SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Serving our Rural Veterans Act of 
2016''.

SEC. 2. AUTHORIZATION OF PAYMENT BY DEPARTMENT OF VETERANS AFFAIRS FOR 
              SERVICE BY RESIDENTS OR INTERNS AT FACILITIES OPERATED BY 
              INDIAN TRIBES, TRIBAL ORGANIZATIONS, AND THE INDIAN 
              HEALTH SERVICE.

    (a) In General.--Subsection (c) of section 7406 of title 38, United 
States Code, is amended by striking ``Department facility'' each place 
it appears and inserting ``covered facility''.
    (b) Covered Facility Defined.--Such section is amended by adding at 
the end the following new subsection:
    ``(d) In this section, the term `covered facility' means--
            ``(1) a Department facility;
            ``(2) a facility operated by an Indian tribe or a tribal 
        organization, as those terms are defined in section 4 of the 
        Indian Self-Determination and Education Assistance Act (25 
        U.S.C. 5304); or
            ``(3) a facility operated by the Indian Health Service.''.

SEC. 3. PILOT PROGRAM TO CREATE OR EXPAND GRADUATE MEDICAL RESIDENCIES 
              AT FACILITIES OPERATED BY INDIAN TRIBES, TRIBAL 
              ORGANIZATIONS, AND THE INDIAN HEALTH SERVICE IN RURAL 
              AREAS.

    (a) In General.--The Secretary of Veterans Affairs, in consultation 
with the Director of the Indian Health Service, shall carry out a pilot 
program to establish graduate medical education residency training 
programs at covered facilities.
    (b) Locations.--The Secretary shall carry out the pilot program at 
not more than one covered facility in each of Alaska and Montana that 
has been selected by the Secretary for purposes of the pilot program.
    (c) Duration.--The Secretary shall implement the pilot program 
during the eight-year period beginning on the date that is 180 days 
after the date of the enactment of this Act.
    (d) Reimbursement of Costs.--The Secretary shall reimburse each 
covered facility participating in the pilot program for the following 
costs associated with the pilot program:
            (1) Curriculum development.
            (2) Recruitment, training, and retention of residents and 
        faculty.
            (3) Accreditation of programs of education under the pilot 
        program by the Accreditation Council for Graduate Medical 
        Education (ACGME) or the American Osteopathic Association 
        (AOA).
            (4) The portion of faculty salaries attributable to 
        activities relating to carrying out the pilot program.
            (5) Payment for expenses relating to providing medical 
        education under the pilot program in an amount not to exceed--
                    (A) the amount determined under section 340H of the 
                Public Health Service Act (42 U.S.C. 256h) that would 
                be paid to a covered facility for such expenses if the 
                covered facility were a qualified teaching health 
                center under such section, plus
                    (B) an additional amount to account for the 
                increased costs to the covered facility of providing 
                health care and medical education under the pilot 
                program in rural and remote areas.
    (e) Period of Obligated Service.--
            (1) In general.--The Secretary shall enter into an 
        agreement with each medical resident who participates in the 
        pilot program under which such medical resident agrees to serve 
        a period of two years of obligated service at a covered 
        facility or a facility of the Department of Veterans Affairs 
        for each year in which the medical resident participates in the 
        pilot program under this section.
            (2) Breach.--A medical resident who participates in the 
        pilot program and fails to satisfy the period of obligated 
        service under paragraph (1) shall be liable to the United 
        States, in lieu of such obligated service, for the amount that 
        has been paid or is payable to or on behalf of the medical 
        resident under the pilot program, reduced by the proportion 
        that the number of days served for completion of the period of 
        obligated service bears to the total number of days in the 
        period of obligated service of such medical resident.
    (f) Loan Repayment.--
            (1) In general.--A medical resident who participates in the 
        pilot program shall be eligible for participation in the Indian 
        Health Service Loan Repayment Program under section 108 of the 
        Indian Health Care Improvement Act (25 U.S.C. 1616a).
            (2) Authorization of appropriations.--
                    (A) In general.--There is authorized to be 
                appropriated to the Secretary of Health and Human 
                Services, acting through the Indian Health Service, 
                such sums as may be necessary to cover loan repayments 
                paid under the Indian Health Service Loan Repayment 
                Program to medical residents participating in the pilot 
                program.
                    (B) Supplement not supplant.--Amounts appropriated 
                or otherwise made available for the Indian Health 
                Service Loan Repayment Program pursuant to the 
                authorization of appropriations under subparagraph (A) 
                shall supplement, not supplant, amounts made available 
                to such program under other provisions of law.
    (g) Report.--Not later than two years before the termination of the 
pilot program under subsection (c), the Secretary shall submit to the 
Committee on Veterans' Affairs of the Senate and the Committee on 
Veterans' Affairs of the House of Representatives a report on the 
feasibility and advisability of--
            (1) expanding the pilot program to additional locations; 
        and
            (2) making the pilot program or any aspect of the pilot 
        program permanent.
    (h) Covered Facility Defined.--In this section, the term ``covered 
facility'' means a facility--
            (1) operated by an Indian tribe or a tribal organization 
        (as those terms are defined in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 5304)), 
        or the Indian Health Service, that has an existing 
        reimbursement agreement with the Department of Veterans Affairs 
        under section 405(c) of the Indian Health Care Improvement Act 
        (25 U.S.C. 1645(c)); and
            (2) located in a rural or remote area, as determined by the 
        Secretary.
    (i) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of Veterans Affairs $20,000,000 for each 
year in which the pilot program is carried out.
Output: Serving our Rural Veterans Act of 2016 This bill authorizes payment by the Department of Veterans Affairs (VA) for the costs associated with service by Veterans Health Administration medical residents and interns at facilities operated by Indian tribes, tribal organizations, or the Indian Health Service (covered facilities). The bill requires the VA to carry out a pilot program to establish graduate medical education residency training programs at such facilities that have an existing reimbursement agreement with the VA under the Indian Health Care Improvement Act and that are located in rural or remote areas, including at one facility in each of Alaska and Montana. The VA shall reimburse each covered facility participating in the program for costs of:  curriculum development;  recruitment, training, and retention of residents and faculty; accreditation of programs of education; faculty salaries; and certain other expenses relating to providing medical education under the program.  Each medical resident who participates in the program must agree to two years of obligated service at a covered facility or a VA facility for each year in the program. A program participant who fails to satisfy the period of obligated service shall be liable to the United States for prorated portion of the amount paid for program participation. A medical resident who participates in the program shall be eligible for participation in the Indian Health Service Loan Repayment Program.