[Federal Register Volume 71, Number 70 (Wednesday, April 12, 2006)]
[Rules and Regulations]
[Pages 18654-18667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3492]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412 and 413
[CMS-1531-IFC]
RIN 0938-AO35
Medicare Program; Medicare Graduate Medical Education Affiliation
Provisions for Teaching Hospitals in Certain Emergency Situations
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Interim final rule with comment period.
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SUMMARY: This interim final rule with comment period will modify the
current Graduate Medical Education (GME) regulations as they apply to
Medicare GME affiliations to provide for greater flexibility during
times of disaster. Specifically, this rule will implement the emergency
Medicare GME affiliated group provisions that will address issues that
may be faced by certain teaching hospitals in the event that residents
who would otherwise have trained at a hospital in an emergency area (as
that term is defined in section 1135(g) of the Social Security Act (the
Act)) are relocated to alternate training sites.
DATES: This interim final rule is effective as of August 29, 2005.
Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on June 12, 2006.
ADDRESSES: In commenting, please refer to file code CMS-1531-IFC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may submit electronic comments on specific
issues in this regulation to http://www.cms.hhs.gov/eRulemaking. Click
on the link ``Submit electronic comments on CMS regulations with an
open comment period.'' (Attachments should be in Microsoft Word,
WordPerfect, or Excel; however, we prefer Microsoft Word.)
2. By regular mail. You may mail written comments (one original and
two copies) to the following address only:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1531-IFC, P.O. Box 8011, Baltimore, MD
21244-8011.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address only:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1531-IFC, Mail Stop C4-26-05, 7500
Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to one of the following addresses. If you
intend to deliver your comments to the Baltimore address, please call
telephone number (410) 786-9994 in advance to schedule your arrival
with one of our staff members.
Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue,
SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD
21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by mailing your
comments to the addresses provided at the end of the ``Collection of
Information Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Elizabeth Truong, (410) 786-6005.
Renate Rockwell, (410) 786-4645.
SUPPLEMENTARY INFORMATION: Submitting Comments: We welcome comments
from the public on all issues set forth in this rule to assist us in
fully considering issues and developing policies. You can assist us by
referencing the file code CMS-1531-IFC and the specific ``issue
identifier'' that precedes the section on which you choose to comment.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.cms.hhs.gov/eRulemaking. Click on the link ``Electronic Comments on
CMS Regulations'' on that Web site to view public comments.
Comments received timely will be also available for public
inspection as they are received, generally beginning approximately
three weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Background
[If you choose to comment on issues in this section, please include
the caption ``BACKGROUND'' at the beginning of your comments.]
[[Page 18655]]
A. Legislative Authority
The stated purpose of section 1135 of the Act is to enable the
Secretary to ensure, to the maximum extent feasible, in any emergency
area and during an emergency period, that sufficient health care items
and services are available to meet the needs of enrollees in Medicare,
Medicaid, and the State Children's Health Insurance Program (SCHIP).
Section 1135 of the Act authorizes the Secretary, to the extent
necessary to accomplish the statutory purpose, to temporarily waive or
modify the application of certain types of statutory and regulatory
provisions (such as conditions of participation or other certification
requirements, program participation or similar requirements, or pre-
approval requirements) with respect to health care items and services
furnished by health care provider(s) in an emergency area during an
emergency period.
The Secretary's authority under section 1135 of the Act arises in
the event there is an ``emergency area'' and continues during an
``emergency period'' as those terms are defined in the statute. Under
section 1135(g) of the Act, an emergency area is a geographic area in
which there exists an emergency or disaster that is declared by the
President according to the National Emergencies Act or the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, and a public
health emergency declared by the Secretary according to section 319 of
the Public Health Service Act. (Section 319 of the Public Health
Service Act authorizes the Secretary to declare a public health
emergency and take the appropriate action to respond to the emergency,
consistent with existing authorities.) Throughout the remainder of this
discussion, we will refer to such emergency areas and emergency periods
as ``section 1135'' emergency areas and emergency periods.
Section 1871(e)(1)(A) of the Act, as amended by section 903(a)(1)
of the Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) (Pub. L. 108-173), generally prohibits the Secretary from
making retroactive substantive changes in policy unless retroactive
application of the change is necessary to comply with statutory
requirements, or failure to apply the change retroactively would be
contrary to the public interest. Due to the infrastructure damage and
disruption of operations experienced by medical facilities, and the
consequent disruption in residency training, caused by Hurricanes
Katrina and Rita in 2005, there is urgent need for the regulation
changes provided in this interim final rule with comment period to be
applied retroactively. Existing regulations do not adequately address
the issues faced by hospitals that are located in the emergency areas
addressed in this rule, or hospitals that assisted by training
displaced residents from the emergency area. We believe failure to
apply the regulatory changes retroactively would be contrary to the
public interest because hospitals affected by Hurricanes Katrina and
Rita could otherwise face dramatic financial hardship and impede the
recovery of graduate medical education programs in the emergency area.
Specifically, the training programs at many teaching hospitals in
New Orleans and surrounding areas were temporarily closed in the
aftermath of the hurricanes, and the displaced residents were
transferred to other hospitals to continue their training programs in
other parts of the country. While many residents will likely be able to
return to the hurricane-affected hospitals after some period of time,
others may need to remain where they have been transferred for an
extended period of time. A regulatory change is required so that
Medicare graduate medical education (GME) funding can be maintained
while there are displaced residents training at various hospitals
outside of the emergency area even as the hurricane-affected hospitals
incrementally bring residents back in the process of rebuilding their
training programs.
Under section 1886(h) of the Act, as amended by section 9202 of the
Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 (Pub. L.
99-272), the Secretary is authorized to make payments to hospitals for
the direct costs of approved GME programs. Section 1886(d)(5)(B) of the
Act provides that prospective payment hospitals that have residents in
an approved GME program receive an additional payment for a Medicare
discharge to reflect the higher patient care costs of teaching
hospitals, that is, the indirect graduate medical education (IME)
costs. Sections 1886(h)(4)(F) and 1886(d)(5)(B)(v) of the Act
established limits on the number of allopathic and osteopathic
residents that hospitals may count for purposes of calculating direct
GME payments and the IME adjustment, respectively, thereby establishing
hospital-specific direct GME and IME full-time equivalent (FTE)
resident caps. However, under the authority granted by section
1886(h)(4)(H)(ii) of the Act, the Secretary may issue rules to allow
institutions that are members of the same affiliated group to apply
their direct GME and IME FTE resident caps on an aggregate basis
through a Medicare GME affiliation agreement. The Secretary's
regulations permit hospitals, through a Medicare GME affiliation
agreement, to adjust IME and direct GME FTE resident caps to reflect
the rotation of residents among affiliated hospitals. The current
regulation at Sec. 413.75(b), implementing Medicare GME affiliations,
specifies that hospitals may only form a Medicare GME affiliated group
with other hospitals if they are in the same or contiguous urban or
rural areas, if they are under common ownership, or if they are jointly
listed as program sponsors or major participating institutions in the
same program. The existing regulations do not provide for hospitals
whose residency programs have been disrupted in an emergency area to
enter into valid Medicare GME affiliation agreements with host
hospitals where the hospitals may not meet the regulatory requirements
for Medicare GME affiliations. Therefore, through this interim final
rule with comment period, we are supplementing the regulations at Sec.
413.75(b) and Sec. 413.79(f) with provisions for emergency Medicare
GME affiliated groups to provide relief to hospitals with disrupted
residency programs in an emergency area. These provisions are being
made effective retroactive to August 29, 2005.
B. Overview of Medicare Direct GME and IME
As we discussed in the previous section, the Medicare program makes
payments to teaching hospitals to account for two types of costs, the
direct costs (direct GME) and the indirect costs (IME) of a hospital's
graduate medical education program. Direct GME payments represent the
direct costs of training residents (for example, resident salaries,
fringe benefits, and teaching physician costs associated with an
approved GME program) and generally are calculated by determining the
product of the Medicare patient load (that is, the percentage of the
hospital's Medicare inpatient days), the hospital's per resident
payment amount, and the weighted number of FTE residents training at
the hospital during the cost reporting period.
The IME adjustment is made to teaching hospitals for the additional
indirect patient care costs attributable to teaching activities. For
example, teaching hospitals typically offer more technologically
advanced treatments to their patients, and therefore, patients who are
sicker and need more sophisticated treatment are more likely
[[Page 18656]]
to go to teaching hospitals. Furthermore, there are additional costs
related to the presence of inefficiencies associated with teaching
residents resulting from the additional tests or procedures ordered by
residents and the demands put on physicians who supervise, and staff
who support, the residents. IME payments are made as a percentage add-
on adjustment to the per discharge Hospital Inpatient Prospective
Payment System (IPPS) payment, and are calculated based on the
hospital's ratio of FTE residents to available beds as defined at Sec.
412.105(b). The statutory formula for calculating the IME adjustment
is: c x [(1 + r)\.405\ - 1], where ``r'' represents the hospital's
ratio of FTE residents to beds, and ``c'' represents an IME multiplier,
which is set by the Congress.
