[Federal Register: June 19, 2000 (Volume 65, Number
118)] [Notices] [Page 37985-37992] From the Federal Register Online
via GPO Access [wais.access.gpo.gov] [DOCID:fr19jn00-71] -----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Resources and Services
Administration Children's Hospitals Graduate Medical Education
Payment Program: Proposed Eligibility and Funding Criteria and
List of Eligible Hospitals AGENCY: Health Resources and Services
Administration, HHS. [[Page 37986]] ACTION: Notice. -----------------------------------------------------------------------
SUMMARY: The Health Resources and Services Administration (HRSA)
announces the Children's Hospitals Graduate Medical Education (CHGME)
Payment Program, authorized under section 340E of the Public Health
Service (PHS) Act (the Act) (42 U.S.C. 256e), as added by the Healthcare
Research and Quality Act of 1999 (Public Law 106-129), enacted
December 6, 1999. This notice requests comments on proposed eligibility
criteria, funding factors and methodology, and performance measures
for participating hospitals for the CHGME program. It includes
a list of hospitals meeting these proposed eligibility criteria.
In compliance with the Paperwork Reduction Act of 1995, the Department
will obtain prior Office of Management and Budget clearance to
any data collections imposed on the public. DATES: Interested persons
are invited to comment by July 19, 2000. All comments received
on or before July 19, 2000 will be considered in the development
of the criteria and methodology for the CHGME program. Comments
will be addressed individually or by group in the final notice
published in the Federal Register. ADDRESSES: All written comments
concerning this notice should be submitted to F. Lawrence Clare,
Division of Medicine, Bureau of Health Professions, Health Resources
and Services Administration, Room 9A-21, Parklawn Building, 5600
Fishers Lane, Rockville, Maryland 20857; or by e-mail to: ChildrensHospitalGME@hrsa.gov.
FOR FURTHER INFORMATION CONTACT: F. Lawrence Clare, Division of
Medicine; telephone (301) 443-7334. SUPPLEMENTARY INFORMATION:
Purpose The Children's Hospitals Graduate Medical Education Payment
Program provides funds to children's hospitals to support the training
of pediatric and other residents in graduate medical education
programs (GME). Since Federal financial support of graduate medical
education is extensively supported by the Medicare system, this
program compensates for the disparity in the level of Federal funding
for teaching hospitals for pediatrics versus other types of teaching
hospitals. For example, on average a freestanding children's hospital
receives $374 per resident in Medicare funds versus an average
of $87,034 per resident for a non-children's hospital. The CHGME
program is an interim measure to assist children's hospitals to
continue their teaching programs while Congress examines the medical
education funding system. The Secretary of HHS (the Secretary)
has delegated the authority for the administration of the CHGME
program to HRSA which redelegated it to the Bureau of Health Professions
(BHPr). Available Funds The Act authorizes $280 million for fiscal
year (FY) 2000 and $285 million for FY 2001. Under the FY 2000
appropriations law, $40 million has been appropriated for this
program. The Act directs the Secretary to make payments for both
direct and indirect expenses to each eligible children's hospital.
I. Dividing the CHGME Appropriation Between Direct and Indirect
Medical Education The Act requires the Secretary to make payments
to children's hospitals for both direct and indirect medical education
expenses (DME and IME). Although the Act authorizes funds for FY
2000 and FY 2001 in specific amounts for each, the Appropriation
Act does not similarly divide the appropriation between DME and
IME. In FY 2000, section 340E(f) authorizes the appropriation of
$90 million for DME and $190 million for IME. To conform with the
allocation of funds indicated in the Act, the Secretary will divide
the amount appropriated between DME and IME based on the ratio
set forth in the authorizing statute, approximately one-third of
the funds to DME and two-thirds to IME. II. Proposed Hospital Eligibility
Criteria The Act requires HHS to make payments to ``children's
hospitals that operate graduate medical education programs.'' A
children's hospital is defined as a hospital in which more than
50 percent of its patients are under the age of 18, referencing
the definition of children's hospital contained in section 1886(d)(1)(B)(iii)
of the Social Security Act (42 U.S.C. 1395ww). Regulations at 42
CFR 412.23(d) use this definition in the Prospective Payment Systems
(PPS) for Inpatient Hospital Services. The Department proposes
to define a children's hospital eligible for funding by adopting
this definition of children's hospital from the PPS regulations
as follows: A children's hospital must- (1) Have a provider agreement
with a unique Medicare provider number as a hospital, under Section
1886(d)(1)(B)(iii) of the Social Security Act; (2) Be engaged in
furnishing services to inpatients who are predominantly individuals
under the age of 18; and (3) Participate in an accredited graduate
medical education program. The Congressional intent of the CHGME
program is to provide funds only to children's hospitals that do
not have access to Medicare payments under the PPS system to achieve
some degree of parity in support. Fifty-nine was the number of
teaching hospitals certified by Medicare as children's hospitals
at that time. Accordingly, the proposed eligibility criteria exclude
children's hospitals which are part of a hospital system, rather
than freestanding. Even if a children's hospital is separately
identified in the AMA Directory but shares a Medicare provider
number as part of a health system, it still would not be considered
to be an eligible children's hospital under these criteria. Since
these hospitals have access to Medicare direct and indirect GME
funding as part of the PPS, they are able to receive the higher
levels of Medicare GME paid to PPS hospitals, by being able to
(1) factor a higher Medicare patient proportion into the direct
GME funding formula, and (2) receive, as part of a PPS hospital
system, indirect GME funds. Thus, these hospitals are not within
the universe of intended beneficiaries of the CHGME program. The
physical characteristics or location of a children's hospital are
irrelevant to eligibility. Even if a children's hospital is separated
physically from its adult hospital partner, sharing a Medicare
provider number makes the children's hospital ineligible because
it then qualifies for Medicare GME funds for its pediatric or other
residents under the PPS as part of the adult hospital partner.
