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after providing notice to the Secretary of an intent 
to proceed under this paragraph in a specific case 
and providing the Secretary with an opportunity to 
bring an action under this subsection and the Sec-
retary declining such opportunity, may proceed 
under this subsection against an applicable manufac-
turer or distributor in the State. 
‘‘(e) ANNUAL REPORT
TO CONGRESS.—Not later 
than April 1 of each year beginning with 2011, the Sec-
retary shall submit to Congress a report that includes the 
following: 
‘‘(1) The information submitted under this sec-
tion during the preceding year, aggregated for each 
applicable reporting entity that submitted such in-
formation during such year. 
‘‘(2) A description of any enforcement actions 
taken to carry out this section, including any pen-
alties imposed under subsection (d), during the pre-
ceding year. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE
DISTRIBUTOR.—The term 
‘applicable distributor’ means— 
‘‘(A) any entity, other than an applicable 
group purchasing organization, that buys and 
resells, or receives a commission or other simi-
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lar form of payment, from another seller, for 
selling or arranging for the sale of a covered 
drug, device, biological, or medical supply; or 
‘‘(B) any entity under common ownership 
with such an entity described in subparagraph 
(A) and which provides assistance or support to 
such entity so described with respect to the pro-
duction, 
preparation, 
propagation, 
compounding, 
conversion, 
processing, 
mar-
keting, or distribution of a covered drug, device, 
biological, or medical supply. 
Such term does not include a wholesale pharma-
ceutical distributor. 
‘‘(2) APPLICABLE MANUFACTURER.—The term 
‘applicable manufacturer’ means any entity which is 
engaged in the production, preparation, propagation, 
compounding, conversion, processing, marketing, or 
manufacturer-direct distribution of a covered drug, 
device, biological, or medical supply (or any entity 
under common ownership with such entity and which 
provides assistance or support to such entity with re-
spect to the production, preparation, propagation, 
compounding, conversion, processing, marketing, or 
distribution or a covered drug, device, biological, or 
medical supply). For purposes of this section only, 
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such term does not include a retail pharmacy li-
censed under State law. 
‘‘(3) CLINICAL
INVESTIGATION.—The term 
‘clinical investigation’ means any experiment involv-
ing one or more human subjects, or materials de-
rived from human subjects, in which a drug or de-
vice is administered, dispensed, or used. 
‘‘(4) COVERED DRUG, DEVICE, BIOLOGICAL, OR 
MEDICAL SUPPLY.—The term ‘covered’ means, with 
respect to a drug, device, biological, or medical sup-
ply, such a drug, device, biological, or medical supply 
for which payment is available under title XVIII or 
a State plan under title XIX or XXI (or a waiver 
of such a plan). 
‘‘(5) COVERED RECIPIENT.—The term ‘covered 
recipient’ means the following: 
‘‘(A) A physician. 
‘‘(B) A physician group practice. 
‘‘(C) Any other prescriber of a covered 
drug, device, biological, or medical supply. 
‘‘(D) A pharmacy or pharmacist. 
‘‘(E) A health insurance issuer, group 
health plan, or other entity offering a health 
benefits plan, including any employee of such 
an issuer, plan, or entity. 
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‘‘(F) A pharmacy benefit manager, includ-
ing any employee of such a manager. 
‘‘(G) A hospital. 
‘‘(H) A medical school. 
‘‘(I) A sponsor of a continuing medical 
education program. 
‘‘(J) A patient advocacy or disease specific 
group. 
‘‘(K) A organization of health care profes-
sionals. 
‘‘(L) A biomedical researcher. 
‘‘(M) A group purchasing organization. 
‘‘(6) EMPLOYEE.—The term ‘employee’ has the 
meaning given such term in section 1877(h)(2). 
‘‘(7) KNOWINGLY.—The term ‘knowingly’ has 
the meaning given such term in section 3729(b) of 
title 31, United States Code. 
‘‘(8) PAYMENT
OR
OTHER
TRANSFER
OF 
VALUE.— 
‘‘(A) IN GENERAL.—The term ‘payment or 
other transfer of value’ means a transfer of 
anything of value for or of any of the following: 
‘‘(i) Gift, food, or entertainment. 
‘‘(ii) Travel or trip. 
‘‘(iii) Honoraria. 
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‘‘(iv) Research funding or grant. 
