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MEDICARE and MEDICAID REIMBURSEMENT for GRADUATE MEDICAL EDUCATION. A REVIEW FOR COORDINATORS. KAREN R. BORMAN, MD, FACS. A REVIEW FOR COORDINATORS. SCOPE OF GME ECONOMICS COSTS AND FINANCING SOURCES ROLE OF MEDICARE ROLE OF MEDICAID CONTROVERSIES AND CHALLENGES. GMEC.
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MEDICARE and MEDICAID REIMBURSEMENT for GRADUATE MEDICAL EDUCATION A REVIEW FOR COORDINATORS KAREN R. BORMAN, MD, FACS
A REVIEW FOR COORDINATORS • SCOPE OF GME ECONOMICS • COSTS AND FINANCING SOURCES • ROLE OF MEDICARE • ROLE OF MEDICAID • CONTROVERSIES AND CHALLENGES
GMEC GMECONOMICS IS BIG BUSINESS!!!
GME PAYMENTS ARCS STEERING COMMITTEE SOURCE: CMS, MEDICARE COST REPORT FILE
GMECONOMICS BASICS: PROGRAMS PROGRAMS 8,400*
GMECONOMICS BASICS:SPONSORS + AFFILIATES SPONSORING INSTITUTIONS 700 PARTICIPATING INSTITUTIONS 2,900
GMECONOMICS BASICS: TYPES OF TEACHING HOSPITALS AAMC COTH MEMBERS 400
GMECONOMICS BASICS: FACULTY ALL COTH FACULTY 125,000
GMECONOMICS BASICS: RESIDENTS ACGME APPROVED RESIDENTS 106,000*
GMECONOMICS: DIRECT GME COSTS (DME) • RESIDENT SALARY + BENEFITS • SUPERVISING FACULTY PAYMENTS • EDUCATION OVERHEAD • EDUCATIONAL PRODUCTS + SERVICES • SIMULATION • ADMINISTRATION • PROGRAM COORDINATOR + DIRECTOR • ACCREDITATION FEES • RECRUITING • OTHER (e.g., PAGERS, COATS, TRAVEL)
DME SALARY + BENEFITS RESIDENTS 106,000*
GMECONOMICS: INDIRECT GME COSTS (IME) • INEFFICIENT CARE BY RESIDENTS • EMERGING TECHNOLOGY USAGE • CASE MIX / SPECIALIZED SERVICES • ?PAYER MIX (DSH) • ?OTHER TRAINEES (TITLE VII) • OPERATING EXPENSES • EDUCATION RELATED FACILITIES • CAPITAL EXPENSES
GMECONOMICS: FINANCING SOURCES • MEDICARE: DME + IME + DSH • CHILDRENS’ HOSPITALS GME VIA HRSA • DEPARTMENT OF VETERANS AFFAIRS (VA): DIRECT SUPPORT APPROPRIATION • MEDICAID: PER DIEM / CASE RATES • STATES LINE ITEM / GOAL-DIRECTED • PRIVATE PAYERS: HIGHER INPT RATES • MEDICAL SCHOOLS: PRACTICE PLANS • HOSPITALS: FROM TOTAL MARGIN
GMECONOMICS: OPERATING BUDGET SOURCE: AAMC HOUSESTAFF REPORTS 2003-2007
GMECONOMICS: OPERATING BUDGET SOURCE: AAMC HOUSESTAFF REPORTS 2003-2007
GME FUNDING: MEDICARE’S ROLE MEDICARE BECOMES LAW, 1965 (SOCIAL SECURITY ACT)
GME FUNDING: MEDICARE’S ROLE “…educational activities enhance the quality of care in an institution, and it is intended, until the community undertakes to bear such educational costs in some other way, that part of the net cost of such activities (including stipends of trainees, as well as compensation of teachers and other costs) should be borne to an appropriate extent by the hospital insurance program”
MEDICARE: PROGRAM PARTS SOURCE: MedPAC DATA BOOK, 2006
GME FUNDING: MEDICARE’S ROLE • PART D: SUPPLEMENTARY MEDICAL INSURANCE Rx DRUGS
GME FUNDING: MEDICARE’S ROLE • PART B: SUPPLEMENTARY MEDICAL INSURANCE PROVIDERS FACULTY-GENERATED PATIENT CARE REVENUES
GME FUNDING: MEDICARE’S ROLE • PART A: HOSPITAL INSURANCE TRUST FUND GME FUNDING
PART A: HI TRUST FUND • PART A: HOSPITAL INSURANCE TRUST FUND • ACUTE CARE • HIPPS, HOPPS, PSYCHIATRIC, ASCs • POST-ACUTE CARE • SNF, IRF, LTCH, HOME HEALTH, HOSPICE • OTHER • DIALYSIS, CLINICAL LABORATORY GME FUNDING?
PART A: HI TRUST FUND • HOSPITAL INPATIENT PROSPECTIVE PAYMENT SYSTEM (HIPPS) GME FUNDING!
