(1)

in paragraph (4)(F)(i), by striking and (10) and inserting (10), and (11);

(2)

in paragraph (4)(H)(i), by striking and (10) and inserting (10), and (11);

(3)

in paragraph (7)(E), by inserting paragraph (11), after paragraph (10),; and

(4)

by adding at the end the following new paragraph:

(11) Distribution of additional residency positions

(A) Additional residency positions

(i) In general

For each of fiscal years 2027 through 2033 (and succeeding fiscal years if the Secretary determines that there are additional residency positions available to distribute under clause (iii)(II)), the Secretary shall increase the otherwise applicable resident limit for each qualifying hospital (as defined in subparagraph (G)) 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 of the fiscal year of the increase. Except as provided in clause (iii), the aggregate number of increases in the otherwise applicable resident limit under this subparagraph shall be equal to 2,000 in each of fiscal years 2027 through 2033.

(ii) Process for distributing positions

(I) Rounds of applications

The Secretary shall initiate 7 separate rounds of applications for an increase under clause (i), 1 round with respect to each of fiscal years 2027 through 2033.

(II) Number available

In each of such rounds, the aggregate number of positions available for distribution in the fiscal year as a result of an increase in the otherwise applicable resident limit (as described in clause (i)) shall be distributed, plus any additional positions available under clause (iii).

(III) Timing

The Secretary shall notify hospitals of the number of positions distributed to the hospital under this paragraph as result of an increase in the otherwise applicable resident limit by January 31 of the fiscal year of the increase. Such increase shall be effective for portions of cost reporting periods beginning on or after July 1 of that fiscal year.

(iii) Positions not distributed during the fiscal year

(I) In general

If the number of resident full-time equivalent positions distributed under this paragraph in a fiscal year is less than the aggregate number of positions available for distribution in the fiscal year (as described in clause (i), including after application of this subclause), the difference between such number distributed and such number available for distribution shall be added to the aggregate number of positions available for distribution in the following fiscal year.

(II) Exception if positions not distributed by end of fiscal year 2033

If the aggregate number of positions distributed under this paragraph during the 7-year period of fiscal years 2027 through 2033 is less than 14,000, the Secretary shall, in accordance with the considerations described in subparagraph (B)(i) and the priority described in subparagraph (B)(ii), conduct an application and distribution process in each subsequent fiscal year until such time as the aggregate amount of positions distributed under this paragraph is equal to 14,000.

(B) Distribution to certain hospitals

(i) Consideration in distribution

In determining for which hospitals the increase in the otherwise applicable resident limit is provided under subparagraph (A), the Secretary shall take into account the demonstrated likelihood of the hospital filling the positions made available under this paragraph within the first 5 cost reporting periods beginning after the date the increase would be effective, as determined by the Secretary.

(ii) Minimum distribution for certain categories of hospitals

With respect to the aggregate number of such positions available for distribution under this paragraph, the Secretary shall distribute not less than 10 percent of such aggregate number to each of the following categories of hospitals:

(I)

Hospitals that—

(aa)

are located in a rural area (as defined in section 1886(d)(2)(D)), excluding hospitals that are treated as being located in a rural area pursuant to section 1886(d)(8)(E);

(bb)

are located in an area that has a rural-urban commuting code equal to or great than 4.0;

(cc)

are sole community hospitals (as defined in section 1866(d)(5)(D)(iii));

(dd)

are located within 10 miles of a sole community hospital; or

(ee)

for fiscal years after fiscal year 2031, have an accredited rural training track (as described in paragraph (4)(H)(iv)).

(II)

Hospitals in which the reference resident level of the hospital (as specified in subparagraph (G)(iv)) is greater than the otherwise applicable resident limit.

