CHGME-ApplicationGuidance- 06.26.24 FINAL.pdf

U.S. Department of Health and Human Services

Health Resources & Services Administration

(HRSA)

Bureau of Health Workforce Division of Medicine and Dentistry

Children’s Hospitals Graduate Medical Education (CHGME) Payment Program

Application Guidance (Updated June 2024)

CHGME Payment Program Application Guidance 1

Department of Health and Human Services OMB No. 0915-0247 Health Resources and Services Administration Expiration Date: 12/31/2025 Bureau of Health Workforce

Dear Applicant:

The Children’s Hospitals Graduate Medical Education (CHGME) Payment Program application guidance, including descriptions of all applicable forms and instructions, is available on-line within Health Resources and Services Administration’s Electronic Handbooks (EHBs). It is very important to thoroughly read the detailed application guidance and instructions before completing the required application forms. The material contains information related to submission of both the initial and reconciliation applications.

Your completed application must be submitted through the HRSA EHBs following the guidance provided in the “Application Cycle and Deadlines” section of the application guidance. Applications must be received by the stated deadlines in the CHGME Payment Program Notice of Funding Opportunity to be considered for CHGME Payment Program funding.

If you have questions regarding the application, please call Dr. Witzard Seide, Branch Chief to the Graduate Medical Education Branch at 301-945-3428 or email at wseide@hrsa.gov.

Sincerely yours, /s/ Luis Padilla, M.D.

Associate Administrator

Enclosures mailto:wseide@hrsa.gov

CHGME Payment Program Application Guidance 2

Children’s Hospitals Graduate Medical Education (CHGME) Payment Program Application Guidance

Table of Contents

Section I: Overview of the CHGME Payment Program Introduction

Administration

Section II: Application Cycle and Deadlines Initial Application

Interim Payment Determination and Disbursement (Based Upon the Initial Application)

Assessment of Resident Full-Time Equivalent Counts Reported in Initial Applications

Reconciliation Application

Final Payment Determination and Disbursement (Based Upon the Reconciliation Application)

Section III: CHGME Payment Program Application Forms HRSA 99: Demographic and Contact Information

HRSA 99-1: Determination of Weighted and Unweighted Resident Full-Time Equivalent Counts

HRSA 99-2: Determination of Indirect Medical Education Data Related to the Teaching of Residents

HRSA 99-4: Government Performance and Results Act Tables

HRSA 99-5: Application Checklist

Additional Application Supporting Documentation

CHGME Payment Program Application Guidance 3

Section IV: Hospital Eligibility Eligibility Criteria

Changes in Eligibility

Section V: Payment Methodology Payment Methodology

Section VI: Hospital Data Needed to Complete the CHGME Payment Program Application Data Sources for Children’s Hospitals that File Full Medicare Cost Reports

Data Sources for Children’s Hospitals that File Low- or No-Utilization Medicare Cost Reports

Data Sources for Children’s Hospitals that Have Not Completed Three (3) Medicare Cost Report Periods

Data Sources for Children’s Hospitals that Have Not Completed One (1) Medicare Cost Report Period

Section VII: Determining the Total Number of Resident Full-Time Equivalents Cap and Cap Year

Adjustments to a Hospital’s Cap

§422 of Medicare Modernization Act 2003

§5503 of the Affordable Care Act of 2010

Medicare GME Affiliation Agreements and Other Regulations Allowing the Establishment or Adjustment of a Hospital Cap

Exceeding the Cap

Impact of §422 of the MMA When a Hospital Exceeds its Cap

Impact of §5503 of the MMA When a Hospital Exceeds its Cap

Eligible Residency Programs (Approved Training Programs)

Eligible Residents

CHGME Payment Program Application Guidance 4

International Medical Graduates (IMGs)

Resident Full-Time Equivalent Counts

Initial Residency Period

Weighting of Resident Full-Time Equivalent Counts

Where Residents are Counted

Hospital Complex

Non-Provider/Non-Hospital Settings and Written Agreements

Partial Resident Full-Time Equivalents

Research Time

Resident Full-Time Equivalent Count Accuracy and Documentation

Section VIII: Special Instructions for Calculating Reductions and Increases to a Hospital’s 1996 Base Year Cap as a Result of §422 of the Medicare Modernization Act of 2003 Decrease to a Hospital’s 1996 Base Year Cap (§422 Cap Reduction)

Increase to a Hospital’s 1996 Base Year Cap (§422 Cap Increase)

Section IX: Special Instructions for Calculating Reductions and Increases to a Hospital’s 1996 Base Year Cap as a Result of §5503 of the Affordable Care Act of 2010 Decrease to a Hospital’s 1996 Base Year Cap (§5503 Cap Reduction) Increase to a Hospital’s 1996 Base Year Cap (§5503 Cap Increase)

Section X: Special Instructions for Calculating Increases to a Hospital’s 1996 Base Year Cap as a Result of §126, §127, and §131 of the Consolidated Appropriations Act of 2021 Increase to a Hospital’s 1996 Base Year Cap (§126, §127, and §131 Cap Increase)

Section XI: Special Instructions for Calculating Indirect Medical Education Payment Variables Number of Inpatient Discharges

CHGME Payment Program Application Guidance 5

Case Mix Index Number of Available Beds

Intern/Resident to Bed Ratio

Section XII: Special Calculation Instructions for Hospitals that Have Not Completed a Medicare Cost Reporting Period Determining the Period of Eligibility Calculating the Resident Full-Time Equivalent Count for an Incomplete Cost Reporting Period Calculating the Case Mix Index for an Incomplete Cost Reporting Period Calculating Discharges for an Incomplete Cost Reporting Period

