United States: Senate Reintroduces Resident Rotator Legislation, Other GME-Related Washington Updates

With the recent change of administration and a new congressional session beginning in 2017, medical education stakeholders have been watching closely for any signs on the political horizon regarding federal GME funding. Below are three key developments in the past month that provide some insight into current talk on the Hill likely to impact the medical education community.

Advancing Medical Resident Training in Community Hospitals Act reintroduced in the Senate

On June 6, the Senate reintroduced a bill designed to help hospitals that accidentally established Medicare GME caps and/or per resident amounts based on small numbers of resident rotators. The bill (S. 1291) was introduced by Senators Bill Nelson (D-FL), Ron Johnson (R-WI), Rob Portman (R-OH), Tammy Baldwin (D-WI) and Sherrod Brown (D-OH). A House of Representatives version of the same bill is expected to be introduced in the near future.

The legislation addresses three problems:

  • Accidental establishment of a hospital's resident limit, or "cap": The bill would permit community hospitals whose caps were accidentally established by small numbers of resident rotators to build and receive Medicare funding for new residency programs. Under the legislation, any hospital whose cap was established based on training fewer than 3.0 full-time equivalent (FTE) resident rotators from new residency training programs between October 1, 1997, and the date of enactment, would be permitted to establish new GME caps.
  • Accidental establishment of a hospital's per-resident amount (PRA): The bill would permit community hospitals whose PRAs were accidentally established by small numbers of resident rotators to build and receive Medicare funding for new residency training programs. Under the legislation, any hospital whose PRA was established based on training fewer than 3.0 FTE resident rotators between October 1, 1997, and the date of enactment, would be permitted to establish a new PRA.
  • Extremely low base-year cap: Any hospital whose base-year GME cap was set based on the training of less than 1.0 FTE resident prior to October 1, 1997, would be permitted to establish a new PRA.

Moving forward, a hospital's GME caps and PRA would not be established until the hospital trained more than 1.0 FTE resident in a given fiscal year.

Presidential budget proposal

On May 22, 2017, President Trump released his FY 2018 Budget Proposal which, although widely publicized for its significant proposed health care-related budget cuts, contained no specific recommendations for cuts to Medicare GME funding. This silence on GME stands in contrast to the significant GME cuts that were included in each of the past five budget proposals from President Obama. Trump's budget proposal, however, included double-digit percentage cuts to federal funding in support of scientific, medical and public health research, including deep cuts in funding for the National Institutes of Health and the Centers for Disease Control and Prevention. Under the budget proposal, the Medicaid program also would face funding decreases of $610 billion over the next ten years. Interestingly, the proposal included $60 million in each of 2018 and 2019 to extend Teaching Health Centers Graduate Medical Education (THCGME) program grants. The president's budget is, of course, merely a proposal—an opportunity for Mr. Trump to signal Congress as to what its fiscal priorities should be—and, like presidential budgets during the Obama administration, this year's budget has found little traction up on Capitol Hill.

Resident Physician Shortage Act reintroduced

On May 5, 2017, Rep. Joseph Crowley (D-NY) introduced the Resident Physician Shortage Reduction Act of 2017 (HR 2267). Cosponsored by Rep. Ryan Costello (R-PA), the bipartisan legislation would increase the total number of Medicare-funded allopathic and osteopathic residency training positions nationwide by 3,000 slots per year for the years 2019 through 2023, for an aggregate increase of 15,000 slots over the 5-year period.

In distributing the residency slots, consideration would be given to hospitals that demonstrate a likelihood of filling the awarded slots within five years. No hospital may receive more than 75 slots. Priority would be given to hospitals that: (i) are located in a state with a new medical school or medical school branch campus (established in or after the year 2000) that meets certain accreditation criteria; (ii) participate in certain health personnel training programs in cooperation with the Veterans Health Administration; (iii) emphasize training in community-based settings or in hospital outpatient departments; and, finally,(iv) are not located in a rural area, but which operate rural-track programs.

Under the proposed legislation, one-third of the new slots would be designated as "cap-relief" slots, and would be reserved for hospitals that are already exceeding their full-time equivalent (FTE) resident limit by 10 or more FTEs. Hospitals eligible to receive cap-relief slots must be training at least 25 percent of their FTEs in primary care and general surgery as of the date of enactment, and must continue to maintain this 25 percent threshold during the 5-year period following enactment. Additionally, at least half of every hospital's newly awarded slots (including non-cap-relief slots) must be used to train residents in a "shortage specialty residency program," as designated in a December 2008 report by the Health Resources and Services Administration. Recipient hospitals that fail to meet these benchmarks will lose their slots.

Of note, similar legislation has been introduced in both houses of Congress in each of the past three sessions. In the 114th Congress, the Resident Physician Shortage Reduction Act of 2015 accumulated 143 cosponsors in the House (HR 2124), including 111 Democrats and 32 Republicans. The Senate bill (S 1148) had 16 cosponsors, all of whom were Democrats.

The GME @ Dentons team keeps abreast of legislative developments affecting graduate medical education reimbursement. We are available to answer your questions, and we continue to advocate on behalf of our clients for the passage of the Advancing Medical Resident Training in Community Hospitals Act.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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