There has been recent activity in Congress surrounding full-time equivalent (FTE) residency training caps (FTE caps) that limit the number of Medicare-funded graduate medical education (GME) training positions for which a teaching hospital may claim reimbursement each year. As we have reported previously, on March 14, 2016, the Advancing Medical Resident Training in Community Hospitals Act was introduced in both the House and the Senate (H.R.4732 and S. 2671). Among other issues, this legislation would address problems caused when a hospital unwittingly establishes too-low FTE caps by hosting certain residents participating in new medical residency training programs (the so-called “resident rotator issue”), and would enable such hospitals to build new caps. Dentons believes this bill to be a thoughtful approach to solving the resident rotator issue, and continues to advocate for its passage on behalf of its clients. The House bill currently has 12 cosponsors, and the Senate bill has 6 cosponsors.

In recent news, on September 15, 2016, Congressional Representative Cresent Hardy (R-NV) introduced another FTE cap proposal—the Graduate Opportunities in Medical Distribution Act (H.R. 6039)—which would redistribute certain unused FTE resident training slots to hospitals located in health professional shortage areas (HPSAs). In brief, the Hardy bill would direct that hospitals with unused cap slots during a one-year measurement period would have their FTE caps reduced by 65 percent of the difference between their existing caps and their reference resident level during the measurement period. Rural hospitals with fewer than 250 inpatient beds would be exempt from this cap reduction. Resulting slots would be redistributed to hospitals that demonstrate a likelihood of filling them within a prescribed period (which is not specified in the draft legislation), with priority given to hospitals that are expected to fill the positions with residents from training programs located in the hospital’s own state. Of the available slots, 70 percent would be distributed to hospitals located in states with low resident-to-population ratios and 30 percent would go to states with a high number of HPSAs as compared to the state’s population. Hospitals failing to fill the slots within the prescribed period would lose their awarded slots in a subsequent redistribution cycle. The bill currently has two cosponsors, and is not expected to gain much traction, particularly in the middle of this election cycle.

The Resident Physician Shortage Reduction Act (H.R. 2124) (S. 1148), a version of which has been introduced annually in one or both houses of Congress for four years running, would authorize the creation of 3,000 new resident slots per year for five years, for a total of 15,000 new Medicare-funded medical residency training positions. In distributing the residency slots, consideration would be given to hospitals that demonstrate a likelihood of filling the awarded slots within five years. Although the House and Senate versions of the bill are not identical, both draft bills would award slots based on priority, with consideration given to some combination of the following factors: (i) location in a state with a new medical school or campus location meeting certain criteria; (ii) location in a state with a high percentage of the population living in HPSAs; (iii) designation of awarded slots for training in a shortage specialty residency program; (iv) whether a hospital is already training over its FTE resident limit; (v) participation in certain health personnel training programs in cooperation with the Veterans Health Administration; (vi) emphasis on training in community-based settings or in hospital outpatient departments; and (vii) whether a hospital is a meaningful EHR user. Specifically, the House version of the bill would direct that one-third of the additional slots created each year would be made available to hospitals already exceeding their FTE resident limit by 10 or more FTEs and that train at least 25 percent of their FTEs in primary care and general surgery, whereas the Senate version would direct that half of the annual slots be used for training in a shortage specialty residency program. The House bill currently has 139 cosponsors, and the Senate version has 14 cosponsors.

Finally, to complete our roundup of similar FTE cap proposals kicking around Congress this year, a related bill, the Training Tomorrow’s Doctors Today Act (H.R. 4774), introduced on March 17, 2016, incorporates, wholesale, the language from the Advancing Medical Resident Training in Community Hospitals Act, addressing the resident rotator issue, as well as certain provisions similar to the Resident Physician Shortage Reduction Act, which would create 15,000 new FTE training slots over 5 years. But the aim of this bill is even broader. Among other changes, the Training Tomorrow’s Doctors Today Act would also eliminate the three-year rolling average, and would make a small percentage of GME payments for indirect medical education contingent upon achieving certain performance standards. A version of this bill has been introduced in the House for the past three years. It currently has 14 cosponsors.

The Dentons team listed here will continue to track congressional actions affecting Medicare GME reimbursement to teaching hospitals. For more information about any of these bills, or if you are interested in joining Dentons’ advocacy effort to solve the resident rotator issue, please reach out to Lori Mihalich-Levin at lori.mihalich-levin@dentons.com