Calculating the Number of Available Beds for an Incomplete Cost Reporting Period Calculating Inpatient Days for an Incomplete Cost Reporting Period Calculating Outpatient Services for an Incomplete Cost Reporting Period

Section XIII: Special Calculation Instructions for Establishing a “CHGME cap” for Newly Qualified Hospitals

Section XIV: CHGME Payment Program Application Form Instructions

HRSA 99: Hospital Demographic and Contact Information

HRSA 99-1: Determination of Weighted and Unweighted Resident Full-Time Equivalent Counts

HRSA 99-2: Determination of Indirect Medical Education Data Related to the Teaching of Residents

HRSA 99-4: Government Performance and Results Act Tables

HRSA 99-5: Application Checklist

Section XV: References Commonly Used Acronyms

CHGME Payment Program Application Guidance 6

Section I: Overview of the CHGME Payment Program

Introduction In 1999, Congress addressed the disparity of graduate medical education (GME) funding between freestanding children’s teaching hospitals and other teaching hospitals by passing the Healthcare Research and Quality Act, which established the Children’s Hospitals Graduate Medical Education (CHGME) Payment Program. The act was signed on December 6, 1999, and the statute authorized the program for Federal fiscal year (FY) 2000 and FY 2001. On October 17, 2000, the Children’s Health Act of 2000 amended the Healthcare Research and Quality Act of 1999 extending the CHGME Payment Program through FY 2005. On December 23, 2004, additional amendments under Public Law 108- 490 were made to Title III, Section 340E of the Public Health Service Act affecting the CHGME Payment Program. In October 2006, the Children’s Hospital GME Support Reauthorization Act of 2006 reauthorized the CHGME Payment Program through FY 2011.

In April 2014, the Children’s Hospital GME Support Reauthorization Act of 2013 reauthorized the CHGME Payment Program through FY 2019 and included a provision to allow newly qualified hospitals to apply for CHGME funding. Most recently, the CHGME Payment Program was reauthorized by the Dr. Benjy Frances Brooks Children's Hospital GME Support Reauthorization Act of 2018 (P.L. 115-241). The CHGME Payment Program continues to operate through an appropriation.

CHGME funding supports the education and training of physician and dental residents and enhances their ability to care for low-income patients. The CHGME program funds nearly 60 freestanding children’s teaching hospitals across the country that train 55 percent of the Nation’s pediatricians and 53 percent of pediatric specialists trained in the United States1

These are the physicians who care for America’s youngest population – its children. Almost 50 percent of the patient care that children’s teaching hospitals provide is for low-income children, including those covered by Medicaid and those who are uninsured. In addition, these hospitals are regional and national referral centers for very sick children, often serving as the only source of care for many critical pediatric services. In Academic Year 2022–2023, CHGME funded hospitals served as sponsoring institutions for 44 medical residency programs and 267 fellowship programs2.

The CHGME Payment Program provides a more adequate level of support for GME training in U.S. children’s teaching hospitals that have a separate Medicare provider payment

1 U.S. Department of Health and Human Services, Health Resources and Services Administration Fiscal Year 2025 Justif ication of Estimates for Appropriation Committees 2 Ibid.

CHGME Payment Program Application Guidance 7 agreement. These hospitals receive relatively little funding from Medicare for GME. In 2020, Medicare paid over $16.1 billion in funding to support GME training at around 1,319 hospitals, with an average payment of approximately $11 million per hospital.3 4

In FY 2023, the CHGME Payment Program through the Notice of Funding Opportunity, HRSA-23-012, provided $363,725,699 in GME payments to 59 children's hospitals in 30 states, the District of Columbia and Puerto Rico; and $1,743,656 in Quality Bonus Systems payments to 29 eligible children’s hospitals. Since the inception of this program in 1999, the program has disbursed over $6.1 billion in Federal GME support to freestanding children’s teaching hospitals.

Administration The CHGME Payment Program is administered by the Graduate Medical Education Branch (GMEB) of the Division of Medicine and Dentistry (DMD), Bureau of Health Workforce (BHW), Health Resources and Services Administration (HRSA), Department of Health and Human Services (DHHS). Questions regarding the CHGME Payment Program should be directed to the:

Department of Health and Human Services Health Resources and Services Administration Bureau of Health Workforce Division of Medicine and Dentistry Graduate Medical Education Branch Attn: Dr. Wizard Seide, MD 5600 Fishers Lane Room 15N116 Rockville, Maryland 20857 Telephone: 301-945-3428 Email: wseide@hrsa.gov

3 United States Government Accountability Office (GAO). Report to Congressional Requesters.

PHYSICIAN WORKFORCE: Caps on Medicare-Funded Graduate Medical Education: An Overview. GA0-21-391, May 2021. https://www.gao.gov/products/gao-21-391

4 Congressional Research Service (CRS). Analysis of FY2020 Medicare hospital cost report data.

https://crsreports.congress.gov/product/pdf/IF/IF10960 https://www.hrsa.gov/ https://crsreports.congress.gov/product/pdf/IF/IF10960

CHGME Payment Program Application Guidance 8

Section II: Application Cycle and Deadlines

For hospitals to be considered for CHGME Payment Program funding, they must comply with statutory eligibility requirements described herein and participate in the CHGME Payment Program’s application cycle, which consists of specific processes for any given fiscal year (FY). These processes are guided by the CHGME Payment Program’s statute and are described below.

