Under Section 442 of the Medicare Modernization Act, the Centers for Medicare and Medicaid Services ("CMS") must manage a redistribution of "unused" residency slots. CMS will reduce a hospital's cap on residency positions by 75 percent of the difference between its current cap and the total number of residents on its last cost report submitted for a year ending on or before September 30, 2002. Rural hospitals with less than 250 beds are exempt from this reduction. CMS shall redistribute the estimated number of reduced resident slots in the following order: first to rural teaching hospitals, second to hospitals in "small" urban areas, and third to those where the hospitals are the only ones with a particular specialty residency training program in the state. No single hospital can receive more than 25 slots. This redistribution provision will affect a hospital's direct graduate medical education ("GME") and indirect medical education ("IME") caps for portions of cost reporting periods beginning on or after July 1, 2005. If a hospital requests to use its cost reporting period that includes July 1, 2003, for purposes of determining a possible reduction to the cap, the request must be signed and dated by the Chief Financial Officer, and SENT TO THE HOSPITALS' FISCAL INTERMEDIARY BY JUNE 4, 2004. A hospital may also submit a request that its unweighted FTE resident level in either of the most recent cost reporting period ending on or before September 30, 2002, or its cost reporting period that includes July 1, 2003, be adjusted to include the number of residents for which a new program was accredited by the appropriate accrediting body before January 1, 2002, but which was not in operation during the hospital's most recent cost reporting period ending on or before September 30, 2002, or the cost report including July 1, 2003. To be considered timely, a hospital's request, to have the number of unweighted allopathic and osteopathic FTE residents for GME and IME adjusted to reflect the residents in a newly approved program, must be signed and dated by the Chief Financial Officer, and SENT TO THE HOSPITALS' FISCAL INTERMEDIARY BY JUNE 4, 2004. For more information regarding the content of the requests, see http://www.cms.hhs.gov/Manuals/pm_trans/R77OTN.pdf.
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