REDISTRIBUTION OF UNUSED RESIDENT POSITIONS.

SEC. 422. REDISTRIBUTION OF UNUSED RESIDENT POSITIONS.(a) In General.—Section 1886(h) (42 U.S.C. 1395ww(h)(4)) is amended—(1) in paragraph (4)(F)(i), by inserting “subject to paragraph (7),” after “October 1, 1997,”;(2) in paragraph (4)(H)(i), by inserting “and subject to paragraph (7)” after “subparagraphs (F) and (G)”; and(3) by adding at the end the following new paragraph:“(7) Redistribution of unused resident positions.—“(A) Reduction in limit based on unused positions.—“(i) Programs subject to reduction.—“(I) In general.—Except as provided in subclause (II), if a hospital’s reference resident level (specified in clause (ii)) is less than the otherwise applicable resident limit (as defined in subparagraph (C)(ii)), effective for portions of cost reporting periods occurring on or after July 1, 2005, the otherwise applicable resident limit shall be reduced by 75 percent of the difference between such otherwise applicable resident limit and such reference resident level.“(II) Exception for small rural hospitals.—This subparagraph shall not apply to a hospital located in a rural area (as defined in subsection (d)(2)(D)(ii)) with fewer than 250 acute care inpatient beds.“(ii) Reference resident level.—“(I) In general.—Except as otherwise provided in subclauses (II) and (III), 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 September 30, 2002, 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 programs.—If a hospital submits a timely request to increase its resident level due to an expansion of an existing residency training program that is not reflected on the most recent settled cost report, after audit and 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 July 1, 2003, as determined by the Secretary.“(III) Expansions under newly approved programs.—Upon the timely request of a hospital, the Secretary shall adjust the reference resident level specified under subclause (I) or (II) to include 117 STAT. 2285 the number of medical residents that were approved in an application for a medical residency training program that was approved by an appropriate accrediting organization (as determined by the Secretary) before January 1, 2002, but which was not in operation during the cost reporting period used under subclause (I) or (II), as the case may be, as determined by the Secretary.“(iii) Affiliation.—The provisions of clause (i) shall be applied to hospitals which are members of the same affiliated group (as defined by the Secretary under paragraph (4)(H)(ii)) as of July 1, 2003.“(B) Redistribution.—“(i) In general.—The Secretary is authorized to increase the otherwise applicable resident limit for each qualifying hospital that submits a timely application under this subparagraph by such number as the Secretary may approve for portions of cost reporting periods occurring on or after July 1, 2005. The aggregate number of increases in the otherwise applicable resident limits under this subparagraph may not exceed the Secretary’s estimate of the aggregate reduction in such limits attributable to subparagraph (A).“(ii) Considerations in redistribution.—In determining for which hospitals the increase in the otherwise applicable resident limit is provided under clause (i), 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, 2005, made available under this subparagraph, as determined by the Secretary.“(iii) 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 clause (i), the Secretary shall distribute the increase to programs of hospitals located in the following priority order:“(I) First, to hospitals located in rural areas (as defined in subsection (d)(2)(D)(ii)).“(II) Second, to hospitals located in urban areas that are not large urban areas (as defined for purposes of subsection (d)).“(III) Third, to other hospitals in a State if the residency training program involved is in a specialty for which there are not other residency training programs in the State.Increases of residency limits within the same priority category under this clause shall be determined by the Secretary.“(iv) Limitation.—In no case shall more than 25 full-time equivalent additional residency positions be made available under this subparagraph with respect to any hospital.“(v) Application of locality adjusted national average per resident amount.—With respect to additional residency positions in a hospital attributable 117 STAT. 2286 to the increase provided under this subparagraph, 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 paragraph (4)(E) for that hospital.“(vi) Construction.—Nothing in this subparagraph shall be construed as permitting the redistribution of reductions in residency positions attributable to voluntary reduction programs under paragraph (6), under a demonstration project approved as of October 31, 2003, under the authority of section 402 of Public Law 90–248, or as affecting the ability of a hospital to establish new medical residency training programs under paragraph (4)(H).“(C) Resident level and limit defined.—In this paragraph:“(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 paragraph (4)), in the fields of allopathic and osteopathic medicine for the hospital.“(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) of paragraph (4) on the resident level for the hospital determined without regard to this paragraph.“(D) Judicial review.—There shall be no administrative or judicial review under section 1869, 1878, or otherwise, with respect to determinations made under this paragraph.”.(b) Conforming Provisions.—(1) Section 1886(d)(5)(B) (42 U.S.C. 1395ww(d)(5)(B)) is amended—(A) in the second sentence of clause (ii), by striking “For discharges” and inserting “Subject to clause (ix), for discharges”; (B) in clause (v), by adding at the end the following: “The provisions of subsection (h)(7) shall apply with respect to the first sentence of this clause in the same manner as it applies with respect to subsection (h)(4)(F)(i).”; and(C) by adding at the end the following new clause:“(ix) For discharges occurring on or after July 1, 2005, insofar as an additional payment amount under this subparagraph is attributable to resident positions redistributed to a hospital under subsection (h)(7)(B), in computing the indirect teaching adjustment factor under clause (ii) the adjustment shall be computed in a manner as if ‘c’ were equal to 0.66 with respect to such resident positions.”. (2) Chapter 35 of title 44, United States Code, shall not apply with respect to applications under section 1886(h)(7) of the Social Security Act, as added by subsection (a)(3).(c) Report on Extension of Applications Under Redistribution Program.—Not later than July 1, 2005, the Secretary shall submit to Congress a report containing recommendations regarding whether to extend the deadline for applications for an increase 117 STAT. 2287 in resident limits under section 1886(h)(4)(I)(ii)(II) of the Social Security Act (as added by subsection (a)).