The amount of IME payment a hospital receives for a particular
discharge is dependent upon the number of FTE residents the hospital
trains, the hospital's number of available beds, the current level of
the statutory IME multiplier, and the per discharge IPPS payment.
Sections 1886(d)(5)(B)(v) and 1886(h)(4)(F) of the Act established
hospital specific limits (that is, caps) on the number of allopathic
and osteopathic FTE residents that hospitals may count for purposes of
calculating indirect and direct GME payments, respectively.
C. Effect of Existing Regulations
As explained above, the Secretary's authority under section 1135 of
the Act is prompted by the occurrence of an emergency or disaster that
leads to designation of a section 1135 emergency area, and continues
throughout a section 1135 emergency period. For example, when Hurricane
Katrina occurred on August 29, 2005, disrupting health care operations
and medical residency training programs at teaching hospitals in New
Orleans and the surrounding area, the conditions were met for an
emergency area and emergency period under section 1135(g) of the Act.
Under section 1135 of the Act, the Secretary was then authorized to
waive a number of provisions to ensure that sufficient services would
be available in the section 1135 emergency area to meet the needs of
Medicare, Medicaid, and SCHIP patients. Shortly after Hurricane Katrina
occurred, we were informed by hospitals in New Orleans that the
training programs at many teaching hospitals in the city were closed as
a result of the disaster and that the displaced residents were being
transferred to training programs at host hospitals in other parts of
the country. For purpose of discussion in this rule, a host hospital is
a hospital that trains residents displaced from a training program in a
section 1135 emergency area. A home hospital is a hospital that meets
all of the following: (1) Is located in a section 1135 emergency area
(2) had its inpatient bed occupancy decreased by 20 percent or more due
to the disaster so that it is unable to train the number of residents
it originally intended to train in that academic year, and (3) needs to
send the displaced residents to train at a host hospital.
Immediately after Hurricane Katrina, home and host hospitals
petitioned CMS for a mechanism to allow host hospitals to count the
displaced FTE residents they would be training for direct GME and IME
payment purposes. In response to the petitions, we immediately issued a
Question and Answer (Q&A), which cited provisions in existing
regulations at Sec. 413.79(h). Section 413.79(h) allows home hospitals
that closed, or closed one or more residency training programs, to
temporarily transfer FTE residents to host hospitals and allows host
hospitals that were already training residents at or above their FTE
resident caps to count those displaced residents for direct GME and IME
payment (see the CMS Q&A's Web site: http://questions.cms.hhs.gov (the
Web site link is located at ID 5696)).
As specified at Sec. 413.79(h), Medicare considers a program at a
hospital to be closed if ``* * * the hospital ceases to offer training
for residents in a particular approved medical residency training
program.'' Section 413.79(h) also defines closure of a hospital as when
a hospital ``* * * terminates its Medicare agreement under the
provisions of Sec. 489.52 * * *.'' The regulations at Sec. 413.79(h)
allow a host hospital that accepts residents from the closed program to
receive a temporary increase in its IME and direct GME resident caps
for those residents as long as the home hospital agrees to a
corresponding temporary reduction to its own caps. The host hospital
under the closed program provisions would receive temporary FTE
resident cap adjustments only as long as the specific resident(s) is
displaced (and only as long as the home hospital or home hospital's
program remains closed). Therefore, once the resident(s) completes
training in the program that he or she was training in when the program
closed, or he or she returns to train at the home hospital, no
additional FTE resident cap adjustments for the host hospital are
permitted under Sec. 413.79(h). Furthermore, Sec. 413.79(h) specifies
that a host hospital can receive a temporary increase in its FTE
resident caps in order to count displaced FTE residents only if the
proper documentation is submitted to the fiscal intermediaries (FIs) by
both the home and host hospital no later than 60 days after the host
hospital begins to train the displaced resident(s).
In accordance with the authority granted to the Secretary under
section 1135 of the Act, as stated in our Q&A posted on the CMS Web
site, we extended the regulatory 60-day deadline for submitting
documentation to CMS as required by Sec. 413.79(h) and thus allowed
hospitals to submit the documentation by the earlier of the end of the
section 1135 emergency period granted for Hurricanes Katrina and Rita
or by June 30, 2006. The section 1135 emergency period ended on January
31, 2006. We believe the existing regulation at Sec. 413.79(h)
addressed the issue of finding host hospitals for residents displaced
from home hospitals in the immediate aftermath of Hurricanes Katrina
and Rita. However, teaching hospitals in section 1135 emergency areas
have since made us aware of several issues that are not addressed (or
not addressed adequately) under current regulations. For instance, some
of the hurricane-affected programs in New Orleans and elsewhere did not
in fact close entirely. In many cases, a reduced number of residents
continued to train in the hospitals' outpatient departments. Therefore,
those programs at the home hospitals did not actually close, and
neither the home or host hospitals will be able to use the regulatory
provisions at Sec. 413.79(h) to enable host hospitals that are at or
above their FTE resident caps to count displaced residents from home
hospitals for Medicare direct GME and IME purposes. We understand that
even hospitals that had originally completely closed their programs
have been in the process of gradually reopening their programs (that
is, residents are being brought back to the home hospitals in stages).
Therefore, even where a home hospital temporarily closed a program
following the disaster, once it begins training any residents (even a
fraction of an FTE resident) in that program again, the program is no
longer closed and any adjustments made to the host hospital's cap under
the closed program regulation would no longer be allowed. Therefore, we
believe that, in order to remove the disincentive faced by hospitals
that are at or above their FTE resident caps to continue training
displaced residents, some kind of regulatory relief is necessary.
II. Meeting the Needs of Teaching Hospitals Affected by a Disaster
[If you choose to comment on issues in this section, please include
the
[[Page 18657]]
caption ``TEACHING HOSPITALS AFFECTED BY A DISASTER'' at the beginning
of your comments.]
This interim final rule with comment period will amend the Medicare
GME affiliation regulations to address the needs and incentives of home
and host hospitals in the event of an emergency or disaster. In
developing a policy to provide home and host hospitals flexibility in
response to a disaster, we address two priorities. First, we believe
that in disaster situations, to the extent that the statute permits,
the policy should facilitate the continuity of GME, minimizing the
disruption of residency training. Second, the policy should take into
account that the training programs at home hospitals have been severely
disrupted by a disaster and that home hospitals will usually want to
rebuild their GME programs as soon as possible.
A. Overview of the Closed Programs Provisions
As we noted in our Q&A (posted on the CMS Web site), issued in
response to inquiries from hospitals affected by Hurricane Katrina, the
regulations at Sec. 413.79(h) offer a payment policy option that could
be applied in limited situations occurring after a disaster. Thus, a
host hospital would be allowed to make temporary adjustments to its IME
and direct GME caps (limited by the home hospital's IME and direct GME
caps) in order to count displaced residents for direct GME and IME
payment purposes. However, due to the complexity of training programs
where residents train at multiple hospitals (this is a common training
model used throughout the country), there are many potential
difficulties that can arise in applying this policy to address disaster
situations.
Typically, residents in a program spend time training during the
year at multiple hospitals, some of which may have been affected by the
disaster, while others may not have been affected. For example, a first
year resident in a family practice program may spend one third of the
year training at a hospital in New Orleans, and the remaining two-
thirds of the year at other hospitals in Baton Rouge. When the New
Orleans hospital closed due to the hurricane, this resident may have
been training at one of the Baton Rouge hospitals. Therefore, although
the resident was not immediately displaced by the hurricane, since the
resident would have rotated to the New Orleans hospital later in the
year, the resident will ultimately be affected. Conversely, a resident
that was training in New Orleans at the time of the hurricane was
immediately displaced, so even if the resident was transferred to a
host hospital in Texas to continue training, that resident may be able
to continue to train at the unaffected Baton Rouge hospital after
completing a rotation at the host hospital.
Additional complexity can arise through the interaction of the home
and host hospital's FTE resident caps. Each one of the home hospitals
involved in the previous example could be training residents above
their respective IME and direct GME FTE resident caps. Since the closed
program provisions are resident-specific, that is, the host hospital's
cap adjustment is tied to the specific resident who was displaced, as
specified at Sec. 413.79(h), documentation would be required to
account for each resident's FTE time spent training at each of the home
and host hospitals. Additionally, because the policy under Sec.
413.79(h) is resident-specific, the host hospital would only receive a
temporary cap adjustment for as long as the specific residents are
displaced. Therefore, home and host hospitals would need to provide a
very detailed accounting of each resident's training as required at
Sec. 413.79(h).
Hospitals in New Orleans have notified us that in light of the
damage they suffered from the hurricane, documenting the specific
residents, their rotations at the various home and host hospitals (and
the FTEs associated with each rotation) and where the displaced
residents were sent after the hurricane constitutes a major
documentation burden. We note that although CMS extended the
documentation deadline to January 31, 2006, under the authority of
section 1135 of the Act, giving hospitals 5 months from the time of the
hurricane to submit this type of documentation, we are aware of no
hospitals that complied with all of the documentation requirements
listed at Sec. 413.79(h) by the due date. Therefore, due to the
challenges and complexities mentioned above, we believe that the
existing closed program regulations do not adequately address the
issues associated with Medicare direct GME and IME payment policies
that are faced by residency training programs affected by a disaster.
