Every teaching hospital that trains residents is capped at a total number of full-time equivalent (FTE) medical residents for which the hospital may claim Medicare GME reimbursement each year. These “FTE caps” are determined according to each hospital’s historic resident training levels. The FTE caps of longstanding teaching hospitals were established roughly twenty years ago. These days, newer teaching hospitals’ FTE caps are established five years after the hospital first trains residents in a “new” program, based on training that occurs at the hospital during that five-year period.
Within this basic framework, some important special rules apply for dental and podiatric residency programs:
First, dental and podiatric residents are exempt from the Medicare FTE caps. By statute, the FTE caps, which were established in the Balanced Budget Act of 1997, limit only the numbers of allopathic and osteopathic residents for which a hospital may be reimbursed each year. Thus, a hospital that is already training “over its caps” (i.e., the hospital’s actual FTE counts of allopathic and osteopathic residents exceed its FTE caps) could still train, claim, and be reimbursed for additional dental and podiatric residents.
Second, unlike allopathic and osteopathic residency programs, newly (or recently) established dental and podiatric residency programs do not trigger the establishment of a non-teaching hospital’s FTE caps. Similarly, if the hospital’s FTE caps have already been triggered, and the hospital is currently within its five-year cap-building period, residents training in dental and podiatric programs do not count towards building the hospital’s caps.
But, training dental and podiatric residents does trigger establishment of a non-teaching hospital’s per‑resident amount (PRA), which limits the amount of direct GME reimbursement a hospital may receive under the Medicare program for each resident FTE. Hospitals that have not previously trained residents, but may be considering participating in dental or podiatric training programs, must be careful to incur, document, and claim sufficient costs with respect to the dental or podiatric resident(s) to ensure that the hospital receives an adequate PRA.