Payments made to a children's hospital will have no effect on payments
received under the Medicare or Medicaid programs. The intent of
the CHGME program is to create a degree of parity between children's
hospitals and adult hospitals. Accordingly, the CHGME program will
operate independently from the Medicare and Medicaid programs.
Based on the proposed eligibility criteria, the Department has
identified the following-listed hospitals potentially eligible
for this program as of December 6, 1999. Any hospitals meeting
the proposed criteria which are not included on the list may inform
the Department of their eligibility during the comment period for
this notice. The Secretary will then publish a revised list [[Page
37987]] of eligible hospitals for FY 2000 in the final Federal
Register notice. ------------------------------------------------------------------------
Medicare Provider Facility name City State Number ------------------------------------------------------------------------
01-3300 Children's Hospital of Alabama Birmingham.......... AL
04-3300 Arkansas Children's Hospital.. Little Rock......... AR
05-3300 Valley Children's Hospital.... Madera.............. CA
05-3301 Children's Hospital Medical Oakland............. CA Center.
05-3302 Children's Hospital of Los Los Angeles......... CA Angeles.
05-3303 Children's Hospital and Health San Diego........... CA
Center. 05-3304 Children's Hospital of Orange Orange..............
CA County. 05-3305 Lucile Salter Packard Palo Alto........... CA
Children's Hospital. 06-3301 The Children's Hospital....... Denver..............
CO 07-3300 Connecticut Children's Medical Hartford............
CT Center. 08-3300 Alfred I Dupont Institute..... Wilmington..........
DE 09-3300 Children's Hospital National Washington.......... DC
Medical Center. 10-3300 All Children's Hospital....... Saint Petersburg....
FL 10-3301 Miami Children's Hospital..... Miami...............
FL 11-3300 Egleston Children's Hospital Atlanta............. GA
at Emory. 12-3300 Kapiolani Women's & Children's Honolulu............
HI Medical Center. 14-3300 Children's Memorial Hospital.. Chicago.............
IL 14-3301 Larabida Children's Hospital.. Chicago.............
IL 15-3300 St. Vincent's Children's Indianapolis........ IN Specialty
Hospital. 19-3300 Children's Hospital........... New Orleans.........
LA 21-3301 Kennedy Krieger Institute..... Baltimore...........
MD 22-3300 Franciscan Children's Hospital Brighton............
MA & Rehabilitation Center. 22-3302 The Children's Hospital.......
Boston.............. MA 23-3300 Children's Hospital of Detroit.............
MI Michigan. 24-3300 Gillette Children's Hospital.. Saint Paul..........
MN 24-3301 Children's Health Care--Saint Saint Paul.......... MN
Paul. 24-3302 Children's Health Care-- Minneapolis......... MN
Minneapolis. 26-3301 St. Louis Children's Hospital. Saint Louis.........
MO 26-3302 Children's Mercy Hospital..... Kansas City.........
MO 28-3300 Boys Town National Research Omaha............... NE
Hospital. 28-3301 Children's Memorial Hospital.. Omaha...............
NE 31-3300 Children's Specialized Mountainside........ NJ Hospital.
32-3307 Carrie Tingley Hospital....... Albuquerque......... NM
33-3301 Blythdale Children's Hospital. Valhalla............ NY
36-3300 Children's Hospital Medical Cincinnati.......... OH Center.
36-3302 Rainbow Babies and Children's Cleveland........... OH Hospital.
36-3303 Children's Hospital Medical Akron............... OH Center.
36-3304 Cleveland Clinic Children's Cleveland........... OH Rehabilitation
Hospital. 36-3305 Children's Hospital........... Columbus............
OH 36-3306 Children's Medical Center..... Dayton..............
OH 36-3307 Northside and Tod Children's Youngstown.......... OH
Hospital. 37-3301 Children's Medical Center..... Tulsa...............
OK 39-3307 St. Christopher's Hospital for Philadelphia........
PA Children. 39-3302 Children's Hospital of Pittsburgh..........
PA Pittsburgh. 39-3303 Children's Hospital of Philadelphia........
PA Philadelphia. 40-3301 University Pediatric Hospital. San Juan............
PR 44-3302 St. Jude Children's Research Memphis............. TN
Hospital. 44-3303 East Tennessee Children's Knoxville...........
TN Hospital. 45-3300 Cook Ft. Worth Children's Fort Worth..........
TX Medical Center. 45-3301 Driscoll Children's Hospital.. Corpus
Christi...... TX 45-3302 Children's Medical Center of Dallas..............
TX Dallas. 45-3304 Texas Children's Hospital..... Houston.............
TX 45-3305 Santa Rosa Children's Hospital San Antonio.........