B. Overview of the Medicare GME Affiliation Provisions
Accordingly, we are revising Sec. 413.75(b) to include definitions
of emergency Medicare GME affiliated group, home hospital, host
hospital, section 1135 emergency area, and section 1135 emergency
period. We are also revising Sec. 413.79(f) to set forth the
requirements of an emergency Medicare GME affiliation agreement.
The existing definition of Medicare GME affiliated group at Sec.
413.75(b) specifies that hospitals may only form a Medicare GME
affiliated group with other hospitals if they are in the same or
contiguous urban or rural areas, if they are under common ownership, or
if they are jointly listed as program sponsors or major participating
institutions in the same program. The existing Medicare GME affiliation
provisions at Sec. 413.79(f) permit participating teaching hospitals
to aggregate and ``share'' FTE caps during a specified academic year.
The Medicare GME affiliation regulations allow hospitals that need to
either decrease or increase their FTE resident counts to reflect the
normal movement of residents among affiliated hospitals to do so for
the agreed-upon training years.
Hospitals that affiliate must submit a Medicare GME affiliation
agreement, as specified at Sec. 413.75(b), to their Medicare FIs and
to CMS no later than July 1 of the relevant academic year. Each
hospital in the Medicare GME affiliated group must have a shared
rotational arrangement with at least one other hospital within the
Medicare GME affiliated group, and all of the hospitals within the
Medicare GME affiliated group must be connected by a series of shared
rotational arrangements. The net effect of the adjustments to
hospitals' FTE resident caps, whether positive or negative on a
hospital-specific basis, in the aggregate must not exceed zero. While
additional hospitals may not be added to the Medicare GME affiliated
group after July 1 of a year, amendments to the affiliation agreement
to adjust the distribution of the number of FTE residents in the
original Medicare GME affiliation among the hospitals that are part of
the Medicare GME affiliated group can be made through June 30 of the
academic year for which they are effective.
C. Overview of the Emergency Medicare GME Affiliated Group Provision
[If you choose to comment on issues in this section, please include
the caption ``OVERVIEW OF THE EMERGENCY MEDICARE GME AFFILIATED GROUP
PROVISION'' at the beginning of your comments.]
Based on what we have learned about the impact of a disaster on
teaching hospitals, we believe it is necessary to provide hospitals
with greater flexibility to distribute FTE resident caps within a group
of home and host hospitals if there is an emergency at a home hospital
that has resulted in the designation of a section 1135 emergency
[[Page 18658]]
area. We believe that a modified Medicare GME affiliation policy would
allow affected hospitals the maximum degree of flexibility following
the disaster so that residents displaced by the disaster can continue
their residency training at other hospitals, while the home hospitals
can remain committed to reopening their programs.
While there may be hospitals in the section 1135 emergency area
that do not experience a disruption in residency training due to the
disaster, the provisions in this rule are only intended to help home
hospitals, that is, hospitals that have been directly affected by the
disaster to the extent that their inpatient bed occupancy is
diminished, limiting the hospital's ability to train residents. In
determining whether a hospital in a section 1135 emergency area
qualifies as a home hospital, we believe it is appropriate to compare
the inpatient bed occupancy of the hospital one week before the earlier
of the date the section 1135 emergency period begins, or the date on
which the hospital began any evacuation efforts in anticipation of an
event that results in the declaration of a section 1135 emergency area,
to the inpatient bed occupancy of the hospital one week after the
section 1135 emergency period begins. If the inpatient bed occupancy
decreases by 20 percent or more between these two comparison
timeframes, we believe that the significant drop in occupancy can be
assumed to be the result of the event that led to the declaration of a
section 1135 emergency period. We believe a hospital that experiences
such a drop in occupancy may not have enough patients to continue to
provide for adequate residency training, and therefore, may need to
send residents to host hospitals. The emergency Medicare GME
regulations are applicable to these home hospitals. These emergency
Medicare GME affiliated group provisions in Sec. 413.79(f)(6) are
effective as of the date of the first day of a section 1135 emergency
period (for example, in the case of Hurricane Katrina, they are
effective on August 29, 2005). The duration of these emergency Medicare
GME affiliation agreements is limited to the remainder of the academic
year during which the section 1135 emergency period began, plus two
additional academic years. Thus, an emergency Medicare GME affiliation
agreement is permitted to remain in effect for no more than 3 training
years, beginning with the first day of the section 1135 emergency
period. (An emergency Medicare GME affiliation agreement could remain
in effect for three full academic years only if the first day of a
section 1135 emergency period occurred on July 1.)
For example, in the case of Hurricane Katrina, an emergency
Medicare GME affiliation could be effective from August 29, 2005, to
June 30, 2006 (we refer to this as the first effective year); the
affiliation could also be effective for two subsequent academic years:
the second effective year of the emergency Medicare GME affiliation
would be from July 1, 2006 to June 30, 2007, and the third effective
year would be from July 1, 2007 to June 30, 2008. At the conclusion of
the allowable effective period for an emergency Medicare GME affiliated
group, the emergency provisions at Sec. 413.79(f)(6) cease to apply,
and the existing provisions for Medicare GME affiliation agreements at
Sec. 413.79(f)(1) through (5) would apply.
We believe that the limits on the allowable effective period for
emergency Medicare GME affiliated group serve to maintain GME funding
over a sufficient period to allow home hospitals to rebuild their GME
programs, while also supporting the continuity of residency training.
We welcome public comments on whether the allowable effective period is
sufficient time to accommodate rebuilding of residency programs at home
hospitals.
D. Emergency Medicare GME Affiliated Group Provisions
1. Affiliation Agreement
To provide home hospitals with more flexibility to train displaced
residents at various sites, and to allow host hospitals to count
displaced residents for IME and direct GME, home hospitals may enter
into emergency Medicare GME affiliation agreements effective
retroactive to the date of the first day of the section 1135 emergency
period.
The emergency Medicare GME affiliated group may include hospitals
that would not meet the requirements for a Medicare GME affiliated
group as specified as Sec. 413.75(b). Specifically, for these
emergency Medicare GME affiliated groups, home hospitals may affiliate
with host hospitals anywhere in the country because we recognize that
immediately following a disaster, home hospitals need flexibility to
assign displaced residents to any available program. As home hospitals
recover the ability to train residents after a disaster, the emergency
Medicare GME affiliated group provisions allow home hospitals to return
residents to their training sites, thereby giving home hospitals the
opportunity to rebuild their programs incrementally.
For the year during which the section 1135 emergency was declared,
each hospital participating in the emergency affiliation must submit a
copy of the emergency Medicare GME affiliation agreement, as specified
under Sec. 413.79(f)(6), to CMS and the CMS FI servicing each hospital
in the agreement by the later of 180 days after the section 1135
emergency period begins or by June 30 of the relevant training year.
Emergency Medicare GME affiliation agreements for the subsequent 2
academic years must be submitted by the later of 180 days after the
section 1135 emergency period begins or by July 1 of each of the years.
Amendments to the emergency Medicare GME affiliation agreement to
adjust the distribution of the number of FTE residents in the original
emergency Medicare GME affiliation among the hospitals that are part of
the emergency Medicare GME affiliated group can be made through June 30
of the academic year for which they are effective. The emergency
Medicare GME affiliation agreement must be written, signed, and dated
by responsible representatives of each participating hospital and must:
(1) List each participating hospital and its provider number, and
specify whether the hospital is a home or host hospital; (2) specify
the effective period of the emergency Medicare GME affiliation
agreement; (3) list each participating hospital's IME and direct GME
FTE caps in effect for the current academic year before the emergency
Medicare GME affiliation (that is, if the hospital was already a member
of a regular Medicare GME affiliated group before entering into the
emergency Medicare GME affiliation, the emergency Medicare GME
affiliation must be premised on the FTE caps of the hospital as
adjusted per the regular Medicare GME affiliation agreement, and not
include any slots gained under section 422 of the MMA); and (4) specify
the total adjustment to each hospital's FTE caps in each year that the
emergency Medicare GME affiliation agreement is in effect, for both
direct GME and IME, that reflects a positive adjustment to the host
hospital's direct and indirect FTE caps that is offset by a negative
adjustment to the home hospital's (or hospitals') direct and indirect
FTE caps of at least the same amount. The sum total of adjustments to
all the participating hospitals' FTE caps under the emergency Medicare
GME affiliation agreement may not exceed the aggregate adjusted caps of
the hospitals participating in the emergency Medicare GME affiliated
group. A home hospital's IME and direct GME FTE cap reductions under an
emergency Medicare GME affiliation agreement are limited to the
[[Page 18659]]
home hospital's IME and direct GME FTE resident caps in effect for the
academic year in accordance with regulations at Sec. 413.79(c)(1)
through (c)(3) or Sec. 413.75(b), that is, the hospital's base year
FTE resident caps as adjusted by any and all existing affiliation
agreements.
