Graduate Medical Education: Resident Physician Shortage Reduction Act of 2009
Proposed Law to Raise Cap on Medicare-supported Residency
Positions by 15,000
By:
Richard F. Minicucci &
Lindsay Maleson [1]
In
May, Senator Bill Nelson (D-FL) introduced the Resident Physician Shortage
Reduction Act of 2009 in the Senate, and Representative Joseph Crowley (D-NY)
introduced identical legislation in the House of Representatives.[2]
This bill proposes to amend Title XVIII of the Social Security Act to increase
the number of Medicare-supported residency positions across the United States by
15%, or approximately 15,000 positions. [3]The
bill also proposes changes in the distribution of currently available positions
and encourages the creation of new positions in primary care and general surgery
programs.
Teaching hospitals and other graduate medical education
institutions currently receive funding for approximately 100,000 medical
resident positions nationwide, a number that was set by the Balanced Budget Act
(BBA) of 1997 to reflect the level of funding in place on December 31, 1996.
Since then, only minor adjustments have been made to the BBA-established cap,
and the overall number of federally funded residency positions has remained the
same even as programs have expanded significantly and the need for physicians
has grown. [4]
The Resident Physician Shortage Reduction Act of 2009, if
enacted as proposed, will increase the overall number of Medicare-supported
residency positions, redistribute currently unused positions, and relax the
current standards by which calculations for determining full-time equivalency of
residents are made.
Increasing the number of Medicare-funded positions
The Act proposes a two-part system for the distribution of newly
created Medicare-supported residency slots. Of the approximately 15,000
positions that will be newly funded, one-third will be reserved for use by
institutions that are already operating residency programs over their current
Medicare cap levels. The remaining two-thirds will be made available to any
teaching hospital seeking to expand or create new residency programs.
In order to obtain new positions out of the one-third reserved
for hospitals operating programs over cap limits, an institution must establish
that:
- It is training at least 10 residents above its cap; and
- It is training at least 25% of its residents in general surgery
and primary care[5]
and will continue to do so for a minimum of 10 years after receiving new, funded
positions.
The number of slots allotted to an institution pursuant to the
over-cap provision will be the product of the total number of new positions
available, and the number of positions by which the particular hospital is
exceeding its cap divided by the total number of resident positions by which all
hospitals exceed the total current cap. For example, if Hospital X has enrolled
14 residents above its cap and hospitals nationwide have enrolled 7,000
residents over the aggregate cap, then Hospital X would be eligible for funding
for a maximum of 30 positions above its current cap. [6]Essentially,
hospitals that are most over their cap will be eligible for the greatest number
of slots under this provision of the proposed legislation.
The remaining two-thirds of the newly created positions will be
made available to any institution looking to expand its current programs or to
create new programs, provided that the institution can demonstrate the
likelihood that it will fill the positions within three years of receiving them.
Institutions will be eligible to receive funding for up to 50 additional slots
from this pool, with preference given to:
- Institutions seeking primary care and general surgery slots
that will remain designated as such for at least 10 years, provided that the
institution will not lower the overall number of primary care and general
surgery positions available after receiving funding for the new slots;
- Institutions that emphasize training in community-based and
clinical settings;
- Institutions located in states that have more medical students
than currently available residency positions;[7]
and
- Institutions located in states that have low
resident-to-population ratios. [8]
Institutions will be expected to file applications for
additional funding regardless of which type of position they pursue. No
application procedure has been established as of yet. Institutions that are
currently operating over their cap limits will be permitted to apply for
positions from both the pool reserved for over-cap institutions and the general
pool.
Redistributing unused Medicare-funded slots
The Act calls for (1) the redistribution of positions that have
been vacant for all of the five most recent cost-reporting periods, (2) the
redistribution of slots from institutions that have closed since the cap was
previously set by the BBA in 1997, and (3) the preservation of slots at
institutions that are acquired by other entities.
Institutions with residency positions that have remained vacant
for all of the five most recent cost reporting periods will have their cap
limits reduced by the number of vacant positions. Only rural-area hospitals,
hospitals that have participated in voluntary reduction programs pursuant to
§1886(h)(6) of the Social Security Act, and hospitals that have participated in
a demonstration project approved as of October 31, 2003 under §402 of Public Law
90-248 will be exempt from these mandatory reductions in cap limits.