‘‘(v) Education or conference funding. 
‘‘(vi) Consulting fees. 
‘‘(vii) Ownership or investment inter-
est and royalties or license fee. 
‘‘(B) INCLUSIONS.—Subject to subpara-
graph (C), the term ‘payment or other transfer 
of value’ includes any compensation, gift, hono-
rarium, speaking fee, consulting fee, travel, 
services, dividend, profit distribution, stock or 
stock option grant, or any ownership or invest-
ment interest held by a physician in a manufac-
turer (excluding a dividend or other profit dis-
tribution from, or ownership or investment in-
terest in, a publicly traded security or mutual 
fund (as described in section 1877(c))). 
‘‘(C) EXCLUSIONS.—The term ‘payment or 
other transfer of value’ does not include the fol-
lowing: 
‘‘(i) Any payment or other transfer of 
value provided by an applicable manufac-
turer or distributor to a covered recipient 
where the amount transferred to, requested 
by, or designated on behalf of the covered 
recipient does not exceed $5. 
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‘‘(ii) The loan of a covered device for 
a short-term trial period, not to exceed 90 
days, to permit evaluation of the covered 
device by the covered recipient. 
‘‘(iii) Items or services provided under 
a contractual warranty, including the re-
placement of a covered device, where the 
terms of the warranty are set forth in the 
purchase or lease agreement for the cov-
ered device. 
‘‘(iv) A transfer of anything of value 
to a covered recipient when the covered re-
cipient is a patient and not acting in the 
professional capacity of a covered recipient. 
‘‘(v) In-kind items used for the provi-
sion of charity care. 
‘‘(vi) A dividend or other profit dis-
tribution from, or ownership or investment 
interest in, a publicly traded security and 
mutual fund (as described in section 
1877(c)). 
‘‘(vii) Compensation paid by an appli-
cable manufacturer or distributor to a cov-
ered recipient who is directly employed by 
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‘‘(C) The disclosure or reporting, in any 
format, of the type of information by any per-
son or entity other than an applicable manufac-
turer (as so defined) or a covered recipient (as 
defined in subsection (f)). 
‘‘(D) The disclosure or reporting, in any 
format, of the type of information required to 
be disclosed or reported under this section to a 
Federal, State, or local governmental agency for 
public health surveillance, investigation, or 
other public health purposes or health oversight 
purposes. 
Nothing in paragraph (1) shall be construed to limit 
the discovery or admissibility of information de-
scribed in this paragraph in a criminal, civil, or ad-
ministrative proceeding.’’. 
(b) AVAILABILITY OF INFORMATION FROM THE DIS-
CLOSURE
OF
FINANCIAL
RELATIONSHIP
REPORT 
(DFRR).—The Secretary of Health and Human Services 
shall submit to Congress a report on the full results of 
the Disclosure of Physician Financial Relationships sur-
veys required pursuant to section 5006 of the Deficit Re-
duction Act of 2005. Such report shall be submitted to 
Congress not later than the date that is 6 months after 
the date such surveys are collected and shall be made pub-
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licly available on an Internet website of the Department 
of Health and Human Services. 
(c) GAO REPORT.—Not later than December 31, 
2012, the Comptroller General of the United States shall 
submit to Congress a report on section 1128H of the So-
cial Security Act, as added by subsection (a). Such report 
shall address the extent to which important transfers of 
value are being adequately reported under such section 
(including unreported transfers required by such section 
as well as transfers not required to be reported by such 
section), the impact on States of the Federal preemption 
provision under subsection (h) of such section, whether 
changes have occurred in the pattern of payments as a 
result of efforts to evade reporting requirements, a de-
scription of the financial relationships subject to delayed 
reporting under subsection (a) of such section, and any 
recommended improvements to the collection or the anal-
ysis of data reported under such section. 
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Subtitle E—Public Reporting on 
Health Care-Associated Infections 
SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY 
HOSPITALS 
AND 
AMBULATORY 
SURGICAL 
CENTERS ON HEALTH CARE-ASSOCIATED IN-
FECTIONS. 
(a) IN GENERAL.—Title XI of the Social Security Act 
is amended by inserting after section 1138 the following 
section: 
‘‘SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY 
HOSPITALS 
AND 
AMBULATORY 
SURGICAL 
CENTERS ON HEALTH CARE-ASSOCIATED IN-
FECTIONS. 
