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Federal Report to the ACGME - February 11, 2003
Introduction The federal government has been operating under continuing resolutions (CR) since October 2002. The latest (eighth) CR keeps the government operating at FY 2002 levels until February 20, 2003. Health Resources and Services Administration Council on Graduate Medical Education (COGME) The Council on Graduate Medical Education's (COGME) authorization and charter expired on September 30, 2002. Public Law 101-251, the Health Safety Net Amendments of 2002, extended COGME through September 30, 2003. Following COGME's extension, the charter was renewed through September 30, 2003 with provisions for the Council to meet twice annually. The Council's last meeting was held in September 2002; its next meeting is scheduled for April 10-11, 2003 in Bethesda, Maryland. COGME's agenda for the April meeting includes discussion of:
At the meeting, COGME workgroups will convene to address selected issues regarding the physician workforce, GME financing, and diversity. Children's Hospitals Graduate Medical Education Payment Program (CHGME PP) The CHGME PP published a Federal Register notice on September 25, 2002 setting forth policies (1) related to the reconciliation process required by statute, (2) proposing to update the wage index from 1999 to the current version in the calculation of IME payments, (3) dissemination of data and (4) audits. Payments for GME totaling nearly $276 million were disbursed in fiscal year (FY) 2002 to 59 freestanding children's teaching hospitals across the nation. The range of payments was wide, with six children's teaching hospitals receiving less than $100,000, six children's hospitals receiving between $10 and $20 million, and two hospitals receiving more than $20 million. The number of children's hospitals applying for FY 2003 CHGME PP funds has risen from 59 to 62. Congress proposed an appropriation of $292 million for the CHGME PP, $7 million above last year's budget and above the amount authorized by statute. The CHGME PP is making interim monthly payments during the FY 2003 continuing resolution period, at levels dependent on availability of funds Centers for Medicare and Medicaid Services (CMS) Indirect Medical Education Payments: CMS Final Rule - August 1, 2002. For discharges occurring during FY 2003 and thereafter, the constant multiplier will change from 1.6 to 1.35. This new multiplier represents a 5.5 percent indirect medical education (IME) payment for every 10 percent increase in the resident to bed ratio. This change reflects a decrease from the previous IME adjustment factor which was at 6.5 percent for every 10 percent increase in the resident to bed ratio. Medicare Payment Advisory Commission The MedPac Commission assessed Medicare payments' adequacy for hospitals' inpatient and outpatient services, including payment for rural hospitals, physician services, outpatient dialysis services, ambulatory surgical center services, inpatient psychiatric facilities, skilled nursing facility and home health services, new technologies in Medicare's Prospective Payment System (PPS), and Medicare's indirect medical education adjustment. During their January public meeting, MedPac staff presented a number of recommendations regarding Medicare payments, many of which were adopted. The following is a summary of the recommendations, with an indication of whether the recommendations were adopted by the MedPac Commission. Updating payments for inpatient services. The Commission adopted the recommendation that for fiscal year 2004, the Congress should increase payment rates for inpatient PPS by the rate of increase in the hospital market basket less 0.4 percent. According to MedPac staff assessment, this recommendation should result in a decrease in spending. Indirect medical education (IME) adjustment. MedPac staff presented a recommendation that would reduce the indirect medical education adjustment from 5.5 percent to 5.0 percent in fiscal year 2004 and gradually reduce the adjustment by 0.5 percentage point per year to the empirical relationship between teaching intensity and hospital costs per case which is estimated at 2.7 percent. The Commission did not approve the recommendation. In its August 1, 2002 Federal Register notice, CMS announced the reduction of the IME adjustment from 6.5 percent to 5.5 percent as required by law. There is currently a proposal in Congress (H.R. 26) to reduce IME to 6.0 percent. Improve payments for rural hospitals. The Commission adopted a recommendation to enact a low-volume adjustment to the rates used to pay for inpatient stays under PPS. This option should apply only to hospitals located in rural areas. Furthermore, the Commission recommended that Congress raise the inpatient base rate for hospitals in rural areas and other urban areas to the level of the rate for those major urban areas, phased -in over two years. As to the Disproportionate Share Hospitals (DSH) payments, MedPac recommended an interim measure that will raise the cap on the DSH add-on for most rural hospitals from 5.25 to 10 percent phased in over two years. Labor share/ Wage Index. The Commission approved a recommendation directing the Secretary to reevaluate the labor share used in the wage index system that geographically adjusts payments for inpatient stays. Payments for inpatient stays when cases are discharged to PPS-exempt hospitals, SNFs, or related home health care (Post Acute Transfer Policy). The recommendation before the Commission was to expand this policy to DRGs other than those that are currently required to be adjusted by law. There was no clear assessment of this policy on the hospitals' financial situation. Hence, the Commission adopted a recommendation that would instruct the Secretary to add thirteen DRGs to the post acute transfer policy in fiscal year 2004, and then reevaluate the impact before the policy is expanded further. MedPac staff estimate that expanding this payment policy to other DRGs would decrease Medicare spending. |
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