S 210 IS
106th CONGRESS
1st Session
S. 210
To establish a medical education trust fund, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
January 19, 1999
Mr. MOYNIHAN introduced the following bill; which was read twice and referred
to the Committee on Finance
A BILL
To establish a medical education trust fund, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Medical Education Trust
Fund Act of 1999'.
(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Medical Education Trust Fund.
Sec. 3. Amendments to medicare program.
Sec. 4. Amendments to medicaid program.
Sec. 5. Assessments on insured and self-insured health plans.
Sec. 6. Medical Education Advisory Commission.
Sec. 7. Demonstration projects.
SEC. 2. MEDICAL EDUCATION TRUST FUND.
The Social Security Act (42 U.S.C. 300 et seq.) is amended by adding after
title XXI the following new title:
`TITLE XXII--MEDICAL EDUCATION TRUST FUND
`TABLE OF CONTENTS OF TITLE
`Sec. 2201. Establishment of Trust Fund.
`Sec. 2202. Payments to medical schools.
`Sec. 2203. Payments to teaching hospitals.
`SEC. 2201. ESTABLISHMENT OF TRUST FUND.
`(a) IN GENERAL- There is established in the Treasury of the United States
a fund to be known as the Medical Education Trust Fund (in this title referred
to as the `Trust Fund'), consisting of the following accounts:
`(1) The Medical School Account.
`(2) The Medicare Teaching Hospital Indirect Account.
`(3) The Medicare Teaching Hospital Direct Account.
`(4) The Non-Medicare Teaching Hospital Indirect Account.
`(5) The Non-Medicare Teaching Hospital Direct Account.
Each such account shall consist of such amounts as are allocated and
transferred to such account under this section, sections 1886(l) and 1936, and
section 4503 of the Internal Revenue Code of 1986. Amounts in the accounts of
the Trust Fund shall remain available until expended.
`(b) EXPENDITURES FROM TRUST FUND- Amounts in the accounts of the Trust
Fund are available to the Secretary for making payments under sections 2202
and 2203.
`(1) IN GENERAL- The Secretary of the Treasury shall invest amounts in
the accounts of the Trust Fund which the Secretary determines are not
required to meet current withdrawals from the Trust Fund. Such investments
may be made only in interest-bearing obligations of the United States. For
such purpose, such obligations may be acquired on original issue at the
issue price, or by purchase of outstanding obligations at the market
price.
`(2) SALE OF OBLIGATIONS- The Secretary of the Treasury may sell at
market price any obligation acquired under paragraph (1).
`(3) AVAILABILITY OF INCOME- Any interest derived from obligations held
in each such account, and proceeds from any sale or redemption of such
obligations, are hereby appropriated to such account.
`(d) MONETARY GIFTS TO TRUST FUND- There are appropriated to the Trust
Fund such amounts as may be unconditionally donated to the Federal Government
as gifts to the Trust Fund. Such amounts shall be allocated and transferred to
the accounts described in subsection (a) in the same proportion as the amounts
in each of the accounts bears to the total amount in all the accounts of the
Trust Fund.
`SEC. 2202. PAYMENTS TO MEDICAL SCHOOLS.
`(a) FEDERAL PAYMENTS TO MEDICAL SCHOOLS FOR CERTAIN COSTS-
`(1) IN GENERAL- In the case of a medical school that in accordance with
paragraph (2) submits to the Secretary an application for fiscal year 2000
or any subsequent fiscal year, the Secretary shall make payments for such
year to the medical school for the purpose specified in paragraph (3). The
Secretary shall make such payments from the Medical School Account in an
amount determined in accordance with subsection (b), and may administer the
payments as a contract, grant, or cooperative agreement.
`(2) APPLICATION FOR PAYMENTS- For purposes of paragraph (1), an
application for payments under such paragraph for a fiscal year is in
accordance with this paragraph if--
`(A) the medical school involved submits the application not later
than the date specified by the Secretary; and
`(B) the application is in such form, is made in such manner, and
contains such agreements, assurances, and information as the Secretary
determines to be necessary to carry out this section.
`(3) PURPOSE OF PAYMENTS- The purpose of payments under paragraph (1) is
to assist medical schools in maintaining and developing quality educational
programs in an increasingly competitive health care system.
