the a, b, c’s of the chgme payment program from policy to payments

The A, B, C’s of the CHGME Payment ProgramFrom Policy to Payments

U.S. Department of Health and Human ServicesHealth Resources and Services Administration

Bureau of Health ProfessionsDivision of Medicine and Dentistry Graduate Medical Education Branch

A Historical Overview ofFederal Graduate Medical Education (GME) Funding

America’s Teaching Hospitals

In 1965, with the inception of Medicare, Congress recognized that teaching hospitals enhanced the quality of patient care and offered that the costs of this education should be borne by society.

Payments for Direct and Indirect Graduate Medical Education

Direct Medical Education (DME) payments cover the direct cost of GME such as stipends and fringe benefits for residents, and salaries and fringe benefits for faculty.

Indirect Medical Education (IME) payments cover expenditures such as the cost of treating more severely ill patients, and processing diagnostic tests because of the training of residents.

Distribution of Medicare GMEPayments

In non-metropolitan counties: 70 out of 2,241 short-term non-federal general hospitals (3.1%) (Slifkin and Dalton 1996)

In metropolitan counties: 1,069 hospitals out of 2,823 (37.9%)

Patient Care Provided by Freestanding Children’s Hospitals:

Freestanding children’s hospitals represent 1% of all short-term acute care hospitals.

Children hospitalized in the U.S. account for:39% of all admissions;49% of all inpatient days; and59% of all costs, which equates to $10 billion worth of care

every year.

The Children’s Hospitals Graduate Medical Education (CHGME) Payment Program

Addressing the Disparity in Federal GME Funding to Freestanding

Children’s Hospitals

CHGME Payment Program Purpose

The CHGME Payment Program provides funds to children’s hospitals to support the training of pediatric and other residents in GME programs. This program compensates for the disparity in the level of Federal GME funding for teaching hospitals for pediatrics versus other types of hospitals.

Delegation of Authority

Department of Health and Human ServicesHealth Resources and Services Administration

Bureau of Health Professions

The Impact of the CHGME Payment Program on

Freestanding Children’s Hospitals in FY 2008

CHGME Payment Program Children’s Hospitals Characteristics

In FY 2008: 82 children’s hospitals, nationwide, were potentially eligible(1) to

participate in the CHGME Payment Program; 56 children’s hospitals located in 30 states and territories received

CHGME Payment Program funding;

On average: Almost 50% of the patients that children’s teaching hospitals treat

are low income; Freestanding children’s hospitals provided care to 40% of patients

enrolled in Medicaid and SCHIP(2) ; and Freestanding children’s hospitals provided care to 6.46% of

uninsured patients.

(1) Hospitals with a 3300 series Medicare Provider Number(2) * According to American Academy of Pediatrics (2007)

From Policy to Payments…

Budget Authority The federal spending process may consist of two sequential

steps: authorization and appropriation. Both the Senate and the House each have authorizing

committees and appropriations committees. First, Bills may be introduced to authorizing committees,

which are responsible for recommending programs to be approved, establish program objectives and set appropriation limits.

Next, appropriations committees recommend the actual level of spending that will be allowed for the programs. This is called "budget authority.”

http://www.whitehouse.gov/

AuthorizationAn authorization is an act or a permanent law that may obligate funding for a program or agency. These laws: establish, continue, or modify federal programs; are sometimes necessary under House and Senate

rules (or under statute) for the Congress to appropriate budget authority for programs;

are effective for one year, a fixed number of years, or an indefinite period and may be reauthorized;

are provided either as definite amounts of money or for "such sums as may be necessary“ (indefinite).

http://www.senate.gov/

The CHGME Payment Program’s Statutory Authorization by Fiscal Year (FY)

FY 2000: $280 million

$90 million for DME $190 million for IME

FY 2001: $285 million


FY 2002 through FY 2005: Such sums as may be necessary

FY 2007 through FY 2012: $330 million


Appropriation An appropriation is a provision of federal funds for

specified purposes, through an annual appropriations act or a permanent law.

The Congress may extend a program by providing "unauthorized appropriations“, unless expressly prohibited by the underlying law.

Some Federal programs have never received explicit authorizations of appropriations, but receive appropriations because the authority to obligate and spend funds is considered inherent in the original underlying law or act.


Mandatory Spending

Mandatory (or Direct) spending (budget authority and outlays) is spending controlled by laws other than annual appropriations acts such as funding for most major entitlement programs (e.g. Social Security and Medicare).


Non-Direct SpendingDiscretionary (or non-direct) spending is spending (budget authority and outlays) controlled in annual appropriations acts such as funding for the CHGME Payment Program. The authorizing committees’ role is to enact laws that

provide a basis for operating programs and guidance to the Appropriations Committees. That guidance is usually expressed in terms of an authorization of appropriations (both definite or indefinite).


FY 2008 Funding Disbursed to Participating Hospitals

In FY 2008, the CHGME Payment Program disbursed more than $288 million to children’s teaching hospitals.

Total Fund Distribution: DME: $96 million IME: $192.1 million

Hospital Disbursement (Median): DME: $1,212,116 IME: $2,103,540

CHGME Payment Program Governing Rules and Regulations

Regulatory Guidance Federal Register (FR) is the official daily publication for

proposed final rules, and notices issued by Federal agencies and organizations, as well as executive orders and other presidential documents. A notice published in the FR may also be referenced as an Federal Register Notice (FRN).