Initial Application

For children’s hospitals, meeting all statutory and eligibility requirements, to receive CHGME Payment Program funding, they must submit a completed initial application for CHGME Payment Program funding in accordance with the established deadlines noted in the most current Notice of Funding Opportunity (NOFO). During the initial application process, eligible children’s hospitals provide the CHGME Payment Program with information relevant to the interim determination of payments.

Initial applications for CHGME Payment Program funding must include the following forms:

i. HRSA 99: Demographic and Contact Information

ii. HRSA 99-1: Determination of Weighted and Unweighted Resident FTE Counts

iii. HRSA 99-2: Determination of Indirect Medical Education Data Related to the

Teaching of Residents

iv. HRSA 99-5: Application Checklist

Applications accepted for review must be completed following the application guidance and instructions provided herein, submitted in English, and include the above completed forms and supporting documentation as identified in the HRSA 99-5 (Application Checklist). The forms HRSA 99, HRSA 99-1, HRSA 99-2, and HRSA 99- 5 must be submitted electronically through the secure HRSA Electronic Handbooks (EHBs) web-application system.

The Initial Application package includes a mandatory submission of a PROJECT ABSTRACT. A project abstract is REQUIRED to be submitted to consider an application complete. The project abstract should accurately describe your organization’s objectives and goals within the context of a summary of the project. As an applicant, please seek guidance from your organization’s Designated Institutional Official (DIO) to complete the project abstract form. The project abstract form can be found in Grants.gov.

The CHGME Initial Application will be available through the current fiscal year CHGME Payment Program Notice of Funding Opportunity posted on Grants.gov. Highlighting there are multiple registrations to be completed by an applicant to be able to apply for federal funding including registrations in SAM.gov, Grants.gov, and HRSA EHBs. The current NOFO will have contact information of these websites. CHGME Payment Program strongly encourages applicants to register as soon as possible as it can take up to one moth for registration in all systems to be complete.

https://grants.gov/forms/forms-repository/r-r-family

CHGME Payment Program Application Guidance 9

Interim Payment Determination and Disbursement (Based Upon the Initial Application)

In accordance with CHGME Payment Program statutory requirements, information provided by participating children’s hospitals in their initial applications is used by the CHGME Payment Program to calculate payments for all eligible children’s hospitals for interim payments beginning of the FY (October 1st) for which children’s hospitals have applied for CHGME Payment Program funding. CHGME Direct Medical Education (DME), and Indirect Medical Education (IME) payments, allocated to eligible children’s hospitals, are based on the information reported in their initial applications for CHGME Payment Program funding.

Each of the payments is determined by formula, and a hospital receives its proportion of the total CHGME funding based on the calculation of the formula. For DME, the CHGME funding is proportional to the number of residents the hospital trains. Furthermore, the DME payment formula accounts for a hospital’s specific geographic variations in costs, and inflation. For IME, the CHGME funding takes into account the severity of illness of its inpatients, the number of available beds, as well as the number of residents the hospital trains.

DME and IME payment calculations are subject to all regulations and policies governing the CHGME Payment Program.

On or after October 1st of the FY for which eligible children’s hospitals have applied for CHGME Payment Program funding, the CHGME Payment Program will begin making interim payments. CHGME Program payments to eligible children’s hospitals will be contingent upon enactment of the FY Federal budget. Children’s hospitals will be notified, in writing, of the Secretary’s interim payment determination. In accordance with the CHGME Payment Program statute, payments will reflect up to a 25 percent withholding from each interim installment (payment) for both DME and IME payments, as necessary, to ensure that a hospital will not be overpaid on an interim basis.

Assessment of FTE Resident Counts Reported in Initial Applications

The CHGME Payment Program statute, at 42 USC 256e(e)(3), mandates that “the Secretary shall determine any changes to the number of residents reported by a hospital in the application of the hospital for the current fiscal year to determine the final amount payable to the hospital for the current fiscal year for both direct expense and indirect expense amounts.” Therefore, prior to the end of the FY for which children’s hospitals have applied for CHGME Payment Program funding, the Secretary must determine (reconcile) any changes to the number of FTE residents reported by a hospital in its initial application for the current FY, which will impact final payments made by the CHGME Payment Program to all eligible children’s hospitals. This determination is done by conducting a comprehensive assessment of the FTE resident counts claimed by children’s hospitals in their initial applications for CHGME Payment Program funding.

CHGME Payment Program Application Guidance 10

The CHGME Payment Program has contracted with CHGME Fiscal Intermediaries (FIs) to carry out an assessment of FTE resident counts (hereinafter the “FTE Resident Assessment Program”) reflected in participating children’s hospitals initial applications for CHGME Payment Program funding to determine any changes to the FTE resident counts initially reported. An assessment of FTE resident counts reported by children’s hospitals in their initial applications for CHGME Payment Program funding is performed regardless of the type(s) of Medicare cost report (MCR) the hospital files (e.g., full, low- or no-utilization) for purposes of receiving CHGME Payment Program funding. This process is designed to assess FTE resident counts for all children’s hospitals in an equitable fashion and within CHGME Payment Program time constraints.

