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Washington Highlights

CMS Announces Second Round of Awardees of Redistributed Resident Slots From Closed Hospitals

December 7, 2012—The Centers for Medicare and Medicaid Services (CMS) Nov. 30 released the agency’s second award of resident cap increases under the Affordable Care Act’s (ACA, P.L. 111-148 and P.L. 111-152) closed hospital residency slot redistribution program. CMS redistributed 321 Direct Graduate Medical Education (DGME) slots and 295 Indirect Medical Education (IME) slots from closed hospital St. Vincent’s Medical Center in New York, effective at various dates. Applications for these slots were due on Dec. 1, 2011.  A total of 36 hospitals in Connecticut, New Jersey, and New York received additional slots through this second round of the program.

The closed hospital residency slot redistribution program was required by Sec. 5506 of the ACA, and CMS issued implementing regulations in the Calendar Year (CY) 2011 Outpatient Prospective Payment System (OPPS) Final Rule [see Washington Highlights, Nov. 5, 2010] and in the Fiscal Year (FY) 2013 Inpatient Prospective Payment Systems (IPPS) Final Rule [see Washington Highlights, Aug. 3, 2012].

Under the program, CMS was required to take all of the DGME and IME residency slots from hospitals that closed on or after March 23, 2008, and permanently redistribute them according to certain criteria. Prior to the ACA, hospitals that took on displaced residents from closed hospitals could only receive cap slots temporarily until the displaced residents completed their training, but there was no provision for the permanent redistribution of these slots.

The ACA specified that hospitals in the same geographic region as the closed hospital would receive priority for that closed hospital’s slots. Among other criteria, CMS also gave preference in distributing these permanent slots to hospitals that:

  • Assumed an entire program from the closed hospital;
  • Received slots from the closed hospital under a GME affiliation agreement and would use the slots to continue to train at least the number of residents they had trained under the affiliation agreement; and
  • Took in residents displaced by the hospital closure and would continue to train residents in the same programs as the displaced residents, even after the displaced residents completed their training.

Slots from teaching hospitals that closed between March 23, 2008, and Aug. 3, 2010, were previously redistributed.  Applications for these slots were due April 1, 2011, and awards were posted on Jan. 30, 2012 [see Washington Highlights, Feb. 3, 2012].

In the IPPS Final Rule, CMS also announced a third round of Sec. 5506 slots from closed hospitals Hawaii Medical Center East (Hawaii), Oak Forest Hospital (Ill.), and Huron Hospital (Ohio).  Applications were due Oct. 29, 2012, but results from the third round have not yet been released.  


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806