‘‘(a) REPORTING REQUIREMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
that a hospital (as defined in subsection (g)) or am-
bulatory surgical center meeting the requirements of 
titles XVIII or XIX may participate in the programs 
established under such titles only if, in accordance 
with this section, the hospital or center reports such 
information on health care-associated infections that 
develop in the hospital or center (and such demo-
graphic information associated with such infections) 
as the Secretary specifies. 
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‘‘(2) REPORTING PROTOCOLS.— Such informa-
tion shall be reported in accordance with reporting 
protocols established by the Secretary through the 
Director of the Centers for Disease Control and Pre-
vention (in this section referred to as the ‘CDC’) 
and to the National Healthcare Safety Network of 
the CDC or under such another reporting system of 
such Centers as determined appropriate by the Sec-
retary in consultation with such Director. 
‘‘(3) COORDINATION
WITH
HIT.—The Sec-
retary, through the Director of the CDC and the Of-
fice of the National Coordinator for Health Informa-
tion Technology, shall ensure that the transmission 
of information under this subsection is coordinated 
with systems established under the HITECH Act, 
where appropriate. 
‘‘(4) PROCEDURES TO ENSURE THE VALIDITY 
OF
INFORMATION.—The Secretary shall establish 
procedures regarding the validity of the information 
submitted under this subsection in order to ensure 
that such information is appropriately compared 
across hospitals and centers. Such procedures shall 
address failures to report as well as errors in report-
ing. 
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‘‘(5) IMPLEMENTATION.—Not later than 1 year 
after the date of enactment of this section, the Sec-
retary, through the Director of CDC, shall promul-
gate regulations to carry out this section. 
‘‘(b) PUBLIC POSTING OF INFORMATION.—The Sec-
retary shall promptly post, on the official public Internet 
site of the Department of Health and Human Services, 
the information reported under subsection (a). Such infor-
mation shall be set forth in a manner that allows for the 
comparison of information on health care-associated infec-
tions— 
‘‘(1) among hospitals and ambulatory surgical 
centers; and 
‘‘(2) by demographic information. 
‘‘(c) ANNUAL REPORT TO CONGRESS.—On an annual 
basis the Secretary shall submit to the Congress a report 
that summarizes each of the following: 
‘‘(1) The number and types of health care-asso-
ciated infections reported under subsection (a) in 
hospitals and ambulatory surgical centers during 
such year. 
‘‘(2) Factors that contribute to the occurrence 
of such infections, including health care worker im-
munization rates. 
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‘‘(3) Based on the most recent information 
available to the Secretary on the composition of the 
professional staff of hospitals and ambulatory sur-
gical centers, the number of certified infection con-
trol professionals on the staff of hospitals and ambu-
latory surgical centers. 
‘‘(4) The total increases or decreases in health 
care costs that resulted from increases or decreases 
in the rates of occurrence of each such type of infec-
tion during such year. 
‘‘(5) Recommendations, in coordination with the 
Center for Quality Improvement established under 
section 931 of the Public Health Service Act, for 
best practices to eliminate the rates of occurrence of 
each such type of infection in hospitals and ambula-
tory surgical centers. 
‘‘(d) NON-PREEMPTION OF STATE LAWS.—Nothing 
in this section shall be construed as preempting or other-
wise affecting any provision of State law relating to the 
disclosure of information on health care-associated infec-
tions or patient safety procedures for a hospital or ambu-
latory surgical center. 
‘‘(e) HEALTH CARE-ASSOCIATED INFECTION.—For 
purposes of this section: 
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‘‘(1) IN GENERAL.—The term ‘health care-asso-
ciated infection’ means an infection that develops in 
a patient who has received care in any institutional 
setting where health care is delivered and is related 
to receiving health care. 
‘‘(2) RELATED TO RECEIVING HEALTH CARE.— 
The term ‘related to receiving health care’, with re-
spect to an infection, means that the infection was 
not incubating or present at the time health care 
was provided. 
‘‘(f) APPLICATION
TO
CRITICAL
ACCESS
HOS-
PITALS.—For purposes of this section, the term ‘hospital’ 
includes a critical access hospital, as defined in section 
1861(mm)(1).’’. 
