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Inspector General Calls for Much-Needed Moratorium on Financial Penalties to Teaching Hospitals
FOR IMMEDIATE RELEASE
Washington, DC 20036
December 9, 2004
WASHINGTON – Congress should extend the moratorium on financial penalties imposed on teaching hospitals that use volunteer physicians to teach medical residents in community care settings. That’s the recommendation issued yesterday by Daniel Levinson, Acting Inspector General (IG) of the U.S. Department of Health and Human Services.
The practice -- auditing hospital Medicare cost reports and demanding repayment of Medicare funding for family medicine residents' time in office settings with volunteer teachers – is a disincentive to teaching hospitals to include residency education in office and community settings. Physician specialties that practice predominantly in these settings, rather than in hospitals, would be heavily impacted. The auditing practice is temporarily on hold. It is scheduled to be reinstituted on January 1, 2005.
“The AAFP is grateful for the IG’s conclusions. The AAFP and academic family medicine groups have been opposed to penalties recently instituted by the Centers for Medicare & Medicaid Services,” said Mary E. Frank, M.D., president of the AAFP and a practicing family physician in Rohnert Park, Calif. “They put many family medicine residencies at financial risk and communities could lose a valuable source of care.”
Historically, physicians entering family medicine and other primary care specialties have trained in both hospitals and settings where they are most likely to work: private offices or clinics. The Balanced Budget Act of 1997 encouraged hospitals to place residents in community care settings by allowing federally funded graduate medical education payments to the hospital sponsor of those residents if the hospital paid “all or substantially all” of the training costs. Primary care physicians volunteered as preceptors (teachers) of residents in their offices or clinics. A 2003 survey of family medicine residency directors showed 85 percent of respondents used volunteer preceptors.
In 2002, CMS began demanding repayment of Medicare funds that compensated for the cost of resident education for time spent in non-hospital settings where the preceptor was volunteering supervisory services. CMS’s repayment policy was suspended for 2004 by the Medicare Prescription Drug, Improvement and Modernization Act, so that the Inspector General could examine the issues surrounding Medicare payment for training in the non-hospital setting.
”The federal government wisely encouraged postgraduate education in the community setting," said Frank. "Family medicine did a good job of moving residents into community clinical experiences. Then CMS said they shouldn't pay for residents' time when they are in the community, unless the volunteer teachers are paid. But the hospitals still have the costs of training those residents and the residencies do not have the funding to cover these costs."
HHS’ Levinson identified five alternatives for paying the costs of training residents in non-hospital settings. He said that each of these options had positive and negative aspects. Before implementing any of the options, Levinson recommended CMS and Congress should work together to further analyze current financial arrangements and incentives among teaching hospitals, the teaching physicians, and physician training settings used outside the hospitals. In addition, Levinson recommended clarification of current policy and study of the potential impact of changes on that policy.
”The AAFP deeply appreciates the IG’s call for the extension of the moratorium, and for suggesting possible alternative ways of paying the costs of training residents in non-hospital settings. This decision recognizes training of primary care physicians is especially focused in these settings. An adequate supply of family physicians is needed to assure continued and enhanced access to care for people in our community,” explained Frank. “We will be assessing these suggestions. In the meantime, we are providing guidance to our members on how to manage the government regulations as they come into play again in January.”
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Founded in 1947, the AAFP represents 110,600 physicians and medical students nationwide. It is the only medical society devoted solely to primary care.
Approximately one in four of all office visits are made to family physicians. That is 240 million office visits each year — nearly 87 million more than the next largest medical specialty. Today, family physicians provide more care for America’s underserved and rural populations than any other medical specialty. Family medicine’s cornerstone is an ongoing, personal patient-physician relationship focused on integrated care.
To learn more about the specialty of family medicine, the AAFP's positions on issues and clinical care, and for downloadable multi-media highlighting family medicine, visit www.aafp.org/media. For information about health care, health conditions and wellness, please visit the AAFP’s award-winning consumer website, www.FamilyDoctor.org.
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