TX 46-3301 Primary Children's Medical Salt Lake City...... UT Center.
49-3301 Children's Hospital--King's Norfolk............. VA Daughters.
50-3300 Children's Hospital & Regional Seattle.............
WA Medical Center. 50-3301 Mary Bridge Children's Health Tacoma..............
WA Center. 52-3300 Children's Hospital of Milwaukee...........
WI Wisconsin. ------------------------------------------------------------------------
Changes in Eligibility Status For each fiscal year, the Secretary
will publish a Federal Register notice inviting applicants for
the CHGME program and listing the eligible children's hospitals.
Since HHS calculates the payments for each fiscal year by dividing
the available funds by the resident count data submitted by the
eligible hospitals, additional hospitals cannot be included for
funding for that fiscal year after the allocation has been made.
Newly-qualifying institutions must notify HHS as soon as possible
to be added to the list of eligible hospitals for the next fiscal
year. A children's hospital which loses its eligibility during
the course of a fiscal year must notify HHS immediately of the
change in status. The Department will then declare the hospital
to be [[Page 37988]] ineligible and terminate its payments under
the CHGME program. The hospital will remain liable for the reimbursement,
with interest, of any money received during a period of ineligibility.
Funds that are returned to the Department during a fiscal year
by the termination of hospitals from the CHGME program will be
distributed as follows: (1) Direct GME funds will be 8 placed in
the direct GME withholding account and distributed to the remaining
children's hospitals as part of the reconciliation process; and
(2) the IME funds will be distributed to the remaining children's
hospitals during the fiscal year based on the IME formula. The
latter approach is necessary because IME funding has no reconciliation
process. III. Determining Resident Counts in the CHGME Program
Definition. Section 340E(c)(1) of the Act provides that the amount
of the payment to a children's hospital for direct medical expenses
is equal to the product of the amount per resident as determined
under paragraph (2) of that section and-- the average number of
full-time equivalent (FTE) residents in the hospital's approved
graduate medical residency training programs, as determined under
section 1886(h)(4) [42 U.S.C. 1395ww(h)(4)] of the Social Security
Act during the fiscal year. Section 340E(g)(1) of the Act defines
the term ``approved graduate medical residency training program''
by reference to section 1886(h)(5)(A) of the Social Security Act
(42 U.S.C. 1395ww(h)(5)(A)). Regulations at 42 CFR 413.86 implement
these provisions. Accordingly, the term ``approved graduate medical
residency training program'' means a residency or other postgraduate
medical training program in allopathic medicine, osteopathic medicine,
dentistry, and podiatry approved by the indicated accrediting body
in which participation may be counted toward certification in a
specialty or subspecialty. Only residents in allopathic medicine,
osteopathic medicine, dentistry, and podiatry will be counted to
determine the amount of direct and indirect medical expenses paid
to children's hospitals. Residency FTE Reporting Period The Act
requires the Secretary to make CHGME payments ``for each of fiscal
years 2000 and 2001,'' (emphasis added). ``Fiscal Year'' means
the Federal Fiscal Year from October 1 of each year through September
30 of the following year, not to be confused with the hospital
cost- reporting periods used for Medicare GME purposes. The CHGME
statute distinguishes ``fiscal year'' from a hospital's ``cost
reporting period.'' ``Cost reporting period'' is used in two provisions
to differentiate specific time periods from the Federal fiscal
year. Accordingly, the Secretary is interpreting ``fiscal year''
to mean ``Federal fiscal year.'' To receive CHGME funds, a hospital
must submit the number of FTE residents at the hospital during
the Federal fiscal year for which payments are being made. Counting
FTE Residents Section 340E(c)(1)(B) requires that the average number
of FTE residents in the hospital's approved residency programs
be determined according to section 1886(h)(4)(42 U.S.C. 1395ww(h)(4))
of the Social Security Act. This section is implemented by regulations
at 42 CFR 413.86(f), (g), (h), and (i). These provisions indicate:
How to determine the total and weighted numbers of FTE residents;
the required documentation and certification for purposes of application
for Medicare payments by hospitals for cost reporting periods;
and the application of the ``caps'' (described in sec. 1886(h)(4)(f)
of the Social Security Act (42 U.S.C. 1395ww(h)(4)(f))) and ``rolling
averages'' (described in sec. 1886(h)(4)(g) of the Social Security
Act (42 U.S.C. 1395ww(h)(4)(g))) to FTE resident counts prior to
weighting. Hospitals must certify the accuracy of their FTE resident
counts and apply the Medicare cap and rolling average to this count.
Because these requirements are closely tied to Medicare, the Department
will be using Medicare data to assist in verifying the submitted
counts. Comment is solicited on whether the program should require
the standardized reporting of resident counts currently required
in the Medicare Intern and Resident Information System (IRIS).
The cap requires an accurate count for the last hospital cost reporting
year ending on or before December 31, 1996. The Department will
rely on the resident counts reported on Medicare cost reports to
verify each hospital's count. Some hospitals may have previously
undercounted their residents in their Medicare cost reports due
to the insignificance of their Medicare payments. Because of the
cap, hospitals that underreported that number should consider requesting
the Department to reopen their Medicare cost reports, pursuant
to 42 CFR 405.1885, to revise the numbers submitted for cost reports
that are subject to reopening. The regulations at 42 CFR 413.86
do not apply to a hospital which had not previously submitted Medicare
cost reports but had been operating a residency training program.
