Blog Post

GME Funding Implications of COVID-19 and the National Emergency Declaration

Gme Funding Implications Of Covid 19  Web

Nationally, a number of academic institutions have made the difficult decision to withdraw their learners from some clinical training environments in order to curb the spread of COVID-19, preserve limited supplies of personal protective equipment, and maximize time physician faculty can dedicate to direct patient care.

Initially, teaching hospitals started by limiting clinical rotations for medical, nursing, and other students. In recent days, however, teaching hospitals have been contemplating further changes to resident training, particularly those related to inbound and outbound rotations—situations in which a trainee rotates to a host hospital to obtain experience that is not available in their home hospital (e.g., a family medicine resident rotating to a pediatric hospital for required inpatient or emergency pediatric rotations).

These changes raise key issues for GME leaders to consider:

  • The ability of residents to fulfill volume requirements for their respective programs per the Accreditation Council for Graduate Medical Education (ACGME)
  • GME funding implications resulting from canceled rotations

ACGME Guidance on Volume Requirements

On March 18, 2020, the ACGME issued a response to the clinical volume question stating: “The ACGME visit/case minima were not designed to be a surrogate for the competence of an individual program graduate and are not utilized in that manner by the Review Committees. It is up to the program director, with consideration of the recommendations of the program’s Clinical Competence Committee, to assess the competence of an individual resident/fellow as one part of the determination of whether that individual is prepared to enter the unsupervised practice of medicine.”

In short, the ACGME appears willing to provide some flexibility for the program to determine whether a resident is ready to independently practice in their specialty, given the extenuating circumstances.

Financial Impact of Canceled Rotations

Canceled rotations can have financial implications for both home and host hospitals, as often Medicare GME affiliated group agreements are in place at the beginning of the academic year (i.e., prior to July 1) to transfer cap slots between institutions and allow the host to claim the inbound rotator for reimbursement.

If a rotation is canceled, the home hospital may find itself claiming more resident FTEs than its cap allows, and the host hospital may find itself with more cap slots than resident FTEs it has to claim, impacting the GME reimbursement for both. It should be noted, however, that it is possible to amend a Medicare GME affiliated group agreement during the ongoing academic year (i.e., prior to June 30), provided that any changes are made only to the original parties to the agreement.

Additionally, financial issues may arise if residents become “off cycle” and require additional time to complete their training. Residents are only eligible for funding for the accredited length of their program, and additional time is not reimbursed by CMS. Unreimbursed resident FTEs will impact total GME funding for several years due to the three-year rolling average calculation that is part of the funding formula.

Past Regulatory Responses to National Crises

In 2005, Hurricane Katrina disrupted the training of many New Orleans residents, and CMS recognized the need for a more flexible mechanism to reallocate trainees and funding in emergency situations. In light of that, section 413.79 of the Code of Federal Regulations allows for emergency affiliations and cap sharing if certain conditions are met:

  • There must be a national emergency, demonstrated by both of the following:
    • The president must declare a national emergency or disaster pursuant to the National Emergencies Act or the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
    • The secretary of the Department of Health and Human Services must declare a public health emergency pursuant to section 319 or the Public Health Service Act.
  • The home hospital, which must be located in an emergency area as defined by section 1135 of the Social Security Act, must:
    • Have its inpatient bed occupancy decreased by 20% or more as a result of the emergency and thus be unable to train the number of residents it originally intended to train that academic year.
    • Send displaced residents to a host hospital for ongoing training.
  • The host hospital (i.e., recipient of displaced residents) must then train those learners; shared rotational arrangement requirements that are stipulated as part of Medicare affiliated group arrangements are waived in this situation.

The president declared a national emergency and the secretary declared a public health emergency, thereby potentially allowing access to emergency cap transfer opportunities. However, many hospitals are likely to see their occupancy increase due to COVID-19, not decrease—making them ineligible to create new emergency Medicare GME affiliated groups under current regulations.

What Hospital and GME Leaders Can Do

Teaching hospital leaders should consider seeking additional flexibility in the way the regulations are applied during the response to COVID-19. This may mean appealing to CMS for a dispensation to the inpatient bed occupancy requirement.

Hospital and GME leaders also need to rapidly evaluate existing Medicare GME affiliated group agreements (amending as appropriate) and prepare for any anticipated changes for the upcoming academic year beginning in July.

In this time of significant uncertainty, as hospital and GME leaders develop action plans and mitigation strategies related to the COVID-19 crisis, it will be important to consider the impact on the ongoing training and future success of the students and residents trained in their facilities and related financial implications that directly affect the GME portfolio.

To learn more about capacity ramp-up, including possible ways to incorporate displaced trainees into the response, check out our recent blog Addressing Staffing Shortages During the COVID-19 Outbreak.


Contact us with your questions and concerns about how to address the COVID-19 crisis.

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