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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Improving Physician Access in
Teaching Hospitals (PATH) Act of 2011''.

SEC. 2. DISTRIBUTION OF ADDITIONAL RESIDENCY SLOTS.

Section 1886(h) of the Social Security Act (42 U.S.C. 1395ww(h)) is
amended--
(1) in paragraph (7)(E), by inserting ''paragraph (9),''
after ''paragraph (8),''; and
(2) by adding at the end the following:
''(9) Distribution of additional residency positions.--
''(A) Reductions in limit based on unused
positions.--
''(i) In general.--Except as provided in
clause (ii), if a hospital's resident level (as
defined in paragraph (7)(C)(i)) for each of the
5 most recent cost reporting periods (ending
before the date of the enactment of this
paragraph) of the hospital for which a cost
report has been settled (or, if not, submitted
subject to audit) as determined by the
Secretary is less than the otherwise applicable
resident limit (as defined in paragraph
(8)(H)(iii)), effective for portions of cost
reporting periods occurring on or after the
paragraph (9) effective date (as defined in
subparagraph (E)), the otherwise applicable
resident limit shall be reduced by the
difference between such otherwise applicable
resident limit and the highest such reference
resident level for any of such 5 cost reporting
periods.
''(ii) Exception.--Clause (i) shall not
apply to--
''(I) a hospital located in a rural
area with fewer than 250 beds; or
''(II) a hospital that has had in
effect a voluntary residency reduction
plan under paragraph (6) or pursuant to
section 402 of Public Law 90-248.
''(B) Requirements for additional residency
slots.--
''(i) In general.--The Secretary shall
increase the otherwise applicable resident
limit for hospitals that submit an application
under this subparagraph by such number as the
Secretary may approve for portions of cost
reporting periods occurring on or after the
paragraph (9) effective date. The aggregate
number of increases in the otherwise applicable
resident limit under this subparagraph shall be
equal to the sum of--
''(I) the aggregate reduction in
such limits attributable to
subparagraph (A) (as estimated by the
Secretary); and
''(II) 1,000 for portions of cost
reporting periods occurring during the
12-month period beginning on the
paragraph (9) effective date, 1,000
additional positions for portions of
cost reporting periods occurring during
the 12-month period beginning 1 year
after such effective date, 1,000
additional positions for portion of
cost reporting period occurring during
the 12-month period beginning 2 years
after such effective date, and such
number of additional positions for
portions of the 2 subsequent cost
reporting periods as the Secretary may
determine necessary to support
residency training programs in
specialities that exceed 3 years.
''(ii) Consideration in redistribution.--In
determining for which hospitals the increase in
the otherwise applicable resident limit is
provided under this subparagraph, the Secretary
shall take into account--
''(I) data provided by the Health
Resources and Services Administration
as a national standard to exhibit a
specific demand in the health care
workforce, as well as the
Administration's projected demand and
supply for physicians in the specialty
of medicine involved; and
''(II) the demonstrated likelihood
of the hospital filling positions made
available under this paragraph within
the first 3 cost reporting periods
beginning on or after the paragraph (9)
effective date.
The Secretary shall give special consideration
for up to 25 additional positions in the case
of a hospital that demonstrates the likelihood
of filing such positions during the first cost
reporting period beginning on or after such
effective date.
''(iii) Limitation.--In no case shall the
number of additional positions made available
to a hospital under this paragraph exceed 25 in
the first cost reporting period or 75 for all
cost reporting periods.
''(C) Priority for additional positions resulting
from hospital closures.--With respect to additional
positions described in subparagraph (B)(i)(I) which are
derived from a reduction in limits under subparagraph
(A) for a hospital that closed (in this subparagraph
referred to as a 'closed hospital'), the Secretary
shall distribute the increase to hospitals in the
following priority order:
''(i) First, to other hospitals for the
program or programs under which the hospital
had a cooperative arrangement with the closed
hospital under which residents in the graduate
medical education program of the closed
hospital also rotated through the other
hospital.
''(ii) Second, to other hospitals that are
members of the same affiliated group of
hospitals as the closed hospital.
''(iii) Third, to other hospitals that are
located in the same or contiguous core-based
statistical area as the closed hospital.
''(D) Preference.--After applying subparagraph (C)
and the special consideration under subparagraph (B),
in determining for which hospitals the increase in the
otherwise applicable resident limit is provided under
subparagraph (B), the Secretary shall give preference
to hospitals--
''(i) that submit an application for new
residents in primary care and geriatric
medicine and in other specialties as determined
to be in demand under subparagraph (B)(ii)(I);
and
''(ii) that emphasize training in community
health centers and other community-based or
hospital-sponsored clinics, and private
physicians' offices, including physician
groups.
''(E) Paragraph (9) effective date defined.--In
this paragraph, the term 'paragraph (9) effective date'
means July 1 of the year that begins after the date of
the enactment of this paragraph.
''(F) 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)) and the reference
resident level for each such hospital with respect to
the cost reporting period that results in the smallest
difference between the reference resident level and the
otherwise applicable resident limit.''.