`(b) AVAILABILITY OF TRUST FUND FOR PAYMENTS; ANNUAL AMOUNT OF
PAYMENTS-
`(1) AVAILABILITY OF TRUST FUND FOR PAYMENTS- The following amounts
shall be available for a fiscal year for making payments under subsection
(a) from the amount allocated and transferred to the Medical School Account
under sections 1886(l), 1936, 2201(c)(3), and 2201(d), and section 4503 of
the Internal Revenue Code of 1986:
`(A) In the case of fiscal year 2000, $200,000,000.
`(B) In the case of fiscal year 2001, $300,000,000.
`(C) In the case of fiscal year 2002, $400,000,000.
`(D) In the case of fiscal year 2003, $500,000,000.
`(E) In the case of fiscal year 2004, $600,000,000.
`(F) In the case of each subsequent fiscal year, the amount determined
under this paragraph for the previous fiscal year updated through the
midpoint of such previous fiscal year by the estimated percentage change
in the general health care inflation factor (as defined in subsection (d))
during the 12-month period ending at that midpoint, with appropriate
adjustments to reflect previous underestimations or overestimations under
this subparagraph in the projected health care inflation factor.
`(2) AMOUNT OF PAYMENTS FOR MEDICAL SCHOOLS-
`(A) IN GENERAL- Subject to the annual amount available under
paragraph (1) for a fiscal year, the amount of payments required under
subsection (a) to be made to a medical school that submits to the
Secretary an application for such year in accordance with subsection
(a)(2) is an amount equal to an amount determined by the Secretary in
accordance with subparagraph (B).
`(B) DEVELOPMENT OF FORMULA- The Secretary shall develop a formula for
allocation of funds to medical schools under this section consistent with
the purpose described in subsection (a)(3).
`(c) MEDICAL SCHOOL DEFINED- For purposes of this section, the term
`medical school' means a school of medicine (as defined in section 799 of the
Public Health Service Act) or a school of osteopathic medicine (as defined in
such section).
`(d) GENERAL HEALTH CARE INFLATION FACTOR- The term `general health care
inflation factor' means the Consumer Price Index for Medical Services as
determined by the Bureau of Labor Statistics.
`SEC. 2203. PAYMENTS TO TEACHING HOSPITALS.
`(a) FORMULA PAYMENTS TO ELIGIBLE ENTITIES-
`(1) IN GENERAL- In the case of any fiscal year beginning after
September 30, 1999, the Secretary shall make payments to each eligible
entity that, in accordance with paragraph (2), submits to the Secretary an
application for such fiscal year. Such payments shall be made from the Trust
Fund, and the total of the payments to the eligible entity for the fiscal
year shall equal the sum of the amounts determined under subsections (b),
(c), (d), and (e) with respect to such entity.
`(2) APPLICATION- For purposes of paragraph (1), an application shall
contain such information as may be necessary for the Secretary to make
payments under such paragraph to an eligible entity during a fiscal year. An
application shall be treated as submitted in accordance with this paragraph
if it is submitted not later than the date specified by the Secretary, and
is made in such form and manner as the Secretary may require.
`(3) PERIODIC PAYMENTS- Payments under paragraph (1) to an eligible
entity for a fiscal year shall be made periodically, at such intervals and
in such amounts as the Secretary determines to be appropriate (subject to
applicable Federal law regarding Federal payments).
`(4) ADMINISTRATOR OF PROGRAMS- The Secretary shall carry out
responsibility under this title by acting through the Administrator of the
Health Care Financing Administration.
`(5) ELIGIBLE ENTITY- For purposes of this title, the term `eligible
entity', with respect to any fiscal year, means--
`(A) for payment under subsections (b) and (c), an entity which would
be eligible to receive payments for such fiscal year under--
`(i) section 1886(d)(5)(B), if such payments had not been terminated
for discharges occurring after September 30, 1999;
`(ii) section 1886(h), if such payments had not been terminated for
cost reporting periods beginning after September 30, 1999;
or
`(B) for payment under subsections (d) and (e)--
`(i) an entity which meets the requirement of subparagraph (A);
or
`(ii) an entity which the Secretary determines should be considered
an eligible entity.
`(b) DETERMINATION OF AMOUNT FROM MEDICARE TEACHING HOSPITAL INDIRECT
ACCOUNT-
`(1) IN GENERAL- The amount determined for an eligible entity for a
fiscal year under this subsection is the amount equal to the applicable
percentage of the total amount allocated and transferred to the Medicare
Teaching Hospital Indirect Account under section 1886(l)(1), and subsections
(c)(3) and (d) of section 2201 for such fiscal year.
