[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR413.78]

[Page 715-717]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
 PART 413_PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
 END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT 
 
                 Subpart F_Specific Categories of Costs
 
Sec.  413.78  Direct GME payments: Determination of the total number of FTE residents.

    Subject to the weighting factors in Sec.  Sec.  413.79 and 413.80, 
and subject to the provisions of Sec.  413.81, the count of FTE 
residents is determined as follows:
    (a) Residents in an approved program working in all areas of the 
hospital complex may be counted.
    (b) No individual may be counted as more than one FTE. A hospital 
cannot claim the time spent by residents training at another hospital. 
Except as provided in paragraphs (c), (d), and (e) of this section, if a 
resident spends time in more than one hospital or in a nonprovider 
setting, the resident counts as partial FTE based on the proportion of 
time worked at the hospital to the total time worked. A part-time 
resident counts as a partial FTE based on the proportion of allowable 
time worked compared to the total time necessary to fill a full-time 
internship or residency slot.
    (c) On or after July 1, 1987, and for portions of cost reporting 
periods occurring before January 1, 1999, the time residents spend in 
nonprovider settings such as freestanding clinics, nursing homes, and 
physicians' offices in connection with approved programs is not

[[Page 716]]

excluded in determining the number of FTE residents in the calculation 
of a hospital's resident count if the following conditions are met--
    (1) The resident spends his or her time in patient care activities, 
as defined in Sec.  413.75(b).
    (2) There is a written agreement between the hospital and the 
outside entity that states that the resident's compensation for training 
time spent outside of the hospital setting is to be paid by the 
hospital.
    (d) For portions of cost reporting periods occurring on or after 
January 1, 1999, and before October 1, 2004, the time residents spend in 
nonprovider settings such as freestanding clinics, nursing homes, and 
physicians' offices in connection with approved programs may be included 
in determining the number of FTE residents in the calculation of a 
hospital's resident count if the following conditions are met--
    (1) The resident spends his or her time in patient care activities, 
as defined in Sec.  413.75(b).
    (2) The written agreement between the hospital and the nonhospital 
site must indicate that the hospital will incur the cost of the 
resident's salary and fringe benefits while the resident is training in 
the nonhospital site and the hospital is providing reasonable 
compensation to the nonhospital site for supervisory teaching 
activities. The agreement must indicate the compensation the hospital is 
providing to the nonhospital site for supervisory teaching activities.
    (3) The hospital must incur all or substantially all of the costs 
for the training program in the nonhospital setting in accordance with 
the definition in Sec.  413.75(b).
    (4) The hospital is subject to the principles of community support 
and redistribution of costs as specified in Sec.  413.81.
    (e) For portions of cost reporting periods occurring on or after 
October 1, 2004, and for cost reporting periods beginning before July 1, 
2007, the time residents spend in nonprovider settings such as 
freestanding clinics, nursing homes, and physicians' offices in 
connection with approved programs may be included in determining the 
number of FTE residents in the calculation of a hospital's resident 
count if the following conditions are met:
    (1) The resident spends his or her time in patient care activities, 
as defined in Sec.  413.75(b).
    (2) The hospital must incur all or substantially all of the costs of 
the training program in a nonhospital setting(s) (in accordance with the 
definition under Sec.  413.75(b)).
    (3) The hospital must comply with one of the following:
    (i) The hospital must pay all or substantially all of the costs of 
the training program in a nonhospital setting(s) attributable to 
training that occurs during a month by the end of the third month 
following the month in which the training in the nonhospital site 
occurred; or
    (ii) There is a written agreement between the hospital and the 
nonhospital site that states that the hospital will incur the cost of 
the resident's salary and fringe benefits while the resident is training 
in the nonhospital site and the hospital is providing reasonable 
compensation to the nonhospital site for supervisory teaching 
activities. The agreement must indicate the compensation the hospital is 
providing to the nonhospital site for supervisory teaching activities.
    (4) The hospital is subject to the principles of community support 
and redistribution of costs as specified in Sec.  413.81.
    (f) For cost reporting periods beginning on or after July 1, 2007, 
the time residents spend in non-provider settings such as freestanding 
clinics, nursing homes, and physicians' offices in connection with 
approved programs may be included in determining the number of FTE 
residents the calculation of a hospital's resident count if the 
following conditions are met--
    (1) The resident spends his or her time in patient care activities.
    (2) The hospital must incur all or substantially all of the costs 
for the training program in the nonhospital setting(s) (in accordance 
with the definition under Sec.  413.75(b)).
    (3) The hospital must comply with one of the following:
    (i) The hospital must pay for all or substantially all of the costs 
for the

[[Page 717]]

training program in a nonhospital setting(s) attributable to training 
that occurs during a month by the end of the third month following the 
month in which the training in the nonhospital site occurred; or
    (ii) There is a written agreement in place between the hospital and 
the nonhospital site before the training begins that states that the 
hospital will incur at least 90 percent of the total of the costs of the 
resident's salary and fringe benefits (and travel and lodging where 
applicable) while the resident is training in the nonhospital site and 
the portion of the cost of the teaching physician's salary attributable 
to nonpatient care direct GME activities. The written agreement must 
specify the total cost of the training program at the nonhospital site, 
and the amount the hospital will incur (at least 90 percent of the 
total), and must indicate the portion of the amount the hospital will 
incur that reflects residents' salaries and fringe benefits (and travel 
and lodging where applicable), and the portion of this amount that 
reflects teaching physician compensation. Hospitals may modify the 
amounts specified in the written agreement by the end of the academic 
year (that is, June 30) to reflect that at least 90 percent of the costs 
of the training program in the nonhospital site has been incurred.
    (4) The hospital is subject to the principles of community support 
and redistribution of costs as specified in Sec.  413.81.

[69 FR 49254, Aug. 11, 2004, as amended at 71 FR 48142, Aug. 18, 2006; 
72 FR 26995, May 11, 2007]