During the COVID-19 public health emergency, CMS has announced a number waivers and regulatory flexibilities that specifically address the needs of teaching hospitals. Over the past several weeks, CMS has relaxed rules related to teaching physician supervision, location of resident training, resident moonlighting, IME bed counts, and resident FTE time-counting, and has proposed additional flexibility to rules related to displaced residents. Just last week, CMS issued more guidance providing flexibilities relating to physician time studies and Medicare GME affiliation agreements.

Physician Time Studies

Hospitals that incur physician compensation costs must allocate these costs on the Medicare hospital cost report in proportion to the percentage of total time spent furnishing three categories of services: physician services to the provider, physician services to patients, and activities of the physician that are not reimbursable under Medicare. Current CMS guidance sets forth a number of requirements for physician time studies, including requirements that the studies encompass a full work week per month and be contemporaneous with the costs to be allocated. Physicians in hospitals with numerous COVID-19 patients are likely unable to meet these requirements. Further, given the crisis situation, time studies conducted during the COVID-19 outbreak likely are not accurate representations of physician time.

On May 15, CMS issued guidance offering providers flexibility in completing physician time studies. For the duration of the public health emergency, providers may use the following time study options: 

• “One week time study every 6 months (two weeks per year);”
• “Time studies completed in the cost report period prior to January 27, the PHE effective date (e.g. hospital with a 7/1/2019 -- 6/30/2020 cost reporting period could use the time studies collected 7/1/2019 through 1/26/2020; no time studies needed for 1/27/2020 -- 6/30/2020);” and
• “Time studies from the same period in CY 2019 (e.g., if unable to complete time studies during February through July 2020, use time studies completed February through July 2019).”

Affiliation Agreements

To provide flexibility to hospitals that cross-train residents, CMS permits teaching hospitals to enter into Medicare GME affiliation agreements, which allow hospitals to aggregate and share direct and/or indirect medical education resident caps. Typically, teaching hospitals must submit Medicare GME affiliation agreements to CMS by July 1 (the beginning of the resident year) for an affiliated group agreement to be valid. New CMS guidance issued on May 21 provides that, during the public health emergency, teaching hospitals now have until October 1, 2020 to submit new or amended Medicare GME affiliated group agreements. It is our understanding that CMS has since rescinded this guidance for technical reasons, but plans to issue a formal waiver in the near future extending the submission deadline to October 1. We will publish an alert in GME @ Dentons when such a waiver is released.

Please do not hesitate to reach out to the GME @ Dentons team during this emergency for any assistance we can provide with respect to your residency programs.