(b) EFFECTIVE DATE.—With respect to section 
1138A of the Social Security Act (as inserted by sub-
section (a) of this section), the requirement under such 
section that hospitals and ambulatory surgical centers 
submit reports takes effect on such date (not later than 
2 years after the date of the enactment of this Act) as 
the Secretary of Health and Human Services shall specify. 
In order to meet such deadline, the Secretary may imple-
ment such section through guidance or other instructions. 
(c) GAO REPORT.—Not later than 18 months after 
the date of the enactment of this Act, the Comptroller 
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General of the United States shall submit to Congress a 
report on the program established under section 1138A 
of the Social Security Act, as inserted by subsection (a). 
Such report shall include an analysis of the appropriate-
ness of the types of information required for submission, 
compliance with reporting requirements, the success of the 
validity procedures established, and any conflict or overlap 
between the reporting required under such section and any 
other reporting systems mandated by either the States or 
the Federal Government. 
(d) REPORT ON ADDITIONAL DATA.—Not later than 
18 months after the date of the enactment of this Act, 
the Secretary of Health and Human Services shall submit 
to the Congress a report on the appropriateness of expand-
ing the requirements under such section to include addi-
tional information (such as health care worker immuniza-
tion rates), in order to improve health care quality and 
patient safety. 
TITLE V—MEDICARE GRADUATE 
MEDICAL EDUCATION 
SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSI-
TIONS. 
(a) IN GENERAL.—Section 1886(h) of the Social Se-
curity Act (42 U.S.C. 1395ww(h)) is amended— 
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(1) in paragraph (4)(F)(i), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 
(2) in paragraph (4)(H)(i), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 
(3) in paragraph (7)(E), by inserting ‘‘and 
paragraph (8)’’ after ‘‘this paragraph’’; and 
(4) by adding at the end the following new 
paragraph: 
‘‘(8) ADDITIONAL REDISTRIBUTION OF UNUSED 
RESIDENCY POSITIONS.— 
‘‘(A) REDUCTIONS IN LIMIT BASED ON UN-
USED POSITIONS.— 
‘‘(i) PROGRAMS SUBJECT TO REDUC-
TION.—If a hospital’s reference resident 
level (specified in clause (ii)) is less than 
the otherwise applicable resident limit (as 
defined in subparagraph (C)(ii)), effective 
for portions of cost reporting periods oc-
curring on or after July 1, 2011, the oth-
erwise applicable resident limit shall be re-
duced by 90 percent of the difference be-
tween such otherwise applicable resident 
limit and such reference resident level. 
‘‘(ii) REFERENCE RESIDENT LEVEL.— 
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‘‘(I) IN
GENERAL.—Except as 
otherwise provided in a subsequent 
subclause, the reference resident level 
specified in this clause for a hospital 
is the highest resident level for any of 
the 3 most recent cost reporting peri-
ods (ending before the date of the en-
actment of this paragraph) of the hos-
pital for which a cost report has been 
settled (or, if not, submitted (subject 
to audit)), as determined by the Sec-
retary. 
‘‘(II) USE OF MOST RECENT AC-
COUNTING PERIOD TO RECOGNIZE EX-
PANSION OF EXISTING PROGRAMS.—If 
a hospital submits a timely request to 
increase its resident level due to an 
expansion, or planned expansion, of 
an existing residency training pro-
gram that is not reflected on the most 
recent settled or submitted cost re-
port, after audit and subject to the 
discretion of the Secretary, subject to 
subclause (IV), the reference resident 
level for such hospital is the resident 
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level that includes the additional resi-
dents attributable to such expansion 
or establishment, as determined by 
the Secretary. The Secretary is au-
thorized to determine an alternative 
reference resident level for a hospital 
that submitted to the Secretary a 
timely request, before the start of the 
2009–2010 academic year, for an in-
crease in its reference resident level 
due to a planned expansion. 
‘‘(III) 
SPECIAL
PROVIDER 
AGREEMENT.—In the case of a hos-
pital 
described 
in 
paragraph 
(4)(H)(v), the reference resident level 
specified in this clause is the limita-
tion applicable under subclause (I) of 
such paragraph. 
‘‘(IV) 
PREVIOUS
REDISTRIBU-
TION.—The reference resident level 
specified in this clause for a hospital 
shall be increased to the extent re-
quired to take into account an in-
crease in resident positions made 
available to the hospital under para-
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graph (7)(B) that are not otherwise 
taken into account under a previous 
subclause. 
