Two GME-related provisions in the FY 2020 IPPS proposed rule

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On April 23, CMS released the fiscal year 2020 hospital inpatient prospective payments system (IPPS)  proposed rule. The rule contains many proposals related to hospital payment policy, including two notable GME announcements described below. Comments on the proposed rule are due June 24, 2019.

First, CMS proposes a change relating to how full-time equivalent (FTE) resident time may be counted when residents train at critical access hospitals (CAHs). Under current Medicare policy, a CAH is not considered a “nonprovider setting,” which prohibits IPPS hospitals from claiming on their cost reports any time residents spend at CAHs, even if the IPPS hospitals incur the stipend and benefit costs for residents during their training at the CAH. Instead, the only GME-related payments CMS currently makes for the time residents spend training at CAHs is 101% of the direct costs the CAH itself incurs in training residents.

CMS heard concerns that the agency’s current policy “is creating barriers to training residents in rural areas, thereby also hindering efforts to increase the practice of physicians in rural areas.” To remove this disincentive, CMS proposes that effective October 1, 2019, a hospital may include in its FTE count time spent by residents training at a CAH, so long as the hospital meets the nonprovider setting requirements located at 42 C.F.R. §§ 412.105(f)(1)(ii)(E) and 413.78(g). From the Federal Register preamble language, it does not appear that CMS is proposing to change any regulatory text to reflect this shift in policy.

Second, CMS announced Round 14 of the Affordable Care Act’s section 5506 close hospital slot redistribution program. Under this round, CMS will redistribute 62.60 IME slots and 62.03 DGME slots from closed hospital Good Samaritan Hospital of Dayton, Ohio. Of the available IME slots, 7.00 are from a section 422 cap increase, meaning they will be reimbursed at half the normal rate. Of the available DGME slots, 3.14 are from a section 422 cap increase, meaning they will be reimbursed at a national average PRA.

Section 5506 of the ACA required CMS to implement the closed hospital residency slot redistribution program. Under the program, CMS is required to take all of the DGME and IME residency slots from hospitals that closed on or after March 23, 2008, and to permanently redistribute them according to certain criteria. Prior to the ACA, hospitals that took on displaced residents from closed hospitals could only receive cap slots temporarily until the displaced residents completed their training, but there was no provision for the permanent redistribution of closed hospital slots.

The ACA specified that hospitals in the same geographic region as the closed hospital would receive priority for the closed hospital’s slots. Among other criteria, CMS also gave preference in distributing these permanent slots to hospitals that:

  • Assumed an entire program from the closed hospital;
  • Received slots from the closed hospital under a GME affiliation agreement and would use the slots to continue to train at least the number of residents the hospital had trained under the affiliation agreement; and
  • Took in residents displaced by the hospital closure and would continue to train residents in the same programs as the displaced residents, even after the displaced residents completed their training.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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