42 U.S.C. § 256h — Program of payments to teaching health centers that operate graduate medical education programs

**(a) Payments** (1) **In general** — Subject to subsection (h)(2), the Secretary shall make payments under this section for direct expenses and indirect expenses to qualified teaching health centers that are listed as sponsoring institutions by the relevant accrediting body for, as appropriate— (A) maintenance of filled positions at existing approved graduate medical residency training programs; (B) expansion of existing approved graduate medical residency training programs; and (C) establishment of new approved graduate medical residency training programs. (2) **Per resident amount** — In making payments under paragraph (1), the Secretary shall consider the cost of training residents at teaching health centers and the implications of the per resident amount on approved graduate medical residency training programs at teaching health centers. (3) **Priority** — In making payments under paragraph (1)(C), the Secretary shall give priority to qualified teaching health centers that— (A) serve a health professional shortage area with a designation in effect under [section 254e of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section254e&num=0&edition=prelim) or a medically underserved community (as defined in [section 295p of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section295p&num=0&edition=prelim)); or (B) are located in a rural area (as defined in [section 1395ww(d)(2)(D) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/d/2/D&num=0&edition=prelim)). **(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. (B) *Indirect expense amount* — The amount determined under subsection (d) for indirect expenses associated with the additional costs relating to teaching residents in such 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. (B) *Limitation* — The Secretary shall limit the funding of full-time equivalent residents in order to ensure the direct and indirect payments as determined under subsection 11 So in original. Probably should be “subsections”. (c) and (d) do not exceed the total amount of funds appropriated in a fiscal year under subsection (g). (C) *Addition* — Notwithstanding any provision of this section, for the period beginning on October 1, 2023, and ending on December 31, 2024, the Secretary may use any amounts made available in any fiscal year to carry out this section (including amounts recouped under subsection (f)) to make payments described in paragraphs (1)(A) and (1)(B), in addition to the total amount of funds appropriated 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 (B) the average number of full-time equivalent residents in the teaching health center’s graduate approved medical residency training programs as determined under [section 1395ww(h)(4) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/h/4&num=0&edition=prelim) (without regard to the limitation under subparagraph (F) of such section) during the fiscal year. (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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section256e/c/2/D&num=0&edition=prelim) 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/d/3/E&num=0&edition=prelim) (but without application of section 4410 of the Balanced Budget Act of 1997 ([42 U.S.C. 1395ww](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww&num=0&edition=prelim) note)) during the preceding fiscal year for the teaching health center’s area; and (iii) by adding the non-wage-related portion to the amount computed under clause (ii). (B) *Updating rate* — The Secretary shall update such per resident amount for each such qualified teaching health center as determined appropriate by the Secretary. **(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. (2) **Factors** — 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— (A) for the indirect costs of medical education under [section 1395ww(d)(5)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/d/5/B&num=0&edition=prelim); (B) for direct graduate medical education costs under [section 1395ww(h) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/h&num=0&edition=prelim); and (C) for direct costs of medical education under [section 1395ww(k) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/k&num=0&edition=prelim); (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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/h/4&num=0&edition=prelim) and clauses (v), (vi)(I), and (vi)(II) of [section 1395ww(d)(5)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/d/5/B&num=0&edition=prelim) for the portion of time that a resident rotates to a hospital; and (3) shall not include the time in which a resident is counted toward full-time equivalency by a hospital under paragraph (2) or under [section 1395ww(d)(5)(B)(iv) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/d/5/B/iv&num=0&edition=prelim), [section 1395ww(h)(4)(E) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/h/4/E&num=0&edition=prelim), or [section 256e of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section256e&num=0&edition=prelim). **(f) Reconciliation** The Secretary shall determine any changes to the number of residents reported by a teaching health center in the application of the teaching health center for the current fiscal year to determine the final amount payable to the teaching health center 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) 22 See References in Text note below. of this title is subject to review under such section. **(g) Funding** (1) **In general** — To carry out this section, there are appropriated such sums as may be necessary, to remain available until expended, not to exceed— (A) $230,000,000, for the period of fiscal years 2011 through 2015; (B) $60,000,000 for each of fiscal years 2016 and 2017; (C) $126,500,000 for each of fiscal years 2018 through 2023; (D) $16,635,616 for the period beginning on October 1, 2023, and ending on November 17, 2023, $21,834,247 for the period beginning on November 18, 2023, and ending on January 19, 2024, $16,982,192 for the period beginning on January 20, 2024, and ending on March 8, 2024, and $164,136,986 for the period beginning on October 1, 2023,33 So in original. and ending on December 31, 2024; (E) $43,150,685 for the period beginning on January 1, 2025, and ending on March 31, 2025; (F) $87,739,726 for the period beginning on April 1, 2025, and ending on September 30, 2025; and (G) $58,493,151 for the period beginning on October 1, 2025, and ending on January 30, 2026. (2) **Administrative expenses** — Of the amount made available to carry out this section for any fiscal year, the Secretary may not use more than 5 percent of such amount for the expenses of administering this section. **(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. (B) The number of approved training positions for residents described in paragraph (4). (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. (D) The number of patients treated by residents described in paragraph (4). (E) The number of visits by patients treated by residents described in paragraph (4). (F) Of the number of residents described in paragraph (4) who completed their residency training at the end of such residency academic year, the number and percentage of such residents entering primary care practice (meaning any of the areas of practice listed in the definition of a primary care residency program in section 293l–1 of this title). (G) Of the number of residents described in paragraph (4) who completed their residency training at the end of such residency academic year, the number and percentage of such residents who entered practice at a health care facility— (i) primarily serving a health professional shortage area with a designation in effect under [section 254e of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section254e&num=0&edition=prelim) or a medically underserved community (as defined in [section 295p of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section295p&num=0&edition=prelim)); or (ii) located in a rural area (as defined in [section 1395ww(d)(2)(D) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395ww/d/2/D&num=0&edition=prelim)). (H) Other information as deemed appropriate by the Secretary. (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 (ii) such report fails to provide complete and accurate information required under any subparagraph of such paragraph. (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. (4) **Residents** — The residents described in this paragraph are those who are in part-time or full-time equivalent resident training positions at a qualified teaching health center in any approved graduate medical residency training program. **(i) Regulations** The Secretary shall promulgate regulations to carry out this section. **(j) Definitions** 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 (B) that meets criteria for accreditation (as established by the Accreditation Council for Graduate Medical Education, the American Osteopathic Association, or the American Dental Association). (2) **New approved graduate medical residency training program** — The term “new approved graduate medical residency training program” means an approved graduate medical residency training program for which the sponsoring qualified teaching health center has not received a payment under this section for a previous fiscal year (other than pursuant to subsection (a)(1)(C)). (3) **Primary care residency program** — The term “primary care residency program” has the meaning given that term in section 293l–1 of this title. (4) **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.