`(2) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the
applicable percentage for any fiscal year is equal to the percentage of the
total payments which would have been made to the eligible entity in such
fiscal year under section 1886(d)(5)(B) if such payments had not been
terminated for discharges occurring after September 30, 1999.
`(c) DETERMINATION OF AMOUNT FROM MEDICARE TEACHING HOSPITAL DIRECT
ACCOUNT-
`(1) IN GENERAL- The amount determined for an eligible entity for a
fiscal year under this subsection is the amount equal to the applicable
percentage of the total amount allocated and transferred to the Medicare
Teaching Hospital Direct Account under section 1886(l)(2), and subsections
(c)(3) and (d) of section 2201 for such fiscal year.
`(2) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the
applicable percentage for any fiscal year is equal to the percentage of the
total payments which would have been made to the eligible entity in such
fiscal year under section 1886(h) if such payments had not been terminated
for cost reporting periods beginning after September 30, 1999.
`(d) DETERMINATION OF AMOUNT FROM NON-MEDICARE TEACHING HOSPITAL INDIRECT
ACCOUNT-
`(1) IN GENERAL- The amount determined for an eligible entity for a
fiscal year under this subsection is the amount equal to the applicable
percentage of the total amount allocated and transferred to the Non-Medicare
Teaching Hospital Indirect Account for such fiscal year under section 1936,
subsections (c)(3) and (d) of section 2201, and section 4503 of the Internal
Revenue Code of 1986.
`(2) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the
applicable percentage for any fiscal year for an eligible entity is equal to
the percentage of the total payments which, as determined by the Secretary,
would have been made in such fiscal year under section 1886(d)(5)(B)
if--
`(A) such payments had not been terminated for discharges occurring
after September 30, 1999; and
`(B) non-medicare patients were taken into account in lieu of medicare
patients.
`(e) DETERMINATION OF AMOUNT FROM NON-MEDICARE TEACHING HOSPITAL DIRECT
ACCOUNT-
`(1) IN GENERAL- The amount determined for an eligible entity for a
fiscal year under this subsection is the amount equal to the applicable
percentage of the total amount allocated and transferred to the Non-Medicare
Teaching Hospital Direct Account for such fiscal year under section 1936,
subsections (c)(3) and (d) of section 2201, and section 4503 of the Internal
Revenue Code of 1986.
`(2) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the
applicable percentage for any fiscal year for an eligible entity is equal to
the percentage of the total payments which, as determined by the Secretary,
would have been made in such fiscal year under section 1886(h) if--
`(A) such payments had not been terminated for cost reporting periods
beginning after September 30, 1999; and
`(B) non-medicare patients were taken into account in lieu of medicare
patients.'.
SEC. 3. AMENDMENTS TO MEDICARE PROGRAM.
Section 1886 of the Social Security Act (42 U.S.C. 1395ww) is amended--
(1) in subsection (d)(5)(B), in the matter preceding clause (i), by
striking `The Secretary shall provide' and inserting the following: `For
discharges occurring before October 1, 1999, the Secretary shall
provide';
(2) in subsection (d)(11)(C), by inserting after `paragraph (5)(B)'
`(notwithstanding that payments under paragraph (5)(B) are terminated for
discharges occurring after September 30, 1999)';
(A) in paragraph (1), in the first sentence, by striking `the
Secretary shall provide' and inserting `the Secretary shall, subject to
paragraph (7), provide'; and
(B) by adding at the end the following:
`(A) IN GENERAL- The authority to make payments under this subsection
(other than payments made under paragraphs (3)(D) and (6)) shall not apply
with respect to--
`(i) cost reporting periods beginning after September 30, 1999;
and
`(ii) any portion of a cost reporting period beginning on or before
such date which occurs after such date.
`(B) RULE OF CONSTRUCTION- This paragraph may not be construed as
authorizing any payment under section 1861(v) with respect to graduate
medical education.'; and
(4) by adding at the end the following:
`(l) TRANSFERS TO MEDICAL EDUCATION TRUST FUND-
`(1) INDIRECT COSTS OF MEDICAL EDUCATION-
`(i) IN GENERAL- From the Federal Hospital Insurance Trust Fund, the
Secretary shall, for fiscal year 2000 and each subsequent fiscal year,
transfer to the Medical Education Trust Fund an amount
equal to the amount estimated by the Secretary under subparagraph (B).