Code of Federal Regulations (CFR) is the collection and organization of the rules published in the Federal Register. The CFR is written to explain in detail what the laws may not specify or address, such as what procedures are to be followed and descriptions of the special situations which can arise.

http://www.gpoaccess.gov/fr/about.html

Federal Register Notice ADVANCE FEDERAL NOTICE

The CHGME Payment Program may publish "Notices of Intent" in the FR to inform the public about an issue under consideration and to encourage additional views.

PROPOSED FEDERAL NOTICE When a formal proposal is developed, the CHGME Payment

Program publishes a “Proposed Notice" in the FR, that gives the timeframe in which written comments may be submitted.

FINAL FEDERAL NOTICE Ultimately, a "Final Notice" is published, and the notice specifies

the date when the new guidance becomes effective. REGULATORY AGENDA PLAN

The CHGME Payment Program has plans to publish an agenda in the CFR that summarizes policy-significant notices.

http://www.archives.gov/federal-register/index.html

Governing Federal Statutes

Governing Federal StatutesCHGME Payment Program Specific: Healthcare Research and Quality Act, 1999 (Public

Law 106-129, Section 340E of the Public Health Service Act)

The Children’s Health Act, 2000 (Public Law 106-310, Title XX)

Amendment to Section 340E of the Public Health Service Act (Public Law 108-490)

Children’s Hospital GME Support Reauthorization Act of 2006 (Public Law 109-307)

Governing Federal Statutes continued.

CHGME Payment Program Related: Medicare Prescription Drug, Improvement and

Modernization Act of 2003 (Public Law 108-173), also known as the Medicare Modernization Act (MMA) of 2003 Section 422, Section 502, Section 713

Social Security Act, Section 1886 42 CFR 412.105 42 CFR 413.65 42 CFR 413.75 – 413.83 42 CFR 415.152

Federal Register Notices

Federal Register NoticesCHGME Payment Program Specific: 65 FR 37136 of June 13, 2000 65 FR 37985 of June 19, 2000 66 FR 12940 of March 1, 2001 66 FR 37980 of July 20, 2001 67 FR 60241 of September 25, 2002 67 FR 68879 of November 13, 2002 68 FR 60396 of October 22, 2003

CHGME Payment Program Related: 63 FR 26318 of May 12, 1998

CHGME Payment Program Eligibility Requirements

Hospital Eligibility CriteriaBy statute (P.L. 106-310), an eligible children’s hospital must meet the following criteria: it participates in an approved GME program; it has a Medicare Provider Agreement; it is excluded from the Medicare inpatient prospective

payment system (PPS) under section 1886(d)(1)(B)(iii) of the Social Security Act, and its accompanying regulations(1); and

it is a “freestanding” hospital.

(1) A hospital with a 3300 series Medicare provider numberwould meet this criteria (i.e., 55-3300).

Changes in Hospital EligibilityA hospital remains eligible for payments as long as it trains residents as a “freestanding” children’s hospital during the FY for which CHGME Payment Program payments are made.

Hospitals which become ineligible for payments:

must notify HRSA immediately of the change in status and the date it became ineligible; and

will be liable for the reimbursement, with interest, of any funds received during the period after it became ineligible.

Payment Methodology

CHGME Payment Program funding to individual hospitals is based upon a hospital’s:

rolling average of the weighted resident FTE count for DME payments; and the

rolling average of unweighted resident FTE count for IME payments.

Approved GME Programs and the Residents they Train

What is an Approved Training Program?

An approved training program means a program that meets one of the following criteria: is approved by the:

Accreditation Council for Graduate Medical Education (ACGME);

Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association;

Commission on Dental Accreditation of the American Dental Association;

Council of Podiatric Medicine Education of the American Podiatric Medical Association; or

What is an Approved Training Program continued?

may count towards certification of the resident in a specialty or subspecialty listed in the current edition of the Directory of Graduate Medical Education Programs (published by the American Medical Association) or the Annual Report and Reference Handbook (published by the American Board of Medical Specialties); or

is approved by the ACGME as a fellowship program in geriatric medicine; or

is a program that would be accredited except for the accrediting agency’s reliance upon an accreditation standard that requires an entity to perform an induced abortion or require, provide, or refer for training in the performance of induced abortions, or make arrangements for such training, regardless of whether the standard provides exceptions or exemptions.

Resident Eligibility Requirements

To be counted, a resident: must be in an approved training program*; and be a graduate of an accredited medical school in the

U.S. or Canada; or have passed the United States Medical Licensing

Examination (USMLE) Parts I & II (in the case of international medical graduates)

*See 42 CFR 413.75(b)

Accredited Medical Schools in the U.S. or Canada

An accredited U.S. or Canadian medical school is a school that meets the standards necessary for accreditation (and is accredited) by the: Liaison Committee on Medical Education of the American

Medical Association; American Osteopathic Association; Commission on Dental Accreditation; or the Council on Podiatric Medical Education.

International Medical Graduates (IMGs)

An IMG [also known as a foreign medical graduate (FMG)] is a resident who is not a graduate of a medical, osteopathy, dental, or podiatry school, respectively, accredited or approved as meeting the standards necessary for accreditation by the: Liaison Committee on Medical Education of the American

Medical Association; American Osteopathic Association; Commission on Dental Accreditation; or the Council on Podiatric Medical Education.

Counting Residents

Resident Counts

Resident counts are based on the number of residents training at the hospital complex and certain non-hospital/non-provider settings/sites throughout the hospital’s fiscal year.

