Ill STAT. 480 PUBLIC LAW 105-33 —AUG. 5, 1997 SEC. 4626. INCENTIVE PAYMENTS UNDER PLANS FOR VOLUNTARY REDUCTION IN NUMBER OF RESIDENTS. (a) IN GENERAL. —Section 1886(h) (42 U.S.C. 1395ww(h)) is amended by adding at the end the following new paragraph: "(6) INCENTIVE PAYMENT UNDER PLANS FOR VOLUNTARY REDUCTION IN NUMBER OF RESIDENTS. — "(A) IN GENERAL.— In the case of a voluntary residency reduction plan for which an application is approved under subparagraph (B), subject to subparagraph (F), each hospital which is part of the qualifying entity submitting the plan shall be paid an applicable hold harmless percentage (as specified in subparagraph (E)) of the sum of— "(i) the amount (if any) by which— "(I) the amount of payment which would have been made under this subsection if there had been a 5-percent reduction in the number of full-time equivalent residents in the approved medical education training programs of the hospital as of June 30, 1997, exceeds "(II) the amount of payment which is made under this subsection, taking into account the reduction in such number effected under the reduction plan; and "(ii) the amount of the reduction in payment under subsection (d)(5)(B) for the hospital that is attributable to the reduction in number of residents effected under the plan below 95 percent of the number of full-time equivalent residents in such programs of the hospital as of June 30, 1997. The determination of the amounts under clauses (i) and (ii) for any year shall be made on the basis of the provisions of this title in effect on the application deadline date for the first calendar year to which the reduction plan applies. "(B) APPROVAL OF PLAN APPLICATIONS.— The Secretary may not approve the application of an qualifying entity unless— "(i) the application is submitted in a form and manner specified by the Secretary and by not later than November 1, 1999, "(ii) the application provides for the operation of a plan for the reduction in the number of full-time equivalent residents in the approved medical residency training programs of the entity consistent with the requirements of subparagraph (D); "(iii) the entity elects in the application the period of residency training years (not greater than 5) over which the reduction will occur; "(iv) the entity will not reduce the proportion of its residents in primary care (to the total number of residents) below such proportion as in effect as of the applicable time described in subparagraph (D)(v); and "(v) the Secretary determines that the application and the entity and such plan meet such other requirements as the Secretary specifies in regulations. "(C) QUALIFYING ENTITY. —For purposes of this paragraph, any of the following may be a qualifying entity:
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