Whether a teaching hospital may receive DGME and IME payments for the "chief resident year" has long been a source of confusion, particularly given that some specialties require all residents to complete a chief resident year as part of the approved program and others do not. In the FY 2011 IPPS final rule (75 Fed. Reg. 50042 (Aug. 16, 2010)), CMS clarified when a chief resident year may be counted for Medicare GME payment purposes.

Determining whether a teaching hospital may receive DGME and IME payments for the "chief resident year" has been a source of some confusion. As we have explained in several GME @ Dentons articles, only resident FTEs in approved programs may be counted for DGME and IME payment purposes. Given that some specialties require a chief resident year while others do not, it was unclear for many years whether chief residents were considered to be in an approved program and able to be counted for Medicare GME reimbursement.

To provide clarity, CMS addressed this matter in the FY 2011 IPPS final rule (75 Fed. Reg. 50042 (Aug. 16, 2010)). In the preamble to this rule, CMS explained that whether the chief resident year may be counted for DGME and IME payments turns on whether the chief resident has completed the accredited program and has satisfied the minimum requirements for board certification in a particular specialty.

Surgical and other hospital-based specialties often require a chief resident year as the last year of the accredited residency program. In fact, all residents in their fifth or final year of these programs are considered a "chief resident" or in their "chief resident year." Accordingly, this type of obligatory chief resident year would be considered part of an approved program.

In contrast, serving as a chief resident is not a requirement for board certification in internal medicine or pediatrics programs. Rather, residents who serve in this role become chief resident after their accredited residency has been completed and the requirements for board certification have been satisfied. CMS clarified that, effective October 1, 2010, individuals who act as chief residents after they have completed their accredited program and satisfied the minimum requirements for board certification are not considered residents for IME and DGME payment purposes. In sum, residents in internal medicine and pediatrics programs are not considered residents in approved programs and may not be counted when determining a teaching hospital's DGME and IME payments, while chief residents in surgery programs are considered to be residents in approved programs who may be counted for Medicare GME payment purposes.

For cost reporting periods beginning prior to October 1, 2010, CMS followed the guidance set forth in the September 29, 1989, Federal Register (54 Fed. Reg. 40305). CMS's prior guidance stated that if it was clear that chief residents were in formally organized, approved programs, they could be counted as residents, even if they had completed the requirements for board certification.

Determining how to count chief residents is just one of the many nuances associated with determining a teaching hospital's GME payments. Please do not hesitate to contact the Dentons team listed here with your unique circumstances and inquiries.