Residents are counted as full-time equivalents based on the total time necessary to fill a full-time residency slot for the year.

Resident FTEA resident FTE is measured in terms of time worked during a residency training year. It is not a measure of individual residents who are working.

If a full-time resident spends all time that is part of the approved training program in the hospital complex or qualified non-hospital site, the resident is counted as 1.0 FTE.

No resident may count as more than 1.0 FTE.

Partial Resident FTE

A partial resident FTE is a resident who does not spend all (the) time that is part of the approved training program in the hospital complex or qualified non-provider setting.

When would a resident be counted as a Partial FTE?

A resident will count as a partial FTE based on the proportion of time worked at the children’s hospital and qualified non-provider settings relative to the total time worked in a full-time residency slot if the resident: is part-time; rotates to other hospitals as part of the approved training

program sponsored by the children’s hospital; is in a program sponsored by another hospital and spends one

or more rotations at the children's hospital; is on maternity leave; joins or leaves a program mid-year; or passes the USMLE mid-year.

Weighting FTE Residents

Residents are divided into two categories: those in their initial residency period;

and those beyond their initial residency

period.

Initial Residency Period (IRP)For allopathic residency programs, the IRP is: the minimum number of years of formal training required

for initial board eligibility in a specialty as specified in the current Directory of Residency Training Programs.

For osteopathy, dentistry, and podiatry programs, the IRP is: the minimum number of years of formal training necessary

to satisfy the requirements of the approving body for those programs.

Counting Residents Beyond their IRP

Residents who are beyond their IRP, are weighted by a factor of 0.5 (or ½).

Where are residents counted?

Residents are counted in: the hospital complex; and in non-provider settings

Hospital Complex

The time a resident spends anywhere within the hospital complex* may be included in the resident FTE count for CHGME Payment Program purposes.

*See 42 CFR 413.65

Non-Provider SettingsThe time residents spend in non-provider (or non-hospital) settings such as freestanding clinics, nursing homes, and physicians’ offices in connection with approved programs may be included in determining the number of FTE residents in the calculation of a hospital’s resident count if certain conditions are met.

42 CFR 413.78

Research TimeThe research conducted must be part of the residency program and the resident must carry out the research in: the children’s hospital; or in a non-hospital site where the research

involves direct patient care and the compensation for both the residents and the faculty are paid by the children’s hospital.

Data Sources for Completing the CHGME Payment Program Application

Tying it all together…

Worth Saying Again…

CHGME Payment Program funding to individual hospitals is based upon a hospital’s:

rolling average of the weighted resident FTE count for DME payments; and the

rolling average of unweighted resident FTE count for IME payments.

Rolling AverageThe rolling average is the average of the resident FTE counts reported by the hospital for the: most recently filed Medicare cost report (MCR) [or the

most recently completed Medicare cost reporting period];

the previously filed MCR (or the previously completed Medicare cost reporting period); and

the penultimate filed MCR (or the penultimate completed Medicare cost reporting period).

Rolling Average continued.

The rolling average is based upon the number of: allopathic and osteopathic residents following

application of the “cap”, where applicable; and the

residents in dentistry and podiatry.

The Cap and Cap Year

The “cap” is the number of unweighted resident FTEs enrolled in a hospital’s allopathic and osteopathic residency programs during the “cap year” (the most recent cost reporting period ending on or before December 31, 1996).

Which Residency Programs are included in the 1996 cap?

For allopathic and osteopathic residency programs: The unweighted FTE count in the hospital’s most recent

MCR period ending on or before December 31, 1996 is included in the cap.

For dental and podiatric residency programs: Dental and podiatric residency programs are exempt from

the cap, but are included in the FTE counts for all relevant years included in the rolling average.

Medicare Modernization Act of 2003, Section 422

Impact of Section 422, Redistribution of Unused Resident Positions, on the CHGME Payment Program: Reduction to 1996 Base Year Cap

Children’s hospitals whose cap has been reduced under §422 of the MMA will report and be paid based on the new and reduced cap “for portions of cost reporting periods occurring on or after July 1, 2005.” The current 1996 cap will be used for prior MCR periods.

Increase to 1996 Base Year Cap Effective for portions of cost reporting periods and discharges

occurring on or after July 1, 2005, the CHGME PP will not include resident FTEs counted against the §422 cap in the 3-year rolling average calculation for purposes of DME and IME payments.

Establishing and Adjusting a Hospital’s Cap

Hospitals that were not in existence for the most recent cost reporting period ending on or before December 31, 1996 do not have a cap and are, therefore, limited or “capped” to a resident FTE count of zero “0”. Hence, hospitals must obtain (or adjust) their cap in order to receive CHGME Payment Program funding.

Establishing and Adjusting a Hospital’s Cap continued.

To provide an adjustment to a cap, the CHGME Payment Program will allow hospitals to add resident FTEs to their cap based on the following Medicare and CHGME Payment Program regulations: the formation of a new residency program within the first

3 years after the first program in a hospital begins training residents as described in 42 CFR 413.79(e)*; or

the execution of an affiliation agreement for an aggregate cap.

Medicare GME Affiliation Agreement (for Aggregate Cap)

Adjustments to the cap can be accomplished through an affiliation agreement in accordance with the CMS May 12, 1998 FRN (63 FR 26338). The effective date and length of the affiliation agreement for an

aggregated cap must be clearly documented in the agreement. The affiliation agreement must be filed with all necessary CMS FIs

on or before (the) June 30th that precedes the CHGME Payment Program initial application deadline.

