Current
Imbedded in the long term care hospital final
rule published by the Centers for Medicare and Medicaid Services
(CMS) May 11 in the Federal Register is the final rule modifying
CMS policies and regulations regarding Medicare direct GME (DGME)
and indirect medical education (IME) reimbursement for residents
training in nonhospital sites. The Medicare statute authorizes teaching
hospitals to receive DGME and IME payments associated with residents
training in nonhospital sites, such as physicians' offices, if they
incur "all or substantially all" of the training costs. The policies
are effective with hospital cost reporting periods beginning on
or after July 1, 2007.
In 1999, CMS issued a regulation defining "all or substantially
all" of the training costs as the residents' stipends and benefits
plus physician supervisory costs. Since that time, CMS and the academic
medical community have diverged in their views about how to handle
"volunteer" physicians in determining whether there are physician
supervisory costs. Relying on its interpretation of the "all or
substantially all" statutory language, in a Q
and A document published in 2005, CMS stated that "the issue
of concern is not volunteerism, but whether there is a cost to the
non-hospital site for supervising the residents." The academic medical
community's view has been that if the physicians are volunteering
their time, there are no supervisory costs.
The final rule reiterates the Agency's 2005 position regarding
volunteer physicians, stating that in situations in which a teaching
physician receives a predetermined salary that does not vary with
the number of patients he or she treats, that salary is presumed
to reflect some level of payment for supervision, which is a cost
that the hospital must incur. However, the final rule does modify
the regulatory definition of "all or substantially all" of the nonhospital
site training costs to be 90 percent of the residents' stipends
and benefits plus physician supervisory costs at the nonhospital
site. The prior standard requires hospitals to incur 100 percent
of these amounts.
The 2005 Q and A document also specified that the level of supervisory
costs is determined by the teaching physician's salary and the amount
of time that he or she spends on supervisory activities that do
not involve patient care. Many teaching hospitals and nonhospital
settings were frustrated with these requirements because they imposed
significant compliance difficulties in a) obtaining actual physician
salary data, and b) computing the amount of physician time spent
supervising that does not involve patient care activities.
In recognition of these administrative hurdles, the proposed rule
had given hospitals the option of using actual data or proxies for
physician salary and nonpatient care-related teaching time. For
example, teaching hospitals would have the option to use national
physician salary data in calculating supervision costs. The proposal
also would establish a "presumptive" level of time for supervising
physician evaluation and didactic activities that hospitals and
supervising physicians could use in calculating supervisory costs,
rather than determining actual time levels for each physician at
each site.
The final rule retains many of the provisions retained in the proposed
rule, but does make some changes. For example, the final rule allows
for the proration of physician supervision time when residents do
partial week rotations. The final rule also provides flexibility
to modify the hospital/nonhospital written agreements through June
30 of each academic year to reflect changing rotation arrangements
and other situations. However, the final rule does not reduce the
presumptive supervision time proxy of three hours, nor does it modify
CMS's current positions regarding physician group practices and
global agreements between teaching hospitals and medical schools.
In the final rule, CMS did express a willingness to look into a
number of issues that were raised in the comments received, particularly
the three hour per week physician supervision proxy and the use
of physician work hours rather than nonhospital site hours of operation.
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