The 2013 Inpatient Prospective Payment System Proposed Rule, issued by the Centers for Medicare & Medicaid Services (CMS) on May 11, 2012, proposes some important changes relating to graduate medical education (GME) reimbursement for teaching hospitals.  Comments regarding the Proposed Rule are due June 25, 2012.

The GME-related changes in the Proposed Rule include:

• Increasing the period of time, from three years to five, in which a new teaching hospital can establish its full-time equivalent (FTE) cap and changing the calculations of new hospitals’ direct GME and indirect GME (IME) caps when residents rotate to more than one hospital during the cap-building period;
• Creating additional requirements in order for hospitals that received additional slots from hospitals that had their caps reduced to keep those slots;
• Changing the ranking criteria for hospitals applying for cap space from hospitals that closed, as well as the effective dates of the transferred slots; and
• Including labor and delivery beds in the calculation of the hospital’s IME adjustment.

Teaching hospitals should review and closely analyze each of the proposed changes to determine whether they achieve the best result for the hospital’s Medicare GME reimbursement needs.