The FTE Resident Assessment Program requires participating children’s hospitals to comply with requests from the CHGME FIs, within the time constraints provided, as any changes to FTE resident counts in one children’s hospital’s application for CHGME Payment Program funding affects the distribution of funds among all eligible children’s hospitals. To minimize public burden, CHGME FIs use and build upon work previously conducted by CHGME and/or Medicare Administrative Contractors (MACs) in prior years.

At the conclusion of the FTE Resident Assessment Program, the CHGME FIs will forward final assessment reports to the respective children’s hospitals, the MACs, and the CHGME Payment Program explaining the results of the review. The assessment reports include CHGME FI- generated HRSA 99-1’s, which children’s hospitals must use to complete their reconciliation applications (see Reconciliation Application below). The assessment reports may also include supporting documentation including, but not limited to adjustment reports, updates to the intern and resident database, adjustments to the Centers for Medicare and Medicaid Services (CMS) form 2552-10 Worksheet E-4 (2552-96 Worksheet E-3, Part IV), or letters to the MAC requesting the reopening of one or more MCRs.

Reconciliation Application

During the third quarter of each FY (typically April 1st) for which payments are being made, the CHGME Payment Program will release a reconciliation application for use by participating children’s hospitals to report changes in the FTE resident counts reported in their initial applications for CHGME Payment Program funding. For children’s hospitals to continue receiving CHGME Payment Program funding, they must submit a completed reconciliation application for CHGME Payment Program funding in accordance with established deadlines noted below. The FTE resident counts reported by children’s hospitals in their reconciliation applications must be for the same MCR period(s) identified in the hospital’s initial application for the subject FY and consistent with those reported in the CHGME FIs FTE resident final assessment report to be accepted by the CHGME Payment Program.

The FTE resident counts from the final assessment reports are used to determine the final amounts payable to children’s hospitals for the current FY for both DME and IME. Children’s

CHGME Payment Program Application Guidance 11 hospitals whose FTE resident counts have not changed are not exempt from completing and submitting a CHGME Payment Program reconciliation application.

Reconciliation applications for CHGME Payment Program funding must include the following forms:

i. HRSA 99: Hospital Demographic and Contact Information

ii. HRSA 99-1: Determination of Weighted and Unweighted Resident FTE Counts

iii. HRSA 99-2: Determination of Indirect Medical Education Data Related to the

Teaching of Residents

iv. HRSA 99-4: Government Performance and Results Act Tables

v. HRSA 99-5: Application Checklist

Applications accepted for review must be completed following the application guidance and instructions provided herein, submitted in English and include the above completed forms and supporting documentation as identified in the HRSA 99- 5 (Application Checklist). The forms HRSA 99, HRSA 99-1, HRSA 99-2, HRSA 99-4 and HRSA 99-5 must be submitted electronically through the secure EHBs web- application system.

Children’s hospitals that were not eligible to participate or did not apply for funding during the initial application process for a given FY are not eligible to apply for and receive funding during the reconciliation application process for the same FY. These hospitals must wait until the next (initial) application cycle to apply for CHGME Payment Program funding.

Final Payment Determination and Disbursement (Based Upon the Reconciliation Application)

The Secretary will determine any balance due, or any overpayment made to individual hospitals following the determination of changes, if any, to the number of FTE residents reported by children’s hospitals in their reconciliation applications because of the FTE Resident Assessment Program. Children’s hospitals will be notified, in writing, of the Secretary’s final reconciliation payment determination during the fourth quarter (July 1st – September 30th) of the FY in which payments are being made.

Reconciliation payments will be made to individual hospitals on or before the end of the FY (September 30th) in which payments are being made. The Secretary will include in the reconciliation payments funding initially withheld in accordance with statutory requirements.

All hospitals, whether or not they report changes to their FTE resident counts during the reconciliation process, can expect changes to their final payment determination as a result of FTE resident count changes reported by other participating children’s hospitals. This is due to the methodology used to determine CHGME Payment Program payments. More detailed information is available on the CHGME Payment Program payment methodology in Section V of this application package.

CHGME Payment Program Application Guidance 12

The DME and IME payment calculations are subject to all statutes and accompanying policies relating to the CHGME Payment Program, including the June 19, 2000, Federal Register notice for DME, the July 20, 2001, Federal Register notice for IME, §422 of the Medicare Modernization Act (MMA) of 2003, and sections 5503, 5504, 5505, and 5506 of the Affordable Care Act (ACA) of 2010, Sections 126, 127 and 131 of the Consolidated Appropriations Act (CAA) of 2021, and other pertinent legislation, if applicable.

At the end of the FY, the CHGME Payment Program may make a final payment to distribute any remaining funds, including those funds that have been returned to the DHHS during the FY because of overpayment or hospitals’ loss of eligibility.

Section III: Application Forms

Department of Health and Human Services OMB No. 0915-0247 Health Resources and Services Administration Expiration Date: 12/31/2025

Public Burden Statement The purpose of this information collection is to obtain performance data for the following:

HRSA Grantees and cooperative agreement recipients, public health, and applications. In addition, these data will facilitate the ability to demonstrate alignment between BHW programs and CHGME Payment Program’s participating children’s hospitals. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control number for this information collection is 0915-0247 and it is valid until 12/31/2025. Public reporting burden for this collection of information is estimated to average 3.7 hours per response, including the time for reviewing instructions, searching existing data sources, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to HRSA Reports Clearance Officer, 5600 Fishers Lane, Room 14N136B, Rockville, Maryland, 20857 or paperwork@hrsa.gov.

mailto:paperwork@hrsa.gov

CHGME Payment Program Application Guidance 13

Application Forms for Use by CHGME Applicant and Participating Hospitals

HRSA 99: Demographic and Contact Information.