`(ii) ALLOCATION- Of the amount transferred under clause
(i)--
`(I) there shall be allocated and transferred to the Medical
School Account of such Trust Fund an amount which bears the same ratio
to the total amount available under section 2202(b)(1) for the fiscal
year (reduced by the balance in such account at the end of the
preceding fiscal year) as the amount transferred under clause (i)
bears to the total amounts transferred to such Trust Fund under title
XXII (excluding amounts transferred under subsections (c)(3) and (d)
of section 2201) for such fiscal year; and
`(II) the remainder shall be allocated and transferred to the
Medicare Teaching Hospital Indirect Account of such Trust
Fund.
`(B) DETERMINATION OF AMOUNTS- The Secretary shall make an estimate
for each fiscal year involved of the nationwide total of the amounts that
would have been paid under subsection (d)(5)(B) to hospitals during the
fiscal year if such payments had not been terminated for discharges
occurring after September 30, 1999.
`(2) DIRECT COSTS OF MEDICAL EDUCATION-
`(i) IN GENERAL- From the Federal Hospital Insurance Trust Fund and
the Federal Supplementary Medical Insurance Trust Fund, the Secretary
shall, for fiscal year 2000 and each subsequent fiscal year, transfer to
the Medical Education Trust Fund an amount equal to the amount estimated
by the Secretary under subparagraph (B).
`(ii) ALLOCATION- Of the amount transferred under clause
(i)--
`(I) there shall be allocated and transferred to the Medical
School Account of such Trust Fund an amount which bears the same ratio
to the total amount available under section 2202(b)(1) for the fiscal
year (reduced by the balance in such account at the end of the
preceding fiscal year) as the amount transferred under clause (i)
bears to the total amounts transferred to such Trust Fund under title
XXII (excluding amounts transferred under subsections (c)(3) and (d)
of section 2201) for such fiscal year; and
`(II) the remainder shall be allocated and transferred to the
Medicare Teaching Hospital Direct Account of such Trust
Fund.
`(B) DETERMINATION OF AMOUNTS- For each hospital, the Secretary shall
make an estimate for the fiscal year involved of the amount that would
have been paid under subsection (h) to the hospital during the fiscal year
if such payments had not been terminated for cost reporting periods
beginning after September 30, 1999.
`(C) ALLOCATION BETWEEN FUNDS- In providing for a transfer under
subparagraph (A) for a fiscal year, the Secretary shall provide for an
allocation of the amounts involved between part A and part B (and the
trust funds established under the respective parts) as reasonably reflects
the proportion of direct graduate medical education costs of hospitals
associated with the provision of services under each respective
part.'.
SEC. 4. AMENDMENTS TO MEDICAID PROGRAM.
(a) IN GENERAL- Title XIX of the Social Security Act (42 U.S.C. 1396 et
seq.) is amended by adding at the end the following:
`TRANSFER OF FUNDS TO ACCOUNTS
`SEC. 1936. (a) TRANSFER OF FUNDS-
`(1) IN GENERAL- For fiscal year 2000 and each subsequent fiscal year,
the Secretary shall transfer to the Medical Education Trust Fund established
under title XXII an amount equal to the amount determined under subsection
(b).
`(2) ALLOCATION- Of the amount transferred under paragraph (1)--
`(A) there shall be allocated and transferred to the Medical School
Account of such Trust Fund an amount which bears the same ratio to the
total amount available under section 2202(b)(1) for the fiscal year
(reduced by the balance in such account at the end of the preceding fiscal
year) as the amount transferred under paragraph (1) bears to the total
amounts transferred to such Trust Fund (excluding amounts transferred
under subsections (c)(3) and (d) of section 2201) for such fiscal year;
and
`(B) the remainder shall be allocated and transferred to the
Non-Medicare Teaching Hospital Indirect Account and the Non-Medicare
Teaching Hospital Direct Account of such Trust Fund, in the same
proportion as the amounts transferred to each account under section
1886(l) relate to the total amounts transferred under such section for
such fiscal year.
`(1) OUTLAYS FOR ACUTE MEDICAL SERVICES DURING PRECEDING FISCAL YEAR-
Beginning with fiscal year 2000, the Secretary shall determine 5 percent of
the total amount of Federal outlays made under this title for acute medical
services, as defined in paragraph (2), for the preceding fiscal year.
