I 114th CONGRESS 2d Session H. R. 6039 IN THE HOUSE OF REPRESENTATIVES September 15, 2016 Mr. Hardy introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committee on Energy and 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 title XVIII of the Social Security Act to redistribute unused residency positions to hospitals in States with shortages of residents and health professionals, and for other purposes.

1. Short title This Act may be cited as the Graduate Opportunities in Medical Education Distribution Act of 2016 . 2. Redistributing unused residency positions to hospitals in States with shortages of residents and health professionals (a) In general Section 1886(h) of the Social Security Act ( 42 U.S.C. 1395ww(h) ) is amended— (1) in paragraph (4)(F)(i), by striking (7) and (8) and inserting (7), (8), and (9) ; (2) in paragraph (4)(H)(i), by striking (7) and (8) and inserting (7), (8), and (9) ; (3) in paragraph (7)(E), by striking paragraph (8) and inserting paragraph (8) or (9) before the period at the end; and (4) by adding at the end the following new paragraph: (9) Distribution of additional residency positions (A) Reductions in limit based on unused positions (i) Making of determinations Not later than 180 days after the date of the enactment of this paragraph and each four years thereafter, the Secretary shall make a set of reduction determinations (as defined in clause (ii)). (ii) Set of reduction determinations defined For purposes of this paragraph, the term set of reduction determinations means determinations with respect to each hospital of whether, with respect to the one-year period ending on the date of such set of reduction determinations (referred to in this paragraph as the measurement period for such set of reduction determinations), the hospital’s reference resident level (as defined in subparagraph (F)(i)) for such period was less than the otherwise applicable resident limit (as defined in subparagraph (F)(iii)) for such hospital and period. (iii) Reduction based on determination In the case that, with respect to the measurement period for a set of reduction determinations, the Secretary determines under this subparagraph that the reference resident level of a hospital for such period was less than the otherwise applicable resident limit for such hospital and period, effective for portions of cost reporting periods occurring after the date of such set of reduction determinations and on or before the date of any subsequent set of reduction determinations under clause (i) (referred to in this paragraph as the consequence period for such set of reduction determinations), the otherwise applicable resident limit for such hospital shall be reduced by 65 percent of the difference between such otherwise applicable resident limit for the hospital and measurement period and such reference resident level for the hospital and measurement period (or, in the case that the Secretary determines that, with respect to the consequence period immediately preceding such consequence period, the hospital was a hospital described in clause (ii) of subparagraph (B) that did not meet the requirements of such clause, by the number described in clause (iv)). (iv) Number described The number described in this clause, with respect to a hospital and consequence period (referred to in this clause as the target consequence period ), is the greater of— (I) the number by which the otherwise applicable resident limit for such hospital would be reduced for the target consequence period under clause (iii) without the application of this clause; and (II) the number by which the otherwise applicable resident limit for such hospital was increased for the consequence period that immediately preceded the target consequence period. (v) Exception This subparagraph shall not apply to a hospital located in a rural area (as defined in subsection (d)(2)(D)(ii)) with fewer than 250 acute care inpatient beds. (vi) Determination timing In the case of a reduction determination made in a year by the Secretary under clause (i) that is not the first such reduction determination so made, the Secretary shall make such determination on a date that is not later than March 31 of such year. (B) Distribution (i) In general With respect to each set of reduction determinations under subparagraph (A)(i), the Secretary shall, in accordance with the succeeding provisions of this paragraph, increase the otherwise applicable resident limit for each qualifying hospital that submits an application under this subparagraph by such number as the Secretary may approve for portions of cost reporting periods occurring during the consequence period for such set of reduction determinations. The aggregate number of increases in the otherwise applicable resident limit under this subparagraph for such consequence period shall be equal to the aggregate reduction in such limits attributable to subparagraph (A) (as estimated by the Secretary) for such consequence period. (ii) Requirements A hospital that receives an increase in the otherwise applicable resident limit under this subparagraph for a consequence period shall ensure that, during such consequence period, the positions resulting from the increase under this paragraph will be filled. The Secretary may determine whether a hospital has met the requirements under this clause during such consequence period in such manner and at such time as the Secretary determines appropriate, including at the end of such period. (C) Capacity considerations in redistribution In determining which hospitals are to receive increases in their otherwise applicable resident limits under subparagraph (B) for a consequence period for a set of reduction determinations, the Secretary shall take into account the demonstrated likelihood of each such hospital filling the positions made available under this paragraph within such consequence period, as determined by the Secretary. (D) Priority in redistribution Subject to subparagraph (C), the Secretary shall select, with respect to a set of reduction determinations under subparagraph (A)(i), the qualifying hospitals that will receive increases under subparagraph (B) in the otherwise applicable resident limits for such hospitals for the consequence period for such set of reduction determinations. The Secretary shall make such selection in a manner that distributes the positions made available to hospitals for such consequence period under this paragraph in accordance with the following: (i) The Secretary shall, with respect to such positions that are so made available for such consequence period, make— (I) 70 percent of such positions available to hospitals located in low resident-to-population States (as defined in subparagraph (F)(iv)); and (II) 30 percent of such positions available to hospitals located in high HPSA-to-population States (as defined in subparagraph (F)(v)). (ii) The Secretary shall, in accordance with clause (i), make such positions available for such consequence period in a manner that prioritizes the distribution of such positions to hospitals that are anticipated to fill such positions with individuals from residence programs located in the State in which such hospitals are located. (E) Application of per resident amounts for primary care and nonprimary care With respect to additional residency positions in a hospital attributable to the increase provided under this paragraph, the approved FTE per 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. (F) Definitions In this paragraph: (i) Reference resident level The term reference resident level means, with respect to a hospital and measurement period, the resident level for the cost reporting periods of the hospital occurring during such measurement period and for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary. (ii) Resident level The term resident level has the meaning given such term in paragraph (7)(C)(i). (iii) Otherwise applicable resident limit The term otherwise applicable resident limit means, with respect to a hospital and period, the limit otherwise applicable under subparagraphs (F)(i) and (H) of paragraph (4) on the resident level of the hospital for such period, determined without regard to this paragraph but taking into account paragraph (7)(A). (iv) Low resident-to-population States (I) In general The term low resident-to-population State means a State that has a smaller applicable number than do at least 75 percent of all States. (II) Applicable number For purposes of subclause (I), the term applicable number means, with respect to a State, the number that results from dividing the number of residents in the State by the number of individuals residing in the State. (v) High HPSA-to-population States (I) In general The term high HPSA-to-population State means a State that has a larger applicable number than do at least 90 percent of all States. (II) Applicable number For purposes of subclause (I), the term applicable number means, with respect to a State, the number that results from dividing the number of areas in the State designated by the Health Resources & Services Administration of the Department of Health and Human Services as Health Professional Shortage Areas by the number of individuals residing in the State. (G) Affiliation The provisions of this paragraph shall be applied to hospitals which are members of the same affiliated group (as defined by the Secretary under paragraph (4)(H)(ii)). . (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 by striking subsections (h)(7) and (h)(8) and inserting subsections (h)(7), (h)(8), and (h)(9) . (2) Conforming amendment 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: (xii) For discharges occurring on or after the date that is 180 days after the date of the enactment of this clause, insofar as an additional payment amount under this subparagraph is attributable to resident positions distributed to a hospital under subsection (h)(9)(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 ), as amended by section 5503 of the Patient Protection and Affordable Care Act ( Public Law 111–148 ), is amended by striking paragraphs (7) and (8) and inserting paragraphs (7), (8), and (9). .