Academy again writes CMS Administrator McClellan on Volunteer Faculty in Family Practice Residencies

Mark B. McClellan, M.D., Ph.D
Administrator, Centers for Medicare and Medicaid Services
Hubert Humphrey Building, Suite 314 G
200 Independence Ave., S.W.
Washington, DC 20201

Dear Dr. McClellan:

On behalf of the 94,000 members of the American Academy of Family Physicians (AAFP), I am responding to the guidance that CMS posted on its Web site on April 8, 2005 regarding graduate medical education (GME) payments for training done in nonhospital settings. The guidance included a background piece, a letter from you as CMS administrator and responses to a set of frequently asked questions (FAQs).

The AAFP appreciates the Agency’s attempt to clarify its previous actions and interpretations with regard to the volunteer faculty issue. However, since the guidance could very well result in fewer family practices willing to serve as nonhospital sites for the training of residents, the Academy finds the guidance less than helpful and, in some cases, potentially harmful.

The Academy also appreciates Herb Kuhn, Director of the Center for Medicare Services, taking the time to address our Family Medicine Congressional Conference on April 20. In response to a question regarding the GME volunteer faculty issue, Mr. Kuhn expressed a willingness to discuss the matter with any organization that believes it has information CMS needs to have. We want you to know that the American Academy of Family Physicians is one such organization and we will be contacting Mr. Kuhn to set up a meeting.

We also appreciate the CMS acknowledgment that volunteer precepting is an integral part of resident training in nonhospital settings. The Academy strongly supports the training of residents in primary care offices and nonhospital settings because it is in these ambulatory settings where most family physicians will eventually practice. Congress clearly agrees, as is evidenced by the Balanced Budget Act of 1997, which included provisions to encourage physician training in ambulatory settings.

Moreover, the Academy believes the pre-1999 regulations fully complied with the “all or substantially all” statutory requirement associated with Medicare payments for nonhospital site training. We also continue to believe that if the nonhospital site states that there are no supervisory costs because the supervising physician is volunteering his or her time, then the hospital need not make any supervisory payments. The parties involved--the hospital, the nonhospital site and the preceptor--are in the best position to determine whether or not supervisory costs exist. Moreover, the Academy believes that if and when supervisory duties do exist, such duties are a negligible portion of a family physician’s time and would represent a nonsubstantial dollar amount. Therefore, the teaching hospital will still be incurring all or substantially all of the training costs associated with the family practice residency training.

The AAFP has thoroughly reviewed the posted guidance and has concluded that the FAQ document raises more questions than it answers. The complexity and administrative burden of the requirements as set forth in the document have the potential to impede family medicine training at nonhospital ambulatory sites – which is inconsistent with Congressional intent.

Specifically, CMS’s attempt to determine a physician’s ability to volunteer on the basis of whether or not the physician is salaried is misguided. The posted clarification states:

When the solo practitioner is not treating patients, he/she is not receiving payment for any other duties at the nonhospital site. In this instance, there is no cost to the nonhospital site for the teaching physician’s time. In the case of the group practice or clinic setting, however, the physician often receives a predetermined payment amount, such as a salary, for his/her work at the nonhospital site.

The CMS justification is that a solo practitioner can volunteer as a supervisor because compensation is based solely on the number of patients seen. However, when a physician in a group practice is paid a salary, CMS falsely assumes there is automatically a cost to the nonhospital site for supervisory activities. The Agency bases this assumption on the premise that once a physician in a group practice volunteers as a resident’s supervisor, some portion of that physician's salary must have been intended for resident supervision.

Moreover, it also embraces the assumption that every family physician who is part of a group practice is salaried, a notion that the AAFP believes is unfounded. The distinction presented in the answer does not recognize that a salaried physician can receive compensation based upon revenue generated by the physician through patient treatment activity, an arrangement that is common in family medicine, even in group practices. The result is the creation of a paradigm that seems to make it impossible for any salaried physician in a group practice to be a recognized as a volunteer because CMS insists that a cost be attached to resident supervision activity.

As the December 8, 2004 OIG report noted, there has been immense confusion and ambiguity regarding the nonhospital site regulatory requirements. The publication of the guidance in question has added to that confusion. Consequently, the Academy believes the moratorium established by Section 713 of the Medicare Modernization Act (MMA) of 2003, and recommended by the Office of Inspector General (OIG) in its December 2004 report to Congress, should be reinstated.

The AAFP shares with CMS and Congress a common desire to increase residency training in nonhospital settings. By working with the stakeholder community, we believe the Agency can fulfill its statutory and fiduciary obligations to the Medicare program without imposing an undue administrative burden on teaching hospitals and teaching physicians in nonhospital settings. We ask that the moratorium be reinstituted immediately. Meanwhile, the AAFP is eager to meet with you in pursuit of reasonable, workable solutions that will support volunteer faculty in resident training.

Sincerely,

Michael Fleming, MD, FAAFP
Board Chair

cc: Mr. Herb Kuhn