|
An Update: Physicians Training Residents In Non Hospital Settings
by J. Mark Waxman, Foley & Lardner LLP, Boston, MA
Spurred
by recently enacted Medicare Prescription Drug, Improvement and
Modernization Act of 2003 [MMA
provisions (Section 713)], an OIG report entitled, “Alternative
Medicare Payment Methodologies For The Costs of Training Residents
in Non Hospital Settings” ( “OIG Report”),
issued in December 2004, and the April 8, 2005 release by the
Center for Medicare and Medicaid Services (“CMS”)
of the “Medicare Policy Qualifications on Graduate Medical
Education Payments for Residents Training in Non-Hospital Settings” ( “PQ”),
training in non-hospital settings has become a “hot topic.” This
article addresses why this has become a troublesome area and
offers guidance for avoiding unnecessary issues.
I.
Medicare Reimbursement For Graduate
Medical Education (“GME”) In
Non-Hospital Settings
The heart of Medicare reimbursement for the costs of direct
medical education ( “DGME” or “DME”)
and indirect medical education (“IME”) is an accurate
determination of the number of resident full time equivalent
(“FTEs”). Medicare determines its share for payment
through the payment of a portion of the direct costs of training
focused on residents, faculty and related overhead (e.g., salaries
and fringe benefits are the basis for DGME payments), and the
additional operating costs borne by teaching hospitals – more
tests ordered and higher intensity of treatment of the associated
with sicker patients (“IME”).
One element of the teaching activity that has called for special
treatment is that of training residents in non-hospital settings.
Authorization for DGME payments when this type of training occurs
was specifically allowed under the adoption of Section 1886 (h)
of the Social Security Act (“SSA”) in 1987, with
IME following under the BBA in 1997 (Section
4621). The criteria for the receipt of payment by the academic
medical center (“AMC”) were the same for both:
- Time was spent in patient care activities;
- The medical residency was an approved program; and
- The hospital incurred “all, or substantially all” of
the training costs in non-hospital settings.
This latter provision was defined to mean that “[t]he
residents’ salaries and fringe benefits (including travel
and lodging…) and the portion of the cost of teaching
physician salaries and fringe benefits attributable to direct
graduate medical education (“GME”).” The
costs do not include time spent on direct patient care which
results in billable services.
A second set of requirements also conditions receipt of payment
on the existence of a written agreement between the hospital
and the non-hospital setting. The agreement is not required to
have any specific format, but most provide that:
- The hospital will incur the salary and fringe benefit costs
while the resident is training at the non-hospital setting; and
- The hospital will provide reasonable compensation for the
non-hospital setting, indicating the amounts with specificity.
II.
MMA and the OIG Report
One of the challenges since the adoption of the resident cost
reimbursement formulas relates to the fact that, since 1997,
situations arose in which teaching hospitals might claim costs
for residents in non-hospital training sites (“NHTS”),
but the full costs involved, for example those of the teaching
physicians, were not being incurred by the hospital. Indeed,
much of the time, teaching physicians would simply volunteer
to train residents. This led, as a number of Senators recently
noted, to a practice initiated in 2002, whereby CMS would retroactively
deny an allocated share of residency payments, particularly where
teaching physicians were volunteers. The
Senate had, along with Congress and the President, previously
acted to provide a moratorium during calendar year 2004 on disallowances
where the hospitals did not incur the full costs related to the
physician’s time spent supervision NHTS residents. And,
in MMA Section 713, OIG had been directed to study the problem
and find out just what were the practices that existed for payments,
if at all, for the costs of training residents in NHTS.
The Report, issued in December, 2004, found or recommended
that:
There was a need to clarify the treatment of volunteer time;
CMS could determine a series of alternative methodologies to
pay NHTS costs; and
The moratorium should be extended until the issues were clarified
and resolved.
The moratorium, however, has now expired.
III.
The CMS Policy Qualifications
In lieu of an extension of the moratorium, on April 8, 2005
CMS published its Policy Qualifications. In its PQ, CMS reaffirmed
its recognition of Congress’ commitment to hospitals to encourage
more resident training in NHTS. However, through the PQ, CMS
reaffirmed the view that time spent by residents in NHTS would
be counted to establish qualifying time only if the hospital
is “actually incurring all or substantially 'all of the costs'
of… training at the hospital site.”
