Short title

This Act may be cited as the

Resident Physician Shortage Reduction Act of 2009

Distribution of additional residency positions

(a)

In general

Section 1886(h) of the Social Security Act (42 U.S.C. 1395ww(h)) is amended— (1)in paragraph (4)(F)(i), by striking paragraph (7) and inserting paragraphs (7) and (8); (2)in paragraph (4)(H)(i), by striking paragraph (7) and inserting paragraphs (7) and (8); and (3)by adding at the end the following new paragraph:

(8)

Distribution of additional residency positions

(A)

Additional residency positions

(i)

Reduction in limit based on unused positions

(I)

In general

The Secretary shall reduce the otherwise applicable resident limit for a hospital that the Secretary determines had residency positions that were unused for all 5 of the most recent cost reporting periods ending prior to the date of enactment of this paragraph by an amount that is equal to the number of such unused residency positions. (II)

Exception for rural hospitals and certain other hospitals

This subparagraph shall not apply to a hospital— (aa)located in a rural area (as defined in subsection (d)(2)(D)(ii)); (bb)that has participated in a voluntary reduction plan under paragraph (6); or (cc)that has participated in a demonstration project approved as of October 31, 2003, under the authority of section 402 of Public Law 90–248. (ii)

Number available for distribution

The number of additional residency positions available for distribution under subparagraph (B) shall be an amount that the Secretary determines would result in a 15 percent increase in the aggregate number of full-time equivalent residents in approved medical training programs (as determined based on the most recent cost reports available at the time of distribution). One-third of such number shall only be available for distribution to hospitals described in subclause (I) of subparagraph (B)(ii) under such subparagraph. (B)

Distribution

(i)

In general

The Secretary shall increase the otherwise applicable resident limit for each qualifying hospital that submits an application under this subparagraph by such number as the Secretary may approve for portions of cost reporting periods occurring on or after the date of enactment of this paragraph. The aggregate number of increases in the otherwise applicable resident limit under this subparagraph shall be equal to the number of additional residency positions available for distribution under subparagraph (A)(ii). (ii)

Distribution to hospitals already operating over resident limit

(I)

In general

Subject to subclause (II), in the case of a hospital in which the reference resident level of the hospital (as specified in clause (iii)) is greater than the otherwise applicable resident limit, the increase in the otherwise applicable resident limit under this subparagraph shall be an amount equal to the product of the total number of additional residency positions available for distribution under subparagraph (A)(ii) and the quotient of— (aa)the number of resident positions by which the reference resident level of the hospital exceeds the otherwise applicable resident limit for the hospital; and (bb)the number of resident positions by which the reference resident level of all such hospitals with respect to which an application is approved under this subparagraph exceeds the otherwise applicable resident limit for such hospitals. (II)

Requirements

A hospital described in subclause (I)— (aa)is not eligible for an increase in the otherwise applicable resident limit under this subparagraph unless the amount by which the reference resident level of the hospital exceeds the otherwise applicable resident limit is not less than 10 and the hospital trains at least 25 percent of the full-time equivalent residents of the hospital in primary care and general surgery (as of the date of enactment of this paragraph); and (bb)shall continue to train at least 25 percent of the full-time equivalent residents of the hospital in primary care and general surgery for the 10-year period beginning on such date.

In the case where the Secretary determines that a hospital no longer meets the requirement of item (bb), the Secretary may reduce the otherwise applicable resident limit of the hospital by the amount by which such limit was increased under this clause.

