Transcript Document

Federal Medicare
Funding for Graduate
Medical Education
Lori Mihalich-Levin, JD
Director, Hospital & GME Payment Policies
[email protected]
202-828-0599
August 25, 2013
“New Programs” Covered Today
•Hospital that never trained residents before and
wants to become a new teaching hospital with
Medicare “caps”
•Hospital that never trained residents before and
wants to host rotations – but not become a new
teaching hospital…or at least not yet!
Financing of Resident Education and
the Special Missions of Teaching
Hospitals - Multiple Sources
• Medicare (largest explicit payer – today’s focus)
• Medicaid
• Children’s GME program
• Private patient care revenues
• VA/DoD
• Other Federal and state programs
Medicare Makes 2 Specific
Payments With an “Education” Label
Direct GME Payments (DGME)
• Partially compensates for residency education costs
Indirect Medical Education (IME) Payments
• Partially compensates for higher patient care costs
due to presence of teaching programs
Note: payments made to inpatient hospitals only
Medicare
DGME Payments
What Are DGME Payments
Intended to Cover?
Compensate teaching institutions for Medicare’s share of
the costs directly related to educating residents:
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Residents’ stipends/fringe benefits
Salaries/fringe benefits of supervising faculty
Other direct costs
Allocated overhead costs
Residents must be in approved programs
What is the Basic Methodology
Underlying DGME Payments?
Step 1:
Determine hospital-specific per resident base
year cost amount (generally 1984)
Step 2:
Update (to current year) base-year per
resident amount (PRA) for inflation
Step 3:
Multiply the updated PRA by the number of
resident FTEs in the current year (this amount
capped by BBA resident limits)
Step 4:
Multiply by the hospital’s ratio of Medicare
inpatient days/total days
Medicare Pays Its “Share”
of Resident “Costs”: EXAMPLE
Medicare Share * Per Resident Amount = Medicare Payment
Per Resident
40% x $100,000 = $40,000 payment per resident FTE*
(40% x $90,000) ÷ 2 = $18,000 payment per fellow FTE**
*Note: for existing teaching hospitals, there is a slight difference in payment between
primary care & all other residents; this difference does not exist for “new” teaching
hospitals
**Residents training beyond initial residency period (IRP) count as only 0.5 FTE for
DGME purposes
Medicare IME Payments
Medicare Payments with an
Education Label: IME
Compensates teaching hospitals for higher inpatient
operating costs due to:
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unmeasured patient complexity not captured by the MSDRG system
other operating costs associated with being a teaching
hospital (lower productivity, standby capacity, etc.)
Percentage add-on payment to basic Medicare per case
(MS-DRG) payment
Calculating the IME Adjustment
Factor
The IME adjustment is based on statistical analysis using
intern and resident-to-bed ratios (IRB)
% per case add-on =
Multiplier X ((1 + IRB)0.405 - 1)
For FFY 2012, multiplier is 1.35.
Short hand for IME: Hospitals get about a 5.5% increase
in MS-DRG payments for every 10-resident increase per
100 beds
Calculating the IME Payment
Step 1: Determine the IRB ratio:
Chicago Hope = 170 residents/ 666 beds = 0.255 = IRB
(Note: IME resident counts do NOT reflect weighted amounts)
Step 2: Use statistical formula and IRB to calculate IME%
1.35 x ((1 + 0.255)0.405 - 1) x 100 = 13.00%
Step 3: Calculate the IME payment for each case
(Payment for MS-DRG 227 x IME %) = IME Payment
($29,748 x 13.00%) = $3,867.24
Medicare Resident “Caps”
Medicare Resident Limits:
1997 BBA (P.L. 105-33,
Sections 4621 and 4623)
Generally speaking, # of FTE allopathic and osteopathic
residents a hospital may count for DGME and IME
payments is limited to 1996 Medicare cost report count.
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Limits may be different for DGME and IME
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Does not apply to dental and podiatry residents
Hospital that wasn’t training
residents in 1996?
“New” Teaching Hospital =
• Had no allopathic or osteopathic residents
reported on most recent Medicare cost report
ending on or before 12/31/96 (42 CFR
413.79(e)(1))
Keys to receiving payments:
 Establishing per resident amount (PRA) for
DGME payments
 Establishing resident caps (for DGME & IME)
Who can build DGME & IME caps?
