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CMS Makes Updates for Displaced Residents at Inpatient Psychiatric Facilities

August 6, 2021

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CONTACTS
Brad Cunningham, Sr. Regulatory Analyst, Graduate Medical Education

The Centers for Medicare & Medicaid Services (CMS) finalized a proposed regulation that updates the definition for “displaced” residents at inpatient psychiatric facilities (IPFs) starting in federal fiscal year (FY) 2022. The change will make the definition under IPF payment consistent with the definition under the inpatient prospective payment system. This is important in the event that an IPF that trains residents closes or that its training program closes. Under the revised definition, a resident will be displaced from the day the hospital or training program publicly announces the closure.

The change was finalized as part of the FY 2022 IPF prospective payment system final rule that was published on Aug. 4 (86 FR 42608). In comments to the proposed rule (refer to Washington Highlights, June 4), the AAMC strongly supported the change. The updated definition aligns with inpatient acute care facilities and includes:  

  1. Residents currently training in the closing program.
  2. Residents who are not physically present because they have not started training or do not intend to return to training at the closing institution.

Only after a resident is displaced can the closing hospital transfer Medicare funding (or “slot”) to a receiving hospital so that the resident can complete training. Allowing the closing hospital to temporarily transfer the slots as soon as the closing is made public allows residents flexibility in finding new programs and allows for more certainty in the continuity of training.  

A receiving hospital that is at or above their current Medicare GME cap will have to submit a letter to their Medicare Administrative Contractor within 60 days of beginning to train a displaced resident. Lastly, the CMS is finalizing a clarification that the maximum amount of cap slots available to be transferred to receiving institutions is the hospital’s Medicare cap at the time of closing. It will be up to the closing institution to determine how much of a slot to transfer for each resident.  

 Additionally, the AAMC strongly encourages the CMS to adopt the same definition of displaced residents for inpatient rehabilitation facilities.

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