In addition to meeting the requirements for an emergency Medicare
GME affiliation agreement, a host hospital will be required to document
that any FTE residents counted pursuant to the emergency Medicare GME
affiliation agreement are, in fact, displaced residents from a program
located in the emergency area. That is, the host hospital will need to
provide the FI with a list of resident names and social security
numbers, and the name of the original sponsor of the program located at
the home hospital in the emergency area for each displaced resident. We
note that the hospital is already required, as specified at Sec.
413.75(d), to provide much of this information in order to include any
resident in its FTE count for a particular cost reporting period. We
are adding the requirement that a host hospital document the original
program sponsor of each displaced resident it is training in order to
document that any additional FTE residents counted pursuant to the
emergency Medicare GME affiliation agreement are indeed due to training
of displaced residents. Providing appropriate and sufficient
documentation permits the FI to properly reconcile the correct FTE
resident count for each hospital.
2. Multiple Affiliations
In many cases, home hospitals will already have Medicare GME
affiliation agreements in effect before the section 1135 emergency
period, and may be entering into emergency Medicare GME affiliation
agreements with host hospitals that will already have regular Medicare
GME affiliation agreements in effect. Therefore, such situations will
lead to multiple layers of Medicare GME affiliations. It is critical
that the emergency Medicare GME affiliation agreements accurately state
the appropriate caps for each hospital in the affiliated group in order
for the FIs to pay the hospitals correctly. The hospitals must attach
copies of all existing Medicare GME affiliation agreements (that is, a
hospital's regular or other emergency Medicare GME affiliations already
in place for the year) when submitting the emergency Medicare GME
affiliation agreement to the FI so that the FI can verify and reconcile
the cap adjustments. For example, if a home hospital has a direct GME
cap of 100 but has an existing affiliation agreement before the
disaster in which it reduced its cap by 40 FTEs, then, for purposes of
entering into the emergency Medicare GME affiliation agreement, it has
an adjusted direct GME cap of 60 with which to affiliate under the
emergency affiliation provisions. The emergency Medicare GME
affiliation provisions are different from the regular Medicare GME
affiliation provisions in that regular Medicare GME affiliations are
based upon the hospitals' FTE resident caps before any adjustments
resulting from Medicare GME affiliation agreements. Because they are
likely to occur during an academic year, and cannot be anticipated
before the beginning of the year, emergency Medicare GME affiliations
are based upon hospitals' FTE resident caps as they are already
modified by any existing Medicare GME affiliation agreement(s).
In order to provide each hospital with its correct payment, the CMS
FIs involved need to be aware of both regular Medicare GME affiliation
agreements and any emergency Medicare GME affiliation agreements in
which a hospital is participating. Without the correct information on
each hospital's Medicare GME affiliation agreements (whether regular or
emergency affiliations), hospitals could be paid improperly for direct
GME and IME based on application of incorrect FTE resident caps that do
not reflect all Medicare GME affiliation agreements in effect (that is,
regular and emergency affiliations).
Furthermore, to determine direct GME and IME payments under an
emergency Medicare GME affiliation, the normal FTE-counting rules as
specified at Sec. 413.78 will apply. For example, residents beyond the
initial residency period are counted at .5 FTE for direct GME purposes.
The existing IME FTE-counting rules as specified at Sec. 412.105(f)
apply in determining the IME adjustment. Therefore, when the CMS FI
settles a cost report for a hospital in which an emergency Medicare GME
affiliation agreement is reflected, each participating hospital would
be held to its adjusted IME and adjusted direct GME caps as agreed to
and specified in the emergency Medicare GME affiliation agreement.
We note that in the IPPS final rule published in the Federal
Register on August 11, 2004 (69 FR 49142), we state ``* * * hospitals
that receive section 422 cap increases from CMS and participate in a
Medicare GME affiliation agreement under Sec. 413.79(f) on or after
July 1, 2005 may only affiliate for the purposes of adjusting their
1996 FTE caps (adjusted for new programs and any other reductions under
section 1886(h)(7)(A) of the Act) for direct GME and IME. The
additional slots that a hospital receives under section 422 of the MMA
may not be aggregated and applied to the FTE resident caps of any other
hospitals.'' Similarly, we are providing that any slots gained under
section 422 of the MMA may not be used in any emergency Medicare GME
affiliation agreement.
We are providing examples below of the emergency Medicare GME
affiliation agreements and discussing the ramifications of the
provisions.
Example I
For the training year beginning on July 1, 2005, Hospital A and
Hospital B have a regular Medicare GME affiliation agreement in which
Hospital A (which has IME and direct GME caps of 20 FTEs) agrees to
transfer 10 FTEs to Hospital B (which has IME and direct GME caps of 15
FTEs). Under the regular affiliation agreement, Hospital B now has
adjusted caps of 25 FTEs and Hospital A has adjusted caps of 10 FTEs
for both IME and direct GME. As a result of Hurricane Zeta on November
1, 2005, Hospital A sustained damage to its inpatient facilities
(reducing its occupancy by 20 percent or more) and has displaced
residents that it needs to send to other hospitals for training.
Hospital A is located in a section 1135 emergency area, and the first
day of the section 1135 emergency period is November 1, 2005. In this
case, Hospital A is a home hospital as defined under Sec. 413.75(b),
and is permitted to enter into an emergency Medicare GME affiliation
agreement as specified at Sec. 413.79(f)(6).
In Example I above, Hospital B was not affected by the hurricane
(that is, Hospital B was able to continue training residents at the
same level it was before the hurricane, and is training the maximum
number of residents under its FTE caps as adjusted by the existing
Medicare GME affiliation agreement with Hospital A). We note that
Hospitals A and B may modify their regular Medicare GME affiliation
agreement, if necessary, no later than June 30, 2006, under the
requirements as specified at Sec. 413.79(f)(5). In this case, Hospital
B does not qualify as a home hospital since its inpatient occupancy was
not reduced by 20 percent or more even though it was located in the
area covered by the section 1135 waiver. Hospital A elects to enter
into an emergency Medicare GME affiliation agreement with host
Hospitals C and D in two other States because those
[[Page 18660]]
hospitals are well-situated to provide residents displaced from
Hospital A with an appropriate training experience.
Accordingly, all of the hospitals (A, C, and D) in the emergency
Medicare GME affiliated group must submit copies of the emergency
Medicare GME affiliation agreement to CMS and to the CMS FIs servicing
the hospitals participating in the emergency Medicare GME affiliation
agreement by June 30, 2006 (in this case, June 30, 2006 is the later of
180 days after the section 1135 emergency period begins (November 1,
2005) or by June 30 of the relevant training year). In Table I below,
we list the FTE resident cap information that the emergency Medicare
GME affiliation agreement, included for the first effective period,
which was submitted to CMS and the CMS FI on June 30, 2006.
Table I.--Emergency Medicare GME Affiliation Agreement Due to Hurricane Zeta for Effective Period--November 1,
2005 to June 30, 2006
----------------------------------------------------------------------------------------------------------------
Adjusted
IME cap before Direct GME cap Adjusted IME Direct GME cap
Hospital name Provider No. emergency before cap under the under the
affiliation emergency emergency emergency
affiliation affiliation affiliation
----------------------------------------------------------------------------------------------------------------
Hospital A...................... 19-9999 10 10 1 (-9) 1 (-9)
Hospital C...................... 45-9999 10 10 14 (+4) 14 (+4)
Hospital D...................... 33-9999 10 10 15 (+5) 15 (+5)
----------------------------------------------------------------------------------------------------------------
As indicated in Example I above, Hospital B was not affected by the
hurricane, and therefore did not participate in an emergency Medicare
GME affiliated group. However, Hospital A is required to attach a copy
of the existing Medicare GME affiliation agreement it has with Hospital
B to the emergency Medicare GME affiliation agreement submitted to CMS
and its FI to document its adjusted cap of 10 FTEs. Hospitals C and D
are similarly required to attach copies of all existing Medicare GME
affiliation agreements that they may be participating in as of July 1,
2005, (including any regular or emergency affiliation agreements) in
order to document their caps.
To further illustrate this policy continuing with the above
example, Hospital C, which has an adjusted direct GME cap under the
emergency Medicare GME affiliation of 14 FTEs, could count up to four
displaced FTE residents during the first effective year assuming that
Hospital C can document that these FTEs are from programs in the
section 1135 emergency area. However, upon cost report settlement, the
CMS FI determined that Hospital C has actually trained a total of 16
FTEs during the cost reporting period. Since each participating
hospital will be held to their adjusted IME and adjusted direct GME
caps as agreed to and specified in the emergency Medicare GME
affiliation agreement, the CMS FI would only allow four of the six
additional FTEs Hospital C trained pursuant to the emergency Medicare
GME affiliation agreement.
