Population Health and Its Management

Authors: Treven Cade,  Analyst, Michelle Maire, Consultant, & Sylvie Umuhoza, Manager   
The implications of resident rotations to a Non-Teaching Hospital affect both the full-time equivalent (FTE) cap building period and Medicare payments of the hospital. These implications are controlled by a number of factors, such as the accreditation status (new or existing) of the Non-Teaching Hospital that is hosting rotating residents. Residents coming from a newly accredited ACGME program can trigger a Non-Teaching Hospital’s FTE resident caps. Conversely, a resident coming from an existing accreditation will not trigger this cap. The Per Resident Amount (PRA) can also be affected by resident rotations, which directly influence a hospital’s Medicare payments. Resident rotations are crucial to the medical graduate experience, and they have a number of implications that affect both the Non-Teaching Hospitals and individual residents.

 To begin, it would be best to describe the resident rotation (or clinical rotation) process: “[c]linical rotations comprise the last two years of medical education. During rotations, students shadow physicians and residents at teaching hospitals, have access to patients, and gain valuable hands-on experience.” These rotations are a prominent characteristic of the medical graduate experience. Residents can opt to rotate to various Non-Teaching Hospitals during their clinical rotations, and the implications residents and hospitals face depend on the accreditation status of the program they rotate from. For example, if a resident rotates from a newly ACGME-accredited program to a Non-Teaching Hospital, they will trigger the Non-Teaching Hospital’s FTE resident cap. FTE caps, “dictate the maximum number of residents for which the hospital is eligible to receive graduate medical education (GME) reimbursement from the Medicare program.” The Non-Teaching Hospital would have five years to establish all the residencies they wish to have in the future: after those five years, barring a few exceptions, the hospital would be unable to build an additional FTE cap.

"A Non-Teaching Hospital’s Medicare funding is affected by resident rotations in regard to PRA as well."

 A Non-Teaching Hospital’s Medicare funding is affected by resident rotations in regard to PRA as well. In regard to a resident rotating from a newly accredited program to a hospital, “[a]ny resident rotations into the hospital will trigger the need to establish the hospital-specific PRA.” The PRA will not change once set, and that number will be used to calculate Direct Graduate Medical Education (DGME) payments. These, “payments are calculated by multiplying the PRA times the weighted number of full-time equivalent (FTE) residents working in all areas of the hospital (and non-hospital sites, when applicable) and the hospital's Medicare share of total inpatient days.” Once again, the implications of resident rotations extend to a hospital’s PRA: resident rotations begin the process of setting a hospital’s permanent PRA. If unprepared, this could leave a Non-Teaching Hospital with minimal Medicare funding.

The implications of a resident rotating from an existing accredited program (existing meaning they have been accredited for five or more years) to a hospital are dependent upon whether the program is outside their FTE cap building period. Therefore, and contrary to newly accredited programs, the implications of resident rotations are decided by the FTE cap status of their previous program. If the previous program is outside their cap building period, the Non-Teaching Hospital's cap building period is not triggered. In this scenario, the Non-Teaching Hospital would lose the ability to grow their FTE cap. Also, unlike the implications of newly accredited programs, the PRA will not be affected, as the Non- Teaching Hospital should be establishing it regardless.

 What are the implications of residents rotating to Non-Teaching Hospitals?

Understanding the accreditation status (as new or existing) of the program that a resident rotates from is crucial to answering this question. Rotating from a newly accredited program triggers the FTE cap building period and will set the PRA cap permanently for the Non-Teaching Hospital. From an already existing accredited program, and if this program is outside their FTE cap building period, the Non-Teaching Hospital’s 5-year FTE cap building period is not triggered. The latter of the accredited programs will also not affect a Non-Teaching Hospital’s PRA. These implications affect future residencies and funds to hospitals so they can be cognizant of these implications and knowledgeable of the accreditation of the program from which they come.



https://www.dentons.com/en/insights/newsletters/2016/august/18/gme-dentons/sharing-fte- caps-threshold-requirements-for-entering-into-medicare-gme-affiliation-agreements)


https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/ DGME



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