Final Rule Issued by CMS impacting Medicare Graduate Medical Education Payments
The Centers for Medicare & Medicaid Services (CMS) issued its final rule to implement the legislative changes to Medicare direct graduate medical education (DGME) and indirect medical education (IME) payments to teaching hospitals that were contained in sections 126, 127, and 131 of the Consolidated Appropriations Act, 2021 (CAA 2021)(Pub. L. 116-260, December 27, 2020).
Section 126 – Distribution of 1000 New GME Slots. There were several changes to Section 126 when CMS finalized its plans to distribute 200 slots per year over a five-year period, starting in FY 2023.
- Hospitals with training programs designated as Health Professional Shortage Areas (HPSA) will be prioritized for new residency slots. The residency slots will be prioritized based on the HPSA score. CMS Administrator Chiquita Brooks-La Sure, said “CMS recognizes the importance of encouraging more health professionals to work in rural and underserved areas, and the need to train and retain physicians to improve access to health care in these communities,”
- The residency slots were to be distributed based on the four criteria published in CAA2021.
- Hospitals located in rural areas or that are treated as being located in a rural area.
- Hospitals in which the reference resident level of the hospital is greater that the otherwise applicable resident limit
- Hospitals in states with new medical schools
- Hospitals that serve areas designated as health professional shortage areas.
- CMS will limit each hospital to 1.0 FTE per program year up to a maximum of 5.0 FTEs per year. This is a considerable change to the initial rule which proposed a maximum of 1.0 FTE per year for each hospital.
- Applications for the new slots are now due on March 31, 2022. Hospitals will be notified by January 31, 2023 and the new slots will be effective beginning July 1, 2023.
Section 127 – Promoting Rural Hospital GME Funding OpportunityCMS is implementing Section 127 of the CAA by removing the separate accreditation requirement for rural training tracks (RTTs), which allows urban hospitals and rural hospitals the opportunity to partner in establishing new RTT programs. Urban and Rural hospitals will be able to start multiple RTTs to increase their RTT cap. Beginning Oct. 1, 2022, hospitals with new RTTs will have a five-year cap building window.
Section 131 – Medicare GME Treatment of Hospitals Establishing New Medical Residency Training Programs After Hosting Medical Residency Rotators For Short DurationsCMS is also implementing section 131 of the CAA, Medicare GME treatment of hospitals establishing new medical residency training programs after hosting medical resident rotators for short durations in the past. Some hospitals inadvertently limited their ability to receive Medicare funding for residents in a new training program by accepting residents that rotated to the hospital from other training programs in past years. The final rule will restore that ability to qualifying hospitals that begin a new medical residency training program within the first five years after enactment. These qualifying hospitals will have the opportunity to reset their Per Resident Amount (“PRA”) and FTE Cap.
Comment PeriodThe final rule solicits comments on the following issues for potential future rulemaking. Comments are due by 5 p.m. EDT on February 25, 2022.Find the final rule here: https://public-inspection.federalregister.gov/2021-27523.pdf
About the Author:
Larry Sumitani
Senior Principal
larry@gmesolutions.com