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CMS Releases FY 2022 Inpatient Prospective Payment System Proposed Rule (5-13-21)

CMS Releases FY 2022 Inpatient Prospective Payment System Proposed Rule (5-13-21)

On April 27, the Centers for Medicare and Medicaid Services (CMS) released the Fiscal Year (FY) 2022 Inpatient Prospective Payment System (IPPS) proposed rule. In addition to hospital payment and quality changes, CMS introduced proposals specific to graduate medical education (GME) in the rule. These proposals include closing gaps in health equity in GME by making 1,000 new residency slots available over a five-year period starting in FY 2023 and addressing the adjustment of low per resident amounts. The Academy has actively advocated for years to increase residency slots to address the ongoing national physician workforce shortage. Following successful passage of the Consolidated Appropriations Act, 2021, the proposed rule would fund medical residency positions in rural hospitals and underserved communities.

The IPPS proposed rule includes the following GME provisions important to the specialty:

  • Closing Gaps in Health Equity in GME. 1,000 new residency slots are available over a five-year period starting in FY 2023, with up to 200 slots to be distributed per year. No hospital would receive more than 1.0 full time equivalent (FTE) per year under either of the two alternative methodologies proposed for distribution of the slots. The first alternative would prioritize hospitals with the highest Health Professional Shortage Area (HPSA) scores. In this proposal, CMS estimates that all residency positions would be distributed through HPSA scoring. The second alternative would give CMS additional time to work with stakeholders to develop a “more refined approach for future years,” and the Agency would distribute 200 additional residency slots for FY 2023 among hospitals in four categories—rural hospitals, hospitals above their current cap, hospitals located in states with new medical schools or branch campuses, and hospitals that serve HPSAs—with higher priority given to hospitals that qualify in more categories. Applications for new slots are due January 31 of the preceding fiscal year (i.e. FY 2023 applications would be due Jan. 31, 2022).
  • Promoting Rural Hospital GME Funding Opportunity. Removes the “separately accredited” requirement for rural training tracks (RTTs), which would allow urban hospitals to partner with a rural hospital with any accredited training program. Also allows rural hospitals to increase their RTT cap similar to urban hospitals and allows urban hospitals to start multiple new RTTs. Beginning Oct. 1, 2022, hospitals that train residents in newly created RTTs will have a five-year cap building window.
  • Addressing Adjustment of Low Per Resident Amounts (PRA). CMS proposes to permit certain hospitals with less than 3.0 FTEs on their cost report (starting Oct. 1, 1997 to the date of enactment of the CAA, Dec. 27, 2020) to reset their PRA for direct graduate medical education (DGME) payments and establish a new cap for DGME and indirect medical education. CMS will consider resetting each during a 5-year window starting at enactment, Dec. 27, 2020, and ending Dec. 26, 2025.
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