paragraph not later than 2 years after the date 
of enactment of this paragraph.’’. 
(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 second 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: 
‘‘(x) For discharges occurring on or after the 
date of enactment of this clause, insofar as an addi-
tional payment amount under this subparagraph is 
attributable to resident positions distributed 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 re-
spect to such resident positions.’’. 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
SEC. 3. COUNTING RESIDENT TIME IN OUTPATIENT SET-
TINGS. 
(a) GME.—Section 1886(h)(4)(E) of the Social Se-
curity Act (42 U.S.C. 1395ww(h)) is amended— 
(1) by striking ‘‘shall be counted and that all 
the time’’ and inserting ‘‘shall be counted and 
that— 
‘‘(i) effective for cost reporting peri-
ods beginning before July 1, 2009, all the 
time’’; 
(2) in clause (i), as inserted by paragraph (1), 
by striking the period at the end and inserting ‘‘; 
and’’; and 
(3) by inserting after clause (i), as so inserted, 
the following new clause: 
‘‘(ii) effective for cost reporting peri-
ods beginning on or after July 1, 2009, all 
the time so spent by a resident shall be 
counted towards the determination of full- 
time equivalency, without regard to the 
setting in which the activities are per-
formed, if the hospital continues to incur 
the costs of the stipends and fringe bene-
fits of the resident during the time the 
resident spends in that setting.’’. 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
(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)(A) Effective for discharges occurring on or 
after October 1, 1997, and before July 1, 2009’’; 
and 
(2) by inserting after subparagraph (A), as in-
serted by paragraph (1), the following new subpara-
graph: 
‘‘(B) Effective for discharges occur-
ring on or after July 1, 2009, all the time 
spent by an intern or resident in patient 
care activities at an entity in a nonhospital 
setting shall be counted towards the deter-
mination of full-time equivalency if the 
hospital continues to incur 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) APPLICATION.—The amendments made by this 
section shall not be applied in a manner that requires re-
opening of any settled hospital cost reports as to which 
there is not a jurisdictionally proper appeal pending as 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under sec-
tion 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(B)) or for direct graduate medical edu-
cation costs under section 1886(h) of such Act (42 U.S.C. 
1395ww(h)). 
SEC. 4. RULES FOR COUNTING RESIDENT TIME FOR DIDAC-
TIC AND SCHOLARLY ACTIVITIES AND OTHER 
ACTIVITIES. 
(a) GME.—Section 1886(h) of the Social Security 
Act (42 U.S.C. 1395ww(h)), as amended by section 3, is 
amended— 
(1) in paragraph (4)(E)— 
(A) by designating the first sentence as a 
clause (i) with the heading ‘‘IN GENERAL’’ and 
appropriate indentation and 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-
HOSPITAL
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 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
nonhospital setting that is primarily en-
gaged in furnishing patient care (as de-
fined in paragraph (5)(K)) in non-patient 
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, 
shall be counted toward the determination 
of full-time equivalency.’’; 
(2) in paragraph (4), by adding at the end the 
following new subparagraph: 
‘‘(I) In determining the hospital’s number 
of full-time equivalent residents for purposes of 
this subsection, all the time that is spent by an 
intern or resident in an approved medical resi-
dency 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 participating in the 
approved program beyond the normal duration 
of the program shall be counted toward the de-
termination of full-time equivalency.’’; and 
(3) in paragraph (5), by adding at the end the 
following new subparagraph: 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
‘‘(K) NONHOSPITAL SETTING THAT IS PRI-
MARILY
ENGAGED
IN
FURNISHING
PATIENT 
CARE.—The term ‘nonhospital setting that is 
primarily engaged in furnishing patient care’ 
means a nonhospital setting in which the pri-
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)) is amended by 
adding at the end the following new clause: 
‘‘(x)(I) The provisions of subpara-
graph (I) of subsection (h)(4) shall apply 
under this subparagraph in the same man-
ner as they apply under such subsection. 
‘‘(II) In determining the hospital’s 
number of full-time equivalent residents 
for purposes of this subparagraph, all the 
time spent by an intern or resident in an 
approved medical residency training pro-
gram in non-patient care activities, such as 
didactic conferences and seminars, as such 
time and activities are defined by the Sec-
retary, that occurs in the hospital shall be 
counted toward the determination of full- 
time equivalency if the hospital— 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
‘‘(aa) is recognized as a sub-
section (d) hospital; 
‘‘(bb) is recognized as a sub-
section (d) Puerto Rico hospital; 
‘‘(cc) is reimbursed under a reim-
bursement system authorized under 
section 1814(b)(3); or 
‘‘(dd) is a provider-based hospital 
outpatient department. 
‘‘(III) In determining the hospital’s 
number of full-time equivalent residents 
for purposes of this subparagraph, all the 
time spent by an intern or resident in an 
approved medical residency training pro-
gram in research activities that are not as-
sociated with the treatment or diagnosis of 
a particular patient, as such time and ac-
tivities are defined by the Secretary, shall 
not be counted toward the determination of 
full-time equivalency.’’. 