The Act also provides for the redistribution of residency
positions from hospitals and programs that have closed since the BBA’s passage
in 1997. The number of slots redistributed under this provision will equal the
number of slots previously held by the closed institutions. Priority for these
positions will be given to hospitals located in the same core-based statistical
area as, or one contiguous to, the closed institution. If no such hospital
exists or requests the positions, hospitals located in the same state as,
followed by those located in the same geographic region of the country as, the
closed institution will be considered, and institutions requesting these slots
must be able to establish that they are likely to fill them within three years.
With regard to institutions that are acquired by other entities,
the Act provides that the number of residency positions at the institution will
remain the same as it was immediately prior to the acquisition, as long as the
hospital continues to operate similar programs and services and continues to
serve a similar volume of patients. Acquiring entities may also elect to be
reevaluated as new providers for the purpose of determining the number of funded
slots to which it is entitled.
Calculating full-time equivalency status
The Act calls for the relaxation of standards regarding
how full-time equivalency (FTE) status is calculated for residents. If enacted
as proposed, the Act will include time spent by residents in non-hospital
settings, including community-based clinical settings, seminars and didactic
conferences, and time spent on vacation, sick leave, or other approved leave in
FTE calculations. Only time spent on research unrelated to the diagnosis or
treatment of a particular patient will be excluded from calculations.
Responses from the medical community
Many national medical organizations have urged their members to
support the Resident Physician Shortage Act, including the Association of
American Medical Colleges (AAMC), the American Medical Association (AMA), the
American College of Physicians (ACP), the American Hospital Association (AHA),
and the American Osteopathic Association (AOA).
Writing on behalf of the AMA, Dr. Michael Maves said, “We
believe that the ‘Resident Physician Shortage Reduction Act of 2009’ plays an
important role in addressing the projected physician shortage and ensuring
access to care by increasing the number of [Graduate Medical Education]
positions, providing teaching hospitals with the flexibility to cover training
in non-hospital settings, and allowing continued resident physician training in
communities that face a teaching hospital closure to preserve ongoing residency
training and access to care.” [9]
Conclusion
The Resident Physician Shortage Reduction Act of 2009 is
currently in committee in both the Senate and the House of Representatives. As
the proposed bill moves through the legislative process, there are some ways in
which institutions can begin to prepare themselves to best take advantage of the
Act’s provisions should it become law.
Institutions that are currently operating over their funding
caps should examine the eligibility requirements for acquiring new residency
positions to determine whether they are postured to receive new positions under
this portion of the legislation. Likewise, institutions currently operating
under their cap limits should consider whether they are at risk of having their
funding reduced. In addition, institutions considering program expansion or
creation should take into consideration the Act’s expressed preference for
primary care and general surgery programs and community-based training programs.
All institutions sponsoring graduate medical education programs
must have a strategic vision for the size and mix of their current and future
programs. This strategic vision must take into account the academic strength of
each program, its viability within the institution, and its accreditation
status. Approval from the ACGME or AOA will be required for the expansion or
creation of accredited training programs to be funded by Medicare.
Graduate Medical Education Practice Group attorneys Richard F.
Minicucci (rminicucci@nixonpeabody.com)
and Lindsay Maleson (lmaleson@nixonpeabody.com)
are uniquely qualified to assist sponsoring institutions in planning for any law
that may be enacted regarding residency training positions. The following link
will bring you to a description of the GME Practice Group’s services:http://www.nixonpeabody.com/services_overview.asp?SID=171.
We hope you find the commentary and insights provided by Art
Boll, a national consultant in specialized financial, operational and strategic
issues associated with academic medical organization and teaching hospitals, and
former Congressman Thomas M. Reynolds, a member of Nixon Peabody’s Government
Relations & Public Policy practice, thought provoking.
We invite you to submit questions and comments.
- Special thanks to Stephanie Ehresman for significant contribution to
this article.
[ Back to Reference ]
- See S.973,
http://www.govtrack.us/congress/billtext.xpd?bill=s111-973 and H.R.
2251,
http://www.opencongress.org/bill/111-h2251/text for full text and
lists of co-sponsors.
[ Back to Reference ]
- The 15,000-position estimate assumes that CMS will calculate the number
of new positions by taking 15% of all currently funded residency
positions, including fellowship and non-primary care residency positions
(100,000).
[ Back to Reference ]
-
http://billnelson.senate.gov/news/details.cfm?id=312498&.
[ Back to Reference ]
- Title XVIII, §1886(h)(5)(H) of the Social Security Act defines “primary
care resident” as “a resident enrolled in an approved medical residency
training program in family medicine, general internal medicine, general
pediatrics, preventive medicine, geriatric medicine, or osteopathic general
practice.” See
http://www.ssa.gov/OP_Home/ssact/title18/1886.htm.