`(2) ACUTE MEDICAL SERVICES DEFINED- The term `acute medical services'
means items and services described in section 1905(a) other than the
following:
`(A) Nursing facility services (as defined in section
1905(f)).
`(B) Intermediate care facility for the mentally retarded services (as
defined in section 1905(d)).
`(C) Personal care services (as described in section
1905(a)(24)).
`(D) Private duty nursing services (as referred to in section
1905(a)(8)).
`(E) Home or community-based services furnished under a waiver granted
under subsection (c), (d), or (e) of section 1915.
`(F) Home and community care furnished to functionally disabled
elderly individuals under section 1929.
`(G) Community supported living arrangements services under section
1930.
`(H) Case-management services (as described in section
1915(g)(2)).
`(I) Home health care services (as referred to in section 1905(a)(7)),
clinic services, and rehabilitation services that are furnished to an
individual who has a condition or disability that qualifies the individual
to receive any of the services described in a previous
subparagraph.
`(J) Services furnished in an institution for mental diseases (as
defined in section 1905(i)).
`(c) ENTITLEMENT- This section constitutes budget authority in advance of
appropriations Acts and represents the obligation of the Federal Government to
provide for the payment to the Non-Medicare Teaching Hospital Indirect
Account, the Non-Medicare Teaching Hospital Direct Account, and the Medical
School Account of amounts determined in accordance with subsections (a) and
(b).'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall be
effective on and after October 1, 1999.
SEC. 5. ASSESSMENTS ON INSURED AND SELF-INSURED HEALTH PLANS.
(a) GENERAL RULE- Subtitle D of the Internal Revenue Code of 1986
(relating to miscellaneous excise taxes) is amended by adding after chapter 36
the following new chapter:
`CHAPTER 37--HEALTH RELATED ASSESSMENTS
`SUBCHAPTER A. Insured and self-insured health plans.
`Subchapter A--Insured and Self-Insured Health Plans
`Sec. 4501. Health insurance and health-related administrative services.
`Sec. 4502. Self-insured health plans.
`Sec. 4503. Transfer to accounts.
`Sec. 4504. Definitions and special rules.
`SEC. 4501. HEALTH INSURANCE AND HEALTH-RELATED ADMINISTRATIVE
SERVICES.
`(a) IMPOSITION OF TAX- There is hereby imposed--
`(1) on each taxable health insurance policy, a tax equal to 1.5 percent
of the premiums received under such policy, and
`(2) on each amount received for health-related administrative services,
a tax equal to 1.5 percent of the amount so received.
`(1) HEALTH INSURANCE- The tax imposed by subsection (a)(1) shall be
paid by the issuer of the policy.
`(2) HEALTH-RELATED ADMINISTRATIVE SERVICES- The tax imposed by
subsection (a)(2) shall be paid by the person providing the health-related
administrative services.
`(c) TAXABLE HEALTH INSURANCE POLICY- For purposes of this section--
`(1) IN GENERAL- Except as otherwise provided in this section, the term
`taxable health insurance policy' means any insurance policy providing
accident or health insurance with respect to individuals residing in the
United States.
`(2) EXEMPTION OF CERTAIN POLICIES- The term `taxable health insurance
policy' does not include any insurance policy if substantially all of the
coverage provided under such policy relates to--
`(A) liabilities incurred under workers' compensation laws,
`(C) liabilities relating to ownership or use of property,
`(D) credit insurance, or
`(E) such other similar liabilities as the Secretary may specify by
regulations.
`(3) SPECIAL RULE WHERE POLICY PROVIDES OTHER COVERAGE- In the case of
any taxable health insurance policy under which amounts are payable other
than for accident or health coverage, in determining the amount of the tax
imposed by subsection (a)(1) on any premium paid under such policy, there
shall be excluded the amount of the charge for the nonaccident or nonhealth
coverage if--
`(A) the charge for such nonaccident or nonhealth coverage is either
separately stated in the policy, or furnished to the policyholder in a
separate statement, and
`(B) such charge is reasonable in relation to the total charges under
the policy.
In any other case, the entire amount of the premium paid under such
policy shall be subject to tax under subsection (a)(1).
`(4) TREATMENT OF PREPAID HEALTH COVERAGE ARRANGEMENTS-
`(A) IN GENERAL- In the case of any arrangement described in
subparagraph (B)--
`(i) such arrangement shall be treated as a taxable health insurance
policy,
`(ii) the payments or premiums referred to in subparagraph (B)(i)
shall be treated as premiums received for a taxable health insurance
policy, and
`(iii) the person referred to in subparagraph (B)(i) shall be
treated as the issuer.
