Medicare GME Affiliation Agreements: Criteria, Optimization, & Benefits to the Learning Environment

Medicare GME affiliation agreements (MGMEAA) are agreements that are leveraged between two or more teaching hospitals to optimize Medicare reimbursement from GME activity as well as provide additional experiences to residents/fellows through a variety of clinical learning environments. These affiliations give hospitals the ability to temporarily transfer cap from one hospital to another if certain criteria is met. Common uses for these agreements include 1) hospitals transferring unutilized cap to hospitals training over their cap, 2) as an opportunity for hospitals that have either low reimbursement or a restrictive cap to receive funding through the assistance of other institutions and 3) as an opportunity to expand the learning environment of a program by accessing other clinical sites and experiences. CMS has deadlines to submit these agreements for an academic year: typically, these agreements must be made no later than June 30th each year. In short, MGMEAAs are overseen by CMS and provide flexibility within hospital partnerships regarding Medicare reimbursement and cap sharing.

To establish an affiliation agreement, the following regulations must be followed between hospitals that wish to share cap:

1. Each hospital must send a copy of the agreement to the MAC and CMS Central Office

2. Participating institutions must have a shared rotational arrangement

3. No resident may be counted for more than 1.0 FTE at all training sites

4. If the agreement is terminated, the cap transferred reverts to the originating hospital

After initially creating these partnerships as well as the required analysis and documentation, these agreements must be consistently revisited each academic year. An example of the importance of updating these agreements is shown and articulated below:

As shown, MGMEAAs need to be adjusted, or at the very least reviewed, regularly to ensure cap is used optimally and efficiently when transferring between locations. As stated previously, MGMEAAs are temporary agreements, and this analysis should occur before they are reinstated year after year. Additionally, Indirect Medical Education (IME) and Direct Graduate Medical Education (DGME) have their own separate and distinct cap; therefore, hospitals can transfer only IME cap or DGME cap to further optimize the cap between different participating sites.

Additionally, programs utilizing non-provider sites (defined here by our current legislation—essentially, these are locations that are not recorded on a hospital’s Medicare Cost Reports, such as private offices), have additional opportunities that can arise from affiliation agreements. Hospitals can receive Medicare reimbursement from the training done at these non-provider sites if the hospital pays the salary and fringe benefits of a resident during the time they train at the non-provider site. MGMEAAs are relevant to this strategy because they can offer additional cap to hospitals wanting to claim the residents at these sites. Further optimization can be completed by understanding which hospitals can claim the non-provider training time at the highest rate.

Aside from the financial opportunity MGMEAAs present to hospitals, there is a significant benefit to the learning environment of programs as well, as these agreements allow for residents to train in a variety of settings—with experiences that are not offered at their home hospital. Shared rotational arrangements (aforementioned criteria of MGMEAAs) are a necessity for most programs due to the breadth of experiences required from the ACGME: pediatric experiences are an example of this, as most programs require pediatric experiences that hospitals cannot meet, which is solved by a partnership with a Children’s hospital. These experiences allow residents to garner a wider breadth of clinical environments throughout their training through practicing at various locations, providing experience in cultural competency, exposure to the operations of different hospitals, as well as specialty-specific mentors that are available for residents. If these hospitals do not have available cap, MGMEAAs may be required to get the support needed to bring these partnerships to fruition.

Medicare GME affiliation agreements, or MGMEAAs, provide numerous opportunities for hospitals to manage and optimize GME funding—specifically, these agreements provide one opportunity for hospitals that are not optimized for GME funding (such as with a reimbursement rate that does not cover program expenses or hospitals with a minimal cap) to find success within the industry. As GME leadership across the country become more aware of pertinent strategies and benefits, the prevalence of these agreements will only increase.