Hospital FTE Resident Cap Reductions/Increases for GME Payments
The Centers for Medicare & Medicaid Services (“CMS”) recently published an interim final rule with comment period regarding reductions and increases to hospital full-time equivalent (“FTE”) resident caps for graduate medical education (“GME”) payments (the “Rule”).
Essentially the Rule implements Section 203 of the Medicare and Medicaid Extenders Act of 2010 (“MMEA”) and Section 5503 of the Patient Protection and Affordable Care Act (Pub. L. 111-148) (the “ACA”). The ACA made a number of statutory changes relating to the determination of a hospital's FTE resident count for direct GME and indirect medical education (“IME”) payments and the ACA also amends the manner in which FTE resident limits are calculated and applied to hospitals under certain circumstances. The ACA provides for the reduction in FTE resident caps for direct GME payments under Medicare for certain hospitals, and authorizes the “redistribution”[1] of the estimated number of FTE resident slots to other qualified hospitals.
The methodology to determine a cap reduction for hospitals which are members of the same Medicare GME affiliated group includes two steps: (1) determining the proper reference cost reporting period; and (2) determining the applicable reduction, if any, in a hospital’s FTE resident cap. Following below is summary of the Rule:
1. Determining the “reference cost reporting period.” The Medicare contractor will determine whether a hospital was a member of a Medicare GME affiliated group at any point during any of the hospital’s three (3) most recent cost reporting periods ending before March 23, 2010 for which a cost report has been settled or submitted to Medicare by March 23, 2010.
If a hospital was not a member of a Medicare GME affiliated group during any of the three (3) cost reporting periods, then Medicare will determine if and by how much the hospital’s FTE resident caps should be reduced. Alternatively, if Medicare determines that a hospital was a member of a Medicare GME affiliated group at any point during the three (3) cost reporting periods ending before March 23, 2010, then Medicare will determine a hospital’s reference cost reporting period by applying the cost reporting period which results in the smallest difference between the reference resident level and the otherwise applicable resident limit.
2. Calculating the Applicable Reductions. Once Medicare determines a hospital's reference cost reporting period (i.e., the cost report with the smallest difference between the hospital's FTE resident cap and FTE resident count), then Medicare will determine if the hospital was a member of a Medicare GME affiliated group as of July 1 during the applicable reference cost reporting period. If not, and the hospital's FTE resident count was equal to or exceeded its FTE resident cap in that reference cost report, then no reduction to the hospital’s FTE resident cap is made and no further steps are necessary. However, if that hospital's FTE resident count was less than its FTE resident cap during that reference cost report, then Medicare will reduce the FTE resident cap by sixty-five percent (65%) of the difference between the FTE resident cap and the FTE resident count.
According to CMS, “it is only treating a hospital as part of a group if the hospital was a member of a Medicare GME affiliation agreement during its reference cost reporting period.” Further, CMS stated “in implementing section 203 of the MMEA in this manner, we believe we have addressed the concerns raised by commenters in response to the CY 2011 Outpatient PPS proposed rule (75 FR 46395 August 3, 2010) in that this policy could protect hospitals from a loss of slots if the aggregate counts equal to or exceed the ‘affiliated’ FTE resident caps, and could limit the loss of slots in the instance where a hospital is a member of a Medicare GME affiliated group and the aggregate counts are below the ‘affiliated’ FTE resident caps.”
A copy of the interim final rule is available online at the Federal Register:
http://www.access.gpo.gov/su_docs/aces/fr-cont.html
[1] A description of the rules implementing the cap slot redistribution may be reviewed in the November 24, 2010 Federal Register (75 FR 72168).
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