Hospitals must determine their resident counts in the cost-reporting
year ending in 1996. In cases where this is very difficult to establish
from existing records, it is necessary to propose an FTE counting
methodology addressing this situation. For most hospitals, program
size and resident rotations among the participating institutions
are relatively stable from year to year. Therefore, a hospital
could address missing FTE counts for earlier years by starting
with the assumption that these counts would be the same as the
FY 1999 count in the absence of changes in the residency programs
after 1996. The incremental effect of any changes could be estimated
by adjusting the FY 1999 and FY 2000 counts to determine resident FTE
counts for FY 1996 through FY 1998. Examples of adjustments for
incremental changes in FTE counts follow: Example A: The children's
hospital has 24 residents in a pediatric residency program. The
residents spend 90 percent of their time at the children's hospital
and 10 percent rotating to other hospitals. The hospital's unweighted
FTE count for its cost reporting period beginning in FY1999 is
21.6 (the unweighted FTE count is the FTE number of residents prior
to weighting the residents who have exceeded the number of years
of formal training necessary to satisfy the requirements of the
appropriate approving body related to board certification or 5
years, whichever is less, by 0.5). The unweighted FTE count for
its cost reporting period ending in calendar year 1996 is deemed
to be 21.6. This becomes the cap, which applies to Federal fiscal
years 2000 and beyond. Example B: The children's hospital had 24
residents in its pediatric residency program (8 in each of 3 residency
years) until the program year beginning July 1, 1999, when the
number of first year residents was increased to 10. The residents
spend all their time at the children's hospital. The hospital's
unweighted FTE count for its cost-reporting period ending 12/31/99
is 25, because the additional first year residents added 1.0 to
the FTE resident count (two residents for 6 months each). The count
for its cost reporting period ending in calendar year 1996, and
the hospital's cap from that point on, is deemed to be 24. Example
C: The children's hospital is a major participating institution
for five residency programs. During its cost-reporting period ending
6/30/99, 100 residents rotated from other hospitals for rotations
of 1 to 6 months. The hospital's unweighted FTE count was 25. The
same affiliation agreements have been in effect since before 1996
and there were no significant changes in the size of the residency
programs or rotation schedules. The hospital's unweighted count
for its cost reporting period ending in calendar year 1996 (which
ended 6/30/96), and therefore its cap for future years, is deemed
to be 25. [[Page 37989]] Example D: The children's hospital is
a major participating institution for five residency programs.
During its cost-reporting period ending 6/30/99, 100 residents
rotated from other hospitals for rotations of 1 to 6 months. The
hospital's unweighted FTE count was 25. During the program year
beginning in 1997, the hospital started serving as a training site
for the first time for a family practice program which sends three
residents for 3 months each for a continuity clinic in each of
the first two family practice program years. The residents count
as 1.5 FTE in the hospital's FTE count for its FY ending 6/30/99
(0.75 FTE for 1st year residents and 0.75 for 2nd year residents).
The hospital's count for its cost reporting period ending in calendar
year 1996 (FY ending 6/30/96), and therefore its cap, is deemed
to be 23.5. If no prior counts were reported, it would then only
be necessary to determine the 1996-based cap from the FY1999 and
FY2000 actual counts if the number of residents had increased after
1996. The cap would not be operative if there had been no change
or a decrease since 1996. Similarly, Medicare applies a ``rolling
average'' to resident counts (42 CFR 413.86(g)(5)). Unlike the
cap, the rolling average is applied to weighted FTE resident counts.
For the hospital's first cost reporting period beginning on or
after October 1, 1997, the weighted FTE count equals the average
of the weighted count for that period and the preceding cost reporting
period. For cost reporting periods beginning on or after October
1, 1998, the hospital's weighted FTE count equals the average of
that reporting year and the two preceding cost reporting years.
For the weighted FTE resident count for Federal fiscal years 2000
and 2001, the hospital must determine the weighted FTE resident
count for each Federal fiscal year beginning October 1, 1997 (which
is also the effective date of the caps). The FTE resident counts
for these years are needed to determine the cap and the rolling
average for Federal fiscal years 1999 and 2000. IV. Determining
Direct Medical Education Payments Section 340E(a) requires the
Secretary to make payments for direct and indirect expenses associated
with operating approved graduate medical residency training programs
for each of fiscal years 2000 and 2001. Section 340E(b) describes
direct expenses as covering the costs of 13 operating approved
graduate medical residency training programs. Subsection (e)(1)
requires the Secretary to determine the amount of direct and indirect
payments for each hospital before the beginning of each fiscal
year for which payments are made and to make these payments to
each hospital in 26 equal installments during the fiscal year.
