CMS funding for postdoctoral psychology fellowship programs Kirk Stucky Psy.D. ABPP (Rp, Cn) Barbara Wolf Ph.D. Consortium for Advanced Psychology Training Postdoctoral Fellowship in Clinical Health Psychology 4/18/09
Stucky, K., Buterakos, J., Crystal, T., & Hanks, R. (2008). Acquiring CMS funding for an APA accredited postdoctoral Psychology Fellowship program. Training and Education in Professional Psychology. Vol. 2, Iss. 3, pp. 165-175.
In 2001 Congress reinterpreted existing legislation allowing hospital based, postdoctoral psychology training programs that were APA accredited to file for and receive allied health reimbursement through the Center for Medicare / Medicaid Services (CMS). This became effective on March 13, 2001.
Historically physician and other allied health training programs have received government funding, while psychology training has been non-funded. This new legislation symbolized a shift in federal health policy and recognized psychology as a valuable discipline within the health care system.
Government funding for training programs in graduate medical education was established in 1965 when new federal legislation was passed regarding Medicare and Medicaid. This tradition has been based on the government’s desire to support and maintain high quality health care services for the elderly and poor in the United States.
The social securities Amendments of 1965 (Public law 89-97)
“ Since the inception of Medicare in 1965, we have recognized an obligation to share in the costs of educational activities sponsored by participating providers until the community at large chose to bear them in some other manner. Medicare has historically reimbursed providers for the program’s share of costs associated with approved educational activities. The activities may be broken down into three general categories, each with distinct payment policies:” (Federal Register, 2001, pp. 3358)
Nursing and other allied health programs operated by colleges and universities are considered to be programs in which the costs are borne by the community.
These CMS funds are only provided for particular educational programs that, according to industry norms, qualify an individual to be employed in a specialty in which the person could not have been employed before unless they completed a particular educational program.
"The academic medical community often justifies Medicare GME funding, especially the indirect adjustment, as necessary to support the multiple missions of medical schools and teaching hospitals. These missions include educating the next generation of physicians; providing quality patient care to the poor, the uninsured and those with the most medically complex conditions; supporting excess medical care capacity and other stand-by-resources required to prepare for medical emergencies; maintaining the lead in medical technology; and performing groundbreaking research." (Dickenson, 2004)
Additional dollars a hospital can receive for the training of various clinicians in a formally organized program of study that is maintained in order to enhance the quality of patient care in an institution. (Federal Register, 2001).
Called “pass through” because they are identified as separate from other funds paid to a hospital by CMS (e.g. the prospective payment system) and paid separately (i.e. pass through) on a reasonable cost basis.
Unlike DGME payments, allied health programs typically receive less than the average cost per trainee. Additionally, while GME programs can be funded or controlled outside of the hospital (i.e. participating provider) CMS requires that allied health programs are run and funded by the hospital.
CMS considers all psychology training programs as “allied health”
1. Graduate Medical Education (GME) has received funding through the Medicare Program for quite some time, but little fiscal attention has been paid to psychology training programs
2. Medicine and nursing have traditionally enjoyed a “virtual monopoly” on GME training dollars and have often viewed the efforts of other health care professions to secure similar funds as a threat to their own training revenues
In 2001, Congress reinterpreted existing legislation allowing hospital based, postdoctoral psychology training programs that were accredited by the American Psychological Association (APA) to apply for and receive allied health pass through reimbursement from the Center for Medicare / Medicaid Services (CMS). This became effective on March 13, 2001
The APA sent out a Practice Organization Action Alert titled Update on Medicare Funding for Psychology Internship Training Programs on November 28, 2001 to make psychologists aware of this change (Marilyn Richmond, Assistant Executive Director for Government Relations, personal e-mail communication, November 28, 2001). A section from that practice alert stated;
APA Practice Organization Action Alert, 11/28/01
“ I am pleased to tell you that HHS (U.S. Department of Health and Human Services) has very recently informed us that hospital-based psychology post-doctoral programs that are accredited by the American Psychological Association (APA) may now apply for Medicare funding of their programs. Unlike psychology internship training programs, post-doctoral programs required no rulemaking but rather an agency interpretation of current rules to allow for funding, and HHS has now interpreted the current funding requirements to allow for post-doctoral program funding.”
