A bill to amend the Public Health Service Act to require increases in the enrollment of third-year medical students as a condition to medical schools receiving capitation to grants under such Act.

Amends the Public Health Service Act to require that the application of a medical school for a capitation grant to be made in fiscal year 1978 be supported by assurances satisfactory to the Secretary of Health, Education, and Welfare that the school will increase the enrollment of full-time, third-year students in the 1978-1979 school year by the greater of: (1)five percent; or (2) ten students over the number of such students enrolled in school year 1977-1978 or 1976-1977 whichever is greater.

Directs the Secretary to assist schools of medicine to meet such requirement by identifying citizens of the United States: (1) who before 1976 were students in a school of medicine not in a State; (2) who have completed at least two years in a school of medicine; and (3) who have successfully completed part I of the National Board of Medical Examiners' examination.

Permits the Secretary to waive the increase requirement upon a finding that an increase in the enrollment of third-year students will present the school from providing high quality clinical training for its third-year students because of the inadequate size of the population served by the facility.