On December 17, 2021, the CMS issued a final rule that implements three changes to Medicare’s payment rules for graduate medical education enacted by Congress last year under the 2021 Comprehensive Expenditure Act (CAA). The final rule explains how the CMS plans to implement Congressional directives to distribute 1,000 new full-time equivalent (FTE) cap positions to eligible hospitals over the next five years. The rule also describes how hospitals are eligible to set new FTE limits and / or full-time equivalents (PRA). Finally, this rule implements the changes CAA has made to the payment rules for the Local Training Track (RTT) program. The final rule will take effect 60 days after it is published. Federal Register..
Distribution of 1,000 FTE cap positions
Section 126 of the CAA requires the CMS to distribute 1,000 new full-time equivalent (FTE) cap positions to eligible hospitals over the five years from fiscal year 2023 (FY).
The hospital must submit an application to the CMS to qualify for distribution. A separate application is required every 5 years. In the final rule, the CMS stated that the application will expire on March 31 of the year before the award year and the hospital will be notified of the distribution awarded by January 31 of the following year. The awarded distribution will take effect on July 1st of the same year. For example, the application for distribution in 2023 is due by March 31, 2022. The hospital will be notified of the award by January 31, 2023, and the award will come into effect on July 1, 2023.
In the final rule, the CMS stated that hospitals need to show “demonstrable potential” to fill positions applying for acceptance. To do so, qualified applicants must (1) train residents beyond the FTE limit (as shown in the latest submitted cost report) and (2) from the appropriate accreditation body. You must indicate that you have received an application or approval. Establish a new program or extend an existing program. Comment providers asked if hospitals already operating above the FTE limit could use the excess to fill the awarded positions. CMS replied negatively. The awarded positions must be filled with either a new program or an extension of an existing program. The only exception is that the hospital is allowed to fill the awarded positions with unused certified positions.
Hospitals also need to be classified in one of four eligibility classes to qualify for distribution. The first eligible class is for rural hospitals. The CMS intends to define a region in the same way that it is defined for the purpose of the wage index. Hospitals that are reclassified as local are considered local for the purposes of this class. The second eligible class is a hospital that is training beyond the FTE limit. The third class is a hospital in the state with a new medical school or a new branch of an existing school. The CMS has determined that this class will consist of hospitals in 35 states and one region. The fourth and final class is a program in which residents rotate at least 50% of their training time to a training site physically located in a primary care or mental health health care shortage area (HPSA). For hospitals participating in training.
The CMS has also adopted a rule that limits the number of positions that can be awarded in a year. The maximum prize a hospital is eligible to receive depends on the length of the program. Hospitals can receive up to 1 FTE per program year and can not exceed 5 FTEs. In addition, the CMS limits the annual total distribution at 200 positions.
Because there are so many positions to avoid, the CMS decided to prioritize applications based on the HSPA score. HRSA assigns each HSPA a score in the range 0-25 to indicate the severity of the shortage in the area. The higher the score, the higher the severity. Each year, the CMS makes the first distribution to hospitals servicing HPSA with a score of 25. If the position remains after the distribution, the CMS will distribute the position to the hospital servicing HSPA with a score of 24. This process continues up to all 200 positions. It will be distributed for one year. Within each HPSA score group, the CMS prioritizes hospital applications with less than 250 beds (because beds are defined for IME purposes).
PRA and FTE cap reset
Section 131 of the CAA provides retroactive and future remedies for hospitals that incorrectly set FTE caps or PRAs. Retrospectively, Section 131 provides the opportunity for certain eligible hospitals that already have an FTE cap or PRA to establish a new hospital. In the future, Section 131 prohibits the establishment of CMS and FTE caps or PRAs for hospitals that train less than one FTE that year.
The CMS has interpreted the law as identifying two categories of hospitals (Category A hospitals and Category B hospitals) that are eligible for retroactive relief. Category A consists of hospitals that, at the time of enactment, have an FTE cap or PRA based on training less than 1.0 FTE during the cost reporting period prior to October 1, 1997. Category B refers to hospitals that have an FTE cap or PRA at the time of enactment. , Begins after 1 October 1997 and before the CAA is enacted on 27 December 2020, set the FTE cap or PRA based on FTE training of 3.0 people or less during the cost reporting period.
The final rule explained that the CMS would consider a hospital to have an FTE cap or PRA at the time of enactment if the FTE cap or PRA was reported during the pre-enactment cost reporting period. If the hospital does not agree with the FTE cap or PRA reported in the applicable base year and the base year is within the three-year reopening period or has not yet been resolved, a Category B hospital will be reviewed once. You can start requesting. Medicare contractor who disagrees with the base year FTE cap or PRA. Requests must be submitted by 1 July 2022. The Medicare contractor’s decision can be appealed to PRRB. Category A hospitals do not have similar remedies. The CMS is seeking comment on how to handle base year disputes if the base year exceeds the three-year reopening period.
Comment The provider has trained residents in the last few years but did not report past training in the cost report, so asked what treatment would be offered to hospitals that do not currently have an FTE cap or PRA. I did. The CMS replied that the hospital is entitled to a reset if the basic reporting period is open or reopenable. For base years beyond the three-year resumption period, the CMS is seeking comment on how to handle those years.
Under the final rule, the CMS will train at least one FTE in a cost year beginning on or after December 27, 2020, against Category A hospitals, and at a cost of 3 years or more in Category B hospitals. I explained that the reset will be triggered. Years that begin after that same date. However, the cost report that triggers the reset cannot start more than five years from December 27, 2020. Regarding the FTE limit, the CMS explained that only new programs will trigger a reset. Regarding PRA, the CMS also stated that the reset would be triggered even if the resident did not rotate in the hospital in the first month of the cost reporting period (a deviation from the current PRA rules).
The CMS explained in the rules that the triggering year also serves as the base year for calculating new PRA decisions. However, hospitals have the option of using the year starting after the issuance of the final rule instead. New FTE caps and PRAs provided under these rules are typically calculated in the same way that FTE caps and PRAs are calculated based on the current rules. The new FTE cap adjustment will be added to the existing FTE cap in the hospital.
RTT changes
Section 127 of the CAA has made some changes to the payment rules of the RTT program. The final rule implements those changes.
First, the final rule is that when urban and rural hospitals participate in the RTT program, both urban and rural hospitals will be subject to program cap adjustments. Previous rules only allowed coordination of city hospitals. Local hospitals are entitled to adjustments to new programs rather than existing ones. This meant that local hospitals were not tuned to existing RTT programs. The CAA modifies its policy as implemented in the final rule.
The final rule also stipulates that urban and rural hospitals are eligible for additional coordination of multiple RTT programs. Previously, hospitals were only eligible to receive cap adjustments for the first RTT program they participated in.
The CMS has also lifted the requirement to individually certify RTT programs. In addition, the final rule allows the RTT program to be in any discipline. Previously, only RTT programs dedicated to family medicine were allowed.
Finally, the final rule changes the way RTT program payments are determined during the cap building period. Previously, residents of the RTT program were included in the 3-year moving average during the 5-year cap building period. The CMS interprets the CAA as exempting residents of the RTT program from the three-year moving average during the five-year cap-building period and has updated the regulation accordingly.
The final rule is here and the CMS fact sheet is here.