If the Secretary determines that the funds appropriated for the
CHGME program for a fiscal year are insufficient to provide the
total payments due to hospitals for that fiscal year, the Secretary
will reduce the amount of payments to each hospital on a pro-rata
basis. The Act also provides a method for refining the accuracy
of the direct payments made to each hospital. Under subsection
(e)(2), the Secretary must withhold up to 25 percent from each
direct medical education interim installment payable to hospitals
to permit the final adjustment and reconciliation of the number
of FTE residents for whom direct payments are being made. At the
end of that fiscal year, each participating hospital must submit
information to enable the Secretary to determine the percentage
(if any) of the total amount withheld that is due each hospital
for the fiscal year. The hospital may request a hearing on the
Secretary's payment determination. The Secretary pays each hospital
any balance due or recoups any overpayments made. Due to the time
limitations in establishing a new program and the one year availability
of the $40 million appropriated in FY 2000, for the CHGME program,
the Secretary will obligate the entire CHGME appropriation in FY
2000, without the withholding of direct payments. Determination
of the Amount of Direct Medical Education Payment Section 340E(c)(1)
requires that the payments to a children's hospital for direct
medical education expenses for a fiscal year equal the product
of: <bullet> The updated per resident amount as determined
under subsection (c)(2); and <bullet> The average number
of FTE residents in the hospital's graduate approved medical residency
program as determined under section 1886(h)(4) of the Social Security
Act during the fiscal year. Section 340E(c)(2) determines the updated
per resident amount for direct medical education using the following
methodology. The Secretary will: (1) Determine the hospital's single
per resident amount: Compute for each of every (not just children's)
teaching hospital a single per resident amount computed equal to
the weighted average of the primary care per resident amount and
the non-primary care per resident amount computed under 1886(h)(2)
of the Social Security Act for cost reporting periods ending during
FY 1997; (2) Determine the wage and non-wage-related proportion
of the single per resident amount: Estimate the average proportion
of the single per resident amount that is attributable to wages
and wage- related costs; (3) Standardize per resident amounts:
Establish a standardized per resident amount for each children's
hospital that is adjusted for wages; (4) Determine a national average
per resident amount: Compute a national average per resident amount
equal to the average of the standardized amounts computed above
weighted by the average number of FTE residents at the children's
hospitals; and (5) Apply factors 1-4 to each hospital: Compute
for each children's hospital the national average per resident
amount after adjustment for wage-related costs. Updating the Per
Resident Amount The legislation provides for updating the per resident
amount for each hospital by the estimated percentage increase in
the consumer price index for all urban consumers during the period
beginning October 1997 and ending with the midpoint of the hospital's
cost reporting period that begins in FY 2000. Since the CHGME will
operate on a fiscal rather than a cost reporting year basis, it
is inappropriate to end the adjustment period with the midpoint
of the cost reporting year. To do so would create inconsistent
and inequitable results, rendering the provision ineffective. To
give effect to the intent of updating the per resident amount,
the Secretary will update the per resident amounts to a common
date, the midpoint of the current fiscal year. Determining the
Single Per Resident Amounts The Secretary proposes to use the Health
Care Financing Administration's (HCFA's) Hospital Cost Report Information
System (HCRIS), an electronic reporting system, to determine the
hospitals single per resident amounts. HCRIS is organized by the
cost reporting period beginning dates. The data base for determining
the per resident amounts paid to children's hospitals is from all
teaching hospitals, not just children's teaching hospitals. HCRIS
files are updated quarterly as the cost reports move through the
cost report settlement process. The September 30, 1999, HCRIS update
file has 1206 hospitals reporting residents for cost reporting
periods ending in FY 1997. [[Page 37990]] Wage Adjustment in Standardizing
Per Resident Amounts Section 340E states that the Secretary-- shall
establish a standardized per resident amount for each such hospital
by-- (i) Dividing the single per resident amount computed under
subparagraph (A) into a wage-related and non-wage related portion
by applying the proportion determined under subparagraph (B); (ii)
Dividing the wage-related portion by the factor applied under section
1886(d)(3)(E) of the Social Security Act for discharges occurring
during fiscal year 1999 for the hospital's area; and (iii) Adding
the non-wage-related portion to the amount computed under clause
(ii). Subparagraph (B) requires the Secretary to: [E]stimate the
average proportion of the single per resident amounts computed
under subparagraph (A) that is attributable to wages and wage-related
costs. Under the Medicare program, direct GME expenses include
intern and resident salaries and fringe benefits; compensation
to teaching physicians for the teaching and supervision of residents;
and other, allocated hospital costs. Earlier HCRIS public use files
indicate that the labor-related share of the PPS rate for inpatient
operating costs is at 71.1 percent. However, this figure may not
be appropriate for the per resident amount since it includes direct
patient care costs, such as drugs and room and board costs. The
Department is analyzing the Medicare cost reports to develop a
more accurate estimate of the labor-related share of the per resident
amount. HHS intent is to complete this analysis in time for the
final Federal Register notice. Until the analysis is completed,
the Secretary proposes that the PPS labor-related share be used
to standardize wages in determining the national standard per resident
amount. Determining Payments Each hospital will be requested to
submit an annual application containing the number of weighted
FTE residents in all its graduate training programs. Using this
data, the Secretary will calculate the hospital's direct GME payment
using the following formula: [GRAPHIC] [TIFF OMITTED] TN19JN00.045
Where-- X = national average per resident amount X<INF>z</INF> =
national pro-rata average per resident amount (based on funds available)
WI = wage index (for the area in which the hospital is located)
FTE = weighted number of FTE residents working at the hospital
Y = direct GME payment to a hospital i = indicates an individual
hospital n = the number of children's hospitals participating in
the program <greek-S> = sum of (the following) Z = the total
funds available for direct payments The total direct GME payments
to all children's teaching hospitals equal the sum of payments
to all individual hospitals: [GRAPHIC] [TIFF OMITTED] TN19JN00.046
To calculate the pro rata average per resident amount based on
the funds available (X<INF>z</INF>) without knowing
the national average per resident amount (X), the Secretary will
use the following equation: [GRAPHIC] [TIFF OMITTED] TN19JN00.047
The final Federal Register notice will contain a computed national
per resident amount. V. Determining Indirect Medical Education
Payments Sections 340E(a) and (b)(1)(B) require the Secretary to
make payments for indirect expenses associated with operating approved
graduate medical residency training programs for each of fiscal
years 2000 and 2001. Section 340E(b)(1) requires that the payments
be made for an approved program ``for a fiscal year,'' and section
340E(b)(1)(B) describes indirect payments as covering ``expenses
associated with the treatment of more severely ill patients and
the additional costs relating to teaching residents in such programs.''
