T-18 Changes: Graduate Medical Education

Transmittal 18 New Cost Reporting Instructions for Graduate Medical Education reflect the following:

A. Correction of the Weighted DGME FTE Count on Worksheet E-4  

Transmittal 18 includes new cost report lines for the new weighted FTE count on Worksheet S-2 and Worksheet E-4, resulting from the Milton S. Hershey Medical Center, et al. v. Becerra Case (No. 19-2680), and per the FFY 2023 IPPS Final Rule: 

If the hospital’s unweighted FTE count exceeds the FTE cap, and the number of weighted FTE residents also exceeds the FTE cap, then the respective primary care and OB/GYN weighted FTE count and other weighted FTE count are adjusted to make the total weighted FTE count equal to the FTE cap.  

Toyon’s Take

Regarding the DGME weighted cap change, Transmittal 18 (Worksheet S-2, line 68) asks if permission was obtained from the MAC to apply the formula correction on cost reports prior to FFY 2023 (cost reports starting on or after 10/1/2022). More information is needed from CMS as to what constitutes permission from the MAC. In the meantime, Toyon recommends that providers determine the eligible years and impacts of all cost reports with no Notice of Program Reimbursement (NPR), as well as cost reports within the three-year reopening window. Toyon encourages applicable teaching providers to set expectations that open cost reports will be corrected for the new weighted FTE calculation before issuance of an NPR from their MACs. Please contact Fred Fisher at fred.fisher@toyonassociates.com for the estimated impacts of the GME change at your hospital(s). 

B. Changes per the Consolidated Appropriations Act, 2021 

Effective academic year or cost reporting year as defined in the CAA  

Transmittal 18 updates statistical and teaching reimbursement schedules for provisions in the Consolidated Appropriations Act, 2021 (CAA). Teaching provisions for providers include: 

• Sec. 126 – Provides 1,000 new resident FTE cap slots over five years (200 per year) to qualifying teaching hospitals that begin new programs or formally expand programs. Worksheet E part A Line 8.21 (Indirect GME) and Worksheet E-4 Line 4.21 (Direct GME) are designated to record and recognize the awarded Sec. 126 slots.   

• Sec. 127 – Makes changes to the rural training track (RTT) rules to increase flexibility in the partnership of urban and rural hospitals in order to expand the use of RTT programs in family medicine and other specialties. Worksheet E part A Line 6.26 (Indirect GME) and Worksheet E-4 Line 2.26 (Direct GME) are established to record the rural track program FTE cap limitation adjustment after the cap-building window has closed for the particular rural track program. E Part A Line 16 and E-4 Line 15 adjust the FTE counts for these FTEs during the cap building process.

• Sec. 131 – Provides opportunities for certain qualifying hospitals to reset per-resident amounts (PRA) and/or FTE caps (PRAs and caps established using less than 1 FTE before FFY 1998, or less than 3 FTEs after FFY 1998). Worksheet E part A Lines 5.01 and 16 (Indirect GME), and Worksheet E-4 Lines 1.01 and 18.01 (Direct GME) captures these adjustments.   

C. Rural Track Affiliated Group Agreement Expansion for Family Practice 

Effective Date – Academic years beginning 7/1/2023

Worksheet E Part A Line 7.02 (Indirect IME) and Worksheet E-4 Line 3.02 (DGME) are established to adjust a hospital’s rural track FTE limitation for newly allowed rural track Medicare GME affiliation agreements (per 87 FR 49075, August 10, 2022). 

For further information, please contact Tom Hubner at (925) 685-9312 or tom.hubner@toyonassociates.com.