Return to Letter to CMS Regarding Volunteer Preceptorship.
Regulatory and Legislative History on GME in non-hospital settings prior to regulations in 2004
The Balanced Budget Act of 1997 included a change in statute that allowed for the counting of training time in non-hospital settings to be included in Medicare cost reports for both IME and DME FTE counts. As part of that change, the language stated that a hospital must incur “all or substantially all” the costs of the training. It was CMS that defined what those costs would be. With the 1989 regulations CMS defined those costs as resident stipends only. It was only in the final rule of July 31, 1998, that CMS added the faculty costs to the already included residents’ salary and benefits, and required a written agreement.
CMS’s public record clearly allows for volunteer teaching
The statute did not restrict the use of volunteer faculty, and CMS’s own interpretation allowed for the use of volunteer preceptors. CMS has TWICE stated in the Federal Register that it will allow the use of volunteer faculty. Additionally, the same sentiment was expressed in a program memorandum to intermediaries. See below for the specific sites and wording.
1. In 1998, CMS (Federal Register, July 31, 1998, pg. 40996) allowed for the existence of volunteer teaching physicians, stating “….for the purposes of satisfying the written agreement, the written agreement between a hospital and a non-hospital site may specify that there is no payment to the clinic for supervisory activities because the clinic does not have these costs.”
2. On July 30, 1999, in the Federal Register (pgs.41517-18) CMS reiterates its policy allowing such volunteer faculty.
"Also, similar to the public comments addressed in the in [sic] July 31, 1998 final rule, several commenters asked us to clarify whether hospitals would still be eligible to receive payments in situations where the teaching faculty volunteers their services and neither the hospital nor the non-hospital entity incurs costs for supervisory teaching physicians. The commenters asked us to continue to support the following statement that we included in the July 31, 1998 final rule (63 FR 40996) allowing hospitals to remain eligible for payment in such situations where supervisory physicians in the non-hospital site are volunteering their time: 'for the purposes of satisfying the requirement of a written agreement, the written agreement between a hospital and a non-hospital site may specify that there is no payment to the clinic for supervisory activities because the clinic does not have these costs.'
"Response: . . . We will continue a volunteer supervisory physician
policy consistent with the policy stated in the July 31, 1998 final rule, as requested by the commenter. Hospitals may receive payment for the costs of training residents in the non-hospital site even though the hospital might not be incurring any costs for supervisory physician activities."
3. FY1999 PPS, TERFA Hospital, and Other Bill Processing Changes
Program Memorandum (Intermediaries), HCFA Pub. 60A Transmittal No. A-98-44 Dec. 1, 1998
Volunteer Teaching Physicians
"We would distinguish this situation from those few unique situations where the nonhospital site has no supervisory costs and the physician is voluntarily participating in training. For instance, the resident may be training in a physician's private office. In this situation, the physician may receive all compensation through fee-for-service arrangements and may agree to engage in supervising residents without an expectation of additional compensation for teaching. If the physician agrees to participate in training without compensation, the written agreement must indicate that there is no payment made from the teaching hospital to the private physician because the physician agrees to participate voluntarily in teaching. Similarly, the private practice physician may be providing supervision to residents in a nonhospital site other than their private practice office, such as in a nursing home or skilled nursing facility without an expectation for compensation. In this situation, the physician would be voluntarily participating in teaching and the nonhospital site may have no costs associated with providing a training site to residents. The hospital may count the resident for indirect medical education in this situation if the written agreement indicates that the physician is voluntarily supervising residents and the nonhospital site does not incur graduate medical education costs." [emphasis added]
CMS’s public record clearly allows for volunteer teaching
The statute did not restrict the use of volunteer faculty, and CMS’s own interpretation allowed for the use of volunteer preceptors. CMS has TWICE stated in the Federal Register that it will allow the use of volunteer faculty. Additionally, the same sentiment was expressed in a program memorandum to intermediaries. See below for the specific sites and wording.
1. In 1998, CMS (Federal Register, July 31, 1998, pg. 40996) allowed for the existence of volunteer teaching physicians, stating “….for the purposes of satisfying the written agreement, the written agreement between a hospital and a non-hospital site may specify that there is no payment to the clinic for supervisory activities because the clinic does not have these costs.”
2. On July 30, 1999, in the Federal Register (pgs.41517-18) CMS reiterates its policy allowing such volunteer faculty.
"Also, similar to the public comments addressed in the in [sic] July 31, 1998 final rule, several commenters asked us to clarify whether hospitals would still be eligible to receive payments in situations where the teaching faculty volunteers their services and neither the hospital nor the non-hospital entity incurs costs for supervisory teaching physicians. The commenters asked us to continue to support the following statement that we included in the July 31, 1998 final rule (63 FR 40996) allowing hospitals to remain eligible for payment in such situations where supervisory physicians in the non-hospital site are volunteering their time: 'for the purposes of satisfying the requirement of a written agreement, the written agreement between a hospital and a non-hospital site may specify that there is no payment to the clinic for supervisory activities because the clinic does not have these costs.'
"Response: . . . We will continue a volunteer supervisory physician
policy consistent with the policy stated in the July 31, 1998 final rule, as requested by the commenter. Hospitals may receive payment for the costs of training residents in the non-hospital site even though the hospital might not be incurring any costs for supervisory physician activities."
3. FY1999 PPS, TERFA Hospital, and Other Bill Processing Changes
Program Memorandum (Intermediaries), HCFA Pub. 60A Transmittal No. A-98-44 Dec. 1, 1998
Volunteer Teaching Physicians
"We would distinguish this situation from those few unique situations where the nonhospital site has no supervisory costs and the physician is voluntarily participating in training. For instance, the resident may be training in a physician's private office. In this situation, the physician may receive all compensation through fee-for-service arrangements and may agree to engage in supervising residents without an expectation of additional compensation for teaching. If the physician agrees to participate in training without compensation, the written agreement must indicate that there is no payment made from the teaching hospital to the private physician because the physician agrees to participate voluntarily in teaching. Similarly, the private practice physician may be providing supervision to residents in a nonhospital site other than their private practice office, such as in a nursing home or skilled nursing facility without an expectation for compensation. In this situation, the physician would be voluntarily participating in teaching and the nonhospital site may have no costs associated with providing a training site to residents. The hospital may count the resident for indirect medical education in this situation if the written agreement indicates that the physician is voluntarily supervising residents and the nonhospital site does not incur graduate medical education costs." [emphasis added]
