(ii) USE OF PAYMENTS FOR PRIMARY
CARE
RESIDENTS.—In applying different
weighting factors under clause (i), the
State shall ensure that the amount of pay-
ment made to hospitals for costs attrib-
utable to primary care residents shall be
greater than the amount that would have
been paid to hospitals for costs attributable
to such residents if the State had applied
the weighting factors otherwise set forth in
section 1886(h)(4)(C) of the Social Secu-
rity Act.
(B) PAYMENTS FOR MEDICAL EDUCATION
THROUGH CONSORTIUM.—The State may make
payments for graduate medical education costs
through payments to a health care training con-
sortium (or through any entity identified by
such a consortium as appropriate for receiving
payments on behalf of the consortium) that is
established in the State but that is not other-
wise participating in the demonstration project.
(2) REQUIREMENTS FOR CONSORTIUM.—
(A) IN GENERAL.—In the case of a consor-
tium participating in the demonstration project
under this subtitle, the Secretary shall make
payments for graduate medical education costs
through a health care training consortium
whose members provide medical residency train-
ing (or through any entity identified by such a
consortium as appropriate for receiving pay-
ments on behalf of the consortium).
(B) USE OF PAYMENTS.—
(i) IN
GENERAL.—Each consortium
receiving payments under subparagraph
(A) shall use such funds to conduct activi-
ties which test and evaluate mechanisms to
increase the number and percentage of
medical students entering primary care
practice 
relative 
to 
those 
entering
nonprimary care practice, and may use
such funds for the operation of the consor-
tium.
(ii) PAYMENTS
TO
PARTICIPATING
PROGRAMS.—The consortium shall ensure
that the majority of the payments received
under subparagraph (A) are directed to
consortium members for primary care resi-
dency programs, and shall designate for
each resident assigned to the consortium a
hospital operating an approved medical
residency training program for purposes of
enabling the Secretary to calculate the con-
sortium’s payment amount under the
project. Such hospital shall be the hospital
where the resident receives the majority of
the 
resident’s 
hospital-based, 
non-
ambulatory training experience.
(d) ALLOCATION OF PORTION OF MEDICARE GME
PAYMENTS FOR ACTIVITIES UNDER PROJECT.—Notwith-
standing any provision of title XVIII of the Social Security
Act, the following rules apply with respect to each State
and each health care training consortium participating in
the demonstration project established under this section
during a year:
(1) In the case of a State—
(A) the Secretary shall reduce the amount
of each payment made to hospitals in the State
during the year for direct graduate medical
education costs under section 1886(h) of the
Social Security Act by 3 percent; and
(B) the Secretary shall pay the State an
amount equal to the Secretary’s estimate of the
sum of the reductions made during the year
under subparagraph (A) (as adjusted by the
Secretary in subsequent years for over- or
under-estimations in the amount estimated
under this subparagraph in previous years).
(2) In the case of a consortium—
(A) the Secretary shall reduce the amount
of each payment made to hospitals who are
members of the consortium during the year for
direct graduate medical education costs under
section 1886(h) of the Social Security Act by 3
percent; and
(B) the Secretary shall pay the consortium
an amount equal to the Secretary’s estimate of
the sum of the reductions made during the year
under subparagraph (A) (as adjusted by the
Secretary in subsequent years for over- or
under-estimations in the amount estimated
under this subparagraph in previous years).
(e) ADDITIONAL GRANT FOR PLANNING AND EVAL-
UATION.—
(1) IN GENERAL.—The Secretary may award
grants to States and consortia participating in the
demonstration project under this section for the pur-
pose of developing and evaluating such projects. A
State or consortia may conduct such an evaluation
or contract with a private entity to conduct the eval-
uation. Each State and consortia desiring to receive
a grant under this paragraph shall prepare and sub-
mit to the Secretary an application, at such time, in
such manner, and containing such information as
the Secretary may require.
(2) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated such sums
as may be necessary for grants under this paragraph
for fiscal years 1995 through 2000.
(f) DURATION.—A demonstration project under this
section shall be conducted for a period not to exceed 5
years. The Secretary may terminate a project if the Sec-
retary determines that the State or consortium conducting
the project is not in substantial compliance with the terms
of the application approved by the Secretary.
(g) EVALUATIONS AND REPORTS.—
(1) EVALUATIONS.—Each State or consortium
participating in the demonstration project shall sub-
mit to the Secretary a final evaluation within 360
days of the termination of the State or consortium’s
participation and such interim evaluations as the
Secretary may require.
