by the Fund may be sold by the Secretary
of the Treasury at the market price.
‘‘(3) AVAILABILITY OF INCOME.—Any interest
derived from obligations acquired by the Fund, and
proceeds from any sale or redemption of such obliga-
tions, are hereby appropriated to the Fund.
‘‘(f) ACCEPTANCE OF GIFTS AND BEQUESTS.—The
Fund may accept on behalf of the United States money
gifts and bequests made unconditionally to the Fund for
the benefit of the Fund or any activity financed through
the Fund.
‘‘PART B—PAYMENTS TO TEACHING HOSPITALS
‘‘SEC. 2111. FORMULA PAYMENTS TO TEACHING HOS-
PITALS.
‘‘(a) IN GENERAL.—In the case of each teaching hos-
pital that in accordance with subsection (b) submits to the
Secretary a payment document for fiscal year 1997 or any
subsequent fiscal year, the Secretary shall make payments
for the year to the teaching hospital for the direct and
indirect costs of operating approved medical residency
training programs. Such payments shall be made from the
Fund, and shall be made in accordance with a formula
established by the Secretary.
‘‘(b) PAYMENT DOCUMENT.—For purposes of sub-
section (a), a payment document is a document containing
such information as may be necessary for the Secretary
to make payments under such subsection to a teaching
hospital for a fiscal year. The document is submitted in
accordance with this subsection if the document is submit-
ted not later than the date specified by the Secretary, and
the document is in such form and is made in such manner
as the Secretary may require. The Secretary may require
that information under this subsection be submitted to the
Secretary in periodic reports.’’.
(b) ADJUSTMENTS IN MEDICARE PAYMENTS.—
(1) REMOVAL
OF
MEDICAL
EDUCATION
AND
DISPROPORTIONATE
SHARE
HOSPITAL
PAYMENTS
FROM
CALCULATION
OF
ADJUSTED
AVERAGE
PER
CAPITA COST.—Section 1876(a)(1)(C) of such Act
(42 U.S.C. 1395mm(a)(1)(C)) is amended—
(A) by striking ‘‘(C) The annual’’ and in-
serting ‘‘(C)(i) Subject to clause (ii), the an-
nual’’, and
(B) by adding at the end the following new
clause:
‘‘(ii) In determining the average annual per capita
rate of payment for a year (beginning with 1998), such
rate shall be determined as though the Secretary had ex-
cluded from such rate any amounts which the Secretary
estimated would have been payable under this title during
the year for—
‘‘(I) 
payment 
adjustments 
under 
section
1886(d)(5)(F) for hospitals serving a disproportion-
ate share of low-income patients; and
‘‘(II) the indirect costs of medical education
under section 1886(d)(5)(B) or for direct graduate
medical education costs under section 1886(h).’’.
(2) PAYMENTS TO HOSPITALS OF AMOUNTS AT-
TRIBUTABLE TO DSH.—Section 1886 of such Act