Initial and Reconciliation Applications This required form is used to identify the applicant hospital’s Medicare Provider Number, Tax Identification Number, DUNS number, and the appropriate hospital liaisons for application processing and auditing purposes. This form is the initial part of each application.

HRSA 99-1: Determination of Weighted and Un-weighted Resident FTE Counts.

Initial Application This required form must be completed as a component of the initial application. Information is requested on the hospital’s number of resident FTE unweighted and weighted counts for the current, previous, penultimate and base (1996) Medicate cost report (MCR) periods.

Reconciliation Application This required form must be completed as a component of the reconciliation application.

Information is requested on the hospital’s number of resident FTE unweighted and weighted counts for the current, previous, penultimate and base (1996) MCR periods.

Per section 340E(c)(1) of the Public Health Service Act, payments for direct expenses relating to the hospital’s approved GME programs for a FY are equal to the product of (a) an updated national per resident amount for direct GME with wage adjustment and a labor share for each children’s hospital’s area applied to a standard wage-related portion, and (b) the average number of FTE residents as determined under Section 1886(h)(4) of the Social Security Act.

HRSA 99-2: Determination of IME Data Related to the Teaching of Residents.

Initial Application This required form must be completed as a component of the initial application. Information is requested on the hospital’s number of inpatient days, number of inpatient discharges, number of available beds, case-mix index (CMI) and intern/resident to bed (IRB) ratio for the current, previous, penultimate and base (1996) MCR periods.

Reconciliation Application This required form must be completed as a component of the reconciliation application.

Information is requested on the hospital’s number of inpatient days, number of inpatient

CHGME Payment Program Application Guidance 14 discharges, number of available beds, CMI and IRB ratio for the current, previous, penultimate and base (1996) MCR periods.

Per section 340E(d) of the PHS Act, the Secretary must determine the amounts of IME payments by taking into account factors identified in section 340E(d)(2)(A) of the PHS Act - -- variations in case mix, and the number of resident FTEs in the hospital’s approved GME training programs for a fiscal year.

HRSA 99-4: Government Performance and Results Act (GPRA) Tables.

Reconciliation Application This required form is for the collection of information per the GPRA of 1993, as well as §5504 of the Affordable Care Act of 2010 (ACA). It is requested before the end of the FY when the reconciliation application cycle occurs and the HRSA 99-1 and HRSA 99-2 are resubmitted reflecting changes, if any, to the resident FTE counts reported by the children’s hospitals in their initial applications for CHGME Payment Program funding.

HRSA 99-5: Application Checklist.

Initial and Reconciliation Application This required form is a checklist developed in response to numerous requests by participating children’s hospitals to provide them with a checklist that they could use to ensure that their application for CHGME Payment Program funding was complete before submitting it to the CHGME Payment Program for consideration. The checklist identifies all required forms and supporting documentation, where appropriate, that an applicant children’s hospital must submit to the CHGME Payment Program to be considered for funding.

Additional Application Supporting Documentation:

Application Cover Letter (Initial and Reconciliation Applications) This optional letter includes a brief description of the application submitted and an explanation of issues that may require attention, as well as a list of the documents included for review by CHGME Payment Program. This letter is a document the children’s hospital uploads as an attachment to the CHGME Payment Program application and is not a HRSA form nor a template provided to the children’s hospitals. A copy of the form/template has not been included in this guidance, because each letter uploaded varies depending on the applicant children’s hospital.

CHGME Payment Program Application Guidance 15

Exhibit 2: Revised GME Affiliation Agreement(s) for an Aggregate Cap

Revised GME Affiliation Agreement(s) for an Aggregate Cap, if available, as well as the email confirmation receipt to CMS and proof of submission to the Medicare Administrative Contractor (MAC). This agreement is a document the children’s hospital uploads as an attachment to the CHGME Payment Program application and is not a HRSA form nor a template provided to the children’s hospitals. A copy of the form/template has not been included in this guidance, because each agreement uploaded varies depending on the

Exhibit 3: Medicare Cost Reports

Updated CMS form 2552-10, Worksheet E-4 (formerly named Worksheet E-3, Part IV, and Worksheet E-3, Part VI), if required. This worksheet is a document the children’s hospital uploads as an attachment to the CHGME Payment Program application and is not a HRSA form nor a template provided to the children’s hospitals. A copy of the form/template has not been included in this guidance, because each worksheet uploaded varies depending on the

Exhibit 4: CMS Letter Supporting Add-on to Cap

A confirmation letter from CMS, must be included if hospital claims an add-on to their 1996 cap. This letter is a copy of the letter sent to the provider by CMS informing the hospital of an increase and/or reduction in the resident FTE cap due to Section 422 of MMA, Sections 5503 and 5506 of the ACA, Sections 126, 127 and 131 of the CAA, or other pertinent legislation, if applicable. This letter is a document the children’s hospital uploads as an attachment to the CHGME Payment Program application and is not a HRSA form nor a template provided to the children’s hospitals. A copy of the form/template has not been included in this guidance, because each letter uploaded varies depending on the applicant children’s hospital.

