BUREAU OF OGME DEVELOPMENT
OGME DEVELOPMENT INITIATIVE
Advanced Funding Webinar
October 23, 2012
Q:
Does training podiatric residents trigger an FTE resident cap for a hospital that has never
before trained residents?
A:
No. Neither podiatric nor dental residents are capped. Starting to train them will not trigger
a cap in a hospital that has never before trained residents. Doing so, however, will trigger the
establishment of a per resident amount (PRA) for the hospital. Therefore, the hospital will
want to ensure that the costs of establishing the podiatric or dental training program are well
documented and that they are sufficient to support any osteopathic or allopathic programs it may
wish to establish in the future.
Q:
How is the IOM Committee on Governance and Financing of Graduate Medical Education
different from COGME?
A:
Originally authorized in 1986, the Council on Graduate Medical Education (COGME)
advises and makes recommendations to the Secretary of the Department of Health and Human
Services (HHS), the Senate Health, Education, Labor and Pensions Committee and the House
Committee on Energy and Commerce regarding physician workforce trends, medical training issues
and financing policies and federal and private sector efforts to address them. COGME is staffed by
HHS’ Health Resources and Services Administration (HRSA.) D. Keith Watson, DO, currently
represents the osteopathic profession on COGME.
The Institute of Medicine (IOM) is an independent, nongovernmental, nonprofit organization
charged with advancing and disseminating scientific knowledge to improve human health. In so
doing, it seeks to provide the nation with objective, timely, authoritative information and advice
regarding health and science policy.
In October 2010, the Josiah Macy Jr. Foundation and the Association of Academic Health Centers
called for an independent external review of the governance and financing of graduate medical
education, specifically recommending that the IOM perform this review. The call for such a review
was joined by a bipartisan group of seven U.S. Senators, who wrote to the IOM requesting the
formation of a committee to take on this task. Meeting for the first time in September 2012, the
new IOM Committee on Governance and Financing of Graduate Medical Education is developing a
consensus report with recommendations on policies to improve GME and increase the capacity of a
clinical workforce that can deliver efficient, high quality care that meets the needs of a diverse
population. Among matters the Committee will consider are current GME financing and
governance structures, the residency pipeline, the geographic distribution of generalist and specialist
clinicians, types of training sites, relevant federal statutes and regulations and the role of safety net
providers, community health/teaching health centers and academic health centers. A number of
meetings are planned, with a final report expected before the end of 2013. Barbara Ross Lee, DO,
represents the osteopathic profession on the Committee.
Q:
Will OPTIs disappear under the new, unified accreditation system?
A:
While there is still much to determine over the coming months, for some time the
Accreditation Council for Graduate Medical Education (ACGME) has been very interested in the
OPTI structure and the way it supports osteopathic GME programs and training in community
hospitals. It is likely that the AOA and ACGME will pursue further discussions on this educational
model and its ongoing function within a unified accreditation system.
Q:
How is funding from CMS affected if a sole community hospital shares residents with larger,
acute care hospitals paid under the inpatient prospective payment system?
A:
When a teaching hospital rotates residents to another hospital, Medicare pays the hospital
training the residents for the time they spend there, even if another hospital pays the residents’
salaries and benefits. (Different rules apply when residents rotate to “nonhospital” settings such as
physician offices and clinics.) If a sole community hospital (SCH) shares residents with an acute
care hospital paid under the inpatient prospective payment system (IPPS), each hospital would be
paid under its own payment rules for the time it trains the residents. In other words, the general
acute care hospital would be paid under the “usual” Medicare payment rules. The SCH would be
paid based on whether it receives the hospital specific rate or the federal rate. That is, SCHs
receiving the hospital specific rate would be eligible for direct graduate medical education (DGME)
payment, while those that receive the federal rate are eligible for both DGME and indirect medical
education (IME) payment.
Q:
If a regional family medicine program is made up of two larger hospitals along with multiple
critical access hospital (CAHs) and rural community clinics, can the larger hospitals receive CMS
funding for the time the residents rotate there?
A:
Yes.
Q:
Can they do so even if the regional program receives a HRSA grant or state funding for the
program, which will be run primarily through teaching health centers?
A:
According to HRSA, the Affordable Care Act prescribes the relationship between Teaching
Health Center GME (THCGME) funding and other payments that support THC residents,
including but not limited to Medicare, Medicaid and Children’s Hospital GME. THCGME
payments can supplement, but not duplicate GME payments from other sources. Therefore, if a
hospital claims the THC residents’ inpatient time, the THC cannot also claim that time from HRSA.
Conversely, if the THC pays the hospital out of HRSA funds, the hospital cannot also receive
Medicare GME payment for the same residents. HRSA requires applicants to coordinate closely
with affiliated teaching hospitals in order to avoid over-reporting of FTE residents supported by
THCGME funds. According to HRSA, over-reporting of FTEs and subsequent over-payment will
be subject to the THC reconciliation process and will result in the recoupment of THCGME
payments. HRSA intends to work closely with CMS to maintain counts of resident FTEs in
teaching hospitals affiliated with THCs. Generally speaking, it is better to claim all costs under the
THC grant and refrain from mixing funding streams with already existing teaching hospitals in order
to limit the potential for future CMS questions regarding which funding source is paying for what.
Q:
Are rural hospitals different from urban facilities in their ability to establish a cap one
program at a time rather than a final cap at 5 years for all anticipated residencies?
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A:
Yes and no. A new teaching hospital, urban or rural, establishes caps for each specialty
program during its cap-building period (3 years for programs that started training prior to October
1, 2012; 5 years for those that began training thereafter.) Urban hospitals are capped at the total
number of FTE residents in all specialties started during the period at the end of that period.
Thereafter, even if the hospital adds residents or starts new specialty programs, its cap is set. It
cannot count the additional residents. When the Balanced Budget Act was passed, however,
Congress recognized that it often is difficult for rural hospitals to start new residency programs.
Consequently, even after the cap-building period has run, rural hospitals are allowed to start new
specialty programs, though they cannot add residents to existing specialty programs.
Q:
If a hospital that has never trained residents (“Hospital A”) provides clinical experiences for
residents from another hospital (“Hospital B”) does Hospital A’s 5-year cap window begin?
A:
Yes - unless the hospital that rotates the residents (Hospital B) to Hospital A is an
established teaching hospital that chooses to “lend” some of its slots to Hospital A and there is a
properly executed, filed Medicare GME affiliation agreement in place between the hospitals.
If that is the case, Hospital B will get a temporary increase in its DGME and IME caps (which
previously were zero) consistent with the Medicare GME affiliation agreement. When the
agreement terminates, Hospital A’s caps will return to zero. Without such an agreement Hospital A
would start generating a cap.
On the other hand, if Hospital B is a new teaching hospital that is still in its cap-building period, it
will not be able to enter into a Medicare GME affiliation agreement until its cap is established.
Therefore, resident rotations to Hospital A will trigger both a cap and a per resident amount (PRA)
for that hospital.
If Hospital B is an existing teaching hospital with a cap and rotates residents to Hospital A, it will
not trigger a cap at Hospital A but it will trigger a PRA at that hospital. Because Hospital A’s costs
of accepting the rotation likely will be very small, this PRA may be a problem if the hospital
ultimately decides to establish a teaching program. In this instance neither of the hospitals will
receive payment for the time Hospital B’s residents rotate to Hospital A.
Bottom line: As a practical matter, teaching hospitals should exercise caution before rotating
residents to any hospital that has never trained residents if the latter wishes to preserve the option of
starting a GME program in the future.
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