Subsection (e)(1) requires the Secretary to determine the amount
of both direct and indirect payments for each hospital before the
beginning of each fiscal year for which payments are made and to
make these payments to each hospital in 26 equal installments during
the fiscal year. Subsection (d)(2)(B) provides that the indirect
payments are equal to the amount appropriated for such expenses
for the fiscal year under subsection (f)(2), but unlike the DME
payment, there is no provision for withholding a portion of IME
payments or making a final reconciliation after the close of the
fiscal year. Section 340E(d)(2) requires the Secretary to determine
the appropriate amount of indirect medical education payments for
expenses associated with the treatment of more severely ill patients
and the additional costs relating to teaching residents in such
programs to a children's hospital by considering: <bullet> Variations
in case mix among children's hospitals; and <bullet> The
hospitals' number of FTE residents in approved training programs.
Determination of Case Mix The statute provides no guidance on the
case mix measure to be used for determining indirect payments.
Hence, the Secretary is seeking comments on this issue. Case mix
information for hospitals is typically generated as a by-product
of a billing or administrative reporting system. Children's hospitals
currently use various DRG systems and weights. These include the
HCFA Diagnosis-Related Group (DRG); the All-Payer DRG (AP-DRG);
and the All-Payer Refined DRG (APR-DRG) systems. To require a hospital
to report its case mix index using a different classification system
from its current system would create an administrative burden.
Accordingly, the Secretary proposes to: (1) Identify the case-mix
indexes that are commonly used by children's hospitals; and (2)
Explore the feasibility of adjustment factors derived from comparative
studies that allow for approximate equilibration of the various
case mix indexes that may be used. Determining the Number of FTE
Residents Section (d)(2)(A) states that in determining the amount
of payments to a children's hospital for indirect medical education
expenses, the Secretary shall take into account `` * * * the number
of full-time equivalent residents'' in the hospital's approved
residency programs. Unlike direct payments, it does not specify
that the FTE residents be counted as determined under section 1886(h)(4)
of the Social Security Act. FTE residents under Medicare are also
counted differently for direct (sec. 1886(h)(4)) of the Social
Security Act) and indirect (42 CFR 412.105(a)(1)) payments. Under
the latter, ``full-time equivalent residents'' are counted without
the weighting applied to the count for direct payment determination.
The Secretary will use the number of FTE residents during the fiscal
year as determined under 42 CFR 412.105(a)(1) to determine indirect
payments to a hospital. Factoring in Teaching Intensity The statute
does not specify a factor for determining teaching intensity. Traditionally,
the indirect expenses associated with teaching activity are based
on costs per case. Teaching hospitals tend to have higher costs
per case relative to other hospitals in the same area with a comparable
case mix. The higher costs are generally associated with treating
a more critically ill patient population than non-teaching hospitals
and with the use of more resources, such as diagnostic tests, when
residents are involved in the care of patients. A close relationship
exists between higher costs and teaching intensity as measured
by the ratio of either interns/residents-to-beds, or the ratio
of residents to the average daily census of the hospital. The Secretary
proposes to determine teaching intensity using one of the following
factors derived from the Medicare formula: <bullet> The ratio
of residents to average daily census; or <bullet> The ratio
of residents to beds. In summary, the Secretary proposes to calculate
IME payments for a hospital using the number of FTE residents;
a case mix index; a case mix adjustment factor to correlate hospitals'
case mix information to the case mix index selected for the CHGME
program; a teaching intensity adjustment; and volume. Due to the
time required to statistically model and analyze the various alternatives,
the case mix index, case mix adjustment factor, and the teaching
intensity adjustment are not currently available. The Secretary
will include a detailed methodology for distribution of the IME
funds in the final Federal Register notice to be published in July.
Although FY 2000 IME funds must be distributed this fiscal year
based on the IME formula published in the July notice, we will
solicit comments and change the distribution formula for subsequent
cycles if appropriate. [[Page 37991]] VI. Evaluation Criteria The
CHGME program is subject to the Government Performance and Results
Act of 1993 (GPRA), Public Law 103-62. GPRA provides Congress with
information on whether and in what respects a program is working
well or poorly to support its oversight of Federal agencies and
their budgets. Therefore, GPRA requires each Federal agency to
prepare an annual performance plan covering each program activity
set forth in the budget of the agency. The Department must evaluate
all programs for effectiveness, efficiency, and continuous improvement.
