Important GME Bill Introduced -- Urge Congressional Support

In 2002, Medicare fiscal intermediaries began denying – oftentimes retroactively through audits – payments for the time residents spent in non hospital settings where teaching physicians were freely volunteering their time to supervise resident training. We believe that these actions are in direct conflict with Congressional intent expressed in provisions of the 1997 and 1999 balanced budget acts, which were designed to encourage rural and out of hospital experiences. However, to date CMS has not been persuaded by our pleas or even letters from Congress urging the agency to overturn this errant policy decision. Your actions to date have been successful in encouraging members of Congress to sign on to letters to CMS requesting rapid resolution. But in view of the agency’s non-responsiveness, legislation has been introduced that would clarify the definition of the existing language that we believe CMS is misinterpreting.

Beginning in 1987, hospitals were allowed to count the time resident physicians spent in non-hospital settings for the purpose of direct graduate medical education (DGME) payments, subject to agreements between the hospital and the non-hospital site where training occurred.

To qualify, the hospital was required to incur ‘‘all or substantially all’’ of the costs associated with the resident. In 1989, the Health Care Financing Administration (HCFA) defined ‘‘all or substantially all’’ of costs as the resident salaries and benefits.

Through the Balanced Budget Act of 1997, Congress further reinforced its commitment to ambulatory training by altering the financial formula to include payments for indirect medical education (IME) costs. This requirement was met if the hospital paid the residents’ stipends and benefits. Effective January 1, 1999, the Center for Medicare & Medicaid Services (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’’.

Despite the fact that CMS recognized the use of volunteer supervisory physicians in two regulation preambles and a program memorandum, CMS intermediaries have begun denying, retroactively through audits, the time residents spend in non-hospital settings in situations where faculty are volunteering their services. This has the effect of reducing, by large amounts, the IME and DGME payments a hospital or teaching program receives for residents training in non-hospital settings.

Such reductions seriously jeopardize graduate medical education in general and family practice residencies in particular. As you know, family physicians, the backbone of the Medicare program, ultimately provide the vast majority of our care in the non-hospital setting. Therefore, training in the non-hospital setting is critical. Moreover, it is in these settings that experienced family physicians volunteer their time to serve as preceptors for residents.

Please contact your Senators and your Representative immediately and ask them to sign on to HR 4403 (Hulshof/Tanner) or S. 2071 (Snowe, Collins, Bingaman, Dorgan). You may do this in the following ways:

Time is running short for this action to be effective. Please contact your Members of Congress immediately and let us know of any replies or responses you receive by sending an e-mail to Speakout@aafp.org.

Dear Senator/Representative:

I am writing to urge you to cosponsor the “Community and Rural Medical Residency Preservation Act of 2005.”

S. 2071, introduced by Senators Snowe, Collins, Bingaman and Dorgan, and HR 4403, introduced by Representatives Hulshof and Tanner clarifies in statute congressional intent regarding the counting of residents in a nonhospital setting under the Medicare program.

This legislation is necessary to correct a misinterpretation by the Centers for Medicare and Medicaid Services (CMS) that could compromise the use of volunteer physicians as teachers training residents in non hospital settings. The language clarifies the term “all, or substantially all, of the costs for the training program” to mean “the stipends and benefits provided to the resident and other amounts, if any, as determined by the hospital and the entity operating the nonhospital setting. The hospital is not required to pay the entity any amounts other than those determined by the hospital and the entity in order for the hospital to be considered to have incurred all, or substantially all, of the costs for the training program in that setting.’’

Congress has repeatedly expressed its commitment to including these off-site opportunities and the Medicare program has a long history of supporting residency training in ambulatory sites. These sites include physician offices, nursing homes, and community health centers, cornerstones of ambulatory training for graduate medical education programs. Such sites provide an important educational experience due to the broad range of patients treated. Training in ambulatory settings is critical to family practice residents’ medical education, ensuring they will be exposed to practice settings similar to those in which they may ultimately practice.

Just as we should be encouraging training in these settings, Medicare should be fostering not discouraging volunteerism. For these reasons, I urge you to become a cosponsor of this legislation that will correct the arbitrary and erroneous interpretation by CMS.

Thank you in advance for your serious consideration of this request. As always, I am eager to answer any questions you or your staff might have about the importance of this legislation for practicing family physicians.