Medicare Rule Announces "Community
Support" Requirements for DGME and IME Payments With Grandfather
Provisions
August 15, 2003 - In its fiscal year 2004 Medicare
inpatient final
rule [68 Federal Register 45346], the Centers for
Medicare & Medicaid Services (CMS) finalized regulations
that contain additional requirements hospitals must meet in
order to receive Medicare direct graduate medical education
(DGME) and indirect medical education (IME) payments in nonhospital
sites and DGME payments in inpatient and outpatient hospital
settings.
Viewed as a reiteration of "longstanding policy"
by CMS and opposed by the AAMC, the regulations state "a
hospital must continuously incur costs of direct graduate
medical education of residents training in a particular program
at a training site since the date the residents first began
training in that program" in order for the hospital to
be able to claim the residents for purposes of Medicare payments
(42 C.F.R. §413.86(i)(2)).
In the final rule preamble, CMS states that "[I]t is
longstanding Medicare policy that if the community has undertaken
to bear the costs of medical education, these costs are not
to be assumed by the Medicare program. In addition, medical
education costs that have been incurred by an educational
institution may not be redistributed to the Medicare program."
[68 FR 45436]. In the final rule, CMS emphasized that the
hospital need only incur some, not all, of the DGME costs
in order to comply with the regulations.
The issues of "community support" and "redistribution
of costs" garnered attention by CMS because of recent
arrangements between some teaching hospitals and dental clinic
residency programs whereby the hospital would assume the costs
of the dental program and claim the dental residents for IME
and DGME reimbursement. While the final regulations would
affect these arrangements, CMS makes clear the provisions
also apply to all other residents and programs including,
notably, family practice residency programs.
While the regulations go into effect Oct. 1, CMS stated that
it will permit hospitals to continue to count and receive
payments for residents that are currently being claimed for
DGME and IME payments and who otherwise would not be permitted
to be counted under these regulations until those residents
finish their training, or three years, whichever occurs first.
A provision in the Senate Medicare prescription drug bill
would negate much of the final rule provisions and provide
that the hospital incur the DGME costs at the time it seeks
to claim the residents, rather than since the inception of
the program.
Information:
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
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