Example:If the CHGME Payment Program initial application

deadline is August 1, 2009. The affiliation agreement must be filed on or before June 30, 2009.

Data Sources for Hospitals that File Full MCRs

Hospitals that file a full MCR (report residents on CMS 2552 Worksheet E-3, Part IV and Part VI, where applicable) must use the data as reflected in:

the most recently filed MCR for the period ending on or before December 31, 1996 (“cap year”);

the most recently filed MCR; the previously filed MCR; and the penultimate filed MCR.

Data Sources for Hospitals that File Low/No-Utilization MCRs

Hospitals that file low or no-utilization MCRs (do not report residents to Medicare on CMS 2552, Worksheet E-3, Part IV), must use the data as reflected in their hospital records for:

the most recently completed MCR period ending on or before December 31, 1996 (“cap year”);

the most recently completed MCR period; the previously completed MCR period; and the penultimate MCR period.

Hospitals that Have Not Completed 3 MCR Periods

If a hospital has completed at least one (1), but not more than two (2) full Medicare cost reporting periods, CHGME Payment Program funding to the children’s hospital will be based upon data from the hospital’s “most recently filed” or “most recently completed” Medicare cost reporting period until three (3) full Medicare cost reporting periods have been completed.

Hospitals that Have Not Completed a Full MCR PeriodHospitals that are eligible to receive CHGME Payment Program funding without having completed a full Medicare cost reporting period will report to the CHGME Payment Program their resident FTE counts and other related hospital financial data based on the data available for the following period: from the date it became eligible to participate in the CHGME Payment Program to the CHGME Payment Program applicationdeadline (66 FR 37980).

Calculating Resident FTEs for an Incomplete MCR Period

A hospital that has not completed a full MCR period, but is eligible to begin receiving CHGME Payment Program funding without having completed a full Medicare cost reporting period, will use the methodology described in the July 20, 2001 FRN (66 FR 37980) to convert a partial cost reporting period resident FTE count to a full cost reporting period resident FTE count based upon its period of eligibility.

How to Apply forCHGME Payment Program Funding…

From Regulation to Application

Application Cycle

For hospitals to be considered for inclusion in the CHGME Payment Program, they must comply with statutory eligibility requirements and participate in the CHGME Payment Program’s application cycle, which consists of specific processes for any given FY. These processes are guided by the CHGME Payment Program’s statutes.

FY 2010 Application Cycle Initial application and payments (1): Application forms available: July 1, 2009 Application deadline: August 1, 2009 Payments: Beginning on or about October, 2009 (2):

Resident FTE Assessment Process (1): October 1, 2009 through March 1, 2010

Reconciliation application and payments (1): Application forms available: April 1, 2010 Application deadline: May 1, 2010 Payments: Beginning on or about July 2010(3)

1. Dates are subject to change.2. Payments contingent upon availability of funds.3. These payments are adjusted based upon the Resident

FTE Assessmentprocess and the reconciliation applications.

Initial Application ProcessFor children’s hospitals meeting all statutory and eligibility requirements, to receive CHGME Payment Program funding, they must submit a completed initial application in accordance with the established deadlines.

Upon receipt by the CHGME Payment Program, the hospital’s initial application undergoes an extensive review and subsequent Resident FTE Assessment (audit) to ensure that the hospital has completed all applicable forms in accordance with all governing rules, regulations, instructions and guidance.

What forms and supporting documentation do I need?

The following forms and documentation are needed: HRSA 99: Hospital Demographic and Contact Information

(aka “Face Page”) HRSA 99-1: Determination of Weighted and Unweighted

Resident FTE Counts (aka “FTE Form”) HRSA 99-2: Determination of Indirect Medical Education

Data Related to the Teaching of Residents (aka “IME Form”)

HRSA 99-3: Hospital Certification HRSA 99-4: Government Performance and Results Act

Tables (aka “GPRA Tables”) reconciliation only HRSA 99-5: Application Checklist Documentation in Support of Data Reported in the above

forms

Application Cover Letter, Forms, and Instructions

HRSA 99:Hospital Demographic and Contact Information (aka “Face Page”)

HRSA 99-1:Determination of Weighted and Unweighted Resident FTE Counts (aka “FTE Form”)

Accuracy of Resident Counts Hospitals are responsible for the accuracy of the resident

counts submitted to HRSA and are subject to audit. Hospitals are not required to submit documentation to

support resident counts reported on their CHGME Payment Program application. However, hospitals should be prepared to produce documentation in accordance with 42 CFR 413.75(d) in any subsequent audit carried out by the Department. Hospitals that do not report resident FTE counts to Medicare are not exempt from this policy.

Certification of Supporting Documentation

The information (documentation in support of residents included in the FTE count for a particular cost reporting period) must be certified by an official of the hospital and, if different, an official responsible for administering the residency program.

42 CFR 413.75(d)

Availability of Supporting Documentation

Documentation must be readily available and retained by the individual identified in HRSA 99 section 5 at the time the initial application for funding is forwarded to the CHGME Payment Program for consideration. This individual should be able to forward this information to the CHGME Payment Program or CHGME FI upon request.

HRSA 99-2:Determination of Indirect Medical Education Data Related to the Teaching of Residents (aka “IME Form”)

Calculating IME Data for an Incomplete MCR Period

A hospital that has not completed a full MCR period, but is eligible to begin receiving CHGME Payment Program funding without having completed a full Medicare cost reporting period, will use the methodology described in the July 20, 2001 FRN (66 FR 37980) to calculate the case mix index, number of discharges, bed count, and inpatient days based upon its period of eligibility.