The hospital must incur the costs associated with both the clinical training and classroom instruction if that is a requirement for completion of the program. The hospital has to budget and pay for the cost of books, supplies, faculty salaries, and trainee’s salaries.
The hospital can enter into an agreement with a college or university to provide some basic course requirements. However, the hospital must financially incur the majority of training costs and independently award the degree.
If the university absorbs some costs then these costs cannot be claimed by the program.
Thus, a university based program that places its postdoctoral fellows at a hospital would not be eligible
Why not internship or non-hospital based programs?
postdoctoral programs are by definition “post degree” which is similar to physician residencies.
it was not necessary to write “new law” or rewrite current legislation. This would have been required to fund internships, which occur prior to degree completion.
CMS funding has historically only been available for hospital based programs because of the way in which the original legislation was written.
Why not internship or non-hospital based programs?
Essentially, implementing CMS funding for hospital based psychology fellowship programs only required reinterpretation of existing legislation (personal communication APA Government Relations, September 26, 2007).
Obtain Accreditation: CMS will want a copy of your accreditation letter. If you are part of a consortium or have a collaborative relationship with other institutions they may ask why the programs did not all apply for CMS funding together.
Program Costs: Expect CMS to request a detailed general ledger and how the Finance Department determined the program costs.
Other sources of funding: CMS may investigate if the hospital receives any funding from outside institutions (4 th standard), which supports training. If so this may affect the program’s eligibility for funds or how much funding can be received.
Step 3: Submit the Medicare Cost Report (which includes the data for all allied health and GME programs) to the fiscal intermediary each year. The hospital Finance Department will know who the fiscal intermediary is for your facility.
Step 4: CMS reviews the Medicare Cost Report and sends an initial settlement to the hospital. They are supposed to review the cost report and if they owe the hospital money they pay a tentative settlement (i.e. a portion of that amount).
Step 7: After the cost report is submitted, the fiscal intermediary visits the host hospital and conducts an audit of the cost report, including all of the allied health programs filed in the cost report. When the audit is completed, a final determination is made by the fiscal intermediary regarding the amount of money they owe the hospital or what the hospital owes to them.
These costs do not include usual patient care costs that would be present in the absence of the educational activity such as salary costs for supervisors who oversee other clinical activities. If a psychologist has multiple roles including supervisor, clinician, and administrator only the portion of their time that can be directly attributed to the operation of the training program can be claimed.
The percentage of Medicare bed days in the hospital influences the percentage of reimbursement
The hospital may receive reasonable cost reimbursement for the clinical training and incremental costs only. The incremental costs would include, but are not limited to, the costs of administrative and clerical support staff that are dedicated to the training program. Overhead costs directly related to maintaining the fellowship program are also allowable.
Hospital A has three trainees and four faculty. The trainees salary and benefits cost the hospital $150,000 a year. The four faculty salaries and benefits total $500,000, but on average only 30% of their time is dedicated to the fellowship program (e.g. $150,000). The total overhead costs are $30,000. The incremental costs including an administrative secretary $40,000.
If CMS makes an adjustment or disallows the costs of a specific program (i.e. does not agree to pay the additional costs) there is a process in place. In the appeal, the host hospital can make a case for why the program is an allied health program and should be funded by pass through dollars. In challenging a CMS decision, a list of reasons is required with detailed documentation supporting your arguments.
In the authors opinion this issue parallels psychology’s efforts to obtain parity for services, medical staff membership, and hospital privileges. Unfortunately, the majority of psychologists practicing in hospitals today are currently considered allied health staff by their respective institutions.
**This has effectively created a Catch-22 situation for psychology training programs that are attempting to survive in fiscally challenging times. Currently, only a limited number of programs qualify for CMS funding of trainees, but those ineligible programs that provide services to patients with Medicare cannot or are not supposed to bill for their services because they are trainees.
A change in this policy is highly unlikely and threatens the economic viability of internship and postdoctoral training programs throughout the country.
How is our profession supposed to adequately prepare psychologists in non CMS funded programs when these barriers exist? These issues highlight the importance of obtaining CMS training dollars for more programs in the country.
Sixth, CMS funding would allow training programs to more easily absorb the cost of providing services to patients with Medicare and Medicaid while ensuring that the next generation of psychologists are competent and capable in caring for this population.