CFO Form Letter

Initial and Reconciliation Applications This required letter includes a brief description of the application resubmitted with corrections and an explanation of changes made as well as a list of the revised documents included for further review by CHGME Payment Program. This letter is a document the children’s hospital uploads as an attachment to the CHGME Payment Program application and is not a HRSA form nor a template provided to the children’s hospitals. The CFO Form Letter may be signed by the Project Director (PD), Authorizing Official (AO), the Chief Operating Officer (CFO) or other designated hospital official. A copy of the form/template has not been included in this guidance, because each letter uploaded varies depending on the applicant children’s hospital.

CHGME Payment Program Application Guidance 16

Section IV: Hospital Eligibility Criteria

According to Public Law 106-310, a children’s teaching hospital must meet the following eligibility criteria for CHGME Payment Program funding. The hospital must:

1. participate in an approved GME program;

2. have a Medicare Provider Agreement;

3. be excluded from the Medicare inpatient prospective payment system (PPS) under section 1886(d)(1)(B)(iii) of the Social Security Act, and its accompanying regulations(1); and

4. operate as a “freestanding” children’s teaching hospital, as defined by the CHGME Payment Program.(2)

As per the Children’s Hospital GME Support Reauthorization Act of 2013 (Public Law 113– 98), a freestanding hospital that meets the following criteria may be eligible as a newly qualified hospital for CHGME payments depending on the level of funding appropriated to the program:

1. It has an approved medical residency training program as defined in section 1886(h)(5)(A) of the Social Security Act;

2. It has a Medicare provider agreement and is excluded from the Medicare inpatient hospital prospective payment system (IPPS) pursuant to section 1886(d)(1)(B) of the Social Security Act and its accompanying regulations;

3. Its inpatients are predominantly individuals under 18 years of age;

4. It is not otherwise qualified to receive payments under this section or section

1886(h) of the Social Security Act. For those free-standing children’s hospitals that met the above requirements as of April 7, 2014, when the Secretary has not previously determined an average number of FTE residents under section 1886(h)(4) of the Social Security Act, the Secretary may establish such number of FTE residents for the purposes of calculating CHGME program payments.

(1) A hospital with a 3300 series Medicare provider number would meet this criterion (i.e., 55- 3300).

(2)A children’s teaching hospital is considered “freestanding” if it does not operate under a Medicare hospital provider number assigned to a larger health care entity that receives Medicare GME payments.

Additional references:

Social Security Act, Section 1886 CHGME Payment Program, Federal Register Notice, March 1, 2001 (66 FR 12940)

CHGME Payment Program Application Guidance 17

Changes in Eligibility

A hospital remains eligible for CHGME Payment Program funding as long as it meets the eligibility criteria listed above and trains residents as a “freestanding” children’s hospital during the FY for which CHGME Program payments are being made.

If a hospital becomes ineligible for payments:

1. it must notify the CHGME Payment Program immediately of the change in status and the date of the change; and

2. it will be liable for the reimbursement, with interest, of any funds received during the period of ineligibility.

Additional references:

Section V

Payment Methodology

CHGME Payment Program funding to individual children’s hospitals is based upon a number of variables, including the rolling average of weighted and un-weighted FTE resident counts, which are used to calculate DME and IME payments, respectively. Payment variables and calculations are subject to all other statutes, rules and CMS regulations and accompanying policies relating to the CHGME Payment Program statute, including the June 19, 2000 Federal Register Notice for DME (65 FR 37985), the March 1, 2001 Federal Register Notice (66 FR 12940), the July 20, 2001 Federal Register Notice for IME (66 FR 37980), the October 22, 2003 Federal Register Notice (68 FR 60396), §422 of the MMA of 2003, as well as and Sections 5503, 5504, 5505, and 5506 of the ACA of 2010, and Sections 126, 127 and 131 of the CAA of 2021, and other pertinent legislation, if applicable.

The rolling average is the average of the FTE resident counts reported by the children’s hospital for the (1):

1. most recently filed MCR (or the most recently completed MCR period); and

2. the prior 2 years.

(1) CHGME Payment Program funding to a children’s hospital that has not completed three

(3) MCR periods will be based upon the hospital’s FTE resident count from its “most recently filed” or “most recently completed” MCR period until three (3) MCR periods have been completed.

CHGME Payment Program Application Guidance 18

The rolling average FTE resident count includes all residents except those that qualify for an adjustment after the averaging rules are applied in accordance with 42 CFR 413.77.

The FTE resident count for any MCR period is based upon the number of:

1. allopathic and osteopathic residents following application of the “cap”, where applicable; and

2. dental and podiatric residents.

Effective “for portions of cost reporting periods occurring on or after July 1, 2005”, the CHGME Payment Program will not include FTE residents counted against the §422 cap increase in the 3-year rolling average calculation for purposes of DME and IME payments.

Additional information regarding the CHGME Payment Program’s implementation of §422 of the MMA of 2003 is included in Sections VII and VIII of this application guidance.

Effective “for portions of cost reporting periods ending on or after July 1, 2011”, the CHGME Payment Program will include FTE residents counted against the §5503 cap increase in the 3-year rolling average calculation for purposes of DME and IME payments. Additional information regarding the CHGME Payment Program’s implementation of §5503 of the ACA of 2010 is included in Sections VII and VIII of this application guidance.