‘‘(iii) AFFILIATION.—The provisions 
of clause (i) shall be applied to hospitals 
which are members of the same affiliated 
group (as defined by the Secretary under 
paragraph (4)(H)(ii)) and to the extent the 
hospitals can demonstrate that they are 
filling any additional
resident slots allo-
cated to other hospitals through an affili-
ation agreement, the Secretary shall adjust 
the determination of available slots accord-
ingly, or which the Secretary otherwise has 
permitted the resident positions (under 
section 402 of the Social Security Amend-
ments of 1967) to be aggregated for pur-
poses of applying the resident position lim-
itations under this subsection. 
‘‘(B) REDISTRIBUTION.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall increase the otherwise applicable resi-
dent limit for each qualifying hospital that 
submits an application under this subpara-
graph by such number as the Secretary 
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may approve for portions of cost reporting 
periods occurring on or after July 1, 2011. 
The estimated aggregate number of in-
creases in the otherwise applicable resident 
limit under this subparagraph may not ex-
ceed the Secretary’s estimate of the aggre-
gate reduction in such limits attributable 
to subparagraph (A). 
‘‘(ii) REQUIREMENTS
FOR
QUALI-
FYING
HOSPITALS.—A hospital is not a 
qualifying hospital for purposes of this 
paragraph unless the following require-
ments are met: 
‘‘(I) MAINTENANCE OF PRIMARY 
CARE
RESIDENT
LEVEL.—The hos-
pital maintains the number of primary 
care residents at a level that is not 
less than the base level of primary 
care residents increased by the num-
ber of additional primary care resi-
dent positions provided to the hospital 
under this subparagraph. For pur-
poses of this subparagraph, the ‘base 
level of primary care residents’ for a 
hospital is the level of such residents 
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as of a base period (specified by the 
Secretary), determined without regard 
to whether such positions were in ex-
cess of the otherwise applicable resi-
dent limit for such period but taking 
into account the application of sub-
clauses (II) and (III) of subparagraph 
(A)(ii). 
‘‘(II) DEDICATED
ASSIGNMENT 
OF ADDITIONAL RESIDENT POSITIONS 
TO PRIMARY CARE.—The hospital as-
signs all such additional resident posi-
tions for primary care residents. 
‘‘(III) 
ACCREDITATION.—The 
hospital’s residency programs in pri-
mary care are fully accredited or, in 
the case of a residency training pro-
gram not in operation as of the base 
year, the hospital is actively applying 
for such accreditation for the program 
for such additional resident positions 
(as determined by the Secretary). 
‘‘(iii) CONSIDERATIONS
IN
REDIS-
TRIBUTION.—In determining for which 
qualifying hospitals the increase in the oth-
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erwise applicable resident limit is provided 
under this subparagraph, the Secretary 
shall take into account the demonstrated 
likelihood of the hospital filling the posi-
tions within the first 3 cost reporting peri-
ods beginning on or after July 1, 2011, 
made available under this subparagraph, 
as determined by the Secretary. 
‘‘(iv) PRIORITY
FOR
CERTAIN
HOS-
PITALS.—In determining for which quali-
fying hospitals the increase in the other-
wise applicable resident limit is provided 
under this subparagraph, the Secretary 
shall distribute the increase to qualifying 
hospitals based on the following criteria: 
‘‘(I) The Secretary shall give 
preference to hospitals that had a re-
duction in resident training positions 
under subparagraph (A). 
‘‘(II) The Secretary shall give 
preference to hospitals with 3-year 
primary care residency training pro-
grams, such as family practice and 
general internal medicine. 
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‘‘(III) The Secretary shall give 
preference to hospitals insofar as they 
have in effect formal arrangements 
(as determined by the Secretary) that 
place greater emphasis upon training 
in Federally qualified health centers, 
rural health clinics, and other nonpro-
vider settings, and to hospitals that 
receive additional payments under 
subsection (d)(5)(F) and emphasize 
training in an outpatient department. 
‘‘(IV) The Secretary shall give 
preference to hospitals with a number 
of positions (as of July 1, 2009) in 
excess of the otherwise applicable resi-
dent limit for such period. 
‘‘(V) The Secretary shall give 
preference to hospitals that place 
greater emphasis upon training in a 
health professional shortage area (des-
ignated under section 332 of the Pub-
lic Health Service Act) or a health 
professional needs area (designated 
under section 2211 of such Act). 