Example II
Alternatively, assume that both Hospitals A and B from Example I
above are affected by the same hurricane, both qualify as a home
hospital, and both need to participate in an emergency Medicare GME
affiliation with host Hospitals C and D in the other States.
We note that while Hospitals A and B may modify their existing
Medicare GME affiliation agreement on or before June 30, 2006,
Hospitals A and B may find it easier to reflect the changes in training
(and the resultant shift of FTE resident caps) due to Hurricane Zeta
through the emergency Medicare GME affiliation agreement. In this
scenario, Hospitals A and B may execute an emergency Medicare GME
affiliation agreement in which the emergency Medicare GME affiliated
group includes Hospitals A, B, C, and D. In Table II below, we list the
FTE cap information that the emergency Medicare GME affiliation
agreement included for the first effective period, which was submitted
to CMS and the CMS FI on June 30, 2006.
Table II.--Emergency Medicare GME Affiliation Agreement Due to Hurricane Zeta for Effective Period-- November 1,
2005 to June 30, 2006
----------------------------------------------------------------------------------------------------------------
Adjusted
IME cap before Direct GME cap Adjusted IME Direct GME cap
Hospital name Provider No. emergency before cap under the under the
affiliation emergency emergency emergency
affiliation affiliation affiliation
----------------------------------------------------------------------------------------------------------------
Hospital A...................... 19-9999 10 10 1 (-9) 1 (-9)
Hospital B...................... 19-8999 25 25 10 (-15) 10 (-15)
Hospital C...................... 45-9999 10 10 19 (+9) 19 (+9)
Hospital D...................... 33-9999 10 10 25 (+15) 25 (+15)
----------------------------------------------------------------------------------------------------------------
We note that the pre-existing regular Medicare GME affiliation
agreement between Hospitals A and B which pre-dated the disaster is
still in effect according to existing affiliation agreement rules;
therefore Hospitals A and B must account for any FTE resident cap
transfers specified in the regular affiliation agreement when they
enter into the emergency Medicare GME affiliation agreement with host
Hospitals C and D. In addition, a copy of Hospital A and B's regular
Medicare GME affiliation agreement must be attached to the emergency
Medicare GME affiliation agreement that is submitted to CMS and the
hospitals' CMS FIs.
3. Submission Process
Submissions of emergency Medicare GME affiliation agreements should
be sent to:
Centers for Medicare & Medicaid Services, Division of Acute Care,
Attention: Elizabeth Truong or Renate Rockwell, Mailstop C4-08-06, 7500
[[Page 18661]]
Security Boulevard, Baltimore, MD 21244.
``Emergency Medicare GME Affiliation Agreement'' should be clearly
labeled on the outside envelope.
4. Application of Existing Rules
[If you choose to comment on issues in this section, please include
the caption ``APPLICATION OF EXISTING RULES'' at the beginning of your
comments.]
a. New Teaching Hospitals
Immediately after a disaster, home hospitals are in the best
position to determine where their residents should be sent to continue
with their residency training. Although home hospitals may send their
residents to train at existing teaching hospitals, in some cases,
hospitals affected by a disaster may need to send residents to non-
teaching hospitals (that is, hospitals that have not included any
residents training in approved medical residency training programs on a
previous Medicare cost report) to continue their training.
The following discussion is intended to inform hospitals of how CMS
will determine the GME payments to the host hospital in the case where
home hospitals choose to send displaced residents to host hospitals
that were previously non-teaching hospitals. These host hospitals will
become new teaching hospitals once they begin to train residents from
the home hospitals as part of an approved medical residency training
program. As a new teaching hospital, such a hospital initially will
have IME and direct GME FTE resident caps of zero (based on the number
of residents training in the 1996 base year for FTE resident caps).
However, the new teaching hospital, by participating in an emergency
Medicare GME affiliation agreement, can receive a temporary cap
increase in order to count the displaced FTE residents for purposes of
IME and direct GME payments.
As a new teaching hospital, the hospital will not have an existing
per resident amount for direct GME payment purposes. The per resident
amounts for these hospitals will be established as specified at Sec.
413.77(e) (just as any other new teaching hospital would have its per
resident amount established). The new teaching hospital's per resident
amount is established based on the lower of the hospital's direct GME
costs per resident in its base year, or the updated weighted mean value
of the per resident amounts of all hospitals located in the same
geographic wage area as specified at Sec. 413.77. Therefore, it is
very important for a new teaching host hospital to incur direct GME
costs in its base year and to document all of the direct GME costs it
incurs (for example, the residents' salaries, fringe benefits, any
portion of the teaching physician salaries attributable to GME, and
other direct GME costs) for the displaced residents it is training;
otherwise the host hospital risks being assigned a very low per
resident amount in accordance with our regulations. If the host, new
teaching hospital incurs no GME costs in the relevant base year, its
per resident amount would be zero dollars. We advise hospitals to refer
to the provisions at Sec. 413.77(e) for the rules concerning the
establishment of a new teaching hospital's per resident amount. In
accordance with section 1886(h) of the Act and our regulations at Sec.
413.77, once the base year per resident amount is established, it is
fixed and not subject to adjustment to reflect costs incurred in years
subsequent to the base year that might be associated with new programs
or additional residents.
b. Shared Rotational Requirements
As specified at Sec. 413.79(f)(2), each hospital in a regular
Medicare GME affiliated group must have a shared rotational arrangement
with at least one other hospital participating in the Medicare GME
affiliation agreement. All of the hospitals within the Medicare GME
affiliated group would therefore be connected by a series of shared
rotational arrangements. As defined at Sec. 413.75(b), a shared
rotational arrangement ``means a residency training program under which
a resident(s) participates in training at two or more hospitals in that
program.'' We are specifying at Sec. 413.79(f)(6) that hospitals that
are members of an emergency Medicare GME affiliated group are not
required to participate in a shared rotational arrangement with the
other hospitals participating in the emergency Medicare GME affiliation
agreement. We are implementing this provision because we recognize that
members of an emergency Medicare GME affiliated group may be
geographically dispersed across the country, which would make it
difficult for residents to participate in shared rotational
arrangements. Additionally, after a disaster, affected hospitals may
not have the resources available to participate in shared rotational
arrangements with host hospitals situated around the country. For
example, hospitals may not have the financial capability to
continuously transport residents between States. Therefore, we are
exempting participants in emergency Medicare GME affiliations from the
shared rotational requirements.
c. Weighted FTE Counts (``3-Year Rolling Average'')
As specified at Sec. 412.105(f)(1)(v) and Sec. 413.79(d), a ``3-
year rolling average'' is applied to a hospital's count of FTE
residents to calculate IME and direct GME payments for a cost reporting
period (that is, the number of FTEs used to calculate payments is the
average of the number of FTE residents reported for the current year,
the prior year, and the penultimate year). For example, if the hospital
trained 115 FTE residents (for IME) in the current cost reporting
period, 100 FTEs in the prior cost reporting period, and 100 FTEs in
the penultimate cost reporting period, then the IME payment would not
be based solely on the 115 residents trained in the current year.
Rather, the IME payment in the current year would be based on the 3-
year rolling average FTE count (that is, (115 + 100 + 100) / 3 which
equals 105 FTEs).
Thus, if a hospital increases its number of FTE residents, as a
result of the 3-year rolling average rule, the hospital would be able
to count only one third of the additional FTE residents in that year,
two-thirds of the additional FTEs for the next year, and the full
number in the third year (assuming there are no other changes in the
number of FTE residents training in subsequent years). Conversely, if a
hospital decreases its number of FTE residents in the current year,
then the 3-year rolling average minimizes the effect of the reduced GME
payments based on the reduced level of training over the next 3 years.
Home hospitals that have reduced the number of FTE residents training
at their hospitals would benefit under this provision since only one-
third of the FTE resident reduction will apply in the first cost
reporting year in which an emergency period is declared. The 3-year
rolling average provision, as specified at Sec. 412.105 and Sec.
413.79(d), will be applied to all hospitals in the emergency Medicare
GME affiliation, and their associated FTE resident counts while the
agreement is in effect. This provision is the same as applied under
existing regulations in which hospitals participating in a Medicare GME
affiliation agreement(s) are subject to the 3-year rolling average.
However, there is an exception to the application of the 3-year
rolling average rules for closed program and closed hospital
regulations as specified at Sec. 413.79(d)(6). In the case of host
hospitals that participate in emergency Medicare GME affiliated groups
relating to the section 1135 emergency declared
[[Page 18662]]
following Hurricanes Katrina and Rita, which occurred in 2005, we
understand that, based on the Q&A we posted on the CMS Web site
discussing application of the closed program and closed hospital
regulations to these hospitals, there was an expectation among host
hospitals that the displaced FTE residents they accepted for training
would be exempt from application of the 3-year rolling average, and
that the host hospitals would immediately be permitted to include all
of those residents in their FTE resident counts. Many host hospitals,
believing that the existing regulations regarding closed hospitals and
closed programs would be applied, took in displaced residents with the
reasonable expectation that they would be able to count those
additional residents as FTEs not subject to the 3-year rolling average
rules specified at Sec. 412.105 and Sec. 413.79(d). In recognition of
this expectation, we are providing for a time-limited exception to the
3-year rolling average rules so that a host hospital participating in
an emergency Medicare GME affiliation agreement relating to Hurricanes
Katrina and Rita and training residents in excess of its cap,
consistent with the rolling average provisions applicable for closed
programs as specified at Sec. 413.79(d)(6), will exclude from the 3-
year rolling average FTE residents associated with displaced residents
from August 29, 2005, to June 30, 2006. All host hospitals in an
emergency Medicare GME affiliated group will be subject to the existing
3-year rolling average requirements beginning on July 1, 2006.
