To provide for the redistribution of unused resident positions.

1. Adds SEC. __. REDISTRIBUTION OF UNUSED RESIDENT POSITIONS on page 438, between lines 10 and 11

   Adds a sectionPrinted page

   Inserted: SEC. __. REDISTRIBUTION OF UNUSED RESIDENT POSITIONS.

   Inserted: (a) In General.--Section 1886(h)(4) (42 U.S.C. 1395ww(h)(4)) is amended--

   Inserted: (1) in subparagraph (F)(i), by inserting "subject to subparagraph (I)," after "October 1, 1997,";

   Inserted: (2) in subparagraph (H)(i), by inserting "and subject to subparagraph (I)," after "subparagraphs (F) and (G),"; and

   Inserted: (3) by adding at the end the following new subparagraph:

   Inserted: "(I) Redistribution of unused resident positions.--

   Inserted: "(i) Reduction in limit based on unused positions.--

   Inserted: "(I) In general.--If a hospital's resident level (as defined in clause (iii)(I)) is less than the otherwise applicable resident limit (as defined in clause (iii)(II)) for each of the reference periods (as defined in subclause (II)), effective for cost reporting periods beginning on or after January 1, 2003, the otherwise applicable resident limit shall be reduced by 75 percent of the difference between such limit and the reference resident level specified in subclause (III) (or subclause (IV) if applicable).

   Inserted: "(II) Reference periods defined.--In this clause, the term 'reference periods' means, for a hospital, the 3 most recent consecutive cost reporting periods of the hospital for which cost reports have been settled (or, if not, submitted) on or before September 30, 2001.

   Inserted: "(III) Reference resident level.--Subject to subclause (IV), the reference resident level specified in this subclause for a hospital is the highest resident level for the hospital during any of the reference periods.

   Inserted: "(IV) Adjustment process.--Upon the timely request of a hospital, the Secretary may adjust the reference resident level for a hospital to be the resident level for the hospital for the cost reporting period that includes July 1, 2002.

   Inserted: "(ii) Redistribution.--

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   Inserted: "(I) In general.--The Secretary is authorized to increase the otherwise applicable resident limits for hospitals by an aggregate number estimated by the Secretary that does not exceed the aggregate reduction in such limits attributable to clause (i) (without taking into account any adjustment under subclause (IV) of such clause).

   Inserted: "(II) Effective date.--No increase under subclause (I) shall be permitted or taken into account for a hospital for any portion of a cost reporting period that occurs before July 1, 2003, or before the date of the hospital's application for an increase under this clause. No such increase shall be permitted for a hospital unless the hospital has applied to the Secretary for such increase by December 31, 2004.

   Inserted: "(III) Considerations in redistribution.--In determining for which hospitals the increase in the otherwise applicable resident limit is provided under subclause (I), the Secretary shall take into account the need for such an increase by specialty and location involved, consistent with subclause (IV).

   Inserted: "(IV) Priority for rural and small urban areas.--In determining for which hospitals and residency training programs an increase in the otherwise applicable resident limit is provided under subclause (I), the Secretary shall first distribute the increase to programs of hospitals located in rural areas or in urban areas that are not large urban areas (as defined for purposes of subsection (d)) on a first-come-first-served basis (as determined by the Secretary) based on a demonstration that the hospital will fill the positions made available under this clause and not to exceed an increase of 25 full-time equivalent positions with respect to any hospital.

   Inserted: "(V) Application of locality adjusted national average per resident amount.--With respect to additional residency positions in a hospital attributable to the increase provided under this clause, notwithstanding any other provision of this subsection, the approved FTE resident amount is deemed to be equal to the locality adjusted national average per resident amount computed under subparagraph (E) for that hospital.

   Inserted: "(VI) Construction.--Nothing in this clause shall be construed as permitting the redistribution of reductions in residency positions attributable to voluntary reduction programs under paragraph (6) or as affecting the ability of a hospital to establish new medical residency training programs under subparagraph (H).

   Inserted: "(iii) Resident level and limit defined.--In this subparagraph:

   Inserted: "(I) Resident level.--The term 'resident level' means, with respect to a hospital, the total number of full-time equivalent residents, before the application of weighting factors (as determined under this paragraph), in the fields of allopathic and osteopathic medicine for the hospital.

   Inserted: "(II) Otherwise applicable resident limit.--The term 'otherwise applicable resident limit' means, with respect to a hospital, the limit otherwise applicable under subparagraphs (F)(i) and (H) on the resident level for the hospital determined without regard to this subparagraph.".

   Inserted: (b) No Application of Increase to IME.--Section 1886(d)(5)(B)(v) (42 U.S.C. 1395ww(d)(5)(B)(v)) is amended by adding at the end the following: "The provisions of subsection (h)(4)(I) (determined without regard to clause (ii) thereof) shall apply with respect to the first sentence of this clause in the same manner as such provisions apply with respect to subparagraph (F) of such subsection.".

   Inserted: (c) Report on Extension of Applications Under Redistribution Program.--Not later than July 1, 2004, the Secretary of Health and Human Services shall submit to Congress a report containing recommendations regarding whether to extend the deadline for applications for an increase in resident limits under section 1886(h)(4)(I)(i)(II) of the Social Security Act (as added by subsection (a)).

   Original wording

   On page 438, between lines 10 and 11, insert the following:

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