Calculating Inpatient DaysThe number of inpatient days for the current MCR period is equivalent to the sum of the entire midnight census counts including nursery days for the MCR period reported on line 1.01 on the HRSA 99-2.

This value must be taken to two decimal points (i.e., 38.34).

Calculating Inpatient Discharges

The number of inpatient discharges for the current MCR period is equivalent to the sum of all inpatient discharges including healthy newborns for the MCR period reported on line 1.01 of the HRSA 99-2.

This value must be taken to two decimal points (i.e., 38.34).

Calculating Case Mix IndexThe Case Mix Index (CMI) for the current MCR period is equivalent to the sum of the diagnosis-related group (DRG) weights for all discharges during the MCR period identified on line 1.01 of the HRSA 99-2 divided by the number of discharges. All hospitals must submit a CMI on all patient

discharges using the appropriate CMS DRG version, excluding healthy newborns.

This value must be taken to four decimal points (i.e., 1.2108).

Intern/Resident to Bed Ratio

To comply as closely as possible with Medicare rules and regulations, the Department applies a cap on the Intern/Resident to Bed (IRB) ratio, similar to the cap applied by CMS pursuant to regulations at 42 CFR 412.105(a)(1).

IRB Ratio and CapThe IRB ratio for the current MCR period is equal to the 3-year unweighted FTE rolling average divided by the bed count.

Per 42 CFR 412.105(a)(1), the current IRB ratio may not exceed (is capped at) the ratio for the hospital’s most recent prior cost reporting period.

Determining and Applying the IRB Ratio

Calculate the relevant FY IRBs: Calculate the IRB for the current MCR period (based on

3-year rolling average). Calculate the IRB for the previous MCR period.

Compare the two IRBs (The IRB “cap” is the lower of the two numbers).

IRB Ratio Calculation ExampleExample:Data from the current MCR period (i.e., most recently filed MCR or most recently completed MCR period):

The unweighted FTE rolling average was 78.The bed count was 153.The current MCR period IRB is .509804 [78/153]

Data from the previous MCR period:The unweighted FTE count for the prior MCR

period was 73.The bed count was 138.The prior MCR period IRB is .528986 [73/138]

The IRB “cap” would be .509804 (the lesser of the two).

Exceptions and Adjustmentsto the IRB Cap

An IRB cap adjustment is made for hospitals that have increases in their (1) Medicare GME Affiliation Agreement cap, (2) add-ons due to exceptions, and (3) resident FTE count in their current year’s MCR.

Exceptions and Adjustmentsto the IRB Cap continued.

To determine if an adjustment must be made to the IRB cap, three (3) questions must be asked and answered: Did the hospital’s Medicare GME affiliation

agreement cap increase? Did the hospital’s resident FTE count increase? If the hospital’s resident FTE count did not

increase, has the hospital been training above its cap?


Q1: Did the hospital’s Medicare GME affiliation agreement cap increase?To answer this question, check the hospital’s current MCR year Medicare GME affiliation agreement and compare it to the prior MCR year Medicare GME affiliation agreement cap. If the current Medicare GME affiliation agreement cap

has not increased, no adjustment is made. If the current Medicare GME affiliation agreement cap

is higher, proceed to Step 2.


Q2: Did the hospital’s resident FTE count increase?To answer this question, check whether the current MCR year FTE count increased? If the current MCR year increased:

Determine the incremented increase in the current MCR year’s FTE count relative to the prior year’s FTE count.

Add that amount to the numerator of the prior year’s IRB ratio, but not to exceed the amount by which the Medicare GME affiliation agreement cap increased in the current year.

If the current MCR year did not increase: Proceed to question 3.


Q3: Has the hospital been training above its cap? If the hospital has been training above its Medicare GME

affiliation agreement cap, calculate the number of additional slots in the current MCR year Medicare GME affiliation agreement cap and add that number to the prior MCR year FTE count.

If the hospital has not been training over its Medicare GME affiliation agreement cap, no adjustment is made.

HRSA 99-3:Hospital Certification

HRSA 99-4:Government Performance and Results Act Tables (aka “GPRA Tables”)

Government Performance and Results Act (GPRA) of 1993

The CHGME Payment Program is subject to the GPRA of 1993.

The Act provides Congress with the information necessary to determine the success of government programs. Measures evaluated include effectiveness, efficiency and continuous improvement.

Current Performance Measures Maintain the number of FTE residents participating:

in and rotating into an approved residency program sponsored by the program eligible children's teaching hospitals and other institutions (On-site Training).

in an approved residency program sponsored by the program eligible children's teaching hospitals who rotate to other sites (Off-site Training).

Monitor the: proportion of hospital's gross revenue from patient care attributed to

public insurance (Medicaid, Medicare, SCHIP), and uninsured patients. percentage of hospitals funded by the program with negative total

margins. hospital allowable operating expenses.

HRSA 99-5:Application Checklist

Availability and Certification of Supporting Documentation

Availability of Supporting Documentation

Documentation must be readily available and retained by the individual identified in HRSA 99 section 5 at the time the initial application for funding is forwarded to the CHGME Payment Program for consideration. This individual should be able to forward this information to the CHGME Payment Program or CHGME FI upon request.


