Dental GME Update: Current Challenges and Issues Laura Loeb King & Spalding, LLP 202/ ADEA Annual Session Dallas, Texas March 31, 2008

2 Overview Update on Hindin Litigation HHS Administrative Decision on Effective Date Issue CMS Recent Treatment of Didactic Training Implementation of Proxy Formula for Faculty Costs CMS Recognition of All Accredited Dental Programs Ongoing Opportunities for New Programs Future GME Advocacy

3 Hindin Litigation Mid Oct. 2007, 26 universities and hospitals received copy of a complaint filed in the Eastern District of NY Filed by Allen Hindin, as the relator (whistleblower), long serving member of ADA House of Delegates Original complaint filed in Dec. 2000, but was under seal (not public) In 2003, complaint was amended, still under seal

4 Hindin Litigation (cont’d) Government sought and was granted 6 extensions of time to decide whether to intervene On April 30, 2007, Judge denied government’s 7 th request for an extension and case was unsealed and relator told to send copy of complaint to all defendants

5 Hindin Litigation (cont’d) Substance of complaint –AEGD programs are not eligible for GME funding because the training doesn’t occur in a hospital –AEGD programs are not similar to GPR programs in nature of training, site of training, costs of program –To qualify for GME funding, program must be an accredited GPR program conducted by an accredited hospital

6 Hindin Litigation (cont’d) Government’s decisionmaking whether to intervene –Government’s memorandum of law supporting its request for extensions tries to link Hindin allegations to OIG audits where OIG recommended that some hospitals pay back millions

7 Hindin Litigation (cont’d) February 7, 2008 pre-motion conference with Judge Block in Eastern District of NY Judge did not consider Hindin’s complaint to be frivolous Judge gave Hindin 2 weeks to amend complaint yet again and government 2 weeks after that to determine whether to intervene

8 Hindin Litigation (cont’d) Feb. 20 th Hindin’s lawyer calls defendants’ lawyers to suggest that he would drop them from amended complaint if they agreed not to pursue him for fees and costs Not all defendants agreed to not pursue him for fees and costs Nevertheless, in the amended complaint filed on Feb 21 st, all defendants were dropped except for Lutheran Medical Center

9 Hindin Litigation (cont’d) Substance of second amended complaint similar to prior complaints –Still argues that AEGD programs aren’t eligible for GME funding because they are not hospital-based and costs are less than GPR programs –Also includes broad allegations regarding the incurring of all or substantially all the costs –Still no details or just wrong details

10 Hindin Litigation (cont’d) Government requested 4 week extension on intervention decision Even if case ultimately dismissed, universities/hospitals were forced to defend frivolous suit and hospitals become more anxious over these programs

11 Effective Date Issue Some GME agreements between dental schools and hospitals were signed in the middle or towards the end of a hospital’s current fiscal year But under the terms of the agreement, the effective date of the contract was the beginning of the current fiscal year Hospitals, therefore, included the dental residents in their cost reports from the beginning of the fiscal year

12 Effective Date (cont’d) CMS’ position was the agreements only effective from date they are signed Hallmark Health System in Boston appealed this CMS position to the Provider Reimbursement Review Board (PRRB) Nov. 1, 2007, PRRB ruled against the Hospital on the effective date issue and also broadly criticized dental programs being eligible for GME and said didactic time shouldn’t be counted

13 Didactic Issue In 1999 letter, CMS stated that hospitals could count didactic time (seminars, conferences, etc.) in their D-GME and IME resident counts Now CMS position is that didactic time is not related to patient care and therefore should not be counted In hospital inpatient final rule for fiscal year 07, CMS created the one-day work rule

14 Didactic Issue (cont’d) One-day work rule is that hospital can count didactic time unless entire work day is spent on didactic activities However, some Medicare contractors are not honoring this rule and if they see detailed schedules with seminars taking up partial days, they are subtracting that time -- CMS says that contractors could have that interpretation

15 Proxy Formula for Faculty Costs Hospitals must pay for resident stipends and benefits and faculty costs for supervisory teaching time There have been ongoing issues regarding what are sufficient costs for supervisory teaching time In April 2005, CMS in Q&A said that patient care time wasn’t supervisory teaching time In final rule for long-term care hospitals for FY08, CMS created proxy formula for calculating faculty costs

16 Proxy Formula (cont’d) Hospitals can either use time/effort reports to determine actual supervisory teaching time or can use this formula: 3 hours/number of hours per week clinic open x average salary of dental faculty per AGMA survey ($165,599) x number of residents

17 Recognition of New Dental Programs CMS has not formally recognized 3 CODA- accredited programs to be eligible for GME funding: –Oral & maxillofacial radiology –Dental anesthesiology –Oral medicine CMS has said that local Medicare contractors could recognize programs though

18 New Dental Programs (cont’d) CMS has been researching these 3 programs CMS might discuss these programs in latest proposed rule for hospital inpatient issues due out in April/May CMS has questioned why only oral & maxillofacial radiology (of the 3) has an ADA- recognized specialty board

19 Ongoing Opportunities Despite all these challenges, new programs in which hospitals are incurring the required costs from the beginning of the program are receiving GME funding Dental schools and hospitals must be aware of all the rules currently in play though Hospitals must treat these programs as they do all other residencies though and subject them to the same rigorous review and documentation requirements

20 Future GME Advocacy? We have been stymied in moving legislation to clarify and improve GME issues –Clarify that didactic time is related to patient care and should be counted –Eliminate 3-year rolling average Post 2008 election might present opportunities however