DIRECT MEDICAL EDUCATION • DME = PRA X FTE X % Medicare Days • PRA = PER RESIDENT AMOUNT • FTE = RESIDENT COUNT • PRIMARY CARE VS OTHER • PRA CORRIDOR 85-140% NATIONAL AVERAGE
PART A: ORIGINS OF IME • HOSPITAL INPATIENT PROSPECTIVE PAYMENT SYSTEM, 1983 • CBO PREDICTED -7% TEACHING HOSPITALS / +7% NON-TEACHING • DIRECT GME EXCLUDED FROM PPS • INDIRECT GME ADD ON TO BASE RATE 11.6
INDIRECT MEDICAL EDUCATION • IME ADJUSTMENT STATUTORY FORMULA, OPERATIONS • 90% PPS PAYMENTS • IME % = 1.32 * [(1 + IRB) .405 - 1 ] x 100 • IME ADJUSTMENT STATUTORY FORMULA, CAPITAL • 10% PPS PAYMENTS • AVG DAILY CENSUS INSTEAD OF IRB
IME ADJUSTMENT HISTORY • 1983 HIPPS 11.6% • 1986 DSH 8.1% • 1988 DSH EXPANSION 7.7% • 1997 BBA • TARGET 5.5% BY 2001 • TARGET BEING REACHED 2008 • RESIDENT CAPS
THE TRUTH ABOUT IME IME ADJUSTMENT 1984 - 2008
RESIDENT FTE • “SLOTS” / “CAPS” / “THE COUNT” • USED IN DME AND IME FORMULAS • BASE YEAR 1996 • THREE YEAR ROLLING AVERAGE • INITIAL ELIGIBILITY PERIOD = 1.0 FTE / ALL ELSE = 0.5 FTE • HOSPITAL VS AMBULATORY • REDISTRIBUTION 2003 2500 SLOTS @ IME 2.7%
TRULY INDIRECT GME: DSH DISPROPORTIONATE SHARE FUNDING (DSH) • HOSPITAL-SPECIFIC ADD-ON TO OPERATING AND CAPITAL PAYMENTS • MEDICAID DAYS/TOTAL PATIENT DAYS + DUAL ELIGIBLE PATIENT DAYS/TOTAL MEDICARE PATIENT DAYS • MINIMUM THRESHOLD - >100% • MULTIPLE FORMULAS BY HOSPITAL SIZE AND LOCATION
TRULY INDIRECT GME: DSH • DISPROPORTIONATE SHARE FUNDING (DSH) • INTRODUCED 1986, EXPANDED 1988 • “POOR PATIENTS ARE MORE COSTLY TO TREAT” • COST SHIFT TO MEDICARE PATIENTS • TEACHING HOSPITALS LESS COMPETITIVE • “PUBLIC GOOD SUBSIDIZINGUNCOMPENSATED CARE”
THE TRUTH ABOUT DSH CARING FOR THE POOR ≠ DSH
THE TRUTH ABOUT DSH MOST DSH GOES TO TEACHING HOSPITALS
TEACHING HOSPITAL MARGINS MAJOR TEACHING HOSPITALS LEAD OVERALL MEDICARE MARGIN CURVE
TEACHING HOSPITAL MARGINS MAJOR TEACHING HOSPITALS TOTAL MARGINS ARE COMPETITIVE
GME FUNDING: MEDICARE’S ROLE • DME $ 2.6 BILLION 2004 • IME $ 5.3 BILLION 2004 • DME + IME = $ 7.9 BILLION • DSH $ 7.7 BILLION 2004 • IME + DSH = 14% ALL ACUTE CARE HOSPITAL PPS PAYMENTS • TOTAL TO GME $ 15.6 BILLION
GME FUNDING: MEDICAID’S ROLE MEDICAID BASICS • CREATED WITH MEDICARE IN 1965 • VOLUNTARY PARTICIPATION BY STATES (ALL SINCE 1982) • FEDERAL GUIDELINES • MATCHING FEDERAL DOLLARS • STATE-ADMINISTERED • DEFINE ELIGIBILITY AND BENEFITS • LOW INCOME + SPECIAL NEED • ON AVERAGE, 22% OF STATE BUDGETS
GME FUNDING: MEDICAID’S ROLE • MAKING GME PAYMENTS IS OPTIONAL FOR STATES • 47 + DC MAKE PAYMENTS (IL, TX, ND) • FORMULAS VARY BY STATE • USUALLY PAID VIA PER CASE/PER DIEM • MOST ARE MATCHED BY FEDERAL DOLLARS • TOTAL GME PAYMENTS BY STATES IN 2006 $3 BILLION
CHILDREN’S HOSPITAL GME FUNDING • CHGME AUTHORIZED 2000, REAUTHORIZED 2006-2011 • HEALTH RESOURCE SERVICES ADMINISTRATION • ANNUAL APPROPRIATIONS FUNDING IN LABOR-EDUCATION-HHS BILL • 1/3 DME USING NATIONAL AVG PRA • 2/3 IME FORMULA WITH CASE MIX, VOLUME, TEACHING INTENSITY • $ 300 MILLION 2004 TO 61 HOSPITALS
GME FUNDING: GOVERNMENT’S ROLE • DME $ 2.6 BILLION 2004 • IME $ 5.3 BILLION 2004 • DSH $ 7.7 BILLION 2004 • MEDICAID $ 3 BILLION • CHGME $ 0.3 BILLION • TOTAL ANNUAL GOVERNMENT FUNDING TO GME $ 18.9 BILLION
CONTROVERSIES AND CHALLENGES • HUMAN RESOURCES ISSUES • WORKFORCE SHORTAGE • AAMC EXPANSION • BBA CAP
CONTROVERSIES AND CHALLENGES • FUTURE GOVERNMENT FUNDING • MEDICARE SUSTAINABILITY • MEDICAID MATCHING • CHGME CONTINUATION • DECLINING PART B FACULTY REVENUES • PART D EFFECT
Table 4.5 Medicare Trustee’s Report: Part A Income and Expenses, 1970-2015 Actual Projected . Source: CMS, Office of the Actuary.Trustees Report, 2006. Projected Expenditures First Exceed Projected Income in 2011
PART D: Rx DRUGS ? SOURCE: MedPAC DATA BOOK, 2006