Balanced Budget Refinement
Act of 1999 Interim Final Rule: Provisions Relating to Resident
Limits
Resident Limits
The interim final rule contains a number of changes that
relate to the resident limits mandated by the BBA.
A. 30 percent Upward Adjustment for Rural Hospitals' Resident
Limits
The interim final rule implements the BBRA provision to
expand rural hospitals' DGME and IME resident limits. Under
the interim final rule, the unweighted resident count for
rural hospitals may not exceed 130 percent of the number of
unweighted residents the rural hospital counted in its most
recent cost reporting period ending on or before December
31, 1996 (the date of the original resident limit mandated
by the BBA).
For DGME payments, this provision begins with cost reporting
periods beginning on or after April 1, 2000. For IME payments,
the provision begins with discharges occurring on or after
April 1, 2000.
These provisions are codified at 42 C.F.R. §412.105(f)(1)(iv)
(IME) and 42 C.F.R. §412.86(g)(4) (DGME)
Analysis-Under the Medicare regulations, a hospital
is considered to be "rural" if it is not located in a metropolitan
statistical area (42. C.F.R. §412.62(f)). However, in certain
situations, a hospital can have its geographic classification
(urban or rural) changed if it meets specified criteria. Historically,
a number of rural hospitals have sought to be classified as
urban because the reclassification generally means higher
Medicare reimbursements. The BBRA, however, provides that
in certain situations an urban hospital may apply to be treated
as a rural hospital (see page 47029 of the Federal Register).
According to the interim final rule, such a redesignation
would apply for purposes of "payment under the Medicare inpatient
[PPS]." It is unclear whether an urban teaching hospital that
is reclassified as a rural hospital would be permitted to
expand its resident limit by 30 percent. The AAMC will request
clarification of this issue in our comment letter. It is important
to realize, however, that if the resident limit expansion
is included as a benefit of reclassification, such a benefit
must be weighed against the effect of reclassification on
other payments, including likely reductions in operating and
disproportionate share payments.
B. Adjustments for Urban Hospitals that Establish Separately
Accredited Approved Medical Programs in a Rural Area
The BBRA provided that urban hospitals may receive an adjustment
to their resident limits if they have "separately accredited
approved medical residency training programs (or rural tracks)"
or have "an accredited training program with an integrated
rural track."
The interim final rule permits adjustments to resident limits
for "1-2" rural track programs1,
and for other programs that are not "1-2" programs, but which
include rural training portions. The legislation did not define
"rural tracks" or an "integrated rural track." Consequently,
these terms are defined synonymously in the regulations as:
"an approved medical residency training program
established by an urban hospital in which residents train
for a portion of the program at the urban hospital and then
rotate for a portion of the program to a rural hospital(s)
or a rural nonhospital site(s)." 42 C.F.R. §412.86(b)
The requirements for the resident limit adjustments vary
for urban and rural hospitals, and also vary depending upon
whether the rural training occurs at a hospital or nonhospital
site:
1. Rural Track Programs with Residency Training at Urban
and Rural Hospitals
Adjustment for the Urban Hospital--if the urban hospital
rotates residents to a rural hospital(s) for at least two-thirds
of the duration of the program, the urban hospital may include
in its resident limit the time the rural track residents spend
at the urban hospital. If the residents train at the rural
hospital for less than two-thirds of the duration of the program,
the resident limit for the urban hospital may not be
adjusted.
Adjustment for the Rural Hospital(s)-The rural hospital's
resident limit may be adjusted for the time residents spend
training at the rural hospital, regardless of the length of
time the resident trains at the urban hospital.
2. Rural Training Programs with Residency Training at an
Urban Hospital and Rural Nonhospital Site.
Adjustment for the Urban Hospital-- if the urban hospital
rotates residents to the rural nonhospital site for at least
two-thirds of the duration of the program, the urban hospital's
resident limit may be adjusted to reflect the time the residents
spend training at both the urban and rural nonhospital
site if the urban hospital incurs "all or substantially all"
of the training costs in the nonhospital site2.
If the residents train at the rural nonhospital site for
less than two-thirds of the duration of the program, the resident
limit for the urban hospital may not be adjusted for the resident
time at the urban hospital. However, the urban hospital could
have its resident limit adjusted for the resident time at
the rural nonhospital site if it incurs "all or substantially
all" of the nonhospital site training costs.
Adjustment for the Rural Hospital-Does not apply
The rural track provisions apply to both existing and newly
established rural track programs. However, the effective date
in terms of Medicare payment is cost reporting periods beginning
on or after April 1, 2000 for DGME and discharges occurring
on or after April 1, 2000 for IME payments.
This provision is codified at 42 C.F.R. §412.105(f)(1)(x)
(IME) and 42 C.F.R. §412.86(g)(11) (DGME)
Analysis-Congress enacted this provision to encourage
additional residency training in rural areas. Resident limits
for rural hospitals currently are adjusted for any new program
established by the rural hospital. Prior to these regulations,
however, urban hospitals could not have their limits adjusted
if they started new programs. This provision would permit
adjustments to the resident limits for urban hospitals for
new programs, but only if they involve training in a rural
area for at least two-thirds of the training period. The AAMC
is seeking member input as to whether "two-thirds" is a reasonable
threshold for determining when an urban hospital can have
its resident limit adjusted, whether the definition of a "rural
track" program is appropriate, and any other issues related
to this section of the interim final rule.
C. Adjustments for Residents on Leaves of Absence
A hospital's resident limit may be adjusted by up to three
additional residents if there were primary care residents
who were not included in the 1996 base year count because
they were on maternity or disability leave or a similar approved
leave of absence.
To receive the adjustment, a hospital must submit a request
to the fiscal intermediary within 6 months of the publication
of the interim final rule (by February 1) that includes documentation
that the leave was approved by the residency program director
and that the resident returned to the program after the absence.
For DGME payments, this provision begins for cost reporting
periods beginning on or after November 29, 1999; for IME payments,
the provision begins with discharges on or after November
29, 1999.
This provision is codified at 42 C.F.R. §412.105(f)(1)(xi)
(IME) and 42 C.F.R. §412.86(g)(9) (DGME)
Analysis-It is unclear why a resident must return
to the residency program after the leave of absence in order
for the hospital to receive the adjustment to the resident
limit.
D. Resident Transfer When VA Residency Program Loses Accreditation
A non-Veterans Affairs (VA) hospital may receive a temporary
adjustment to its resident limit to reflect residents who
had previously trained at a VA hospital and were subsequently
transferred to the non-VA hospital if: a) the residency program
in which the affected residents had been training would have
lost its accreditation if the residents continued to train
at the VA hospital, and b) the residents were transferred
from the VA hospital between January 1, 1997 and July 31,
1998.
This provision is codified at 42 C.F.R. §412.105(f)(1)(xii)
(IME) and 42 C.F.R. §412.86(g)(10) (DGME)
Analysis-According to the interim final rule discussion,
HCFA is aware of only one hospital that is affected by this
provision.
1. The interim final rule preamble
states that "1-2" rural track programs are identified as such
by the Accreditation Council of Graduate Medical Education
(ACGME) and are predominantly 3-year primary care residency
programs in which residents train for 1 year at an urban hospital
and are then rotated to a rural facility for the remaining
two years. [Back]
2. The "all or substantially all"
requirement is consistent with current regulations regarding
Medicare teaching payments for residents training at nonhospital
sites. See 42 C.F.R. §413.86(f)(4). [Back]
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