On March 16, 2023, CMS issued Transmittal 11904, directing its contractors to adjust hospitals’ nursing and allied health education (NAH) payments associated with services furnished to Medicare Advantage (MA) enrollees. Transmittal 11904 implements Section 4143 of the Consolidated Appropriations Act of 2023 (CAA 2023), which waived the $60 million per year cap on MA nursing and allied health education payments for calendar years (CYs) 2010 through 2019. Medicare contractors are instructed to recalculate eligible hospitals’ NAH MA payments for cost reporting periods occurring between CYs 2010 and 2019 that are still open or within the 3-year reopening period as of March 16, 2023.
As background, Section 541 of the Balanced Budget Refinement Act (BBRA) of 1999 established additional payments to hospitals for costs of NAH education associated with services to MA enrollees. Hospitals that operate approved NAH programs and receive Medicare reasonable cost reimbursement for these programs receive additional payments associated with services furnished to MA enrollees. Section 541, however, limits total spending under the provision to no more than $60 million in any CY—also known as the $60 million payment “pool.” In addition, section 541 of the BBRA of 1999 provides that Direct Graduate Medical Education (DGME) payments for MA utilization will be reduced to the extent that these additional payments are made for NAH programs.
Section 4143 of the CAA 2023, entitled “Waiver of Cap on Annual Payments for Nursing and Allied Health Education Payments,” directs CMS that for cost reporting periods in CYs 2010 through 2019, the $60 million payment pool shall not apply to the total amount of additional payments for NAH education to be distributed to hospitals. For FY 2019, for instance, the uncapped pool amount is over $140 million. Accordingly, eligible hospitals should expect to receive an upward adjustment in their NAH MA payments.
Medicare contractors will make a two-step assessment to determine a hospital’s payment adjustment. First, the contractor will assess eligibility by determining whether the hospital received initial payments subject to the $60 million payment pool and is still currently receiving NAH MA payments for its NAH program(s). Second, contractors will recalculate an eligible hospital’s NAH MA payment for cost reporting periods occurring between CYs 2010 and 2019 that are still open or within the 3-year reopening period as of March 16, 2023. For reopenings, contractors shall identify payments owed on those cost reports, and issue adjustment reports and revised Notice of Program Reimbursement letters within one year of the effective date of Transmittal 11904.
Transmittal 11904 is available here.