(III)

Clarification regarding eligibility for other additional residency positions

Nothing in this clause shall be construed as preventing a hospital described in subclause (I) from applying for additional residency positions under this paragraph that are not reserved for distribution under this clause. (iii)

Reference resident level

(I)

In general

Except as otherwise provided in subclause (II), the reference resident level specified in this clause for a hospital is the resident level for the most recent cost reporting period of the hospital ending on or before the date of enactment of this paragraph, for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary. (II)

Use of most recent accounting period to recognize expansion of existing program or establishment of new program

If a hospital submits a timely request to increase its resident level due to an expansion of an existing residency training program or the establishment of a new residency training program that is not reflected on the most recent cost report that has been settled (or, if not, submitted (subject to audit)), subject to the discretion of the Secretary, the reference resident level for such hospital is the resident level for the cost reporting period that includes the additional residents attributable to such expansion or establishment, as determined by the Secretary. (C)

Considerations in redistribution

In determining for which hospitals the increase in the otherwise applicable resident limit is provided under subparagraph (B) (other than an increase under subparagraph (B)(ii)), the Secretary shall take into account the demonstrated likelihood of the hospital filling the positions within the first 3 cost reporting periods beginning on or after July 1, 2010, made available under this paragraph, as determined by the Secretary. (D)

Priority for certain areas

In determining for which hospitals the increase in the otherwise applicable resident limit is provided under subparagraph (B) (other than an increase under subparagraph (B)(ii)), the Secretary shall distribute the increase to hospitals based on the following criteria: (i)The Secretary shall give preference to hospitals that submit applications for new primary care and general surgery residency positions. In the case of any increase based on such preference, a hospital shall ensure that— (I)the position made available as a result of such increase remains a primary care or general surgery residency position for not less than 10 years after the date on which the position is filled; and (II)the total number of primary care and general surgery residency positions in the hospital (determined based on the number of such positions as of the date of such increase, including any position added as a result of such increase) is not decreased during such 10-year period.

In the case where the Secretary determines that a hospital no longer meets the requirement of subclause (II), the Secretary may reduce the otherwise applicable resident limit of the hospital by the amount by which such limit was increased under this paragraph.

(ii)The Secretary shall give preference to hospitals that emphasize training in community health centers and other community-based clinical settings. (iii)The Secretary shall give preference to hospitals in States that have more medical students than residency positions available (including a greater preference for those States with smaller resident-to-medical-student ratios). In determining the number of medical students in a State for purposes of the preceding sentence, the Secretary shall include planned students at medical schools which have provisional accreditation by the Liaison Committee on Medical Education or the American Osteopathic Association. (iv)The Secretary shall give preference to hospitals in States that have low resident-to-population ratios (including a greater preference for those States with lower resident-to-population ratios). (E)

Limitation

(i)

In general

Except as provided in clause (ii), in no case may a hospital (other than a hospital described in subparagraph (B)(ii)(I), subject to the limitation under subparagraph (B)(ii)(III)) apply for more than 50 full-time equivalent additional residency positions under this paragraph. (ii)

Increase in number of additional positions available for distribution

The Secretary shall increase the number of full-time equivalent additional residency positions a hospital may apply for under this paragraph if the Secretary determines that the number of additional residency positions available for distribution under subparagraph (A)(ii) exceeds the number of such applications approved. (F)

Application of per resident amounts for primary care and nonprimary care

With respect to additional residency positions in a hospital attributable to the increase provided under this paragraph, the approved FTE resident amounts are deemed to be equal to the hospital per resident amounts for primary care and nonprimary care computed under paragraph (2)(D) for that hospital. (G)

Distribution

The Secretary shall distribute the increase to hospitals under this paragraph not later than 2 years after the date of enactment of this paragraph.

(b)

IME

(1)

In general

Section 1886(d)(5)(B)(v) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, is amended— (A)by striking subsection (h)(7) and inserting subsections (h)(7) and (h)(8); and (B)by striking it applies and inserting they apply. (2)

Conforming provision

Section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following clause:

(x)For discharges occurring on or after the date of enactment of this clause, insofar as an additional payment amount under this subparagraph is attributable to resident positions distributed to a hospital under subsection (h)(8)(B), the indirect teaching adjustment factor shall be computed in the same manner as provided under clause (ii) with respect to such resident positions.