Resident Full Time Equivalent (FTE) Assessment Process (1): October 1, 2009 through March 1, 2010

Reconciliation application and payments (1): Application forms available: April 1, 2010 Application deadline: May 1, 2010 Payments: Beginning on or about July 2010 (3)

1. Dates are subject to change.2. Payments contingent upon availability of funds.3. These payments are adjusted based upon the Resident FTE Assessment

process and the reconciliation applications.

Statutory Payment Requirements

The Secretary will: Determine the amount to be paid for DME and

IME before the beginning of each FY. Withhold up to 25% from each installment

payment for both DME and IME to ensure that a hospital will not be overpaid on an interim basis.

Distribute funds withheld prior to the end of the FY.




1. Dates are subject to change.2. Payments contingent upon availability of funds.3. These payments are adjusted based upon the Resident

FTE Assessmentprocess and the reconciliation applications.

Overview of the Resident FTE Assessment Program

Resident FTE Assessment ProgramThe Resident FTE Assessment Program requires that participating children’s hospitals comply with requests from the CHGME FIs, within the time constraints provided, as any changes to resident FTE counts in one children’s hospital’s application for CHGME Payment Program funding affect the distribution of dollars among all eligible children’s hospitals.

CHGME FIs, also known as auditors, use and build upon work previously conducted by CHGME and/or Medicare FIs in prior years.




1. Dates are subject to change.2. Payments contingent upon availability of funds.3. These payments are adjusted based upon the Resident FTE Assessment

process and the reconciliation applications.

Reconciliation Application Process

Reconciliation ApplicationFor children’s hospitals to continue receiving CHGME Payment Program funding: they must complete and submit a reconciliation

application in accordance with established deadlines; the resident FTE counts reported by children’s hospitals

in their reconciliation applications must be for the same MCR period(s) identified in the hospital’s initial application for the subject FY and consistent with those reported in the CHGME FIs final Resident FTE Assessment Report to be accepted by the CHGME Payment Program;

What forms and supporting documentation do I need?

The following forms and documentation are needed: HRSA 99: Hospital Demographic and Contact Information (aka

“Face Page”) HRSA 99-1: Determination of Weighted and Unweighted Resident

FTE Counts (aka “FTE Form”) HRSA 99-2: Determination of Indirect Medical Education Data

Related to the Teaching of Residents (aka “IME Form”) HRSA 99-3: Hospital Certification HRSA 99-4: Government Performance and Results Act Tables

(aka “GPRA Tables”) reconciliation only HRSA 99-5: Application Checklist Documentation in Support of Data Reported in the above forms

(MCRs and CHGME FI report at reconciliation)

Hospitals that Used Data From an Incomplete MCR at the Time of the

Initial Application CycleAt the time of the reconciliation application if a hospital has filed an MCR by the CHGME Payment Program reconciliation application deadline, the hospital will report the “actual” resident FTE count, CMI, discharges, bed count, and inpatient days data from that MCR period.

Hospitals that Used Data from an Incomplete MCR at the Time of the

Initial Application CycleAt the time of the reconciliation application if a hospital has not filed an MCR by the CHGME Payment Program reconciliation application deadline, the hospital will use the methodology described in the July 20, 2001 FRN, with an appropriate adjustment to the timeframe (beginning of the FY for which payments are made to the CHGME Payment Program reconciliation application deadline date) to determine and report its revised resident FTE count, CMI, discharges, bed count, and inpatient days.

Submitting an application for CHGME PP funding

An application for CHGME Payment Program funding should include the following completed and signed, where applicable, forms and documents: HRSA 99 HRSA 99-1 HRSA 99-2 HRSA 99-3 HRSA 99-4 (submit at reconciliation only) HRSA 99-5 Documentation in Support of Data Reported in the above

forms (i.e., Worksheet E-3, Part IV for each MCR period reflected in the HRSA 99-1)

One (1) complete copy of the application package, including cover letter and other supporting documentation.

Reconciliation and Recoupment of Funding

The Secretary will: Determine any changes to the numbers of

residents reported by the hospital in its application for DME and IME payments.

Pay any balance due, or recoup any overpayment made to or from each hospital.

Include in the reconciliation, funds that are returned to the Department during a FY by the termination of a hospital from the CHGME Payment Program.

Coming Full Circle

From Application to Calculation

Payment Process Flowchart

Calculating Payments

Direct Medical EducationMethodology and Payment

Calculation

Total $$ for DME

According to statute: 1/3 of total dollars are allocated to DME

DME Payments

Payments to a children’s hospital for the DME expenses for a fiscal year is a function of: the updated per resident amount as determined under

subsection (c)(2) of 340E; and the average number of FTE residents in the hospital’s

approved graduate medical residency program as determined under section 1886(h)(2) of the Social Security Act

Data Needed for Calculation of DME Payment to Hospital:

National per resident amount Three years Rolling average of weighted

residents FTEs Weighted residents FTEs claimed against §422

of the MMA (“new cap”) Hospital specific wage index (WI) Labor related share Non-labor related share

DME FormulaDME Payi = ZDME*

X*(WFTE1996capi+WFTE§422capi)*(LBRS*WIi+NLBRS)

X*(WFTE1996capi+WFTE§422capi))*(LBRS*WIi+NLBRS)

DME FormulaWhere:DME Payi -- Direct GME payment to hospital “i”ZDME -- Total funds available for direct GME paymentsX -- National average per resident amountWFTE1996capi -- Weighted number of FTE residents subject to the

1996 capWFTE§422capi -- Weighted number of FTE residents subject to the

§422 of the MMAWI CMS Wage index (for the county in which the

hospital is located)LBRS -- Labor related share (0.697)NLBRS -- Non-labor related share (0.303)

Payment Calculation for DME Calculate the relative DME value for the individual

hospital; Sum the relative values across all hospitals; Compute the hospital’s share of DME funds by

dividing each hospital’s relative value by the sum of all relative values; and

Multiply the hospital’s share by the total DME payment pool.