(III)

Hospitals in States with—

(aa)

new medical schools that received Candidate School status from the Liaison Committee on Medical Education or that received Pre-Accreditation status from the American Osteopathic Association Commission on Osteopathic College Accreditation on or after January 1, 2000, and that have achieved or continue to progress toward Full Accreditation status (as such term is defined by the Liaison Committee on Medical Education) or toward Accreditation status (as such term is defined by the American Osteopathic Association Commission on Osteopathic College Accreditation); or

(bb)

additional locations and branch campuses established on or after January 1, 2000, by medical schools with Full Accreditation status (as such term is defined by the Liaison Committee on Medical Education) or Accreditation status (as such term is defined by the American Osteopathic Association Commission on Osteopathic College Accreditation).

(IV)

Hospitals that serve areas designated as health professional shortage areas under section 332(a)(1)(A) of the Public Health Service Act, as determined by the Secretary.

(iii) Special rules

(I) In general

In distributing positions under clause (ii), the Secretary shall not prioritize hospitals in multiple categories over hospitals in an individual category or based on section 332 of the Public Health Service Act.

(II) Prioritization in distribution to HPSA hospitals

In distributing positions to a hospital described in clause (ii)(IV), the Secretary shall give priority to hospitals that are affiliated with—

(aa)

a historically Black medical school (as defined in subparagraph (G)); or

(bb)

any other school listed in section 326(e)(1) of the Higher Education Act of 1965 that establishes a medical college.

(C) Prohibition on distribution to hospitals without an increase agreement

No increase in the otherwise applicable resident limit of a hospital may be made under this paragraph unless such hospital agrees to increase the total number of full-time equivalent residency positions under the approved medical residency training program of such hospital by the number of such positions made available by such increase under this paragraph.

(D) Limitation

(i) In general

Except as provided in clause (ii), a hospital may not receive more than 75 full-time equivalent additional residency positions in the aggregate under this paragraph and paragraphs (9) and (10) over the period of fiscal years 2027 through 2033.

(ii) Increase in number of additional positions a hospital may receive

The Secretary shall increase the aggregate number of full-time equivalent additional residency positions a hospital may receive under this paragraph over such period if the Secretary estimates that the number of positions available for distribution under subparagraph (A) exceeds the number of applications approved under such subparagraph over such period.

(E) Application of per resident amounts for primary care and nonprimary care

With respect to additional residency positions in a hospital attributable to the increase provided under this paragraph, the approved FTE per resident amounts are deemed to be equal to the hospital per resident amounts for primary care and nonprimary care computed under paragraph (2)(D) for that hospital.

(F) Permitting facilities to apply aggregation rules

The Secretary shall permit hospitals receiving additional residency positions attributable to the increase provided under this paragraph to, beginning in the fifth year after the effective date of such increase, apply such positions to the limitation amount under paragraph (4)(F) that may be aggregated pursuant to paragraph (4)(H) among members of the same affiliated group.

(G) Definitions

In this paragraph:

(i) Historically black medical school

The term historically Black medical school means Howard University College of Medicine, Charles R. Drew University of Medicine and Science, Meharry Medical College, Morehouse School of Medicine, Xavier University Graduate School of Health Sciences and Medical School, and Maryland College of Osteopathic Medicine at Morgan State University.

(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 but taking into account paragraphs (7)(A), (7)(B), (8)(A), (8)(B), (9)(A), (9)(B), (10)(A), and (10)(B).

(iii) Qualifying hospital

The term qualifying hospital means a hospital described in any of subclauses (I) through (IV) of subparagraph (B)(ii).

(iv) Reference resident level

The term reference resident level means, with respect to a hospital, the resident level for the most recent cost reporting period of the hospital ending on or before the date of enactment of this paragraph, for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary.

(v) Resident level

The term resident level has the meaning given such term in paragraph (7)(C)(i).

(1) In general

Section 1886(d)(5)(B)(v) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the third sentence, is amended by striking and (h)(10) and inserting (h)(10), and (h)(11).

(2) Conforming provision

Section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following new clause:

(xiv)

For discharges occurring on or after July 1, 2027 insofar as an additional payment amount under this subparagraph is attributable to resident positions distributed to a hospital under subsection (h)(11), the indirect teaching adjustment factor shall be computed in the same manner as provided under clause (ii) with respect to such resident positions.