Counting resident time in outpatient settings

(a)

GME

Section 1886(h)(4)(E) of the Social Security Act (42 U.S.C. 1395ww(h)) is amended— (1)by striking shall be counted and that all the time and inserting “shall be counted and that—

(i)effective for cost reporting periods beginning before July 1, 2009, all the time

;

(2)in clause (i), as inserted by paragraph (1), by striking the period at the end and inserting ; and; and (3)by inserting after clause (i), as so inserted, the following new clause:

(ii)effective for cost reporting periods beginning on or after July 1, 2009, all the time so spent by a resident shall be counted towards the determination of full-time equivalency, without regard to the setting in which the activities are performed, if the hospital continues to incur the costs of the stipends and fringe benefits of the resident during the time the resident spends in that setting.

(b)

IME

Section 1886(d)(5)(B)(iv) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amended— (1)by striking (iv) Effective for discharges occurring on or after October 1, 1997 and inserting (iv)(A) Effective for discharges occurring on or after October 1, 1997, and before July 1, 2009; and (2)by inserting after subparagraph (A), as inserted by paragraph (1), the following new subparagraph:

(B)Effective for discharges occurring on or after July 1, 2009, all the time spent by an intern or resident in patient care activities at an entity in a nonhospital setting shall be counted towards the determination of full-time equivalency if the hospital continues to incur the costs of the stipends and fringe benefits of the intern or resident during the time the intern or resident spends in that setting.

(c)

Application

The amendments made by this section shall not be applied in a manner that requires reopening of any settled hospital cost reports as to which there is not a jurisdictionally proper appeal pending as of the date of the enactment of this Act on the issue of payment for indirect costs of medical education under section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs under section 1886(h) of such Act (42 U.S.C. 1395ww(h)).

Rules for counting resident time for didactic and scholarly activities and other activities

(a)

GME

Section 1886(h) of the Social Security Act (42 U.S.C. 1395ww(h)), as amended by section 3, is amended— (1)in paragraph (4)(E)— (A)by designating the first sentence as a clause (i) with the heading

In general

and appropriate indentation and by striking Such rules and inserting Subject to clause (ii), such rules; and (B)by adding at the end the following new clause:

(ii)

Treatment of certain nonhospital and didactic activities

Such rules shall provide that all time spent by an intern or resident in an approved medical residency training program in a nonhospital setting that is primarily engaged in furnishing patient care (as defined in paragraph (5)(K)) in non-patient care activities, such as didactic conferences and seminars, but not including research not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall be counted toward the determination of full-time equivalency.

;

(2)in paragraph (4), by adding at the end the following new subparagraph:

(I)In determining the hospital’s number of full-time equivalent residents for purposes of this subsection, all the time that is spent by an intern or resident in an approved medical residency training program on vacation, sick leave, or other approved leave, as such time is defined by the Secretary, and that does not prolong the total time the resident is participating in the approved program beyond the normal duration of the program shall be counted toward the determination of full-time equivalency.

; and

(3)in paragraph (5), by adding at the end the following new subparagraph:

(K)

Nonhospital setting that is primarily engaged in furnishing patient care

The term nonhospital setting that is primarily engaged in furnishing patient care means a nonhospital setting in which the primary activity is the care and treatment of patients, as defined by the Secretary.

(b)

IME determinations

Section 1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following new clause:

(x)(I)The provisions of subparagraph (I) of subsection (h)(4) shall apply under this subparagraph in the same manner as they apply under such subsection. (II)In determining the hospital’s number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in non-patient care activities, such as didactic conferences and seminars, as such time and activities are defined by the Secretary, that occurs in the hospital shall be counted toward the determination of full-time equivalency if the hospital— (aa)is recognized as a subsection (d) hospital; (bb)is recognized as a subsection (d) Puerto Rico hospital; (cc)is reimbursed under a reimbursement system authorized under section 1814(b)(3); or (dd)is a provider-based hospital outpatient department. (III)In determining the hospital’s number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in research activities that are not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall not be counted toward the determination of full-time equivalency.