DME Case Presentation

The total $$ amount available for disbursement to children’s hospitals is $15 million.

1/3 of total funds, or $5 million, are allocated for DME payments to all eligible children’s hospitals.

Data Reported by Children’s Hospitals

Children’s HospitalWeighted Resident FTE Rolling Average

“1996 cap”

Weighted Resident FTE Added due to

§422 of MMA

Wage Index

Charlie’s Angels Children’s Center

92.19 0.00 0.9310

Shirley Temple Children’s Hospital

71.5 5.60 1.1969

Good Times Children’s Center 25.5 12.62 0.4621

City of Angels Children’s Center

6.5 0.00 1.5521

Total 195.69 18.22 n/a

Computing Charlie’s Angels Children’s Center ‘s Relative Value

(WFTE1996capi +WFTE§422capi)* (0.697*WIi+0.303)

=(92.19 +0.00) * (0.697* 0.9310+0.303)

=87.75630633

DME Relative Value for Eligible Children’s Hospitals

Children’s Hospital Relative Value

Charlie’s Angels Children’s Center 87.75630633

Shirley Temple Children’s Hospital 87.68115003

Good Times Children’s Center 23.82819064

City of Angels Children’s Center 9.00128905

Total 208.2669361

Computing Charlie’s Angels Children’s Center’s Share

Hospital’s Relative ValueSum of All Hospitals’ Relative Values

=87.75630633 /208.2669361

=0.421364562

Eligible Children’s Hospitals Share of DME


Hospital Share of DME


87.75630633 0.421364562


87.68115003 0.421003697

Good Times Children’s Center

23.82819064 0.114411779


9.00128905 0.043219962

Hospital DME Payout

Hospital’s share of DME* Total DME pool =

0.421364562 * 5,000,000=

$2,106,822.81

DME Payout for Eligible Children’s Hospitals

Children’s Hospital Relative Value Hospital Share of DME

DME Payout


87.75630633 0.421364562 $2,106,822.81


87.68115003 0.421003697 $2,105,018.48


23.82819064 0.114411779 $572,058.89


9.00128905 0.043219962 $216,099.81

Total 208.2669361 n/a $5,000,000

Indirect Medical EducationMethodology and Payment

Calculations

Total $$ for IME

According to statute: 2/3 of total dollars are allocated to IME

IME Payments

CHGME Payment Program statute: requires that the Secretary make payments for IME to

children’s hospitals operating approved GME programs. describes IME payments as covering expenses associated

with treatment of severely ill patients and the additional costs relating to teaching residents in such programs.

considers variation in case mix and number of FTE residents in approved training programs.

Data Needed for Calculation of IME Payment to Hospital:

NoD - Number of inpatient discharges CMI - Case mix index (For FY2010 CHGME Payment Program

funding, hospitals must use CMS DRG Version 25 with the appropriate CMS Version 25 weights reported to the ten-thousandth decimal place.*)

WI - Hospital specific wage index, labor and non labor related shares

Rolling average of unweighted resident FTEs subject to the 1996 cap

Number of unweighted of resident FTEs subject to §422 of the MMA cap

Number of inpatient beds in the hospital complex IRB – Intern and resident-to-bed ratio

* This is updated annually by the CHGME Payment Program.

IME Formula (1)

IME Payi = ZIME * NoDi*CMIi*(WIi*0.697+0.303)*Adjustin NoDi*CMIi*(WIi*0.697+0.303)*Adjusti

i=1

IME Formula (2)

Where:Adjusti ={1.35*[(1+IRB1996capi) ^0.405 -1]} +

{0.66*[(1+IRB§422MMA)^0.405 - 1]}

And, The IRB is the intern and resident-to bed ratio

Medicare Modernization Act of 2003, Section 502

Section 502 of the MMA of 2003 modified the formula multiplier (teaching intensity factor) to be used in the calculation of the IME adjustment. Prior to passage of the MMA, the formula multiplier for the IME adjustment was fixed at 1.35 for FY 2003 and thereafter. The new legislation modifies the formula multiplier mid-way through FY 2004 and provides for a new schedule of formula multipliers for FYs 2005 and thereafter, as follows:

For discharges occurring on or after April 1, 2004, and before

October 1, 2004 —1.47; For discharges occurring during FY 2006—1.37; For discharges occurring during FY 2007—1.32; and For discharges occurring on or after October 1, 2008—1.35.

MMA 2003, Section 502 Medicare vs. CHGME Payment Program

Application of the teaching intensity factor for Medicare purposes: Example:A hospital applies for and receives Medicare funding based on its 12/31/2000 fiscal year end (FYE). In accordance with Medicare regulations, IME payments for this hospital would be calculated based on two different teaching intensity factors because its discharge data for this FYE crosses FYs. For discharges that occurred during FY 2000 (October 1, 1999 through September 30, 2000) the hospital would use a factor of 1.47 and for discharges that occurred during FY 2001 (October 1, 2000 through September 30, 2001) the hospital would use a factor of 1.35.