Additional references:

Social Security Act, Section 1886

CMS, 42 CFR 413.77

CMS, Federal Register Notice, August 11, 2004 (69 FR 48916) CMS, Federal Register Notice, November 24, 2010 (75 FR 72194) CHGME Payment Program, Federal Register Notice, June 19, 2000 (65 FR 37985) CHGME Payment Program, Federal Register Notice, March 1, 2001 (66 FR 12940) CHGME Payment Program, Federal Register Notice, July 20, 2001 (66 FR 37980) CHGME Payment Program, Federal Register Notice, October 22, 2003 (68 FR

60396) Applicable to the following application forms: HRSA-99-1, HRSA-99-2, and HRSA-99-4

CHGME Payment Program Application Guidance 19

Section VI: Hospital Data Needed to Complete the CHGME Payment Program Application

Data Sources for Children’s Hospitals that File Full MCRs

To complete a CHGME Payment Program application, hospitals that file full MCRs (i.e., report residents to Medicare on CMS 2552-10, Worksheet E-4 (formerly named CMS 2552-96, Worksheet E-3, Part IV)) must use the data as reflected in their:

1. most recently filed MCR for the period ending on or before December 31, 1996 (the “cap year");

2. most recently filed MCR; and the

3. prior 2 years.

In addition, hospitals who received adjustments to their cap (increases or decreases) as a result of §422 of the MMA of 2003 must use data included in and provide a copy of their written notification from CMS regarding these adjustments on CMS 2552-10, Worksheet E- 4 (formerly named CMS 2552-96, Worksheet E-3, Part VI). Additional information regarding the CHGME Payment Program’s implementation of §422 of the MMA of 2003 is included in Sections VII and VIII of this application guidance.

Also, hospitals who received adjustments to their cap (increases or decreases) as a result of §5503 of the ACA of 2010 must use data included in and provide a copy of their written notification from CMS regarding these adjustments on CMS 2552-10, Worksheet E-4 (formerly named CMS 2552-96, Worksheet E-3, Part IV). Additional information regarding the CHGME Payment Program’s implementation of §5503 of the ACA of 2010 is included in Sections VII and VIII of this application guidance.

Additional references:

Social Security Act, Section 1886

CMS, 42 CFR 413.77

CMS, Federal Register Notice, August 11, 2004 (69 FR 48916) CMS, Federal Register Notice, November 24, 2010 (75 FR 72192)

Data Sources for Children’s Hospitals that File Low- or No-Utilization MCRs

To complete a CHGME Payment Program application, hospitals that file low- or no-utilization MCRs (i.e., do not report residents to Medicare on CMS 2552-10, Worksheet E-

CHGME Payment Program Application Guidance 20

4 (formerly named CMS 2552-96, Worksheet E-3, Part IV)) must use the data as reflected in their hospital records for the:

1. most recently completed MCR period for the period ending on or before December 31, 1996 (the “cap year”);

2. most recently completed MCR period; and the

3. completed MCR periods for the prior 2 years.

In addition, hospitals who received adjustments to their cap (increases or decreases) as a result of §422 of the MMA of 2003 must use data included in and provide a copy of their written notification from CMS regarding these adjustments. Additional information regarding the CHGME Payment Program’s implementation of §422 of the MMA of 2003 is included in Sections VII and VIII of this application guidance.

Also, hospitals who received adjustments to their cap (increases or decreases) as a result of §5503 of the ACA of 2010 must use data included in and provide a copy of their written notification from CMS regarding these adjustments. Additional information regarding the CHGME Payment Program’s implementation of §5503 of the ACA of 2010 is included in Sections VII and VIII of this application guidance.

Hospitals whose most recently completed MCR period ends less than five (5) months prior to the stated CHGME Payment Program initial application deadline may report as their most recently completed MCR period FTE resident counts from their most recently completed or the previously completed MCR period.

Example:

Charlie’s Angels Children’s Center (CACC) will file a low-utilization MCR for its 06/30/23 year- end. The CHGME Payment Program application deadline for FY 2024 is August 1, 2023 (approximately 1 month after CACC’s year-end). CACC has the option of reporting as its “most recently completed MCR period” data from its 6/30/22 or 6/30/23 year-end. Since CACC needs time to close-out its FTE resident counts and financial records for its 6/30/23 year-end, it decides to use the FTE resident count data from its 6/30/22 cost reporting period to complete Section 4 of HRSA-99-1. Consequently, CACC must use data from its 6/30/21 and 6/30/20 MCR periods to complete Sections 5 and 6 of the HRSA-99-1, respectively.

CACC must also use its hospital data from its 6/30/22 cost reporting period to complete all subsequent application forms (i.e., HRSA- 99-2, HRSA-99-4, etc.). CACC cannot use the FTE resident count data from its 6/30/23 MCR period until the next CHGME Payment Program initial application cycle (FY 2025).

Additional references:

Social Security Act, Section 1886

CMS, 42 CFR 413.77

CMS, Federal Register Notice, August 11, 2004 (69 FR 48916) CMS, Federal Register Notice, November 24, 2010 (75 FR 72152)

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Data Sources for Children’s Hospitals that Have Not Completed Three

(3) MCR Periods

If a hospital has completed at least one (1), but not more than two (2) MCR periods, CHGME Payment Program funding to the children’s hospital will be based upon data from the hospital’s “most recently filed” or “most recently completed” MCR period until three (3) MCR periods have been completed. Hence, the hospital will not complete sections 5 and 6 of HRSA-99-1 and its DME and IME payments will not be based upon a 3-year rolling average FTE resident count.

Upon completion of three (3) MCR periods, the hospital will complete sections 5 and 6 of HRSA-99-1 and will receive DME and IME payments based upon a 3-year rolling average FTE resident count.