To measure effectiveness, it must obtain performance information
from recipients of HHS funds. Performance Goals The performance
goals described below are those included in the President's FY
2001 GPRA performance plan. These goals are still formative because
HHS is unable to set targets until it obtains the necessary data.
The Department requests public comment on the appropriateness and
feasibility of these performance measures. The Department is particularly
interested in receiving comments on the feasibility of each goal,
in terms of the hospitals' ability to both provide data and measure
the success of the program. Goals I and II listed below take into
consideration that some information requirements may be more easily
obtained for residents in programs sponsored by the children's
hospital than for residents who rotate in from programs sponsored
by another teaching hospital. Comments are requested on the practicality
and value of reporting this information on residents who rotate
in from programs sponsored by other hospitals, as well as those
from residency programs sponsored by the children's hospital. Proposed
Goal I: Eliminate Barriers to Care A. Maintain the number of FTE
residents supported by the children's hospitals receiving funds
under the program. The health care workforce environment requires
that sufficient numbers and types of physicians be appropriately
and adequately trained to care for pediatric populations. Financial
pressures common to the academic health center community may raise
interest in reducing or eliminating training programs. These hospitals
and their training programs provide a significant service to the
local, regional, and sometimes national community. A reduction
in training programs could impair the provision of those services
as well as the production of one-quarter of the Nation's pediatricians
and a majority of pediatric specialists. The following data elements
provide an accurate accounting of and trends in the number of resident
FTEs training in children's hospitals, and are fundamental in determining
payments under the program. Proposed Required Data: While the number
of trainees in a given hospital's training program is currently
collected by the Health Care Financing Administration (HCFA) for
freestanding children's hospitals that request reimbursement from
Medicare, not all freestanding children's hospitals that are eligible
for participation in the CHGME Program have submitted this information
to HCFA. Generally, each hospital has a fairly good accounting
of the number of trainees in residency programs sponsored directly
by the hospital; but, accounting for the number of trainees rotating
to a freestanding children's hospital for a portion of their training
is more complicated. Not all children's hospitals have quantified
the FTE residents rotating to their hospital from other training
programs. To receive CHGME payments, hospitals must accurately
report trainees' numbers. HHS proposes to require each hospital
to submit on an annual application the aggregate number of FTE
residents, by program, who are: <bullet> In the recipient
children's hospital and sponsored by the hospital; <bullet> Rotating
into the recipient hospital from residency programs sponsored by
other institutions; and <bullet> Sponsored by the hospital
and rotating to other hospitals. These data should already be available
now from children's hospitals that furnish Medicare cost report
resident data and submit reports under the IRIS. As noted above,
comment is being solicited on whether the program should require
the standardized reporting of resident counts that is currently
required by Medicare in cost reports and IRIS. B. Increase the
percentage of residents' training that is supported in rural and
underserved areas. Research on access to health care services has
focused on the contribution of physicians treating the underserved.
Residency training programs located in rural areas and medically
underserved communities (MUCs) (as defined in sec. 799B(6) of the
PHS Act; 42 U.S.C. 295p(6)) provide much needed care in their communities
while residents learn the knowledge, skills and attitudes necessary
to adequately and appropriately care for these rural and underserved
populations. Proposed Required Data: The Department proposes to
require each hospital to submit on an annual application the FTE
count for resident time spent in training in MUCs and rural areas.
The definition for the designation of rural areas will be taken
from the United States Department of Agriculture's Urban-Rural
County Continuum Code classification system. Proposed Goal II:
Improve Public Health and Health Care Systems. A. Monitor financial
status of hospitals' total and operating margins. B. Monitor the
proportion of uncompensated care patients. C. Monitor the proportion
of Medicaid patients. Children's hospitals have a very high portion
of Medicaid patients, at 40 percent of gross patient revenues.