`(B) DESCRIPTION OF ARRANGEMENTS- An arrangement is described in this
subparagraph if under such arrangement--
`(i) fixed payments or premiums are received as consideration for
any person's agreement to provide or arrange for the provision of
accident or health coverage to residents of the United States,
regardless of how such coverage is provided or arranged to be provided,
and
`(ii) substantially all of the risks of the rates of utilization of
services is assumed by such person or the provider of such
services.
`(d) HEALTH-RELATED ADMINISTRATIVE SERVICES- For purposes of this section,
the term `health-related administrative services' means--
`(1) the processing of claims or performance of other administrative
services in connection with accident or health coverage under a taxable
health insurance policy if the charge for such services is not included in
the premiums under such policy, and
`(2) processing claims, arranging for provision of accident or health
coverage, or performing other administrative services in connection with an
applicable self-insured health plan (as defined in section 4502(c))
established or maintained by a person other than the person performing the
services.
For purposes of paragraph (1), rules similar to the rules of subsection
(c)(3) shall apply.
`SEC. 4502. SELF-INSURED HEALTH PLANS.
`(a) IMPOSITION OF TAX- In the case of any applicable self-insured health
plan, there is hereby imposed a tax for each month equal to 1.5 percent of the
sum of--
`(1) the accident or health coverage expenditures for such month under
such plan, and
`(2) the administrative expenditures for such month under such plan to
the extent such expenditures are not subject to tax under section
4501.
In determining the amount of expenditures under paragraph (2), rules
similar to the rules of subsection (d)(3) apply.
`(1) IN GENERAL- The tax imposed by subsection (a) shall be paid by the
plan sponsor.
`(2) PLAN SPONSOR- For purposes of paragraph (1), the term `plan
sponsor' means--
`(A) the employer in the case of a plan established or maintained by a
single employer,
`(B) the employee organization in the case of a plan established or
maintained by an employee organization, or
`(i) a plan established or maintained by 2 or more employers or
jointly by 1 or more employers and 1 or more employee
organizations,
`(ii) a voluntary employees' beneficiary association under section
501(c)(9), or
`(iii) any other association plan,
the association, committee, joint board of trustees, or other similar
group of representatives of the parties who establish or maintain the
plan.
`(c) APPLICABLE SELF-INSURED HEALTH PLAN- For purposes of this section,
the term `applicable self-insured health plan' means any plan for providing
accident or health coverage if any portion of such coverage is provided other
than through an insurance policy.
`(d) ACCIDENT OR HEALTH COVERAGE EXPENDITURES- For purposes of this
section--
`(1) IN GENERAL- The accident or health coverage expenditures of any
applicable self-insured health plan for any month are the aggregate
expenditures paid in such month for accident or health coverage provided
under such plan to the extent such expenditures are not subject to tax under
section 4501.
`(2) TREATMENT OF REIMBURSEMENTS- In determining accident or health
coverage expenditures during any month of any applicable self-insured health
plan, reimbursements (by insurance or otherwise) received during such month
shall be taken into account as a reduction in accident or health coverage
expenditures.
`(3) CERTAIN EXPENDITURES DISREGARDED- Paragraph (1) shall not apply to
any expenditure for the acquisition or improvement of land or for the
acquisition or improvement of any property to be used in connection with the
provision of accident or health coverage which is subject to the allowance
under section 167, except that, for purposes of paragraph (1), allowances
under section 167 shall be considered as expenditures.
`SEC. 4503. TRANSFER TO ACCOUNTS.
`For fiscal year 2000 and each subsequent fiscal year, there are hereby
appropriated and transferred to the Medical Education Trust Fund under title
XXII of the Social Security Act amounts equivalent to taxes received in the
Treasury under sections 4501 and 4502, of which--
`(1) there shall be allocated and transferred to the Medical School
Account of such Trust Fund an amount which bears the same ratio to the total
amount available under section 2202(b)(1) of such Act for the fiscal year
(reduced by the balance in such account at the end of the preceding fiscal
year) as the amount transferred to such Trust Fund under this section bears
to the total amounts transferred to such Trust Fund (excluding amounts
transferred under subsections (c)(3) and (d) of section 2201 of such Act)
for such fiscal year; and
`(2) the remainder shall be allocated and transferred to the
Non-Medicare Teaching Hospital Indirect Account and the Non-Medicare
Teaching Hospital Direct Account of such Trust Fund, in the same proportion
as the amounts transferred to such account under section 1886(l) of such Act
relate to the total amounts transferred under such section for such fiscal
year.