MMA 2003, Section 502 Medicare vs. CHGME Payment Program

Application of the teaching intensity factor for CHGME Payment Program purposes: CHGME Payment Program:If the same hospital applies for and receives CHGME Payment Program funding based on its 12/31/2000 FYE, in accordance with CHGME Payment Program regulations, IME payments for this hospital would be calculated based on the FY in which payments (to the hospital) will be made. If the hospital applied for FY 2002 CHGME Payment Program funding (to be paid out from October 1, 2001 through September 30, 2002) the IME payments for that hospital would be calculated based upon the FY 2002 teaching intensity factor (1.35) irrespective of the hospital’s patient discharge data.

CHGME Payment Program Implementation of MMA 2003, Section 502

After evaluating the impact of Section 502 of the MMA of 2003 on CHGME Payment Program IME payments, the CHGME Payment Program:

For FY 2004:

Calculated an average of the two multipliers and then applied this average to children’s hospitals receiving FY 2004 CHGME Payment Program funding. The average was calculated as follows: [6 months (October 1, 2003 – March 31, 2004) x 1.35 + 6 months (April 1, 2004 – September 30, 2004) x 1.47] / 12 months = 1.41.

For FY 2005 and beyond: Will replace the multiplier currently reflected in the IME payment formula

in the database with the multiplier identified for the FY in which payments will be made (e.g., FY 2010 IME payments will be calculated using the multiplier associated with discharges for that year which is 1.35).

Payment Calculation for IME

Calculate the relative IME value for the individual hospital;

Sum the relative values across all hospitals; Compute the hospital’s share of IME funds by

dividing each hospital’s relative value by the sum of all relative values; and

Multiply each hospital’s relative value by the total IME pool.

IME Case Presentation

The total $$ amount available for disbursement to children’s hospitals is $15 million.

2/3 of total funds, or $10 million, are allocated for IME payments to all eligible children’s hospitals.

Data Reported By Children’s HospitalsChildren’s Hospital Number of

DischargesCMI Wage

Index# of Beds

UNWGT FTE Rolling Average

(1996 cap)

Added UNWGTF

TEs (§422 of MMA)


17,434 1.71 0.9310 225 107.00 0.00


9,543 1.50 1.1969 314 73.60 7.00


360 0.71 0.4621 79 30.20 15.00


6,604 1.05 1.5521 120 10.50 0.00

Computing Charlie’s Angels Children’s Center’s “Adjusti”

Adjut1 = 1.35*{[1+107/225] ^0.405 -1} +

0.66*{[1+0/225] ^0.405 – 1}=

0.23037726

Computing Charlie’s Angels Children’s Center’s Relative Value

Relative Value=

17,434*1.71*(0.697*0.9310+ 0.303)*0.23037726

=6537.73458

IME Relative Value for Eligible Children’s Hospitals



6537.73458


2052.90106


37.909449


447.961223

Total 9076.50632

Computing Charlie’s Angels Children’s Center’s Share

Hospital’s Relative ValueSum of All Hospitals’ Relative Values

=6537.73458 / 9076.506.32

=0.720291966

Eligible Children’s Hospitals Share of IME


Hospital Share of IME


6537.73458 0.720291966


2052.90106 0.226177451


37.909449 0.004176656


447.961223 0.049353926

Hospital IME Payout

Hospital’s share of IME * Total IME pool =

0.7202919.66 * 10,000,000=

$7,202,919.66

IME Payout for Eligible Children’s Hospitals

Children’s Hospital

Relative Value Hospital IME Share

IME Payout


6537.73458 0.720291966

$7,202,919.66


2052.90106 0.226177451

$2,261,774.51


37.909449 0.004176656

41,766.56


447.961223 0.049353926

493,539.26

Total 9076.50632 n/a 10,000,000

DME & IME Payouts for Children’s Hospitals

Children’s Hospital DME Payout IME Payout


$2,106,822.81 $7,202,919.66


$2,105,018.48 $2,261,774.51


$572,058.89 41,766.56


$216,099.81 493,539.26

Total $5,000,000 10,000,000

Notifying Hospitals of Payments and Overpayments Requiring

RecoupmentIf the CHGME Payment Program determines that a hospital has been overpaid, the hospital will be notified, in writing, of the overpayment and provided procedures for returning the overpayment to the Department. The hospital will have 30 days to return the overpayment. Overpayments returned to the Department within the 30-day period will be returned to the CHGME Payment Program for disbursement to the other participating children’s hospitals. Hospitals that do not return overpayments to the Department within the specified time will accrue interest. In addition, the Department of the Treasury may offset other Federal payments due to the participating children’s hospital until the overpayment is recouped in full.

Other Laws Applicable to the CHGME Payment Program

Legal Implications of Application Record Retention and Access Audit Suspension, Termination and Withholding of Support Fraud, Waste and Abuse Economic and Regulatory Impact

Upon request, hospitals must be prepared to present any and all documents in support of

their CHGME Payment Program application.

Looking Ahead

Success Stories Associated with CHGME Payment Program Funding

CHGME Payment Program Web site (http://www.bhpr.hrsa.gov/childrenshospitalgme)

That’s All Folks!

For questions, please contact…

HHS/HRSA/BHPr/DMD/GMEBParklawn Building

5600 Fishers Lane Room 9A-05Rockville, MD 20857

the a, b, c’s of the chgme payment program from policy to payments

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