42 USC 256e - Program of payments to children’s hospitals that operate graduate medical education programs

U.S Code last checked for updates: Aug 24, 2025

§ 256e.

Program of payments to children’s hospitals that operate graduate medical education programs

(a)

Payments

(b)

Amount of payments

(1)

In general

Subject to paragraphs (2) and (3), the amounts payable under this section to a children’s hospital for an approved graduate medical residency training program for a fiscal year are each of the following amounts:

(A)

Direct expense amount

(B)

Indirect expense amount

(2)

Capped amount

(A)

In general

(B)

Pro rata reductions of payments for direct expenses

(3)

Annual reporting required

(A)

Reduction in payment for failure to report

(i)

In general

The amount payable under this section to a children’s hospital for a fiscal year (beginning with fiscal year 2008 and after taking into account paragraph (2)) shall be reduced by 25 percent if the Secretary determines that—

(I)

the hospital has failed to provide the Secretary, as an addendum to the hospital’s application under this section for such fiscal year, the report required under subparagraph (B) for the previous fiscal year; or

(II)

such report fails to provide the information required under any clause of such subparagraph.

(ii)

Notice and opportunity to provide missing information

(B)

Annual report

The report required under this subparagraph for a children’s hospital 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:

(i)

The types of resident training programs that the hospital provided for residents described in subparagraph (C), such as general pediatrics, internal medicine/pediatrics, and pediatric subspecialties, including both medical subspecialties certified by the American Board of Pediatrics (such as pediatric gastroenterology) and non-medical subspecialties approved by other medical certification boards (such as pediatric surgery).

(ii)

The number of training positions for residents described in subparagraph (C), the number of such positions recruited to fill, and the number of such positions filled.

(iii)

The types of training that the hospital provided for residents described in subparagraph (C) related to the health care needs of different populations, such as children who are underserved for reasons of family income or geographic location, including rural and urban areas.

(iv)

The changes in residency training for residents described in subparagraph (C) which the hospital has made during such residency academic year (except that the first report submitted by the hospital under this subparagraph shall be for such changes since the first year in which the hospital received payment under this section), including—

(I)

changes in curricula, training experiences, and types of training programs, and benefits that have resulted from such changes; and

(II)

changes for purposes of training the residents in the measurement and improvement of the quality and safety of patient care.

(v)

The numbers of residents described in subparagraph (C) who completed their residency training at the end of such residency academic year and care for children within the borders of the service area of the hospital or within the borders of the State in which the hospital is located. Such numbers shall be disaggregated with respect to residents who completed residencies in general pediatrics or internal medicine/pediatrics, subspecialty residencies, and dental residencies.

(C)

Residents

The residents described in this subparagraph are those who—

(i)

are in full-time equivalent resident training positions in any training program sponsored by the hospital; or

(ii)

are in a training program sponsored by an entity other than the hospital, but who spend more than 75 percent of their training time at the hospital.

(D)

Report to Congress

Not later than the end of fiscal year 2018, and the end of fiscal year 2022, the Secretary, acting through the Administrator of the Health Resources and Services Administration, shall submit a report to the Congress—

(i)

summarizing the information submitted in reports to the Secretary under subparagraph (B);

(ii)

describing the results of the program carried out under this section; and

(iii)

making recommendations for improvements to the program.

(c)

Amount of payment for direct graduate medical education

(1)

In general

The amount determined under this subsection for payments to a children’s hospital 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 per resident amount for direct graduate medical education, as determined under paragraph (2); and

(B)

the average number of full-time equivalent residents in the hospital’s graduate approved medical residency training programs (as determined under section 1395ww(h)(4) of this title during the fiscal year.

(2)

Updated per resident amount for direct graduate medical education

The updated per resident amount for direct graduate medical education for a hospital for a fiscal year is an amount determined as follows:

(A)

Determination of hospital single per resident amount

(B)

Determination of wage and non-wage-related proportion of the single per resident amount

(C)

Standardizing per resident amounts

The Secretary shall establish a standardized per resident amount for each such hospital—

(i)

by dividing the single per resident amount computed under subparagraph (A) into a wage-related portion and a non-wage-related portion by applying the proportion determined under subparagraph (B);

(ii)

by dividing the wage-related portion by the factor applied under section 1395ww(d)(3)(E) of this title for discharges occurring during fiscal year 1999 for the hospital’s area; and

(iii)

by adding the non-wage-related portion to the amount computed under clause (ii).

