Blog Post May 10, 2019 New Round of Cap Space Redistribution Announced; Do Not Miss Your Opportunity to Apply! Authors Andrea Bazakas Regulatory BackgroundIn its May 3 publication of the proposed rule for the FY 2020 Hospital Inpatient Prospective Payment System (IPPS), the Centers for Medicare & Medicaid Services (CMS) announced another round of Medicare residency FTE cap space redistribution under section 5506 of the Patient Protection and Affordable Care Act. Under Medicare regulations, established teaching hospitals have two resident FTE caps, one for direct graduate medical education (GME) and one for indirect medical education (IME), that determine the number of resident FTEs for which the hospital may claim Medicare reimbursement for the costs associated with resident training. Applying for redistributed cap slots from a closed teaching hospital is one of the few opportunities hospitals may have to receive an increase in these otherwise permanent FTE caps. Current Cap Redistribution RoundThe FY 2020 IPPS-proposed rule includes a notification of the closure of Good Samaritan Hospital in Dayton, Ohio, and initiation of the 14th round of the section 5506 cap redistribution application and selection process. Through this round, CMS will reallocate 62.6 IME cap slots and 62.03 GME cap slots. CMS regulations provide a 90-day window for receipt of applications; hospitals that wish to apply for a portion of the available FTE cap space must submit their applications no later than July 22, 2019. Key ConsiderationsA significant portion of the nation’s teaching hospitals are training residents in excess of their Medicare FTE caps. With Medicare reimbursement per allowable FTE averaging from $130,000 to $135,000, there is a quantifiable financial benefit to securing additional reimbursable resident FTE slots. Hospitals that are currently training at or above their FTE caps should consider applying to receive a portion of the available cap space. CMS will evaluate all applications on three categories: likelihood, priority level, and ranking criteria. Additional information on the evaluation process can be found here.To apply for the available cap slots, hospitals must complete a six-page application form and submit via hard copy to the central CMS office. If your teaching hospital is training above its FTE cap or planning expansion of its GME portfolio, act today to take advantage of this rare opportunity. Need assistance with the application at your organization? ECG has partnered with teaching hospitals to develop competitive applications in past rounds. Contact us for more information.