SEC. 3. EXPANDING PRIMARY CARE BONUS TO CERTAIN UNDERSERVED
SPECIALTIES.

(a) In General.--Section 1833(x)(2)(A) of the Social Security Act
(42 U.S.C. 1395l(x)(2)(A)) is amended--
(1) in clause (i)--
(A) by striking ''or'' at the end of subclause (I);
(B) by striking ''and'' at the end of subclause
(II) and inserting ''or''; and
(C) by adding at the end the following new
subclause:
''(III) is a physician (as
described in section 1861(r)(1)) who is
in an underserved specialty, such as
psychiatry or neurology, as specified
by the Secretary, or other specialty
identified by the Secretary to be in
demand; and''; and
(2) in clause (ii), by inserting after ''(ii)'' the
following: ''in the case of an individual described in
subclause (I) or (II) of clause (i),''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to payments for items and services furnished on or after January
1, 2012.

SEC. 4. SMALL PHYSICIAN PRACTICE RESIDENCY CREDIT.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business related
credits) is amended by adding at the end the following new section:

''SEC. 45S. SMALL PHYSICIAN PRACTICE RESIDENCY CREDIT.

''(a) In General.--For purposes of section 38, the amount of the
small physician practice residency credit determined under this section
for any taxable year with respect to a qualified small physician
practice is the sum of the following:
''(1) Overall amount.--The per resident dollar amount
multiplied by the number of qualified teaching hospital
residents who provide services to, and are trained by, such
practice during the taxable year and who are in their first,
second, or third post-graduate year of medical residency.
''(2) Bonus.--The sum of--
''(A) 50 percent of the per resident dollar amount
multiplied by the number of such residents who are in
their first post-graduate year of medical residency
during the taxable year; and
''(B) 25 percent of the per resident dollar amount
multiplied by the average number of such residents who
are not counted under subparagraph (A) and are in their
second post-graduate year during the taxable year.
''(b) Qualified Small Physician Practice.--For purposes of this
section, the term 'qualified small physician practice' means any trade
or business of providing physicians' services (as defined in section
1861(q) of the Social Security Act), which may be a community health
center, that is owned and operated by a doctor of medicine or
osteopathy if fewer than 50 individuals are employed in such trade or
business (including new training sites) and the trade or business
includes as part of the practice the training of doctors of medicine or
osteopathy in a rotation covering at least 6 months in the taxable
year. All persons treated as a single employer under subsection (a) or
(b) or section 52 or subsection (m) or (o) of section 414 shall be
treated as a single trade or business for purposes of the preceding
sentence.
''(c) Qualified Teaching Hospital Residents.--For purposes of this
section, the term 'qualified teaching hospital resident' means any
resident (within the meaning of subparagraph (I) of section 1886(h)(5)
of the Social Security Act) in an approved medical residency training
program (as defined in subparagraph (A) of such section) which provides
services to the qualified small physician practice (while utilizing the
technologies and supplies of such practice) for a period not less
than--
''(1) 4 weeks in the case of a primary care resident (as
defined in subparagraph (H) of such section); or
''(2) 2 weeks in the case of any other resident.
''(d) Per Resident Dollar Amount.--For purposes of this section,
the term 'per resident dollar amount' means, in the case of a qualified
small physician practice that includes as part of the practice the
training of doctors of medicine or osteopathy in a rotation covering--
''(1) at least 6 months but less than 9 months in the
taxable year, $2,500; or
''(2) at least 9 months in the taxable year, $3,000.
''(e) Residents Not Taken Into Account More Than Once.--A qualified
teaching hospital resident shall be taken into account under subsection
(a) for the taxable in which the period described in subsection (c)
ends and shall not be so taken into account for any other taxable
year.''.
(b) Credit Allowed as Part of General Business Credit.--Section
38(b) of such Code (defining current year business credit) is amended
by striking ''plus'' at the end of paragraph (35), by striking the
period at the end of paragraph (36) and inserting '', plus'', and by
adding at the end the following new paragraph:
''(37) the small physician practice residency credit
determined under section 45S(a).''.
(c) Conforming Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by adding
at the end the following new item:

''Sec. 45S. Small physician practice residency credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
Improving Physician Access in Teaching Hospitals (PATH) Act of 2011 - Amends title XVIII (Medicare) of the Social Security Act with respect to distribution of additional resident positions as they affect calculation of payments for direct graduate medical education (DME) costs.

States that, if a hospital's resident level for each of the five most recent cost reporting periods is less than the otherwise applicable resident limit, then the otherwise applicable resident limit shall be reduced by the difference between it and the highest reference resident level for any of those five cost reporting periods. Excepts from this reduction requirement a hospital: (1) located in a rural area with fewer than 250 beds, or (2) that has had in effect a voluntary residency reduction plan.

Requires the Secretary of Health and Human Services (HHS) to increase the otherwise applicable resident limit (create additional residency slots) for applicant hospitals according to a specified formula that takes into account the aggregate reduction in limits attributable to this Act.

Expands the primary care bonus to certain underserved specialties, such as psychiatry or neurology.

Amends the Internal Revenue Code to allow a small physician practice residency credit.