[ Back to Reference ]
- A hospital operating over its Medicare cap is entitled to the product of
the total number of new positions available (15,000) and the quotient of the
number of positions by which the hospital exceeds its limit (14 in this
example) and the total number of positions by which hospitals nationwide
exceed cap limits (approximately 7,000 as of Medicare fiscal year 2006, see
http://www.aamc.org/newsroom/presskits/gme-thebasics.pdf, page
34).The calculation is 15,000 x (14/7,000), or 15,000 x .002, which gives
the result of 30 new positions for Hospital X.
[ Back to Reference ]
- Based on data contained in the 2007 State Physician Workforce Data Book,
created by the AAMC’s Center for Workforce Studies (See
http://www.aamc.org/workforce/statephysiciandatabooksept08.pdf,
pages 18 and 24), there were 16 states in 2007 that had more medical
students enrolled than resident positions available. They were the District
of Columbia, Florida, Iowa, Kansas, Kentucky, Louisiana, Maine, Missouri,
Nebraska, Nevada, North Dakota, Oklahoma, South Dakota, Vermont, Virginia,
and West Virginia.
[ Back to Reference ]
- It is unclear at this stage how a “low” resident-to-population ratio
will be defined under the Act. The rate of medical residents per 100,000
people in the United States is 35.6 (based on data published in the 2007
State Physician Workforce Data Book, page 24, see footnote 6). Only 14
states and the District of Columbia have a resident rate equal to or greater
than the national average of 35.6, while 31 states plus D.C. have a resident
rate of 25 or greater. The ten states with the lowest resident rate per
100,000 people are Montana (2.1), Idaho (3.1), Alaska (4.6), Wyoming (8.0),
Nevada (8.8), South Dakota (13.7),Mississippi (16.6), Florida (16.9), North
Dakota (17.3), and Oklahoma (19.8). Only one other state has a resident rate
below 20(Arizona, 19.9).
[ Back to Reference ]
- See
http://www.ama-assn.org/ama1/pub/upload/mm/16/ama-supporting-s973.pdf.
Other organizations have expressed similar sentiments. See
http://www.aamc.org/advocacy/library/workforce/corres/2009/050509.pdf
(letter from the AAMC);
http://www.acponline.org/advocacy/physician_shortageact.pdf (letter
from the ACP);
http://www.ahanews.com/ahanews_app/jsp/display.jsp?dcrpath=AHANEWS/AHANewsArticle/data/AHA_News_090526_AHA_backs&domain=AHANEWS
(news bulletin from the AHA expressing support for the Act);
http://www.osteopathic.org/index.cfm?PageID=mc_residentphysician
(press release announcing AOA endorsement of Act). Criticism of the Act has
included that it fails to go far enough to ensure creation or expansion of
primary care positions.
[ Back to Reference ]
With:
Art Boll, President, Germain Solutions
Question: If enacted as proposed, would the
Resident Physician Shortage Reduction Act of 2009 provide relief for hospitals
operating well over their cap?
Answer: There are approximately 1,100
teaching hospitals, of which 400 currently train over 200 residents each. Most
of these larger teaching hospital programs are over their resident FTE (Full
Time Equivalents) cap, some by substantial amounts. I am aware of several large
hospitals that are 150+ residents over their cap. I have heard anecdotal
comments about one institution being several hundred residents over its cap. If
one-third of the expanded residency slots, or approximately 5,000 slots, are
available for hospitals over the cap, that will translate into only 10 to 15
residents actually being available per major teaching hospital while the bill,
in theory, would provide relief of 50 residents per hospital. The bill may not
help large teaching hospitals get back or below their current cap levels. These
hospitals could also pursue the 10,000 new positions that would be available if
this bill is passed as proposed, but doing so will not directly help them since
they will have to add “new” residents to get “new” cap positions.
Question: Will approximately 10,000 new
slots for starting or expanding residency programs address the need for
additional physicians?
Answer: This bill, if passed, will
hopefully provide some relief to a large number of hospitals that would like to
start or expand Medicare-supported residency programs. Funded residency
positions have been capped for each teaching hospital for over 10 years. I think
most hospitals will have to consider taking advantage of this bill if it is
passed. The impending physician shortages, especially in primary care, are
encouraging hospitals to train and retain their own primary care physicians and
general surgeons for their medical staff. The question is whether there will be
enough physicians graduating from medical schools to fill these new slots. If
indeed 10,000 new funded resident slots become available, each year there will
need to be a large number of graduates from medical schools to fill them.