(D)

Determination of national average

(E)

Application to individual hospitals

The Secretary shall compute for each such hospital that is a children’s hospital a per resident amount—

(i)

by dividing the national average per resident amount computed under subparagraph (D) 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 for discharges occurring during the preceding fiscal year for the hospital’s area; and

(iii)

by adding the non-wage-related portion to the amount computed under clause (ii).

(F)

Updating rate

(d)

Amount of payment for indirect medical education

(1)

In general

(2)

Factors

In determining the amount under paragraph (1), the Secretary shall—

(A)

take into account variations in case mix among children’s hospitals and the ratio of the number of full-time equivalent residents in the hospitals’ approved graduate medical residency training programs to beds (but excluding beds or bassinets assigned to healthy newborn infants); and

(B)

assure that the aggregate of the payments for indirect expenses associated with the treatment of more severely ill patients and the additional costs related to the teaching of residents under this section in a fiscal year are equal to the amount appropriated for such expenses for the fiscal year involved under subsection (f)(2).

(e)

Making of payments

(1)

Interim payments

(2)

Withholding

(3)

Reconciliation

(f)

Authorization of appropriations

(1)

Direct graduate medical education

(A)

In general

There are hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, for payments under subsection (b)(1)(A)—

(i)

for fiscal year 2000, $90,000,000;

(ii)

for fiscal year 2001, $95,000,000;

(iii)

for each of the fiscal years 2002 through 2005, such sums as may be necessary;

(iv)

for each of fiscal years 2007 through 2011, $110,000,000;

(v)

for each of fiscal years 2014 through 2018, $100,000,000; and

(vi)

for each of fiscal years 2019 through 2023, $105,000,000.

(B)

Carryover of excess

(2)

Indirect medical education

There are hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, for payments under subsection (b)(1)(B)—

(A)

for fiscal year 2000, $190,000,000;

(B)

for fiscal year 2001, $190,000,000;

(C)

for each of the fiscal years 2002 through 2005, such sums as may be necessary;

(D)

for each of fiscal years 2007 through 2011, $220,000,000;

(E)

for each of fiscal years 2014 through 2018, $200,000,000; and

(F)

for each of fiscal years 2019 through 2023, $220,000,000.

(g)

Definitions

In this section:

(1)

Approved graduate medical residency training program

(2)

Children’s hospital

(3)

Direct graduate medical education costs

(h)

Additional provisions

(1)

In general

(2)

Qualified hospitals

(A)

In general

To qualify to receive payments under paragraph (1), a hospital shall be a free-standing hospital—

(i)

with a Medicare payment agreement and that is excluded from the Medicare inpatient hospital prospective payment system pursuant to section 1395ww(d)(1)(B) of this title and its accompanying regulations;

(ii)

whose inpatients are predominantly individuals under 18 years of age;

(iii)

that has an approved medical residency training program as defined in section 1395ww(h)(5)(A) of this title; and

(iv)

that is not otherwise qualified to receive payments under this section or section 1395ww(h) of this title.

(B)

Establishment of residency cap

(3)

Payments

(4)

Payment amounts

(5)

Reporting

(6)

Remaining funds

(A)

In general

(B)

Quality bonus system

(July 1, 1944, ch. 373, title III, § 340E, as added Pub. L. 106–129, § 4, Dec. 6, 1999, 113 Stat. 1671; amended Pub. L. 106–310, div. A, title XX, § 2001, Oct. 17, 2000, 114 Stat. 1155; Pub. L. 108–490, § 1(a), Dec. 23, 2004, 118 Stat. 3972; Pub. L. 109–307, § 2, Oct. 6, 2006, 120 Stat. 1721; Pub. L. 113–98, §§ 2, 3, Apr. 7, 2014, 128 Stat. 1140; Pub. L. 115–241, § 2, Sept. 18, 2018, 132 Stat. 2892.)

cite as: 42 USC 256e