Graduate Medical Education Changes

In an effort to address barriers to training residents in rural areas, CMS is proposing to allow hospitals to include residents training in a Critical Access Hospital (CAH) in its FTE count, as long as the nonprovider setting requirements at 42 CFR 413.78(g) are met. This represents a change in CMS’ policy since it was initially implemented in FFY2014. CMS is updating the definition of a “nonprovider” setting to include CAHs.  

Effective with portions of cost reporting periods beginning October 1, 2019, hospitals may include FTE residents training at a CAH, on the condition that the hospital incurs the residents’ salaries and fringe benefits. This change does not impact the continuing ability of CAHs to alternatively incur the costs of training residents in an approved program and receive payment based on 101% of their reasonable cost.  

In addition, CMS announced an additional round of Section 5506 FTE cap redistributions (Round 14):
Applications for these additional FTE slots are due to CMS by August 1, 2019. For additional information, please contact Tom Hubner at
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