As for the specific question of how to address volunteer time
by physicians who were training or supervising residents at these
sites, CMS sought to refocus the question on “whether there
is a cost” to the non-hospital site for supervision. If
so, and the hospital paid the costs by reimbursing the non-hospital
site, the hospital was required to reimburse it. If not, then
no payment would be required. Strangely, however, whether this
specifically also meant that the time spent can no longer be
counted, is not directly addressed!
This gap suggests that the best approach to avoid the potentially
adverse answer is to make sure a payment is made, but it must
be a payment specifically for “teaching time” activities
within the scope of the approved GME program, and not in billable
patient care activities. Hence, if the only payments a physician
receives are production based, i.e. based only on the
number of patients seen and billed, there is no incurred cost
to be reimbursed or compensated.
From this point in the PQ, the logic of the presentation seems
to deteriorate as CMS attempts to distinguish between the role
of and payments to “solo practitioners” and “members
of a group practice”. In the case of the former, CMS assumes
the only compensation is production based -- i.e., that
a facility would not pay a practitioner reasonable compensation
for time spent training, or even as a Department Education and
Training Director. This inability is then contrasted with a group
practice where the physician “often” receives a salary
for work at the NHTS, which by definition would (assumedly) reflect “all” responsibilities
from which some share could/should be allocated to time spent
teaching. If the hospital then paid this amount, then it would
have incurred the costs. The role of production based systems,
and profit sharing in the “group practice” setting
is not explored.
CMS does, however, recognize that a “group practice” that
is simply an overhead sharing arrangement coupled with no revenue
sharing is equivalent for these purposes to the solo practitioner
example.
A third alternative is to make the supervising physicians hospital
employees. Unless additional compensation is received from the
non-hospital site, then additional payment is not required since
there are no additional physician costs to be incurred. The written
agreement would simply need to reflect this state of affairs.
The PQ then addresses several of the written agreement related
issues. First, the agreement should be with the physician is
the training is office based. The physician “must report” to
another official at the NHTS or if the physician is a NHTS employee,
the agreement is to be with the site. Presumably this will also
be the case if the training physician is not an employee, but
receives a reasonable stipend for the training effort.
Second, even if the NHTS is wholly owned or owned by an affiliate,
a written agreement must be in place and the hospital must incur
the teaching physician costs. Hence in multi-faculty systems,
the hospital ust still pay a separately licensed nursing home
the necessary costs. This can be accomplished by at least journal
entries that show the expense being properly charged and credited
to the appropriate cost centers.
The same principles also apply where the teaching physician
is a medical school staff member and supervises residents in
both the AMC and clinics owned by the medical school. The hospital
should have a written agreement with the medical school, and
the agreement would specify the compensation agreement for each
clinic.
IV.
Conclusion
Several conclusions may be reached. First, whatever
the compensation arrangement between hospital, training physician
and NHTS, it is important to have a written agreement in place. Second,
ensuring reimbursement for the full FTE costs of residents will
likely require that there be a teaching cost incurred by the
hospital. Third, if the physician engaged in the training
receives purely production based compensation, CMS will take
the position that there is no incurred cost to be paid by the
hospital. And, fourth, if the physician receives a predetermined
compensation amount, regardless of the number of patients treated,
there can be an allocated share paid for training which will
allow residents to be counted for resident (both IME and DGME)
purposes.
Among the items not addressed would be a situation where the
physician is paid a specific stipend for teaching, based upon
a reasonable hourly rate, or alternative by simply being employed
by the NHTS as a part time employee for teaching purposes. The
issue which remains is how to deal with (uncoerced) volunteerism,
or incentive based volunteerism (in the form of CME credits,
Academic Appointments, library access, and participation in hospital
rounds). Without a resolution of this issue, hospitals remain
at risk. The sad, but conservative answer, would seem to be to
discourage volunteerism and adopt a payment and written agreement
approach.
|
