42 U.S. Code § 256h - Program of payments to teaching health centers that operate graduate medical education programs
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Subject to subsection (h)(2), the Secretary shall make payments under this section for direct expenses and for indirect expenses to qualified teaching health centers that are listed as sponsoring institutions by the relevant accrediting body for expansion of existing or establishment of new approved graduate medical residency training programs.
(b) Amount of payments
(1) In general
Subject to paragraph (2), the amounts payable under this section to qualified teaching health centers for an approved graduate medical residency training program for a fiscal year are each of the following amounts:
(A) Direct expense amount
The amount determined under subsection (c) for direct expenses associated with sponsoring approved graduate medical residency training programs.
(2) Capped amount
(A) In general
The total of the payments made to qualified teaching health centers under paragraph (1)(A) or paragraph (1)(B) in a fiscal year shall not exceed the amount of funds appropriated under subsection (g) for such payments for that fiscal year.
The Secretary shall limit the funding of full-time equivalent residents in order to ensure the direct and indirect payments as determined under subsection  (c) and (d) do not exceed the total amount of funds appropriated in a fiscal year under subsection (g).
(c) Amount of payment for direct graduate medical education
(1) In general
The amount determined under this subsection for payments to qualified teaching health centers for direct graduate expenses relating to approved graduate medical residency training programs for a fiscal year is equal to the product of—
(A) the updated national per resident amount for direct graduate medical education, as determined under paragraph (2); and
(2) Updated national per resident amount for direct graduate medical education
The updated per resident amount for direct graduate medical education for a qualified teaching health center for a fiscal year is an amount determined as follows:
(A) Determination of qualified teaching health center per resident amount
The Secretary shall compute for each individual qualified teaching health center a per resident amount—
(i) by dividing the national average per resident amount computed under section 256e (c)(2)(D) of this title into a wage-related portion and a non-wage related portion by applying the proportion determined under subparagraph (B);
(ii) by multiplying the wage-related portion by the factor applied under section 1395ww (d)(3)(E) of this title (but without application of section 4410 of the Balanced Budget Act of 1997 (42 U.S.C. 1395ww note)) during the preceding fiscal year for the teaching health center’s area; and
(d) Amount of payment for indirect medical education
(1) In general
The amount determined under this subsection for payments to qualified teaching health centers for indirect expenses associated with the additional costs of teaching residents for a fiscal year is equal to an amount determined appropriate by the Secretary.
In determining the amount under paragraph (1), the Secretary shall—
(A) evaluate indirect training costs relative to supporting a primary care residency program in qualified teaching health centers; and
(B) based on this evaluation, assure that the aggregate of the payments for indirect expenses under this section and the payments for direct graduate medical education as determined under subsection (c) in a fiscal year do not exceed the amount appropriated for such expenses as determined in subsection (g).
(3) Interim payment
Before the Secretary makes a payment under this subsection pursuant to a determination of indirect expenses under paragraph (1), the Secretary may provide to qualified teaching health centers a payment, in addition to any payment made under subsection (c), for expected indirect expenses associated with the additional costs of teaching residents for a fiscal year, based on an estimate by the Secretary.
(e) Clarification regarding relationship to other payments for graduate medical education
Payments under this section—
(1) shall be in addition to any payments—
(2) shall not be taken into account in applying the limitation on the number of total full-time equivalent residents under subparagraphs (F) and (G) of section 1395ww (h)(4) of this title and clauses (v), (vi)(I), and (vi)(II) of section 1395ww (d)(5)(B) of this title for the portion of time that a resident rotates to a hospital; and
The Secretary shall determine any changes to the number of residents reported by a hospital in the application of the hospital for the current fiscal year to determine the final amount payable to the hospital for the current fiscal year for both direct expense and indirect expense amounts. Based on such determination, the Secretary shall recoup any overpayments made to pay any balance due to the extent possible. The final amount so determined shall be considered a final intermediary determination for the purposes of section 1395oo of this title and shall be subject to administrative and judicial review under that section in the same manner as the amount of payment under section 1395ww (d)  of this title is subject to review under such section.
To carry out this section, there are appropriated such sums as may be necessary, not to exceed $230,000,000, for the period of fiscal years 2011 through 2015.
(h) Annual reporting required
(1) Annual report
The report required under this paragraph for a qualified teaching health center for a fiscal year is a report that includes (in a form and manner specified by the Secretary) the following information for the residency academic year completed immediately prior to such fiscal year:
(A) The types of primary care resident approved training programs that the qualified teaching health center provided for residents.
(C) The number of residents described in paragraph (4) who completed their residency training at the end of such residency academic year and care for vulnerable populations living in underserved areas.
(2) Audit authority; limitation on payment
(A) Audit authority
The Secretary may audit a qualified teaching health center to ensure the accuracy and completeness of the information submitted in a report under paragraph (1).
(B) Limitation on payment
A teaching health center may only receive payment in a cost reporting period for a number of such resident positions that is greater than the base level of primary care resident positions, as determined by the Secretary. For purposes of this subparagraph, the “base level of primary care residents” for a teaching health center is the level of such residents as of a base period.
(3) Reduction in payment for failure to report
(A) In general
The amount payable under this section to a qualified teaching health center for a fiscal year shall be reduced by at least 25 percent if the Secretary determines that—
(i) the qualified teaching health center has failed to provide the Secretary, as an addendum to the qualified teaching health center’s application under this section for such fiscal year, the report required under paragraph (1) for the previous fiscal year; or
(B) Notice and opportunity to provide accurate and missing information
Before imposing a reduction under subparagraph (A) on the basis of a qualified teaching health center’s failure to provide complete and accurate information described in subparagraph (A)(ii), the Secretary shall provide notice to the teaching health center of such failure and the Secretary’s intention to impose such reduction and shall provide the teaching health center with the opportunity to provide the required information within the period of 30 days beginning on the date of such notice. If the teaching health center provides such information within such period, no reduction shall be made under subparagraph (A) on the basis of the previous failure to provide such information.
In this section:
(1) Approved graduate medical residency training program
The term “approved graduate medical residency training program” means a residency or other postgraduate medical training program—
(A) participation in which may be counted toward certification in a specialty or subspecialty and includes formal postgraduate training programs in geriatric medicine approved by the Secretary; and
(2) Primary care residency program
The term “primary care residency program” has the meaning given that term in section 293l–1 of this title.
(3) Qualified teaching health center
The term “qualified teaching health center” has the meaning given the term “teaching health center” in section 293l–1 of this title.
 So in original. Probably should be “subsections”.
 See References in Text note below.
Source(July 1, 1944, ch. 373, title III, § 340H, as added Pub. L. 111–148, title V, § 5508(c),Mar. 23, 2010, 124 Stat. 670.)
References in Text
Section 4410 of the Balanced Budget Act of 1997, referred to in subsec. (c)(2)(A)(ii), is section 4410 ofPub. L. 105–33, which is set out as a note under section 1395ww of this title.
Section 1395ww (d) of this title, referred to in subsec. (f), was in the original “section 1186(d) of such Act”, and was translated as meaning section 1886(d) of act Aug. 14, 1935, ch. 531, known as the Social Security Act, to reflect the probable intent of Congress. The Social Security Act does not contain a section 1186.