PPSV Obtains Judgment Requiring Research Time to Be Included in IME FTE Count
September 2, 2009
On August 3, 2009, the U.S. District Court for the Northern District of Illinois ruled in favor of the University of Chicago Medical Center (“UCMC”) in an important case governing Medicare payments for indirect medical education. Univ. of Chicago Med. Ctr. v. Sebelius, No. 07 CV 7016, 2009 WL 2382514 (N.D. Ill. Aug. 3, 2009). The Medicare program pays teaching hospitals for the direct and indirect costs of training physician interns, residents, and fellows. The indirect medical education payment (“IME”) is determined, in part, by the count of full-time equivalent interns, residents, and fellows (“FTEs”).
When calculating UCMC’s IME payment for fiscal year 1996, the Secretary of Health and Human Services removed educational research time from the IME FTE count. The Secretary argued that only direct-patient-care activities may be included in the IME FTE count, and any educational research that did not involve the care of individual patients could not be included in the count.
PPSV attorneys Ronald S. Connelly and Mary Susan Philp argued on behalf of UCMC that the plain language of both the Medicare IME statutory provision and the IME regulation requires the Secretary to include educational research in the FTE count. In addition, the Secretary has no longstanding policy to exclude research time, and Congress intended all educational activities to be included in the count.
In ruling for UCMC, the court held that the plain language of the IME regulation determines the FTE count based upon the residents’ location, not on the functions that they perform. Thus, all time spent in educational activities must be included in the FTE count if the residents are assigned to allowable areas of the hospital. In addition, the Secretary’s Medicare Intermediary Manual shows no intent to determine the FTE count based on function. Finally, Congress’s imposition in 1997 of a direct-patient care requirement only for residents in non-hospital settings, demonstrates that Congress did not intend such a requirement for residents within the hospital.
