I. MEDICARE: USE OF VOLUNTEER PHYSICIAN SUPERVISORS IN NON-HOSPITAL SITES
Medicare Graduate Medical Education
Summer 2007
RECOMMENDATION:
Congress should support removing regulatory restrictions on the ability of physicians to volunteer their time as supervisory physicians of residents training in non-hospital settings. Current regulations, published May 11, 2007, need modification by statute to ensure primary care training continues to be viable in community, non-hospital settings.
Congress should consider three possible legislative changes that would encourage primary care training in the community and in underserved and rural areas. The formula put in place by the regulation should be modified so that:
Congress should consider three possible legislative changes that would encourage primary care training in the community and in underserved and rural areas. The formula put in place by the regulation should be modified so that:
- The definition of “substantially all” be set at 75%, similar to that definition in use in the Stark legislation.
- The number of didactic hours per week assumed by CMS should be lowered from 3 to 1.
- The group practice exemption should be expanded to allow all practices where the compensation of the physician is not based on education or supervision of residents to be considered in the same manner as solo practices, (i.e. they derive no revenue from education, so they are volunteering their time.)
Background
In the Balanced Budget Act of 1997, (BBA), Congress mandated that hospitals may count resident training time in nonhospital sites for purposes of both direct graduate medical education (DGME) and indirect medical education (IME) payments. The Medicare statute permits teaching hospitals to claim resident time spent at nonhospital sites if the hospital incurs “all or substantially all” of the training costs at that site. Under the CMS regulations in effect through 1998, this requirement was met if the hospital paid the residents’ stipends and benefits.
Effective January 1, 1999 CMS, on its own authority, changed its regulatory definition of “all or substantially all” to require hospitals to also incur “the portion of the cost of teaching physicians’ salaries and fringe benefits attributable to direct graduate medical education.”
In each succeeding regulation, since 1999, CMS has made it more difficult for the time residents spend training in non-hospital settings to be counted in the cost reports. In February 2007 CMS proposed regulations ostensibly to help hospitals comply with the overly rigorous rules that CMS had promulgated in the past. They included a very complex formula for determining payment to non-hospital teaching physicians. Even though the preponderance of comments responding to the proposal asked for changes, in most cases CMS continued with its own position, culminating in the final rule, published May 11, 2007.
AAFP and AFMAA strongly support non-hospital ambulatory training for medical residents. These sites include physician offices, nursing homes, and community health centers – the cornerstones of ambulatory training for graduate medical education programs. These sites provide an important educational experience because of the broad range of patients and conditions treated. Such training also is critical to residents’ education, ensuring they will be exposed to settings where they may ultimately practice.
The Medicare program has a long history of supporting residency training in ambulatory sites. This training is critical because residents need to be educated in settings in which many of them will ultimately practice. Congress also has a long history of statutory language requiring that CMS implement payment policies intended to encourage educational experiences for residents in rural and underserved settings, rather than imposing barriers. The conference report to the BBA specifically requested that CMS give special consideration to facilities that meet the needs of underserved rural areas, and further stated that “The Conferees believe this authority may help alleviate physician shortages in underserved rural areas.”
Effective January 1, 1999 CMS, on its own authority, changed its regulatory definition of “all or substantially all” to require hospitals to also incur “the portion of the cost of teaching physicians’ salaries and fringe benefits attributable to direct graduate medical education.”
In each succeeding regulation, since 1999, CMS has made it more difficult for the time residents spend training in non-hospital settings to be counted in the cost reports. In February 2007 CMS proposed regulations ostensibly to help hospitals comply with the overly rigorous rules that CMS had promulgated in the past. They included a very complex formula for determining payment to non-hospital teaching physicians. Even though the preponderance of comments responding to the proposal asked for changes, in most cases CMS continued with its own position, culminating in the final rule, published May 11, 2007.
AAFP and AFMAA strongly support non-hospital ambulatory training for medical residents. These sites include physician offices, nursing homes, and community health centers – the cornerstones of ambulatory training for graduate medical education programs. These sites provide an important educational experience because of the broad range of patients and conditions treated. Such training also is critical to residents’ education, ensuring they will be exposed to settings where they may ultimately practice.
The Medicare program has a long history of supporting residency training in ambulatory sites. This training is critical because residents need to be educated in settings in which many of them will ultimately practice. Congress also has a long history of statutory language requiring that CMS implement payment policies intended to encourage educational experiences for residents in rural and underserved settings, rather than imposing barriers. The conference report to the BBA specifically requested that CMS give special consideration to facilities that meet the needs of underserved rural areas, and further stated that “The Conferees believe this authority may help alleviate physician shortages in underserved rural areas.”
II. PROHIBITION ON MEDICAID SPENDING FOR GME
RECOMMENDATION
Support legislation to prohibit the Administration from eliminating graduate medical education (GME) payments under Medicaid.
Background
As of 2005, 47 states provided payment for graduate medical education through their Medicaid program, which totaled nearly $3.2 billion in GME funding nationwide. A large number of states used their Medicaid funding to subsidize medical residency programs through payments directly to teaching hospitals. Others made payments to medical schools or managed care programs. These amounts have continued to increase each year and states now face new pressures in light of the President’s FY08 Budget released earlier this year.
The President’s FY08 budget calls for $24.7 billion in Medicaid cuts over the next five years, and eliminates Medicaid entirely as a source of funding for graduate medical education payments over the course of ten years; a reduction totaling 4.3 billion. Prohibiting the use of Medicaid funds to pay for GME will negatively impact teaching hospitals and their clinical faculty throughout the country.
Status
Congress recently approved an amendment to a Senate supplemental appropriations bill that would delay for 1 year any proposal to restrict Medicaid funding for graduate medical education. Unfortunately however, this bill was vetoed by President Bush on May 1st, due to other language in the bill regarding Iraq.
Support legislation to prohibit the Administration from eliminating graduate medical education (GME) payments under Medicaid.
Background
As of 2005, 47 states provided payment for graduate medical education through their Medicaid program, which totaled nearly $3.2 billion in GME funding nationwide. A large number of states used their Medicaid funding to subsidize medical residency programs through payments directly to teaching hospitals. Others made payments to medical schools or managed care programs. These amounts have continued to increase each year and states now face new pressures in light of the President’s FY08 Budget released earlier this year.
The President’s FY08 budget calls for $24.7 billion in Medicaid cuts over the next five years, and eliminates Medicaid entirely as a source of funding for graduate medical education payments over the course of ten years; a reduction totaling 4.3 billion. Prohibiting the use of Medicaid funds to pay for GME will negatively impact teaching hospitals and their clinical faculty throughout the country.
Status
Congress recently approved an amendment to a Senate supplemental appropriations bill that would delay for 1 year any proposal to restrict Medicaid funding for graduate medical education. Unfortunately however, this bill was vetoed by President Bush on May 1st, due to other language in the bill regarding Iraq.
Background on Federal Issues
Senate Letter in Support of Title VII Funding in FY '08 (*PDF file)
Congressional Letter in Support of Title VII Funding in FY '08 (*PDF file)
Graduate Medical Education
Medicare Physician Reimbursement
NIH Reauthorization FY08 Appropriations
Summary of President's FY 2008 Budget (*PDF file)
(*PDF file. About PDFs)
