SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY ACTIVITIES AND OTHER ACTIVITIES.

[a] Direct GME- Section- 1886[h] of the Social Security Act [42 U.S.C. 1395ww[h]] is amended--

[1] in paragraph [4][E], as amended by section 1502[a]--

[A] in clause [i], by striking 'Such rules' and inserting 'Subject to clause [ii], such rules'; and

[B] by adding at the end the following new clause:

'[ii] TREATMENT OF CERTAIN NONPROVIDER AND DIDACTIC ACTIVITIES- Such rules shall provide that all time spent by an intern or resident in an approved medical residency training program in a nonprovider setting that is primarily engaged in furnishing patient care [as defined in paragraph [5][K]] in nonpatient care activities, such as didactic conferences and seminars, but not including research not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall be counted toward the determination of full-time equivalency.';

[2] in paragraph [4], by adding at the end the following new subparagraph:

'[I] In determining the hospital's number of full-time equivalent residents for purposes of this subsection, all the time that is spent by an intern or resident in an approved medical residency training program on vacation, sick leave, or other approved leave, as such time is defined by the Secretary, and that does not prolong the total time the resident is participating in the approved program beyond the normal duration of the program shall be counted toward the determination of full-time equivalency.'; and

[3] in paragraph [5], by adding at the end the following new subparagraph:

'[K] NONPROVIDER SETTING THAT IS PRIMARILY ENGAGED IN FURNISHING PATIENT CARE- The term 'nonprovider setting that is primarily engaged in furnishing patient care' means a nonprovider setting in which the primary activity is the care and treatment of patients, as defined by the Secretary.'.

[b] IME Determinations- Section- 1886[d][5][B] of such Act [42 U.S.C. 1395ww[d][5][B]], as amended by section 1501[b], is amended by adding at the end the following new clause:

'[xi][I] The provisions of subparagraph [I] of subsection [h][4] shall apply under this subparagraph in the same manner as they apply under such subsection.

'[II] In determining the hospital's number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in nonpatient care activities, such as didactic conferences and seminars, as such time and activities are defined by the Secretary, that occurs in the hospital shall be counted toward the determination of full-time equivalency if the hospital--

'[aa] is recognized as a subsection [d] hospital;

'[bb] is recognized as a subsection [d] Puerto Rico hospital;

'[cc] is reimbursed under a reimbursement system authorized under section 1814[b][3]; or

'[dd] is a provider-based hospital outpatient department.

'[III] In determining the hospital's number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in research activities that are not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall not be counted toward the determination of full-time equivalency.'.

[c] Effective Dates; Application-

[1] IN GENERAL- Except as otherwise provided, the Secretary of Health and Human Services shall implement the amendments made by this section in a manner so as to apply to cost reporting periods beginning on or after January 1, 1983.

[2] DIRECT GME- Section- 1886[h][4][E][ii] of the Social Security Act, as added by subsection [a][1][B], shall apply to cost reporting periods beginning on or after July 1, 2008.

[3] IME- Section- 1886[d][5][B][x][III] of the Social Security Act, as added by subsection [b], shall apply to cost reporting periods beginning on or after October 1, 2001. Such section, as so added, shall not give rise to any inference on how the law in effect prior to such date should be interpreted.

[4] APPLICATION- The amendments made by this section shall not be applied in a manner that requires reopening of any settled hospital cost reports as to which there is not a jurisdictionally proper appeal pending as of the date of the enactment of this Act on the issue of payment for indirect costs of medical education under section 1886[d][5][B] of the Social Security Act or for direct graduate medical education costs under section 1886[h] of such Act.