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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Children's Hospitals Education and
Research Act of 1999''.

SEC. 2. PROGRAM OF PAYMENTS TO CHILDREN'S HOSPITALS THAT OPERATE
GRADUATE MEDICAL EDUCATION PROGRAMS.

(a) Payments.--
(1) In general.--The Secretary shall make payments under
this section to each children's hospital for each hospital cost
reporting period under the medicare program beginning in or
after fiscal year 2000 and before fiscal year 2004 for the--
(A) direct expenses associated with operating
approved medical residency training programs; and
(B) indirect expenses associated with the treatment
of more severely ill patients and the additional costs
related to the teaching of residents.
(2) Payment amounts.--Subject to paragraph (3), the
following amounts shall be payable under this section to a
children's hospital for a cost reporting period described in
paragraph (1):
(A) Direct expenses.--The amount determined under
subsection (b) for direct expenses described in
paragraph (1)(A).
(B) Indirect expenses.--The amount determined under
subsection (c) for indirect expenses described in
paragraph (1)(B)
(3) Capped amount.--
(A) In general.--The payments to children's
hospitals established in this subsection for cost
reporting periods ending in any fiscal year shall not
exceed the funds appropriated under subsection (e) for
that fiscal year.
(B) Pro rata reductions of payments for direct
expenses.--If the Secretary determines that the amount
of funds appropriated under subsection (e)(1) for cost
reporting periods ending in any fiscal year is
insufficient to provide the total amount of payments
otherwise due for such periods, the Secretary shall
reduce each of the amounts payable under this section
pursuant to paragraph (2)(A) for such period on a pro
rata basis to reflect such shortfall.
(b) Amount of Payment for Direct Medical Education.--
(1) In general.--The amount determined under this
subsection for payments to a children's hospital for direct
expenses relating to approved medical residency training
programs for a cost reporting period beginning in or after
fiscal year 2000 and before fiscal year 2004 is equal to the
product of--
(A) the updated per resident amount for direct
medical education, as determined under paragraph (2),
for the cost reporting period; and
(B) the number of full-time equivalent residents in
the hospital's approved medical residency training
programs (as determined under section 1886(h)(4) of the
Social Security Act (42 U.S.C. 1395ww(h)(4))) for the
cost reporting period.
(2) Updated per resident amount for direct medical
education.--The updated per resident amount for direct medical
education for a hospital for a cost reporting period ending in
a fiscal year is an amount equal to the per resident amount for
cost reporting periods ending during fiscal year 1999 for the
hospital involved (as determined by the Secretary using the
methodology described in section 1886(h)(2)(E)) of such Act (42
U.S.C. 1395ww(h)(2)(E))) increased by the percentage increase
in the Consumer Price Index for All Urban Consumers (United
States city average) from fiscal year 1999 through the fiscal
year involved.
(c) Amount of Payment for Indirect Medical Education.--
(1) In general.--The amount determined under this
subsection for payments to a children's hospital for indirect
expenses associated with the treatment of more severely ill patients
and the additional costs related to the teaching of residents for a
cost reporting period beginning in or after fiscal year 2000 and before
fiscal year 2004 is equal to an amount determined appropriate by the
Secretary.
(2) Factors.--In determining the amount under paragraph
(1), the Secretary shall--
(A) take into account variations in case mix among
children's hospitals and the number of full-time
equivalent residents in the hospitals' approved medical
residency training programs for the cost reporting
period; and
(B) assure that the aggregate of the payments for
indirect expenses associated with the treatment of more
severely ill patients and the additional costs related
to the teaching of residents under this section in a
fiscal year are equal to the amount appropriated for
such expenses in such year under subsection (e)(2).
(d) Making of Payments.--
(1) Interim payments.--The Secretary shall estimate, before
the beginning of each cost reporting period for a hospital for
which the payments may be made under this section, the amounts
of the payments for such period and shall (subject to paragraph
(2)) make the payments of such amounts in 26 equal interim
installments during such period.
(2) Withholding.--The Secretary shall withhold up to 25
percent from each interim installment paid under paragraph (1).
(3) Reconciliation.--At the end of each such period, the
hospital shall submit to the Secretary such information as the
Secretary determines to be necessary to determine the percent
(if any) of the total amount withheld under paragraph (2) that
is due under this section for the hospital for the period.
Based on such determination, the Secretary shall recoup any
overpayments made, or pay any balance due. The amount so
determined shall be considered a final intermediary
determination for purposes of applying section 1878 of the
Social Security Act (42 U.S.C. 1395oo) and shall be subject to
review under that section in the same manner as the amount of
payment under section 1886(d) of such Act (42 U.S.C. 1395ww(d))
is subject to review under such section.
(e) Limitation on Expenditures.--
(1) Direct medical education.--
(A) In general.--Subject to subparagraph (B), there
are hereby appropriated, out of any money in the
Treasury not otherwise appropriated, for payments under
this section for direct expenses relating to approved
medical residency training programs for cost reporting
periods beginning in--
(i) fiscal year 2000, $35,000,000;
(ii) fiscal year 2001, $95,000,000;
(iii) fiscal year 2002, $95,000,000; and
(iv) fiscal year 2003, $95,000,000.
(B) Carryover of excess.--If the amount of payments
under this section for cost reporting periods beginning
in fiscal year 2000, 2001, or 2002 is less than the
amount provided under this paragraph for such payments
for such periods, then the amount available under this
paragraph for cost reporting periods beginning in the
following fiscal year shall be increased by the amount
of such difference.
(2) Indirect medical education.--There are hereby
appropriated, out of any money in the Treasury not otherwise
appropriated, for payments under this section for indirect
expenses associated with the treatment of more severely ill
patients and the additional costs related to the teaching of
residents for cost reporting periods beginning in--
(A) fiscal year 2000, $65,000,000;
(B) fiscal year 2001, $190,000,000;
(C) fiscal year 2002, $190,000,000; and
(D) fiscal year 2003, $190,000,000.
(f) Relation to Medicare and Medicaid Payments.--Notwithstanding
any other provision of law, payments under this section to a hospital
for a cost reporting period--
(1) are in lieu of any amounts otherwise payable to the
hospital under section 1886(h) or 1886(d)(5)(B) of the Social
Security Act (42 U.S.C. 1395ww(h); 1395ww(d)(5)B)) to the
hospital for such cost reporting period, but
(2) shall not affect the amounts otherwise payable to such
hospitals under a State medicaid plan under title XIX of such
Act (42 U.S.C. 1396 et seq.).
(g) Definitions.--In this section:
(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 (42 U.S.C. 1395ww(h)(5)(A)).
(2) Children's hospital.--The term ''children's hospital''
means a hospital described in section 1886(d)(1)(B)(iii) of the
Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iii)).
(3) Direct graduate medical education costs.--The term
''direct graduate medical education costs'' has the meaning
given such term in section 1886(h)(5)(C) of the Social Security
Act (42 U.S.C. 1395ww(h)(5)(C)).
(4) Secretary.--The term ''Secretary'' means the Secretary
of Health and Human Services.
Children's Hospitals Education and Research Act of 1999 - Directs the Secretary of Health and Human Services to make payment as specified to each children's hospital for each hospital cost reporting period under Medicare (title XVIII of the Social Security Act (SSA)) from FY 2000 through FY 2003 for the direct and indirect expenses associated with operating approved medical residency training programs.
Provides that such payments are in lieu of certain Medicare payments to hospitals for inpatient hospital services, but shall not affect the amounts otherwise payable to such hospitals under a State Medicaid (SSA title XIX) plan.
Makes appropriations.