In addition, hospitals who received adjustments to their cap (increases or decreases) as a result of §422 of the MMA of 2003 must use data included in and provide a copy of their written notification from CMS regarding these adjustments. Additional information regarding the CHGME Payment Program’s implementation of §422 of the MMA of 2003 is included in Sections VII and VIII of this application guidance.

Also, hospitals who received adjustments to their cap (increases or decreases) as a result of §5503 of the ACA of 2010 must use data included in and provide a copy of their written notification from CMS regarding these adjustments. Additional information regarding the

CHGME Payment Program’s implementation of §5503 of the ACA of 2010 is included in Sections VII and VIII of this application guidance.

Additional references:

CHGME Payment Program, Federal Register Notice, July 20, 2001 (66 FR 37980) CMS, Federal Register Notice, August 11, 2004 (69 FR 48916) CMS, Federal Register Notice, November 24, 2010 (75 FR 72152)

Data Sources for Children’s Hospitals that Have Not Completed One (1) MCR Period

New children’s teaching hospitals (new to the CHGME Payment Program) training residents who were originally trained in a program that received and will continue to receive funding under the CHGME Payment Program are required to wait until they have completed a MCR period before applying for CHGME Payment Program funding. These hospitals must also apply the 3-year rolling average (to their FTE resident counts) in accordance with Medicare

CHGME Payment Program Application Guidance 22 regulations. Over a 3-year period, the “new children’s teaching hospital” will gradually increase its number of FTE residents that can be claimed in the CHGME Payment Program as the children’s hospital that originally trained those FTE residents gradually decreases its FTE resident count for determining payments from the CHGME Payment Program.

New children’s teaching hospitals (new to the CHGME Payment Program) training residents previously trained at a hospital that never received (or is no longer receiving) funding under the CHGME Payment Program are eligible for CHGME Payment Program funding without having completed a MCR period. In addition, a hospital that becomes newly eligible for the CHGME Payment Program by starting its own “new medical residency training program” according to Medicare regulation 42 CFR 413.79(e)(1) will also be eligible for CHGME Payment Program funding without having completed a MCR period.

Hospitals that are eligible to receive CHGME Payment Program funding without having completed a MCR period must follow the guidance provided in Section X of this application guidance which provides special calculation instructions for hospitals that have not completed a MCR report.

Additional references:

CHGME Payment Program, Federal Register Notice, July 20, 2001 (66 FR 37980)

Section VII: Determining the Total Number of Resident Full-Time Equivalents

Cap and Cap Year

Section 1886(d)(5)(B)(v) of the Social Security Act established “caps” on the number of allopathic and osteopathic residents that a hospital operating an approved GME program may count when requesting payment for DME and IME costs. A hospital’s “cap” (hereinafter the “1996 Base Year Cap”) is currently defined as the “number of un-weighted FTE residents enrolled in a hospital’s allopathic and osteopathic residency programs during the most recent cost reporting period ending on or before December 31, 1996 (the “cap year”).” The cap (i.e., limit) on the number of allopathic and osteopathic residents is effective for all cost reporting periods beginning on or after October 1, 1997. Dental and podiatric residents are exempt from the cap but are included in the FTE resident counts for all relevant years to calculate the 3-year rolling average.

The “cap year” is defined as a hospital’s most recent cost reporting period ending on or before December 31, 1996.

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Example:

CACC had 75 FTE residents enrolled in its allopathic programs, 25 FTE residents enrolled in its osteopathic programs and 7 FTE residents enrolled in its dental and podiatric programs for its 6/30/96 MCR period (its most recent MCR period ending on or before December 31, 1996). Hence, CACC’s cap for Medicare and CHGME Payment Program purposes is 100 (75+25=100). Note: Dental residents do not count towards the cap amount.

Hospitals that are eligible to receive CHGME funds as “newly qualified hospitals” under the Children’s Hospital GME Support Reauthorization Act of 2013, and that do not already have a CMS cap established and are not able to apply for a CMS cap as a new residency training program, will have a “CHGME cap” established using the number of FTE residents trained during the most recent Medicare cost report period completed on or before April 7, 2014, the date of enactment of the Children’s Hospital GME Support Reauthorization Act of 2013, as verified by the CHGME auditors during the FTE Resident Assessment Program.

Additional references:

Social Security Act, Section 1886

CMS, 42 CFR 413.79

CHGME Payment Program, Federal Register Notice, March 1, 2001 (66 FR 12940)

Applicable to the following application forms: HRSA-99-1 and HRSA-99-2

Adjustments to a Hospital’s Cap

As noted above, Section 1886(d)(5)(B)(v) of the Social Security Act established caps on the number of allopathic and osteopathic residents that a hospital operating an approved GME program may count when requesting payment for DME and IME costs. While Medicare and the CHGME Payment Program only make DME and IME payments for the number of allopathic and osteopathic FTE residents up to a hospital’s “1996 Base Year Cap”, some hospitals have trained allopathic and osteopathic residents in excess of their 1996 Base Year Cap. There are also a number of hospitals that have reduced their resident positions to a level below their 1996 Base Year Cap.

Subsequent legislative actions and related Federal Register notices addressing these issues allow a hospital’s cap to be permanently changed (increased or decreased) by CMS or temporarily adjusted at the request of the hospital and approved by CMS. These provisions are detailed below.

§422 of the Medicare Modernization Act of 2003

In December 2003, the President signed the MMA of 2003 (also known as the Medicare Prescription Drug…