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Washington Highlights

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

February 1, 2013—The Centers for Medicare and Medicaid Services (CMS) Jan. 30 released  the agency’s third 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 69 Direct Graduate Medical Education (DGME) slots and 66 Indirect Medical Education (IME) slots from closed hospitals Hawaii Medical Center East in Honolulu, Hawaii; Oak Forest Hospital in Oak Forest, Ill.; and Huron Hospital in East Cleveland, Ohio. Applications for these slots were due Oct. 29, 2012. A total of six hospitals in Hawaii, Illinois, and Ohio received additional slots through this third 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 only could 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.

Two rounds of slots were redistributed previously and awards were posted on Jan. 30, 2012 [see Washington Highlights, Feb. 3, 2012], and Nov. 30, 2012 [see Washington Highlights, Dec. 7, 2012]


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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