Assuming an average residency program length of 3–4 years, 2,500 to 3,300
additional medical school graduates each year will be needed to fill these newly
funded residency positions. With new medical schools (allopathic, osteopathic,
and international) being created each year and established medical schools
increasing class sizes (20–30%), there should be adequate numbers of physicians
graduating from medical school to fill these new slots.
Question: How stiff will competition be for
obtaining any of the 15,000 new slots?
Answer: There clearly will be competition
for both pools of new resident caps. Similar to the Medicare Modernization Act
process, CMS will interpret the bill, if and when it is passed, and set forth
priorities and criteria that will be used to allocate the “new” resident slots.
Question: What can teaching institutions do
now to posture themselves to receive new slots under the Act?
Answer: My advice would be to begin
planning and preparing for this event. Address any accreditation issues and
begin internal planning and consensus building to help establish the business
case to pursue these residency positions if the bill is passed. This decision is
never easy because there will be internal competition within a hospital to
expand existing programs as well as potentially starting new programs (i.e.,
primary care) that will qualify under the new provisions. Hospital leadership
will need to understand the costs/financing implications and the medical staff
will need to weigh in. Start now to internalize this opportunity and begin
planning to position your organization for a successful outcome. Each residency
slot may have a future reimbursement value of $1–2 million dollars. Residency
programs, if aligned with the strategic and operational needs of a hospital, are
a powerful tool to accomplish a hospital’s current and future goals.
Question: What factors should teaching
institutions be considering now as part of their pre-planning?
Answer: If your hospital is over the cap,
it’s a no brainer; you will throw your hat in the ring for the 5,000 or so slots
that will be in that pool. The benefit of pursuing slots for hospitals over the
cap will always exceed the cost, since the costs of operating the residency
program are already in place. Going after resident slots in the second pool of
new residents is a more complicated equation. For these resident slots, the
hospital will need to incur new costs to add them (i.e., faculty salaries,
resident stipends, etc.). Expanding residency programs in New York and Michigan
will have a strong business case because of favorable payor treatment of GME
costs. For other states, a key variable will be the cost of building your own
primary care medical staff through a residency program versus recruiting these
physicians ($200–$300K each), if you can even find them. Historically, many
graduating residents have stayed in the community where they trained. This has
changed dramatically in the last 5–8 years for many reasons. Clearly, this
should be a core objective of any expanding primary care-based residency program
or general surgery program. To bring a financial perspective to this topic, a
recent article estimated the number of smaller hospitals in New York State that
might close simply because the general surgeons, who are the economic backbone
of these hospitals, are nearing retirement, and the hospitals may not be able to
replace them because of general surgeon shortages. [1]
The article highlights the importance of this specialty in rural and smaller
hospitals.
Submit A Question Or Comment On This Article
- Zuckerman, Randall; Doty, Brit; Gold, Michael; Bordley, James; Dietz,
Patrick; Jenkins, Paul; Heneghan, Steven, “General Surgery Programs in Small
Rural New York State Hospitals: A Pilot Survey of Hospital Administrators,” J.
Rural Health, vol. 22, pp. 339-342 (2006).
[ Back to Reference ]
Perspectives from The Hill: The Resident Physician Shortage Reduction Act
By:
Thomas M. Reynolds
Senate Bill 973 was introduced in May by Senator Bill Nelson (D-FL). There
are six co-sponsors including Senators Charles Schumer (D-NY), Harry Reid
(D-NV), and Patrick Leahy (D-VT). Identical legislation, HR 2251, was introduced
in the House by Representative Joseph Crowley (D-NY) in May and currently has 34
co-sponsors.
In the Senate, the Bill was referred to the Finance Committee. In the House,
the Bill was referred to the Committee on Ways and Means with an additional
referral to the Energy and Commerce Committee. There has been no committee
activity to date.
The Bill has strong proponents from legislators representing teaching
hospital constituencies throughout the country, and with key lawmakers'
sponsorship has a good chance of success. It is most likely that the Bill would
pass not as a free-standing piece of legislation but attached to other
significant health reform legislation passing through the House and the Senate
awaiting the President's signature.
In addition, similar provisions to lift the cap on Medicare-sponsored
residency positions have been incorporated into the “Preserving Patient Access
to Primary Care Act of 2009,” introduced by Representative Schwartz (D-PA), and
are expected to be included in a companion bill by Senator Cantwell (D-WA). We
may see more of this legislation attached to other pending health care bills.