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Washington Highlights

CMS Proposes Regulations Implementing GME Provisions of Health Reform Law

July 9, 2010

The Centers for Medicare and Medicaid Services (CMS) July 2 released proposals in the Outpatient Prospective Payment System (OPPS) proposed rule (see related story) that would implement the direct graduate medical education (DGME) and indirect graduate medical education (IME) provisions of the Affordable Care Act (P.L. 111-148 and P.L. 111-152). These provisions relate to the counting of resident time and the redistribution of unused resident slots and resident slots from closed hospitals. The proposed rule is scheduled to be published in the Federal Register on Aug. 3.

Under the rule, CMS proposes to implement provisions of the health reform law that permit hospitals to count resident time in clinical nonprovider settings, as long as the hospital incurs the costs of the residents' salaries and fringe benefits for the time that residents spend in the nonhospital sites. The rule also would implement provisions allowing hospitals to count didactic time in non-hospital settings for DGME payment purposes and didactic time in hospital settings for IME payment purposes.

In addition, the proposed rule would implement the resident redistribution provisions of the law regarding hospitals that have unused residency slots. In general, CMS will take 65 percent of the DGME and IME residency slots that have gone unused by a hospital for the past three years and redistribute them according to certain criteria. The health reform law specifies that 70 percent of the unused slots must be redistributed to hospitals in states with resident-to-population ratios in the lowest quartile, and CMS proposes that these states are: Montana, Idaho, Alaska, Wyoming, Nevada, South Dakota, North Dakota, Mississippi, Florida, Puerto Rico, Indiana, Arizona, and Georgia. The health reform law requires CMS to allocate the remaining 30 percent of the redistributed slots to hospitals in rural areas and to hospitals located in the 10 states with the highest proportion of their populations living in a health professional shortage area, which CMS proposes to be: Louisiana, Mississippi, Puerto Rico, New Mexico, South Dakota, the District of Columbia, Montana, North Dakota, Wyoming, and Alabama. CMS proposes that hospitals that do not fit within these categories will be ineligible to receive slots through the redistribution program. The proposed deadline for hospitals to apply for redistributed slots is Dec. 1, 2010. If any slots are left in the distribution pool after the first round of applications, CMS proposes to initiate a new round of applications after July 1, 2011, using the same redistribution criteria as the first round.

Regarding slots from closed hospitals, the health reform law requires CMS to redistribute permanently the DGME and IME residency slots from hospitals that closed on or after March 23, 2008. Currently, hospitals may receive temporary cap slots for training displaced residents from the closed hospital. Among other criteria, CMS proposes to give preference in distributing these permanent slots to hospitals that assume an entire program from the closed hospital, hospitals that received slots from the closed hospital under a GME affiliation agreement and will use the slots to continue to train at least the number of residents they had trained under the affiliation agreement, and to hospitals that took in residents displaced by the hospital closure and will continue to train residents in the same programs as the displaced residents, even after the displaced residents complete their training. CMS included proposed applications for both the unused resident slot redistribution program and the closed hospital resident slot redistribution programs in the rule.

Comments on the proposed rule are due Aug. 31, 2010.

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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org