•Can only build caps if program is “NEW”
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Relocating existing program or adding
hospital as new training site for existing
program DOES NOT COUNT
• CMS considers factors including
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Whether program director is new
Whether teaching staff is new
Whether residents came from existing program
Relationship between hospitals
Degree to which hospital w/original program continues
to operate own program in same specialty
Whether program was relocated from closed hospital
(and if so whether it was part of that hospital’s caps)
Whether program is part of any existing hospital’s
caps
Establishing Resident Caps at New
Teaching Hospitals
• 5 year window to establish caps
• Window closes at end of 5th program year of
first new program started
• In general, look at 5th program year and take:
 Highest number of FTEs in any PGY year x
IRP of program, subject to # of accredited
slots for that program
• New rules for cap-setting if residents rotate to
>1 hospital during 5 year window
• Permanent caps effective on first day of 6th
program year of first new program started
Calculating Caps if Residents Rotate to
>1 Hospital During Cap-Building Period
Note: perform this calculation separately for each new
program (then sum results to form total caps)
•Step 1: calculate each individual hospital’s TOTAL FTEs
in program over all 5 years
•Step 2: sum all totals from Step 1 to get total FTE time
spent in all hospitals over 5 years
•Step 3: looking only at 5th year, calculate total FTEs for
each PGY year; select highest PGY year
•Step 4: take lower of Step 3 or # of accredited slots/year
•Step 5: take Step 4 x minimum accredited length of
program
•Step 6: take Step 5 x (Step 1 hospital at issue / Step 2)
Example (from FY 2013 IPPS Final Rule)
Hospital A – 5 yr total = 36.95 FTEs (Step 1)
Year 1
Year 2
Year 3
0.75 PGY 1
2.60 PGY 1
0.00 PGY 2
Year 4
Year 5
Step 3:
4.00 PGY 1 4.10 PGY 1
4.20 PGY 1
2.80 PGY 2
3.40 PGY 2 3.40 PGY 2
3.70 PGY 2
0.00 PGY 3
0.00 PGY 3
2.40 PGY 3 2.80 PGY 3
2.80 PGY 3
+ 0.6 = 4.8
+ 1.2 = 4.9
+ 2.0 = 4.8
Total 0.75
Total 5.40
Total 9.80
Total 10.70
Total 10.30
Hospital B – 5 yr total = 20.85 FTEs (Step 1)
Year 1
Year 2
Year 3
Year 4
Year 5
3.75 PGY 1
2.20 PGY 1
0.90 PGY 1
0.80 PGY 1
0.60 PGY 1
0.00 PGY 2
2.00 PGY 2
1.50 PGY 2
1.50 PGY 2
1.20 PGY 2
0.00 PGY 3
0.00 PGY 3
2.40 PGY 3
2.00 PGY 3
2.00 PGY 3
Total 3.75
Total 4.20
Total 4.80
Total 4.30
Total 3.0
Step 2: 36.95 + 20.85 = 57.80 FTEs
Step 4:
Assume 5
accredited
slots/yr = 4.9
Step 5:
4.9 x 3 years
(fam med) =
14.70
Step 6: 14.70 x (36.95/57.80) = 9.41 FTEs for Hospital A
Payment Before Cap is Set
•MAC will establish interim payment rates
•DGME
PRA, based on hospital’s first full cost reporting
period (CRP) with residents
• Training in prior CRP reimbursed on reasonable
cost basis
• IME
• Same as after cap
• Resident Count
• Exemption from 3-year rolling average and IRB
ratio cap only during minimum accredited length
of each program
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Setting the Per Resident
Amount (PRA)
Establishing PRAs for New Teaching
Hospitals
•Calculated using first full cost reporting period with
residents
 Caution: resident rotators trigger establishment
of PRA!
•PRA = LOWER of
PRA based on new hospital’s actual GME costs
OR
• Weighted mean PRA of all hospitals in same
geographic wage area
• Once established, the PRA is permanent
(42 CFR 413.77(e))
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Costs Included in Setting PRA
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Resident stipends and benefits
Faculty salaries and benefits
Administrative office (GME office staff)
Infrastructure improvements (call rooms, library,
lecture rooms, etc.)
• Allocated hospital overhead
• Professional fees
• Payments for preceptors
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Hosting Resident Rotators
What does CMS consider to be a
“rotation”?
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Regular, scheduled, predictable
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Not one-off shadowing opportunities
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No formal definition in law or regulations
What if hospital hosts rotators?
Triggers PRA?
• YES. Always (according to CMS).
• Be sure to record costs carefully on HCR.
Triggers cap-building window?
• YES, if residents rotate in from a new
teaching hospital in its cap-building window.
• NO, if residents rotate in from an existing
teaching hospital.
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