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‘‘(VI) The Secretary shall give 
preference to hospitals in States that 
have low resident-to-population ratios 
(including a greater preference for 
those States with lower resident-to- 
population ratios). 
‘‘(v) LIMITATION.—In no case shall 
more than 20 full-time equivalent addi-
tional residency positions be made available 
under this subparagraph with respect to 
any hospital. 
‘‘(vi) APPLICATION OF PER RESIDENT 
AMOUNTS FOR PRIMARY CARE.—With re-
spect to additional residency positions in a 
hospital attributable to the increase pro-
vided under this subparagraph, the ap-
proved FTE resident amounts are deemed 
to be equal to the hospital per resident 
amounts for primary care and nonprimary 
care computed under paragraph (2)(D) for 
that hospital. 
‘‘(vii) DISTRIBUTION.—The Secretary 
shall distribute the increase in resident 
training positions to qualifying hospitals 
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under this subparagraph not later than 
July 1, 2011. 
‘‘(C) RESIDENT
LEVEL
AND
LIMIT
DE-
FINED.—In this paragraph: 
‘‘(i) The term ‘resident level’ has the 
meaning given such term in paragraph 
(7)(C)(i). 
‘‘(ii) The term ‘otherwise applicable 
resident limit’ means, with respect to a 
hospital, the limit otherwise applicable 
under subparagraphs (F)(i) and (H) of 
paragraph (4) on the resident level for the 
hospital determined without regard to this 
paragraph but taking into account para-
graph (7)(A). 
‘‘(D) MAINTENANCE
OF
PRIMARY
CARE 
RESIDENT LEVEL.—In carrying out this para-
graph, the Secretary shall require hospitals that 
receive additional resident positions under sub-
paragraph (B)— 
‘‘(i) to maintain records, and periodi-
cally report to the Secretary, on the num-
ber of primary care residents in its resi-
dency training programs; and 
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‘‘(ii) as a condition of payment for a 
cost reporting period under this subsection 
for such positions, to maintain the level of 
such positions at not less than the sum 
of— 
‘‘(I) the base level of primary 
care resident positions (as determined 
under subparagraph (B)(ii)(I)) before 
receiving such additional positions; 
and 
‘‘(II) the number of such addi-
tional positions.’’. 
(b) IME.— 
(1) IN GENERAL.—Section 1886(d)(5)(B)(v) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(d)(5)(B)(v)), in the third sentence, is 
amended— 
(A) by striking ‘‘subsection (h)(7)’’ and in-
serting ‘‘subsections (h)(7) and (h)(8)’’; and 
(B) by striking ‘‘it applies’’ and inserting 
‘‘they apply’’. 
(2) 
CONFORMING
PROVISION.—Section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(B)) is amended by adding at the end 
the following clause: 
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‘‘(x) For discharges occurring on or after July 1, 
2011, insofar as an additional payment amount under this 
subparagraph is attributable to resident positions distrib-
uted to a hospital under subsection (h)(8)(B), the indirect 
teaching adjustment factor shall be computed in the same 
manner as provided under clause (ii) with respect to such 
resident positions.’’. 
(c) CONFORMING AMENDMENT.—Section 422(b)(2) 
of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108–173) is 
amended by striking ‘‘section 1886(h)(7)’’ and all that fol-
lows and inserting ‘‘paragraphs (7) and (8) of subsection 
(h) of section 1886 of the Social Security Act.’’. 
SEC. 1502. INCREASING TRAINING IN NONPROVIDER SET-
TINGS. 
(a) DIRECT GME.—Section 1886(h)(4)(E) of the So-
cial Security Act (42 U.S.C. 1395ww(h)) is amended— 
(1) by designating the first sentence as a clause 
(i) with the heading ‘‘IN GENERAL.—’’ and appro-
priate indentation; 
(2) by striking ‘‘shall be counted and that all 
the time’’ and inserting ‘‘shall be counted and 
that— 
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‘‘(I) effective for cost reporting 
periods beginning before July 1, 2009, 
all the time’’; 
(3) in subclause (I), as inserted by paragraph 
(1), by striking the period at the end and inserting 
‘‘; and’’; and 
(A) by inserting after subclause (I), as so 
inserted, the following: 
‘‘(II) effective for cost reporting 
periods beginning on or after July 1, 
2009, all the time so spent by a resi-
dent shall be counted towards the de-
termination of full-time equivalency, 
without regard to the setting in which 
the activities are performed, if the 
hospital incurs the costs of the sti-
pends and fringe benefits of the resi-
dent during the time the resident 
spends in that setting. 