(c)

Effective dates; application

(1)

In general

Except as otherwise provided, the Secretary of Health and Human Services shall implement the amendments made by this section in a manner so as to apply to cost reporting periods beginning on or after January 1, 1983. (2)

Direct GME

Section 1886(h)(4)(E)(ii) of the Social Security Act, as added by subsection (a)(1)(B), shall apply to cost reporting periods beginning on or after July 1, 2008. (3)

IME

Section 1886(d)(5)(B)(x)(III) of the Social Security Act, as added by subsection (b), shall apply to cost reporting periods beginning on or after October 1, 2001. Such section, as so added, shall not give rise to any inference on how the law in effect prior to such date should be interpreted. (4)

Application

The amendments made by this section shall not be applied in a manner that requires reopening of any settled hospital cost reports as to which there is not a jurisdictionally proper appeal pending as of the date of the enactment of this Act on the issue of payment for indirect costs of medical education under section 1886(d)(5)(B) of the Social Security Act or for direct graduate medical education costs under section 1886(h) of such Act.

Preservation of resident cap positions from closed and acquired hospitals

(a)

GME

Section 1886(h)(4)(H) of the Social Security Act (42 U.S.C. 1395ww(h)(4)(H)) is amended by adding at the end the following new clauses:

(vi)

Redistribution of residency slots after a hospital closes

(I)

In general

Subject to the succeeding provisions of this clause, the Secretary shall, by regulation, establish a process under which, in the case where a hospital with an approved medical residency program closes on or after the date of enactment of the Balanced Budget Act of 1997, the Secretary shall increase the otherwise applicable resident limit under this paragraph for other hospitals in accordance with this clause. (II)

Priority for hospitals in certain areas

Subject to the succeeding provisions of this clause, in determining for which hospitals the increase in the otherwise applicable resident limit is provided under such process, the Secretary shall distribute the increase to hospitals located in the following priority order (with preference given within each category to hospitals that are members of the same affiliated group (as defined by the Secretary under clause (ii)) as the closed hospital): (aa)First, to hospitals located in the same core-based statistical area as, or a core-based statistical area contiguous to, the hospital that closed. (bb)Second, to hospitals located in the same State as the hospital that closed. (cc)Third, to hospitals located in the same region of the country as the hospital that closed. (dd)Fourth, to all other hospitals. (III)

Requirement hospital likely to fill position within certain time period

The Secretary may only increase the otherwise applicable resident limit of a hospital under such process if the Secretary determines the hospital has demonstrated a likelihood of filling the positions made available under this clause within 3 years. (IV)

Limitation

The aggregate number of increases in the otherwise applicable resident limits for hospitals under this clause shall be equal to the number of resident positions in the approved medical residency programs that closed on or after the date described in subclause (I). (vii)

Special rule for acquired hospitals

(I)

In general

In the case of a hospital that is acquired (through any mechanism) by another entity with the approval of a bankruptcy court, during a period determined by the Secretary (but not less than 3 years), the applicable resident limit of the acquired hospital shall, except as provided in subclause (II), be the applicable resident limit of the hospital that was acquired (as of the date immediately before the acquisition), without regard to whether the acquiring entity accepts assignment of the Medicare provider agreement of the hospital that was acquired, so long as the acquiring entity continues to operate the hospital that was acquired and to furnish services, medical residency programs, and volume of patients similar to the services, medical residency programs, and volume of patients of the hospital that was acquired (as determined by the Secretary) during such period. (II)

Limitation

Subclause (I) shall only apply in the case where an acquiring entity waives the right as a new provider under the program under this title to have the otherwise applicable resident limit of the acquired hospital re-established or increased.

(b)

IME

Section 1886(d)(5)(B)(v) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by section 3, is amended by striking subsections (h)(7) and (h)(8) and inserting subsections (h)(4)(H)(vi), (h)(4)(H)(vii), (h)(7), and (h)(8). (c)

Application

No effect on temporary FTE cap adjustments

The amendments made by this section shall not effect any temporary adjustment to a hospital's FTE cap under section 413.79(h) of title 42, Code of Federal Regulations (as in effect on the date of enactment of this Act).