To amend title XVIII of the Social Security Act to provide for an exception to the reduction in unused medical residency positions for small family practice residency programs under the Medicare Program.

Amends title XVIII (Medicare) of the Social Security Act with respect to the reduction in unusued medical residency positions as a component of the Secretary of Health and Human Services' payment of direct graduate medical education costs under the Medicare program. Makes an exception from this reduction for small family practice residency programs in hospitals located in rural areas or small urban areas.