(2) REPORTS TO CONGRESS.—Not later than
360 days after the first demonstration project under
this subtitle begins, and annually thereafter for each
year in which such a project is conducted, the Sec-
retary shall submit a report to Congress which eval-
uates the effectiveness of the State and consortium
activities conducted under such projects and includes
any legislative recommendations determined appro-
priate by the Secretary.
(h) MAINTENANCE OF EFFORT.—Any funds available
for the activities covered by a demonstration project under
this subtitle shall supplement, and shall not supplant,
funds that are expended for similar purposes under any
State, regional, or local program.
SEC. 332. GOALS FOR PROJECTS.
The goals referred to in this section for a State or
consortium participating in the demonstration project
under this subtitle are as follows:
(1) The training of an equal number of physi-
cian and non-physician primary care providers.
(2) The recruiting of residents for graduate
medical education training programs who received a
portion of undergraduate training in a rural area.
(3) The allocation of not less than 50 percent
of the training spent in a graduate medical residency
training program at sites at which acute care inpa-
tient hospital services are not furnished.
(4) The rotation of residents in approved medi-
cal residency training programs among practices
that serve residents of rural areas.
(5) The development of a plan under which,
after a 5-year transition period, not less than 50
percent of the residents who begin an initial resi-
dency period in an approved medical residency train-
ing program shall be primary care residents.
SEC. 333. DEFINITIONS.
In this subtitle:
(1) APPROVED MEDICAL RESIDENCY TRAINING
PROGRAM.—The term ‘‘approved medical residency
training program’’ has the meaning given such term
in section 1886(h)(5)(A) of the Social Security Act.
(2) HEALTH
CARE
TRAINING
CONSORTIUM.—
The term ‘‘health care training consortium’’ means
a State, regional, or local entity consisting of at
least one of each of the following:
(A) A hospital operating an approved med-
ical residency training program at which resi-
dents receive training at ambulatory training
sites located in rural areas.
(B) A school of medicine or osteopathic
medicine.
(C) A school of allied health or a program
for the training of physician assistants (as such
terms are defined in section 799 of the Public
Health Service Act).
(D) A school of nursing (as defined in sec-
tion 853 of the Public Health Service Act).
(3) PRIMARY CARE.—The term ‘‘primary care’’
means family practice, general internal medicine,
general pediatrics, and obstetrics and gynecology.
(4) RESIDENT.—The term ‘‘resident’’ has the
meaning given such term in section 1886(h)(5)(H)
of the Social Security Act.
(5) RURAL AREA.—The term ‘‘rural area’’ has
the 
meaning 
given 
such 
term 
in 
section
1886(d)(2)(D) of the Social Security Act.
TITLE IV—HOSPITAL ANTITRUST
FAIRNESS
SEC. 401. ANTITRUST EXEMPTION.
The antitrust laws shall not apply with respect to—
(1) the merger of, or the attempt to merge, 2
or more hospitals,
(2) a contract entered into solely by 2 or more
hospitals to allocate hospital services, or
(3) the attempt by only 2 or more hospitals to
enter into a contract to allocate hospital services,
if each of such hospitals satisfies all of the requirements
of section 503 at the time such hospitals engage in the
conduct described in paragraph (1), (2), or (3), as the case
may be.
SEC. 402. REQUIREMENTS.
The requirements referred to in section 501 are as
follows:
(1) The hospital is located outside of a city, or
in a city that has less than 150,000 inhabitants, as
determined in accordance with the most recent data
available from the Bureau of the Census.
(2) In the most recently concluded calendar
year, the hospital received more than 40 percent of
its gross revenue from payments made under Fed-
eral programs.
(3) There is in effect with respect to the hos-
pital a certificate issued by the Health Care Financ-
ing Administration specifying that such Administra-
tion has determined that Federal expenditures would
be reduced, consumer costs would not increase, and
access to health care services would not be reduced,
if the hospital and the other hospitals that requested
such certificate merge, or allocate the hospital serv-
ices specified in such request, as the case may be.
SEC. 403. DEFINITION.
For purposes of this title, the term ‘‘antitrust laws’’
has the meaning given such term in subsection (a) of the
first section of the Clayton Act (15 U.S.C. 12), except that
such term includes section 5 of the Federal Trade Com-
mission Act (15 U.S.C. 45) to the extent that such section
5 applies with respect to unfair methods of competition.
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