Such amounts shall be transferred in the same manner as under section
9601.
`SEC. 4504. DEFINITIONS AND SPECIAL RULES.
`(a) DEFINITIONS- For purposes of this subchapter--
`(1) ACCIDENT OR HEALTH COVERAGE- The term `accident or health coverage'
means any coverage which, if provided by an insurance policy, would cause
such policy to be a taxable health insurance policy (as defined in section
4501(c)).
`(2) INSURANCE POLICY- The term `insurance policy' means any policy or
other instrument whereby a contract of insurance is issued, renewed, or
extended.
`(3) PREMIUM- The term `premium' means the gross amount of premiums and
other consideration (including advance premiums, deposits, fees, and
assessments) arising from policies issued by a person acting as the primary
insurer, adjusted for any return or additional premiums paid as a result of
endorsements, cancellations, audits, or retrospective rating. Amounts
returned where the amount is not fixed in the contract but depends on the
experience of the insurer or the discretion of management shall not be
included in return premiums.
`(4) UNITED STATES- The term `United States' includes any possession of
the United States.
`(b) TREATMENT OF GOVERNMENTAL ENTITIES-
`(1) IN GENERAL- For purposes of this subchapter--
`(A) the term `person' includes any governmental entity, and
`(B) notwithstanding any other law or rule of law, governmental
entities shall not be exempt from the taxes imposed by this subchapter
except as provided in paragraph (2).
`(2) EXEMPT GOVERNMENTAL PROGRAMS-
`(A) IN GENERAL- In the case of an exempt governmental
program--
`(i) no tax shall be imposed under section 4501 on any premium
received pursuant to such program or on any amount received for
health-related administrative services pursuant to such program,
and
`(ii) no tax shall be imposed under section 4502 on any expenditures
pursuant to such program.
`(B) EXEMPT GOVERNMENTAL PROGRAM- For purposes of this paragraph, the
term `exempt governmental program' means--
`(i) the insurance programs established by parts A and B of title
XVIII of the Social Security Act,
`(ii) the medical assistance program established by title XIX of the
Social Security Act,
`(iii) any program established by Federal law for providing medical
care (other than through insurance policies) to individuals (or the
spouses and dependents thereof) by reason of such individuals
being--
`(I) members of the Armed Forces of the United States,
or
`(iv) any program established by Federal law for providing medical
care (other than through insurance policies) to members of Indian tribes
(as defined in section 4(d) of the Indian Health Care Improvement
Act).
`(c) NO COVER OVER TO POSSESSIONS- Notwithstanding any other provision of
law, no amount collected under this subchapter shall be covered over to any
possession of the United States.'.
(b) CLERICAL AMENDMENT- The table of chapters for subtitle D of the
Internal Revenue Code of 1986 is amended by inserting after the item relating
to chapter 36 the following new item:
`CHAPTER 37. Health related assessments.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply with
respect to premiums received, and expenses incurred, with respect to coverage
for periods after September 30, 1999.
SEC. 6. MEDICAL EDUCATION ADVISORY COMMISSION.
(a) ESTABLISHMENT- There is hereby established an advisory commission to
be known as the Medical Education Advisory Commission (in this section
referred to as the `Advisory Commission').
(1) IN GENERAL- The Advisory Commission shall--
(A) conduct a thorough study of all matters relating to--
(i) the operation of the Medical Education Trust Fund established
under section 2201 of the Social Security Act (as added by section
2);
(ii) alternative and additional sources of graduate medical
education funding;
(iii) alternative methodologies for compensating teaching hospitals
for graduate medical education;
(iv) policies designed to maintain superior research and educational
capacities in an increasing competitive health system;
(v) the role of medical schools in graduate medical
education;
(vi) policies designed to expand eligibility for graduate medical
education payments to children's hospitals that operate graduate medical
education programs; and
(vii) policies designed to expand eligibility for graduate medical
education payments to institutions other than teaching
hospitals;
(B) develop recommendations, including the use of demonstration
projects, on the matters studied under subparagraph (A) in consultation
with the Secretary of Health and Human Services and the entities described
in paragraph (2);
(C) not later than January 2001, submit an interim report to the
Committee on Finance of the Senate, the Committee on Ways and Means of the
House of Representatives, and the Secretary of Health and Human Services;
and
(D) not later than January 2003, submit a final report to the
Committee on Finance of the Senate, the Committee on Ways and Means of the
House of Representatives, and the Secretary of Health and Human
Services.