Accordingly, we revised Sec. 413.79(f) by adding a new paragraph
(6) to provide for more flexibility in Medicare GME affiliations for
home hospitals located in section 1135 emergency areas to allow the
home hospitals to efficiently find training sites for displaced
residents. Under the flexibility provided by the emergency Medicare GME
affiliated group provisions as specified at Sec. 413.79(f)(6),
decisions regarding the transfer of FTE resident cap slots, including
how to address situations where the home hospital was training a number
of residents in excess of its cap before the disaster, and the tracking
of those FTE resident slots, would be left to the home and host
hospitals to work out among themselves. The home and host hospitals
are, however, required to include much of this information in their
emergency Medicare GME affiliation agreements as specified under Sec.
413.79(f)(6). Furthermore, since hospitals may amend the emergency
Medicare GME affiliation agreement (on or before June 30 of the
relevant academic year) to reflect the actual training situation among
the hospitals participating in the emergency Medicare GME affiliated
group, hospitals are provided with greater flexibility to accommodate
any changing residency training circumstances within the emergency
Medicare GME affiliated group. We note that the emergency Medicare GME
affiliated group provisions promulgated herein are intended for the
purpose of providing for continued training of residents displaced from
a section 1135 emergency area, and not to enable hospitals to merely
shift and change FTE resident caps with other hospitals in the country
(for instance, in order to maximize Medicare IME and direct GME
payments).
III. Provisions of the Interim Final Rule
[If you choose to comment on issues in this section, please include
the caption ``PROVISIONS OF THE INTERIM FINAL RULE'' at the beginning
of your comments.]
We are revising the Medicare GME regulations at Sec. 412.105,
Sec. 413.75(b), and Sec. 413.79(f) to implement an emergency Medicare
GME affiliated group policy that will only apply to certain home
hospitals in a section 1135 emergency area and host hospitals that
accept displaced residents from a home hospital.
Section 412.105 Special Treatment: Hospitals That Incur Indirect Costs
for Graduate Medical Education Programs
In Sec. 412.105, we revised paragraph (a)(1)(i) to specify that
special treatment for hospitals that incur indirect costs for GME
programs also applies to the emergency Medicare GME affiliated groups.
In addition, we revised paragraph (f)(1)(vi) to specify that
hospitals that are part of the same Medicare GME affiliated group or
emergency Medicare GME affiliate group may elect to apply the limit at
paragraph (f)(1)(iv) of this section on an aggregate basis, as
specified in Sec. 413.97(f).
Section 413.75 Direct GME Payments: General Requirements
In Sec. 413.75(b), we added the definition of an ``Emergency
Medicare GME affiliated group,'' and within this definition, we specify
the meaning of ``Home hospital'' and ``Host hospital,'' and we define
``Section 1135 emergency area or section 1135 emergency period.''
Section 413.79 Direct GME Payments: Determination of the Weighted
Number of FTE Residents
In Sec. 413.79(f), we revised the introductory text to specify
that a hospital may receive a temporary adjustment to its FTE cap,
which, except as provided in subsection (6)(iv), is subject to the
averaging rules at Sec. 413.79(d), to reflect residents added or
subtracted because the hospital is participating in a Medicare GME
affiliated group or an emergency Medicare GME affiliated group as
defined at Sec. 413.75(b).
In Sec. 413.79(f)(6), we set forth the requirements for emergency
Medicare GME affiliated group.
In paragraph (f)(6)(i), we specify the requirements for the
emergency Medicare GME affiliation agreement that each hospital
participating in the emergency Medicare GME affiliated group must
submit. Specifically, each participating hospital must submit an
emergency Medicare GME affiliation agreement that is written, signed,
and dated by responsible representatives of each participating
hospital, and the emergency Medicare GME affiliation agreement must
include the following:
Specify the effective period of the emergency Medicare GME
affiliation agreement (which must, in any event, terminate at the
conclusion of two academic years following the academic year in which
the section 1135 emergency period began).
List each participating hospital's IME and direct GME FTE
caps in effect before the emergency Medicare GME affiliation agreement
(including any adjustments to those caps in effect as a result of other
Medicare GME affiliation agreements but not including any slots gained
under Sec. 413.79(c)(4)).
Specify the total adjustment to each participating
hospital's FTE caps in each academic year that the emergency Medicare
GME affiliation agreement is in effect, for both direct GME and IME,
that reflects a positive adjustment to the host hospital's direct and
indirect FTE caps that is offset by a negative adjustment to the home
hospital's (or hospitals') direct and indirect FTE caps of at least the
same amount. The sum total of adjustments to all the participating
hospitals' FTE caps under the emergency Medicare GME affiliation
agreement may not exceed the aggregate adjusted FTE caps of the
hospitals participating in the emergency Medicare GME affiliated group.
A home hospital's IME and direct GME FTE cap reductions in an emergency
Medicare GME affiliation agreement are limited to the home hospital's
IME and direct GME
[[Page 18663]]
FTE resident caps at Sec. 413.79(c)(1) through (c)(3) or Sec.
413.75(b), that is, as adjusted by any and all existing affiliation
agreements as applicable.
Attach copies of all existing Medicare GME affiliation
agreements and emergency Medicare GME affiliation agreements in which
the hospital is participating at the time the emergency Medicare GME
affiliation agreement is executed.
In paragraph (f)(6)(ii), we specify that each participating
hospital must submit the emergency Medicare GME affiliation agreement
to CMS and submit a copy to the CMS FI. Specifically, an emergency
Medicare GME affiliation agreement must be submitted to CMS with a copy
to the CMS FI by the later of 180 days after the section 1135 emergency
period begins or by July 1 of the academic year in which the emergency
Medicare GME affiliation agreement is effective.
In paragraph (f)(6)(iii), we specify that during the effective
period of the emergency Medicare GME affiliation agreement, hospitals
in the emergency Medicare GME affiliated group are not required to
participate in a shared rotational arrangement as defined at Sec.
413.75(b).
In paragraph (f)(6)(iv), we specify the host hospital exception
from the rolling average for the period from August 29, 2005 to June
30, 2006. We also specify how to determine the FTE resident count for a
host hospital that is counting a number of displaced residents in
excess of its cap for the period from August 29, 2005, through June 30,
2006.
IV. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
V. Effective Date and Waiver of Proposed Rulemaking
[If you choose to comment on issues in this section, please include
the caption ``EFFECTIVE DATE AND WAIVER OF PROPOSED RULEMAKING'' at the
beginning of your comments.]
The Administrative Procedure Act (APA) normally requires a 30-day
delay in the effective date of a final rule. This delay may be waived,
however, if an agency finds for good cause that the delay is
impracticable, unnecessary or contrary to the public interest, and
incorporates a statement of the finding and the reasons for it in the
rule issued. The Secretary is subject to a similar requirement pursuant
to section 1871(e)(1)(A)(ii) of the Act. Further, under section
1871(e)(1)(A) of the Act, the Secretary is prohibited from applying
substantive changes in policy retroactively unless the Secretary
determines that retroactive application is necessary to comply with
statutory requirements, or that the failure to apply the change
retroactively would be contrary to the public interest.
We find that good cause exists to waive the 30-day delay in
effective date because it would be contrary to the public interest to
delay the effective date of this interim final rule with comment
period. We find further that failure to apply the provisions of this
interim final rule with comment period retroactively to August 29,
2005, which is the first date on which there was an emergency area and
emergency period under section 1135 of the Act resulting from the
impact of Hurricane Katrina, would be contrary to the public interest.
Due to the infrastructure damage and disruption of operations
experienced by medical facilities, and the consequent disruption in
residency training, caused by Hurricanes Katrina and Rita in August of
2005, there is urgent need for the regulation changes provided in this
interim final rule with comment period to be applied retroactively.
Existing regulations do not adequately address the issues relating to
Medicare GME payment policy faced by hospitals that are located in the
emergency areas addressed in this rule, or those faced by hospitals
that assisted the storm-impacted hospitals with their residency
programs. We believe failure to apply the regulatory changes
retroactively would be contrary to the public interest because
hospitals affected by Hurricanes Katrina and Rita could otherwise face
dramatic disruptions in their Medicare GME funding, with possible dire
effects on their GME programs and financial stability.
