Teaching hospitals operate—sometimes significantly—over their Medicare GME reimbursement cap. In fact, of the hospitals participating in GME nationally, approximately 70% are operating over their cap, and these hospitals train, on average, 25% more resident FTEs than they are eligible for reimbursement.1Not surprisingly then, many wonder how they can increase their cap, but there are very limited opportunities to do so. However, right now there is a short window to apply for additional cap slots through the redistribution of FTEs from closed teaching hospitals under Section 5506 of the Patient Protection and Affordable Care Act (PPACA).
Teaching Hospital Cap Slots Opportunity
Historically, cap slots from a closed teaching hospital essentially disappeared, but with the passage of PPACA, those slots are now redistributed to other teaching hospitals. To be considered for these newly available slots, teaching hospitals must apply through CMS. For this cycle, all applications must be received no later than July 23 by 5 p.m., ET.
Applications will be evaluated according to three categories, as described in the figure below.
To demonstrate the likelihood to fill slots, CMS considers a variety of factors, including the establishment of a new residency program or expansion of a current program. Programs with already accredited, but unfilled, positions are typically viewed favorably. Hospitals located in the same or a contiguous CBSA are given the highest priority, and those in the same state or region receive the next highest. The ranking criteria give the highest rating to entities that permanently assume part or all of a recently closed teaching hospital’s programs. Hospitals that temporarily train displaced residents from a closed hospital receive a high ranking, as do hospitals in a Medicare GME affiliated group agreement that includes a closed hospital.
You may provide supplemental materials with the application; for example, analytics related to community need/patient access issues; physician need studies; an agreement to train residents from a closed hospital; proof that your hospital is in a HPSA; a letter from the ACGME documenting that additional slots are already accredited, etc.
Final Thoughts for Teaching Hospitals and GME Leaders
- Teaching hospitals and GME leaders should consider how they may be able to take advantage of this opportunity. Nationally, the average reimbursement per allowable FTE is approximately $135,000, so the addition of even a minimal number of slots can have a meaningful impact to the overall GME budget, particularly for teaching hospitals that are training residents in excess of their cap for which they already incur costs but receive no corresponding reimbursement.
- Although highest priority is given to the immediate geographic areas of the closed teaching hospitals (Texas and Ohio in this cycle), in prior rounds there were instances in which hospitals outside the state/region received slots.
- We encourage GME leaders to regularly monitor the CMS website and Federal Register for notifications of subsequent rounds to ensure their hospitals are well positioned to secure additional cap slots in the future.
Based on publicly available FY 2016 Medicare cost report data for hospitals with teaching activity.