(c) EFFECTIVE DATES; APPLICATION.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided, the Secretary of Health and Human Services 
shall implement the amendments made by this sec-
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
tion in a manner so as to apply to cost reporting pe-
riods beginning on or after January 1, 1983. 
(2) DIRECT GME.—Section 1886(h)(4)(E)(ii) of 
the Social Security Act, as added by subsection 
(a)(1)(B), shall apply to cost reporting periods be-
ginning on or after July 1, 2008. 
(3) IME.—Section 1886(d)(5)(B)(x)(III) of the 
Social Security Act, as added by subsection (b), shall 
apply to cost reporting periods beginning on or after 
October 1, 2001. Such section, as so added, shall 
not give rise to any inference on how the law in ef-
fect prior to such date should be interpreted. 
(4) APPLICATION.—The amendments made by 
this section shall not be applied in a manner that re-
quires reopening of any settled hospital cost reports 
as to which there is not a jurisdictionally proper ap-
peal pending as of the date of the enactment of this 
Act on the issue of payment for indirect costs of 
medical education under section 1886(d)(5)(B) of 
the Social Security Act or for direct graduate med-
ical education costs under section 1886(h) of such 
Act. 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
SEC. 5. PRESERVATION OF RESIDENT CAP POSITIONS 
FROM CLOSED AND ACQUIRED HOSPITALS. 
(a) GME.—Section 1886(h)(4)(H) of the Social Se-
curity Act (42 U.S.C. Section 1395ww(h)(4)(H)) is 
amended by adding at the end the following new clauses: 
‘‘(vi) REDISTRIBUTION OF RESIDENCY 
SLOTS AFTER A HOSPITAL CLOSES.— 
‘‘(I) IN
GENERAL.—Subject to 
the succeeding provisions of this 
clause, the Secretary shall, by regula-
tion, establish a process under which, 
in the case where a hospital with an 
approved medical residency program 
closes on or after the date of enact-
ment of the Balanced Budget Act of 
1997, the Secretary shall increase the 
otherwise applicable resident limit 
under this paragraph for other hos-
pitals in accordance with this clause. 
‘‘(II) PRIORITY FOR HOSPITALS 
IN
CERTAIN
AREAS.—Subject to the 
succeeding provisions of this clause, in 
determining for which hospitals the 
increase in the otherwise applicable 
resident limit is provided under such 
process, the Secretary shall distribute 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
the increase to hospitals located in the 
following priority order (with pref-
erence given within each category to 
hospitals that are members of the 
same affiliated group (as defined by 
the Secretary under clause (ii)) as the 
closed hospital): 
‘‘(aa) First, to hospitals lo-
cated in the same core-based sta-
tistical area as, or a core-based 
statistical area contiguous to, the 
hospital that closed. 
‘‘(bb) Second, to hospitals 
located in the same State as the 
hospital that closed. 
‘‘(cc) Third, to hospitals lo-
cated in the same region of the 
country as the hospital that 
closed. 
‘‘(dd) Fourth, to all other 
hospitals. 
‘‘(III) REQUIREMENT
HOSPITAL 
LIKELY
TO
FILL
POSITION
WITHIN 
CERTAIN
TIME
PERIOD.—The Sec-
retary may only increase the otherwise 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
applicable resident limit of a hospital 
under such process if the Secretary 
determines the hospital has dem-
onstrated a likelihood of filling the po-
sitions made available under this 
clause within 3 years. 
‘‘(IV) LIMITATION.—The aggre-
gate number of increases in the other-
wise applicable resident limits for hos-
pitals under this clause shall be equal 
to the number of resident positions in 
the approved medical residency pro-
grams that closed on or after the date 
described in subclause (I). 
‘‘(vii) SPECIAL RULE FOR ACQUIRED 
HOSPITALS.— 
‘‘(I) IN GENERAL.—In the case 
of a hospital that is acquired (through 
any mechanism) by another entity 
with the approval of a bankruptcy 
court, during a period determined by 
the Secretary (but not less than 3 
years), the applicable resident limit of 
the acquired hospital shall, except as 
provided in subclause (II), be the ap-
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS
plicable resident limit of the hospital 
that was acquired (as of the date im-
mediately 
before 
the 
acquisition), 
without regard to whether the acquir-
ing entity accepts assignment of the 
Medicare provider agreement of the 
hospital that was acquired, so long as 
the acquiring entity continues to oper-
ate the hospital that was acquired and 
to furnish services, medical residency 
programs, and volume of patients 
similar to the services, medical resi-
dency programs, and volume of pa-
tients of the hospital that was ac-
quired (as determined by the Sec-
retary) during such period. 
‘‘(II) 
LIMITATION.—Subclause 
(I) shall only apply in the case where 
an acquiring entity waives the right as 
a new provider under the program 
under this title to have the otherwise 
applicable resident limit of the ac-
quired hospital re-established or in-
creased.’’. 
VerDate Nov 24 2008 
22:45 May 06, 2009
Jkt 079200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H2251.IH
H2251
hsrobinson on PROD1PC76 with BILLS