Specifically, the training programs at many teaching hospitals in
New Orleans and surrounding areas were temporarily closed or
significantly reduced in the aftermath of the hurricanes, and the
displaced residents were transferred to other hospitals to continue
their training programs in other parts of the country. While some
residents may eventually return to the hurricane-affected hospitals,
others may need to remain where they were transferred for an extended
period of time. Immediate regulatory changes are required in order to
maintain Medicare GME funding relating to displaced residents training
at various hospitals outside of the emergency area, and at the same
time, to enable the hurricane-affected hospitals to rebuild
incrementally their GME programs. Existing regulations relating to
closed hospitals and closed residency training programs, and relating
to Medicare GME affiliation agreements, contain certain limitations,
explained more fully in section II.A above, that render them
inapplicable or ineffective to address the issues faced by hospitals as
a result of disruptions caused by Hurricanes Katrina and Rita.
We also ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment on the proposed rule. The
notice of proposed rulemaking includes a reference to the legal
authority under which the rule is proposed, and the terms and substance
of the proposed rule or a description of the subjects and issues
involved. This procedure can be waived, however, if an agency finds
good cause that a notice-and-comment procedure is impracticable,
unnecessary or contrary to the public interest and incorporates a
statement of the finding and supporting reasons in the rule issued. We
find that good cause exists to waive the requirement for publication of
a notice of proposed rulemaking and public comment prior to the
effective date of this rule because such a procedure would be
impracticable and contrary to the public interest. In order to respond
to the urgent needs of the hospitals and GME programs affected by
Hurricanes Katrina and Rita, as described more fully above, it is
necessary for these regulations to take effect retroactively to August
29, 2005. The ordinary notice-and-comment procedures would serve to
delay (or, in some cases, preclude) hurricane-affected hospitals and
GME programs from responding effectively to their circumstances by
availing themselves of the flexibility permitted under this interim
final rule effective as of August 29, 2005.
VI. Collection of Information Requirement
[If you choose to comment on issues in this section, please include
the caption ``COLLECTION OF INFORMATION REQUIREMENT'' at the beginning
of your comments.]
Under the Paperwork Reduction Act of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection
[[Page 18664]]
should be approved by OMB, section 3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we solicit comment on the following
issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
Section 413.79 Direct GME payments: Determination of the weighted
number of FTE residents
Section 413.79(f)(6)(ii) states that each hospital in the emergency
Medicare GME affiliated group must submit an emergency Medicare GME
agreement in the manner specified in paragraph (iv) and include the
following information:
(A) Each participating hospital and its provider number.
(B) Specify the effective period of the emergency Medicare GME
affiliation agreement.
(C) List each participating hospital's IME and direct GME FTE caps
in effect before the emergency Medicare GME affiliation agreement. If
the hospital was already a member of a Medicare GME affiliated group as
defined at Sec. 413.75(b) before entering into the emergency Medicare
GME affiliation agreement, the emergency Medicare GME affiliation
agreement must be premised on the FTE caps of the hospital as adjusted
per the Medicare GME affiliation agreement.
(D) Specify the total adjustment to each hospital's FTE caps in
each year that the emergency Medicare GME affiliation agreement is in
effect, for both direct GME and IME, that reflects a positive
adjustment to one hospital's direct and indirect FTE caps that is
offset by a negative adjustment to the other hospital's (or hospitals')
direct and indirect FTE caps of at least the same amount. The sum total
of adjustments to all the participating hospital's FTE caps under the
emergency Medicare GME affiliation agreement may not exceed the
aggregate adjusted caps of the affiliated group.
(E) Attach copies of all existing Medicare GME affiliation
agreements and emergency Medicare GME affiliation agreements the
hospital is participating in at the time the emergency Medicare GME
affiliation agreement is executed.
The burden associated with this requirement is the time and effort
it would take for the GME affiliated hospital to develop and submit the
emergency Medicare GME affiliation agreement. It is difficult for us to
determine estimated annual burden because we do not know how many
hospitals will be affected in any given disaster. It would depend on
what resources are available to the affected hospitals after sustaining
damage from the disaster. This could take a few hours per hospital or
much longer depending on if they keep records available and current.
Hospitals also have to coordinate with other hospitals to draw up an
affiliation agreement which may take more time if the hospitals have to
negotiate.
If you comment on these information collection and record keeping
requirements, please mail copies directly to the following:
Centers for Medicare & Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Division of Regulations Development,
Attn.: Melissa Musotto, CMS-1531-IFC, Room C5-14-03, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
Office of Information and Regulatory Affairs, Office of Management
and Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn: Carolyn Lovett, CMS Desk Officer, CMS-1531-IFC, [email protected]. Fax (202) 395-6974.
VII. Regulatory Impact Analysis
[If you choose to comment on issues in this section, please include
the caption ``REGULATORY IMPACT ANALYSIS'' at the beginning of your
comments.]
A. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 (as amended by Executive Order 13258, which
merely reassigns responsibility of duties) directs agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
This rule is not a major rule since we anticipate that the cost to the
Medicare program will be $32.3 million for the 10-month period between
August 29, 2005 and June 30, 2006.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6 million to $29 million in any 1 year (for details, see the Small
Business Administration's regulation that set forth size standards for
health care industries at (65 FR 69432)). We believe that the impact on
the affected hospitals will not be significant and will not affect a
substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. This rule is not
anticipated to have a significant effect on small rural hospitals since
the provisions of this rule will most likely be used by large teaching
hospitals that have established residency programs and the capacity to
train a larger complement of displaced residents. The majority of this
type of teaching hospital is located in non-rural areas.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $120 million. This rule will not have
an effect on State, local, or tribal governments in the aggregate and
the private sector costs will be less than the $120 million threshold.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications.
[[Page 18665]]
This rule will not have a substantial effect on State or local
governments.
B. Anticipated Effects
This interim final rule with comment period modifies the current
GME regulations as they apply to Medicare GME affiliated groups to
provide for greater flexibility in training residents in approved
residency programs during times of disaster. Specifically, this rule
implements provisions for ``emergency Medicare GME affiliated groups''
to address the needs of teaching hospitals that are forced to find
alternate training sites for residents that were displaced by a
disaster.
We believe that there are limited effects to modifying the existing
Medicare GME affiliations to allow for emergency affiliation
agreements. We note that we are not allowing hospitals to count for
Medicare IME or direct GME payment purposes additional FTE residents
that had not been counted by Medicare before a qualifying emergency.
Hospitals participating in emergency Medicare GME affiliated groups are
held to their respective FTE resident caps as specified by the
emergency affiliation agreement. IME and direct GME payments to the
hospitals under this provision will not be based upon any FTE residents
in excess of the caps specified under the emergency Medicare GME
affiliation agreements. However, Medicare spending may be affected by
differences in the per resident amounts, resident to bed ratios, and
Medicare utilization rates of host hospitals and home hospitals.
For purposes of comparing the existing closed program or closed
hospital provisions to the emergency Medicare GME affiliation
provisions, we have calculated a financial impact of the time-limited
exception to the 3-year rolling average provision for the 10-month
period between August 29, 2005, and June 30, 2006. This impact is
premised on the fact that for 10 months, host hospitals would be
permitted to count an additional two-thirds of displaced FTE residents,
rather than only one-third of the displaced FTEs that they could count
if the displaced FTEs would be included in the 3-year rolling average.
In estimating the impact of the 10-month exception, we estimated
the cost based on the FY 2006 projected national average per resident
amount and the average Medicare utilization rate for direct GME
purposes, and the average resident to bed ratio for IME purposes. In
addition, we estimate that approximately 293 FTE residents will be
affected. Accordingly, we believe that the impact on combined direct
GME, operating IME and capital IME payments will be approximately $32.3
million for the 10-month period between August 29, 2005 and June 30,
2006.
C. Alternatives Considered
We considered amending the closed program regulations, at Sec.
413.79(h), to apply to partially closed programs. However, due to the
complexity of training programs where residents train at multiple
hospitals, there are many potential difficulties that can arise in
applying this policy to address disaster situations. Typically,
residents in a program spend time training during the year at multiple
hospitals, some of which may have been affected by the disaster, while
others may not have been affected. Additional complexity can arise
through the interaction of the home and host hospital's FTE resident
caps. Each one of the home hospitals involved could be training a
number of FTE residents above their respective IME and direct GME FTE
resident caps. Since the closed program provisions are resident-
specific, that is, the host hospital's cap adjustment is tied to the
specific resident who was displaced, as specified at Sec. 413.79(h),
documentation would be required to account for each resident's FTE time
spent training at each of the home and host hospitals. Additionally,
because the policy under Sec. 413.79(h) is ``resident-specific'', the
host hospital would only receive a temporary cap adjustment for as long
as the specific residents are displaced. Therefore, home and host
hospitals would need to provide a very detailed accounting of each
resident's training as required at Sec. 413.79(h)). The documentation
that would be required if the change in policy was to amend the closed
program regulations would prove to be too burdensome for many
hospitals.
D. Conclusion
For these reasons, we are not preparing analyses for either the RFA
or section 1102(b) of the Act because we have determined that this rule
would not have a significant economic impact on a substantial number of
small entities or a significant impact on the operations of a
substantial number of small rural hospitals.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 412
Health facilities, Kidney diseases, Medicare, Puerto Rico,
Reporting and recordkeeping requirements.