Another 4 percent represent charity and bad debt. Children's hospitals
also have on average poorer financial status than other teaching
hospitals. In 1995, 58 percent of children's hospitals had negative
operating margins. This may have been aggravated by major changes
in the health care system, including the expansion of managed care
and increased enrollments in Medicaid managed care, and increased
efforts to constrain health care costs. These changes in the health
care system put health facilities that train physicians at a competitive
disadvantage. A negative operating margin could affect the long-term
viability of children's hospitals and their ability to continue
providing a high proportion of care to children covered by Medicaid
and uncompensated care. It may also affect their ability to continue
training a high proportion of the nation's general and subspecialty
pediatric and other residents, since, in the competitive marketplace,
payers of health care services have few if any incentives to pay
higher costs to sites that train health professionals. Proposed
Required Data: The Department proposes to require each hospital
to submit on an annual application the following: <bullet> Total
and operating margins; <bullet> Percentage of patients served
who are enrolled in Medicaid; and <bullet> Percentage of
uninsured patients and uncompensated care. Economic and Regulatory
Impact Executive Order 12866 directs agencies to assess all costs
and benefits of available regulatory alternatives and, when rulemaking
is necessary, to select regulatory approaches that provide the
greatest net benefits (including potential economic, environmental,
public health, safety distributive and equity effects). In addition,
under the Regulatory Flexibility Act (RFA) of 1980, if a rule has
a significant economic effect on a substantial number of small
entities, the Secretary must specifically consider the economic
effect of the rule on small entities and analyze regulatory options
that could lessen the impact of the rule. Executive Order 12866
requires that all regulations reflect consideration of alternatives,
of costs, of benefits, of incentives, of equity, and of available
information. Regulations must meet certain standards, such as avoiding
an unnecessary burden. Regulations which are ``significant'' because
of cost, adverse effects of the economy, inconsistency with other
agency actions, effects on the budget, or novel legal or policy
issues, require special analysis. The Department has determined
that resources to implement this rule are required only of the
children's hospitals in submitting their applications and of the
Department in reviewing them. Therefore, in accordance with the
RFA of 1980, and the Small Business Regulatory Enforcement Fairness
Act of 1996, which amended the RFA, the Secretary certifies that
this rule will not have a significant impact on a substantial number
of small entities. The Secretary has also determined that this
rule does not meet the criteria for a major rule as defined by
Executive Order 12866 and would have no major effect on the economy
or Federal expenditures. We have determined that the rule is not
a ``major rule'' within the meaning of the statute providing for
Congressional Review of Agency Rulemaking, 5 U.S.C. 801. Similarly,
it will not have effects on State, local, and tribal governments
and on the private sector such as to require consultation under
the Unfunded Mandates Reform Act of 1995. Further, Executive Order
13132 establishes certain requirements that an agency must [[Page
37992]] meet when it promulgates a rule that imposes substantial
direct compliance costs on State and local governments, preempts
State law, or otherwise has Federalism implications. We have reviewed
this proposed action under the threshold criteria of Executive
Order 13132, Federalism, and, therefore, have determined that this
action would not have substantial direct effects on the rights,
roles, and responsibilities of States. Paperwork Reduction Act
of 1995 In accordance with section 3507(a) of the Paperwork Reduction
Act (PRA) of 1995, the Department is required to solicit public
comments, and receive final Office of Management and Budget (OMB)
approval, on collections of information. As indicated, in order
to implement the Children's Hospital Graduate Medical Education
Payment Program (CHGME), certain information is required as set
forth in this notice in order to determine eligibility for payment.
In accordance with the PRA, we are submitting to OMB at this time
the following requirements for seeking emergency review of these
provisions. HRSA has requested an emergency review because the data
collection and reporting of this information is needed before the
expiration of the normal time limits under OMB's regulations at
5 CFR part 1320, to ensure the timely availability of data as necessary
to ensure payment to eligible children's hospitals. A 30- day notice
was published in the Federal Register on May 15, 2000 to provide
for public comment and to request an expedited review of the information
collection associated with the CHGME. Delaying the data collection
would delay implementation of the statutory purpose of providing
payments by the end of the fiscal year to children's hospitals
that support training of residents in graduate medical education
programs. Collection of Information: The Children's hospital Graduate
Medical Education Program. Description: Data is collected on the
number of full-time equivalent residents in applicant children's
hospital training programs to determine the amount of direct and
indirect expense payments to participating children's hospitals.
Indirect expense payments will also be derived from a formula that
requires the reporting of case mix index information from participating
25c children's hospitals. Hospitals will be requested to submit
such information in an annual application. Description of Respondents:
Children's Hospitals operating approved graduate medical residency
training programs. Estimated Annual Reporting: The estimated average
annual reporting for this data collection is approximately 138
hours per hospital. The estimated annual burden is as follows:
----------------------------------------------------------------------------------------------------------------
Responses Hours Total Form name No. of per Total per hour respondents
respondent responses response burden ----------------------------------------------------------------------------------------------------------------
Form E (Short)............................................ 42 1
42 99.9 4,194 Form E (Long).............................................
12 1 12 46.7 560 Form F (Short)............................................
42 1 42 8 336 Form F (Long).............................................
12 1 12 8 96 IME Data..................................................
54 1 54 14 756 Required GPRA Tables......................................
54 1 54 28 1,512 ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬ ----------------------------------------------------------------------------------------------------------------
National Health Objectives for the Year 2000 The Public Health
Service is committed to achieving the health promotion and disease
prevention objectives of Healthy People 2000, and its successor,
Healthy People 2010. These are Department-led efforts to set priorities
for national attention. The CHGME program is related to the priority
area 1 (Access to Quality Health Services) in Healthy People 2010,
which is available online at http://www.health.gov/healthypeople/.
Education and Service Linkage As part of its long-range planning,
HRSA will be targeting its efforts to strengthening linkages between
Department education programs and programs which provide comprehensive
primary care services to the underserved. Smoke-Free Workplace
The Department strongly encourages all award recipients to provide
a smoke-free workplace and promote abstinence from all tobacco
products, and Public Law 103-227, the Pro-Children Act of 1994,
prohibits smoking in certain facilities that receive Federal funds
in which education, library, day care, health care, and early childhood
development services are provided to children. This program is
not subject to the Public Health Systems Reporting Requirements.
Dated: May 17, 2000. Claude Earl Fox, Administrator, Health Resources
and Services Administration. Dated: April 11, 2000. Donna E. Shalala,
Secretary. [FR Doc. 00-15332 Filed 6-16-00;
8:45 am] BILLING CODE 4160-15-P |