(2) ENTITIES DESCRIBED- The entities described in this paragraph
are--
(A) other advisory groups, including the Council on Graduate Medical
Education and the Medicare Payment Advisory Commission;
(B) interested parties, including the Association of American Medical
Colleges, the Association of Academic Health Centers, and the American
Medical Association;
(C) health care insurers, including managed care entities;
and
(D) other entities as determined by the Secretary of Health and Human
Services.
(c) NUMBER AND APPOINTMENT- The membership of the Advisory Commission
shall include 9 individuals who are appointed to the Advisory Commission from
among individuals who are not officers or employees of the United States. Such
individuals shall be appointed by the Secretary of Health and Human Services,
and shall include individuals from each of the following categories:
(1) Physicians who are faculty members of medical schools.
(2) Officers or employees of teaching hospitals.
(3) Officers or employees of health plans.
(4) Deans of medical schools.
(5) Such other individuals as the Secretary determines to be
appropriate.
(1) IN GENERAL- Except as provided in paragraph (2), members of the
Advisory Commission shall serve for the lesser of the life of the Advisory
Commission, or 4 years.
(2) SERVICE BEYOND TERM- A member of the Advisory Commission may
continue to serve after the expiration of the term of the member until a
successor is appointed.
(e) VACANCIES- If a member of the Advisory Commission does not serve the
full term applicable under subsection (d), the individual appointed to fill
the resulting vacancy shall be appointed for the remainder of the term of the
predecessor of the individual.
(f) CHAIR- The Secretary of Health and Human Services shall designate an
individual to serve as the Chair of the Advisory Commission.
(g) MEETINGS- The Advisory Commission shall meet not less than once during
each 4-month period and shall otherwise meet at the call of the Secretary of
Health and Human Services or the Chair.
(h) COMPENSATION AND REIMBURSEMENT OF EXPENSES- Members of the Advisory
Commission shall receive compensation for each day (including travel time)
engaged in carrying out the duties of the Advisory Commission. Such
compensation may not be in an amount in excess of the maximum rate of basic
pay payable for level IV of the Executive Schedule under section 5315 of title
5, United States Code.
(1) STAFF DIRECTOR- The Advisory Commission shall, without regard to the
provisions of title 5, United States Code, relating to competitive service,
appoint a Staff Director who shall be paid at a rate equivalent to a rate
established for the Senior Executive Service under 5382 of title 5, United
States Code.
(2) ADDITIONAL STAFF- The Secretary of Health and Human Services shall
provide to the Advisory Commission such additional staff, information, and
other assistance as may be necessary to carry out the duties of the Advisory
Commission.
(j) TERMINATION OF THE ADVISORY COMMISSION- The Advisory Commission shall
terminate 90 days after the date on which the Advisory Commission submits its
final report under subsection (b)(1)(D).
(k) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be
appropriated such sums as may be necessary to carry out the purposes of this
section.
SEC. 7. DEMONSTRATION PROJECTS.
(a) ESTABLISHMENT- The Secretary of Health and Human Services (in this
section referred to as the `Secretary') shall establish, by regulation,
guidelines for the establishment and operation of demonstration projects which
the Medical Education Advisory Commission recommends under section
6(b)(1)(B).
(1) IN GENERAL- For any fiscal year after 1999, amounts in the Medical
Education Trust Fund under title XXII of the Social Security Act shall be
available for use by the Secretary in the establishment and operation of
demonstration projects described in subsection (a).
(A) LIMITATION- Not more than 1/10 of 1 percent of the funds in such
Trust Fund shall be available for the purposes of paragraph (1).
(B) ALLOCATION- Amounts under paragraph (1) shall be paid from the
accounts established under paragraphs (2) through (5) of section 2201(a)
of the Social Security Act, in the same proportion as the amounts
transferred to such accounts bears to the total of amounts transferred to
all 4 such accounts for such fiscal year.
(c) LIMITATION- Nothing in this section shall be construed to authorize
any change in the payment methodology for teaching hospitals and medical
schools established by the amendments made by this Act.
END