DEMONSTRATION PROJECT ON USE OF CONSORTIA.

SEC. 4628. DEMONSTRATION PROJECT ON USE OF CONSORTIA. (a) In General.—The Secretary of Health and Human Services (in this section referred to as the “Secretary”) shall establish a demonstration project under which, instead of making payments to teaching hospitals pursuant to section 1886(h) of the Social Security Act, the Secretary shall make payments under this section to each consortium that meets the requirements of subsection (b) and that applies to be included under the project. (b) Qualifying Consortia.—For purposes of subsection (a), a consortium meets the requirements of this subsection if the consortium is in compliance with the following: (1) The consortium consists of a teaching hospital with one or more approved medical residency training programs and one or more of the following entities: (A) A school of allopathic medicine or osteopathic medicine. (B) Another teaching hospital, which may be a children’s hospital. (C) A Federally qualified health center. (D) A medical group practice. (E) A managed care entity. (F) An entity furnishing outpatient services. (G) Such other entity as the Secretary determines to be appropriate. (2) The members of the consortium have agreed to participate in the programs of graduate medical education that are operated by the entities in the consortium. (3) With respect to the receipt by the consortium of payments made pursuant to this section, the members of the consortium have agreed on a method for allocating the payments among the members. (4) The consortium meets such additional requirements as the Secretary may establish. (c) Amount and Source of Payment.—The total of payments to a qualifying consortium for a fiscal year pursuant to subsection (a) shall not exceed the amount that would have been paid under section 1886 (h) or (k) of the Social Security Act for the teaching hospital (or hospitals) in the consortium. Such payments shall be made in such proportion from each of the trust funds established under title XVIII of such Act as the Secretary specifies.