Any hospital claiming under this subpara-
graph for time spent in a nonprovider set-
ting shall maintain and make available to 
the 
Secretary 
records 
regarding 
the 
amount of such time and such amount in 
comparison with amounts of such time in 
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such base year as the Secretary shall speci-
fy.’’. 
(b) IME.—Section 1886(d)(5)(B)(iv) of the Social 
Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amend-
ed— 
(1) by striking ‘‘(iv) Effective for discharges oc-
curring on or after October 1, 1997’’ and inserting 
‘‘(iv)(I) Effective for discharges occurring on or 
after October 1, 1997, and before July 1, 2009’’; 
and 
(2) by inserting after subclause (I), as inserted 
by paragraph (1), the following new subclause: 
‘‘(II) Effective for discharges occurring on or 
after July 1, 2009, all the time spent by an intern 
or resident in patient care activities at an entity in 
a nonprovider setting shall be counted towards the 
determination of full-time equivalency if the hospital 
incurs the costs of the stipends and fringe benefits 
of the intern or resident during the time the intern 
or resident spends in that setting.’’. 
(c) OIG STUDY ON IMPACT ON TRAINING.—The In-
spector General of the Department of Health and Human 
Services shall analyze the data collected by the Secretary 
of Health and Human Services from the records made 
available to the Secretary under section 1886(h)(4)(E) of 
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the Social Security Act, as amended by subsection (a), in 
order to assess the extent to which there is an increase 
in time spent by medical residents in training in nonpro-
vider settings as a result of the amendments made by this 
section. Not later than 4 years after the date of the enact-
ment of this Act, the Inspector General shall submit a re-
port to Congress on such analysis and assessment. 
(d) DEMONSTRATION
PROJECT
FOR
APPROVED 
TEACHING HEALTH CENTERS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct a demonstration 
project under which an approved teaching health 
center (as defined in paragraph (3)) would be eligi-
ble for payment under subsections (h) and (k) of 
section 1886 of the Social Security Act (42 U.S.C. 
1395ww) of amounts for its own direct costs of 
graduate medical education activities for primary 
care residents, as well as for the direct costs of grad-
uate medical education activities of its contracting 
hospital for such residents, in a manner similar to 
the manner in which such payments would be made 
to a hospital if the hospital were to operate such a 
program. 
(2) CONDITIONS.—Under the demonstration 
project— 
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(A) an approved teaching health center 
shall contract with an accredited teaching hos-
pital to carry out the inpatient responsibilities 
of the primary care residency program of the 
hospital involved and is responsible for payment 
to the hospital for the hospital’s costs of the 
salary and fringe benefits for residents in the 
program; 
(B) the number of primary care residents 
of the center shall not count against the con-
tracting hospital’s resident limit; and 
(C) the contracting hospital shall agree not 
to diminish the number of residents in its pri-
mary care residency training program. 
(3) APPROVED TEACHING HEALTH CENTER DE-
FINED.—In this subsection, the term ‘‘approved 
teaching health center’’ means a nonprovider setting, 
such as a Federally qualified health center or rural 
health clinic (as defined in section 1861(aa) of the 
Social Security Act), that develops and operates an 
accredited primary care residency program for which 
funding would be available if it were operated by a 
hospital. 
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SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DI-
DACTIC AND SCHOLARLY ACTIVITIES AND 
OTHER ACTIVITIES. 
