S 391 IS

To provide for payments to children's hospitals that operate graduate medical education programs.

February 8, 1999

Mr. KERREY (for himself, Mr. BOND, Mr. KENNEDY, Mr. GORTON, Mr. GRAHAM, Mr. DEWINE, Mr. MOYNIHAN, Mr. DURBIN, Mr. INOUYE, Mr. MACK, and Mrs. MURRAY) introduced the following bill; which was read twice and referred to the Committee on Finance

To provide for payments to children's hospitals that operate graduate medical education programs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

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.

END