42 CFR Part 413
Health facilities, Kidney disease, Medicare, Puerto Rico, Reporting
and recordkeeping requirements.
0
For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
0
1. The authority citation for part 412 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh), Sec. 124 of Pub. L. 106-113, 113 Stat.
1515, and Sec. 405 of Pub. L. 108-173117, Stat. 2266.
Subpart G--Special treatment of certain facilities under the
prospective payment system for inpatient operating costs
0
2. Section 412.105 is amended by--
0
A. Republishing the introductory text.
0
B. Revising paragraph (a)(1)(i).
0
C. Republishing paragraph (f) introductory text.
0
D. Revising paragraph (f)(1)(vi).
The revisions read as follows:
Sec. 412.105 Special treatment: Hospitals that incur indirect costs
for graduate medical education programs.
CMS makes an additional payment to hospitals for indirect medical
education costs using the following procedures:
(a) * * *
(1) * * *
(i) Except for the special circumstances for Medicare GME
affiliated groups, emergency Medicare GME affiliated groups, and new
programs described in paragraphs (f)(1)(vi) and (f)(1)(vii) of this
section for cost reporting periods beginning on or after October 1,
1997, and for the special circumstances for closed hospitals or closed
programs described in paragraph (f)(1)(ix) of this section for cost
reporting periods beginning on or after October 1, 2002, this ratio may
not exceed the ratio for the hospital's most recent prior cost
reporting period after accounting for the cap on the number of
allopathic and osteopathic full-time equivalent residents as described
in paragraph (f)(1)(iv) of this section, and adding to the capped
numerator any dental and podiatric full-time equivalent residents.
* * * * *
[[Page 18666]]
(f) Determining the total number of full-time equivalent residents
for cost reporting periods beginning on or after July 1, 1991.
* * * * *
(vi) Hospitals that are part of the same Medicare GME affiliated
group or emergency Medicare GME affiliated group (as defined in Sec.
413.75(b) of this subchapter) may elect to apply the limit as paragraph
(f)(1)(iv) of this section on an aggregate basis, as specified in Sec.
413.79(f) of this subchapter.
* * * * *
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES: PROSPECTIVELY DETERMINED PAYMENT
RATES FOR SKILLED NURSING FACILITIES
0
3. The authority citation for part 413 continues to read as follows:
Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and
(n), 1861 (v), 1871, 1881, 1883, and 1886 of the Social Security Act
(42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n),
1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww) Sec 124 of Pub. L.
106-113, 113 Stat. 1515.
Subpart F--Specific categories of costs
0
4. In Sec. 413.75, paragraph (b) introductory text is republished, and
the definition for ``Emergency Medicare GME affiliated group'' is added
in alphabetical order to read as follows:
Sec. 413.75 Direct GME payments: General requirements.
* * * * *
(b) Definitions. For purposes of this section and Sec. 413.76
through Sec. 413.83, the following definitions apply:
* * * * *
Emergency Medicare GME affiliated group means at least one home
hospital and one or more host hospitals, as those terms are defined
below, that meet the requirements at Sec. 413.79(f)(6). For purposes
of an emergency Medicare GME affiliated group, the following
definitions apply:
(1) Home hospital means a hospital that--
(i) is located in section 1135 emergency area;
(ii) had its inpatient bed occupancy decreased by 20 percent or
more as the result of a section 1135 emergency period so that it is
unable to train the number of residents it originally intended to train
in that academic year; and
(iii) needs to send the displaced residents to train at a host
hospital.
(2) Host hospital means a hospital training residents displaced
from a home hospital.
(3) Section 1135 emergency area or section 1135 emergency period
mean, respectively, a geographic area in which, or a period during
which, there exists--
(i) An emergency or disaster declared by the President pursuant to
the National Emergencies Act or the Robert T. Stafford Disaster Relief
and Emergency Assistance Act; and
(ii) A public health emergency declared by the Secretary pursuant
to section 319 of the Public Health Service Act.
* * * * *
0
5. Section 413.79 is amended as follows:
0
A. Revising paragraph (f) introductory text.
0
B. Adding a new paragraph (f)(6).
The revisions and additions read as follows:
Sec. 413.79 Direct GME payments: Determination of the weighted number
of FTE residents.
* * * * *
(f) Medicare GME affiliated group. A hospital may receive a
temporary adjustment to its FTE cap, which, except as provided in
paragraph (f)(6)(iv) below, is subject to the averaging rules at Sec.
413.79(d), to reflect residents added or subtracted because the
hospital is participating in a Medicare GME affiliated group or an
emergency Medicare GME affiliated group (as defined at Sec.
413.75(b)). Under this provision--
* * * * *
(6) Emergency Medicare GME affiliated group.
Effective on or after August 29, 2005, home and host hospitals as
defined at Sec. 413.75(b) may form an emergency Medicare GME
affiliated group by meeting the requirements provided in this section.
The emergency Medicare GME affiliation agreement may be made effective
beginning on or after the first day of a section 1135 emergency period,
and terminates no later than at the conclusion of two academic years
following the academic year during which the section 1135 emergency
period began.
(i) Each hospital in the emergency Medicare GME affiliated group
must submit an emergency Medicare GME affiliation agreement that is
written, signed, and dated by responsible representatives of each
participating hospital in the manner specified in paragraph (ii) and
includes the following information:
(A) List each participating hospital and its provider number; and
indicate whether each hospital is a home or host hospital.
(B) Specify the effective period of the emergency Medicare GME
affiliation agreement (which must, in any event, terminate at the
conclusion of two academic years following the academic year in which
the section 1135 emergency period began).
(C) List each participating hospital's IME and direct GME FTE caps
in effect before the emergency Medicare GME affiliation agreement
(including any adjustments to those caps in effect as a result of other
Medicare GME affiliation agreements but not including any slots gained
under Sec. 413.79(c)(4)).
(D) Specify the total adjustment to each participating hospital's
FTE caps in each academic year that the emergency Medicare GME
affiliation agreement is in effect, for both direct GME and IME, that
reflects a positive adjustment to the host hospital's direct and
indirect FTE caps that is offset by a negative adjustment to the home
hospital's (or hospitals') direct and indirect FTE caps of at least the
same amount. The sum total of adjustments to all the participating
hospitals' FTE caps under the emergency Medicare GME affiliation
agreement may not exceed the aggregate adjusted FTE caps of the
hospitals participating in the emergency Medicare GME affiliated group.
A home hospital's IME and direct GME FTE cap reductions in an emergency
Medicare GME affiliation agreement are limited to the home hospital's
IME and direct GME FTE resident caps at Sec. 413.79(c) or Sec.
413.79(f)(1) through (f)(5), that is, as adjusted by any and all
existing affiliation agreements as applicable.
(E) Attach copies of all existing Medicare GME affiliation
agreements and emergency Medicare GME affiliation agreements in which
the hospital is participating at the time the emergency Medicare GME
affiliation agreement is executed.
(ii) Time for submission of the emergency Medicare GME affiliation
agreement. For the year during which the section 1135 emergency was
declared, each participating hospital must submit an emergency Medicare
GME affiliation agreement to CMS and submit a copy to the CMS fiscal
intermediary by the later of 180 days after the section 1135 emergency
period begins or by June 30 of the academic year in which the emergency
Medicare GME affiliation agreement is effective. Emergency Medicare GME
affiliation agreements for the subsequent 2 academic years must be
submitted by the later of 180 days after the section
[[Page 18667]]
1135 emergency period begins or by July 1 of each year.
(iii) Exemption from the Shared Rotational Arrangement Requirement.
During the effective period of the emergency Medicare GME affiliation
agreement, hospitals in the emergency Medicare GME affiliated group are
not required to participate in a shared rotational arrangement as
defined at Sec. 413.75(b).
(iv) Host Hospital Exception from the Rolling Average for the
Period from August 29, 2005 to June 30, 2006. To determine the FTE
resident count for a host hospital that is training residents in excess
of its cap, a two step process will be applied. First, subject to the
limit at paragraph (f)(6)(i)(D) of this section, a host hospital is to
exclude the displaced FTE residents that are counted by a host hospital
in excess of the hospital's cap pursuant to an emergency Medicare GME
affiliation agreement from August 29, 2005, to June 30, 2006, from the
current year's FTE resident count before applying the three-year
rolling averaging rules under Sec. 413.75 (d) to calculate the average
FTE resident count. Second, the displaced FTE residents that are
counted by the host hospital in excess of the host hospital's cap
pursuant to an emergency Medicare GME affiliation agreement from August
29, 2005, to June 30, 2006, are added to the hospital's 3-year rolling
average FTE resident count to determine the host hospital's FTE
resident count for payment purposes.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: March 31, 2006.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
Approved: April 4, 2006.
Michael O. Leavitt,
Secretary.
[FR Doc. 06-3492 Filed 4-7-06; 3 pm]
BILLING CODE 4120-01-P