(a) DIRECT GME.—Section 1886(h) of the Social Se-
curity Act (42 U.S.C. 1395ww(h)) is amended— 
(1) in paragraph (4)(E), as amended by section 
1502(a)— 
(A) in clause (i), by striking ‘‘Such rules’’ 
and inserting ‘‘Subject to clause (ii), such 
rules’’; and 
(B) by adding at the end the following new 
clause: 
‘‘(ii) TREATMENT OF CERTAIN NON-
PROVIDER
AND
DIDACTIC
ACTIVITIES.— 
Such rules shall provide that all time spent 
by an intern or resident in an approved 
medical residency training program in a 
nonprovider setting that is primarily en-
gaged in furnishing patient care (as de-
fined in paragraph (5)(K)) in nonpatient 
care activities, such as didactic conferences 
and seminars, but not including research 
not associated with the treatment or diag-
nosis of a particular patient, as such time 
and activities are defined by the Secretary, 
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shall be counted toward the determination 
of full-time equivalency.’’; 
(2) in paragraph (4), by adding at the end the 
following new subparagraph: 
‘‘(I) TREATMENT OF CERTAIN TIME IN AP-
PROVED MEDICAL RESIDENCY TRAINING PRO-
GRAMING.—In determining the hospital’s num-
ber of full-time equivalent residents for pur-
poses of this subsection, all the time that is 
spent by an intern or resident in an approved 
medical residency training program on vacation, 
sick leave, or other approved leave, as such time 
is defined by the Secretary, and that does not 
prolong the total time the resident is partici-
pating in the approved program beyond the nor-
mal duration of the program shall be counted 
toward the determination of full-time equiva-
lency.’’; and 
(3) in paragraph (5), by adding at the end the 
following new subparagraph: 
‘‘(K) NONPROVIDER SETTING THAT IS PRI-
MARILY
ENGAGED
IN
FURNISHING
PATIENT 
CARE.—The term ‘nonprovider setting that is 
primarily engaged in furnishing patient care’ 
means a nonprovider setting in which the pri-
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mary activity is the care and treatment of pa-
tients, as defined by the Secretary.’’. 
(b) IME DETERMINATIONS.—Section 1886(d)(5)(B) 
of such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by 
section 1501(b), is amended by adding at the end the fol-
lowing new clause: 
‘‘(xi)(I) The provisions of subparagraph (I) of sub-
section (h)(4) shall apply under this subparagraph in the 
same manner as they apply under such subsection. 
‘‘(II) In determining the hospital’s number of full- 
time equivalent residents for purposes of this subpara-
graph, all the time spent by an intern or resident in an 
approved medical residency training program in non-
patient care activities, such as didactic conferences and 
seminars, as such time and activities are defined by the 
Secretary, that occurs in the hospital shall be counted to-
ward the determination of full-time equivalency if the hos-
pital— 
‘‘(aa) is recognized as a subsection (d) hospital; 
‘‘(bb) is recognized as a subsection (d) Puerto 
Rico hospital; 
‘‘(cc) is reimbursed under a reimbursement sys-
tem authorized under section 1814(b)(3); or 
‘‘(dd) is a provider-based hospital outpatient de-
partment. 
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‘‘(ii) Coordinate patient care within 
and across settings relevant to their spe-
cialties. 
‘‘(iii) Understand the relevant cost 
and value of various diagnostic and treat-
ment options. 
‘‘(iv) Work in inter-professional teams 
and multi-disciplinary team-based models 
in provider and nonprovider settings to en-
hance safety and improve quality of patient 
care. 
‘‘(v) Be knowledgeable in methods of 
identifying systematic errors in health care 
delivery and in implementing systematic 
solutions in case of such errors, including 
experience and participation in continuous 
quality improvement projects to improve 
health outcomes of the population the phy-
sicians serve. 
‘‘(vi) Be meaningful EHR users (as 
determined under section 1848(o)(2)) in 
the delivery of care and in improving the 
quality of the health of the community and 
the individuals that the hospital serves.’’. 
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ance to the home visitation programs using 
such funds; 
‘‘(C) in supporting home visitation pro-
grams using funds provided under this section, 
the State will promote coordination and collabo-
ration with other home visitation programs (in-
cluding programs funded under title XIX) and 
with other child and family services, health 
services, income supports, and other related as-
sistance; 
‘‘(D) home visitation programs supported 
using such funds will, when appropriate, pro-
vide referrals to other programs serving chil-
dren and families; and 
‘‘(E) the State will comply with subsection 
(i), and cooperate with any evaluation con-
ducted under subsection (j). 
‘‘(4) OTHER INFORMATION.—Such other infor-
mation as the Secretary may require. 
‘‘(c) ALLOTMENTS.— 
‘‘(1) INDIAN
TRIBES.—From the amount re-
served under subsection (l)(2) for a fiscal year, the 
Secretary shall allot to each Indian tribe that meets 
the requirement of subsection (d), if applicable, for 
the fiscal year the amount that bears the same ratio 
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