CMS-R-64_Supporting_Statement_Part_A

1

Supporting Statement
for the
Information Collection Requirements in
42 CFR 412.105(f) and 42 CFR 413.75(d)
Indirect Medical Education and Direct Graduate Medical Education
CMS-R-64

A.

BACKGROUND

Section 1886(d)(5)(B) of the Social Security Act requires
additional payments to be made under the Medicare Prospective
Payment System (PPS) for the indirect medical educational costs
a hospital incurs in connection with interns and residents (IRs)
in approved teaching programs. In addition, Title 42, Part 413,
sections 75 through 83 implement section 1886(d) of the Act by
establishing the methodology for Medicare payment of the cost of
direct graduate medical educational activities. These payments,
which are adjustments (add-ons) to other payments made to a
hospital under PPS, are largely determined by the number of
full-time equivalent (FTE) IRs that work at a hospital during
its cost reporting period. In Federal fiscal year (FY) 2011,
the estimated Medicare program payments for indirect medical
education (IME) costs amounted to $6.59 billion. Medicare
program payments for direct graduate medical education (GME) are
also based upon the number of FTE-IRs that work at a hospital.
In FY 2011, the estimated Medicare program payments for GME
costs amounted to $2.57 billion.
Since it is important to accurately count the number of FTE-IRs
working at each hospital, original approval was obtained from
the Office of Management and Budget (OMB) in 1985 to collect the
IR information required in 42 CFR 412.105(f), under OMB control
number 0938-0456. On February 26, 2010, OMB extended its
approval for the continuation of these requirements until
February 28, 2013.
At this time, we are seeking an extension of OMB's current
approval for the collection of information required in 42 CFR
412.105(f), presently approved under OMB control number
0938-0456.

2

B.

JUSTIFICATION
1. Need and Legal Basis
During the first 3 months of PPS only those IRs that were
employed by a hospital could be included in the IME
calculation. Accordingly, a hospital’s FTE-IR count could
be determined and verified from readily available
accounting data such as payroll records.
With cost reporting periods beginning on or after
January 1, 1984, hospitals were permitted to include IRs
in their IME calculation that worked at the hospital but
were employed by an organization with which it had a
long-standing relationship. While this was an important
change, it did not present any special problems in
counting and verifying the number of FTE-IRs at each
hospital. However, section 1886 (d)(5)(B)(iii) of the Act
also provides for all IRs in approved programs working at
a hospital to be included in the IR calculation regardless
of the entity which employs them.
This change, which was effective for cost reporting
periods beginning on or after October 1, 1984,
necessitates that specific data be collected from the
hospitals in order to properly count FTE-IRs, because data
such as payroll records could no longer be used to
document IR services. This is because many IRs are
actually employed by only one entity, but routinely work
at several different hospitals during an academic year.
42 CFR 412.105(f) which was previously codified at 42 CFR
412.105(g) provides the rules for counting IRs pursuant to
the amendments enacted by the Deficit Reduction Act of
1984 (Public Law 98-369). In part, these rules explain
that no IR is counted as more than one FTE, regardless of
the number of hospitals in which he or she may be
providing service. In addition, 42 CFR 412.105(f)
requires hospitals to submit an annual report which lists
each IR that worked at the facility. While the listing
reflects the hospital's determination of its FTE-IR count,
it serves as the basis for CMS to verify the accuracy of
the count as well as ensuring that no IR is counted as
more than one FTE.

3

To implement the data collection requirements of 42 CFR
412.105(f) (previously codified at 42 CFR 405.477 and at
42 CFR 412.118), a Notice of New System of Records was
published in the Federal Register on February 15, 1985
(50 FR 6335), pursuant to the Privacy Act of 1974. This
notice explained that hospitals would be required to
submit quarterly reports containing the actual number of
hours worked by each IR at the hospital during each month.
However, this reporting requirement was not implemented
because of the recordkeeping burden it placed on
hospitals. Based upon comments received on the notice, and
an analysis of graduate teaching programs, the reporting
requirements were changed to a once a year-one day count.
In general, the report hospitals needed to submit was
based upon a census of IRs working at the hospital on
September 1 of each year.
The propriety of this single date method of counting IRs
as being reflective of the actual intensity of IR services
at a hospital throughout a cost reporting period is
predicated on the fact that there is a general consistency
in IR rotations among hospitals.
Effective with cost reporting periods beginning on or
after July 1, 1991, the number of IRs included in the IME
calculation is based upon the total time necessary to fill
an IR slot. This means that the amount of time spent by
each IR at each PPS hospital where that individual may
work during the providers' cost reporting periods must be
determined. While this methodology is significantly more
detailed than the one day count, because it requires a
definitive tracking and measurement of IR time, it is
superior to the one-day count. Specifically, the new
methodology provides for a more precise measurement of IR
services by capturing fluctuations in the number of IRs
working in the hospitals throughout their cost reporting
periods. In addition, there is a greater potential for
abuse using the one-day count methodology than there is
under the new methodology. For example, an IR may work at
a PPS hospital for a portion of September 1, and be
reported by that hospital for IME. However, the IR may
also have worked at another hospital on September 1, which
will also report the IR for the calculation of its IME
payment. These situations, if undetected, result in

4

duplicate program payments.
42 CFR 412.105(f) provides the rules for counting IRs
effective with cost reporting periods beginning on or
after July 1, 1991. In part, these rules explain that no
IR may be counted as more than one FTE. In addition, if a
resident is assigned to more than one hospital, the
individual counts as a partial FTE based upon the portion
of time worked in the portion of the hospital subject to
PPS, to the total time worked at all hospitals. A
part-time resident is counted as a partial FTE based upon
the amount of time worked in the portion of a hospital
subject to PPS, to the total time necessary to fill a
full-time IR slot.
To re-implement the data collection requirements of 42 CFR
412.105(f) and to implement similar requirements of 42 CFR
413.86(i), a Notice of Modified or Altered System of
Records (SOR)--Intern and Resident Information System
(IRIS) was prepared pursuant to the Privacy Act of 1974;
it was originally published in the Federal Register on
Tuesday, July 23, 2002. This notice was revised several
years later to include 42 CFR 413.75(d) which was
originally codified at 42 CFR 413.86(i), and it was
published in the Federal Register on Monday, December 10,
2007.
2. Information Users
The information collected on IRs is used by Part A
Medicare Administrative Contractors (MAC) to verify the
number of IRs used in the calculation of Medicare program
payments for IME as well as GME.
The IR data collected from the hospitals is processed
through computers at MACs to identify any duplicated time
based upon the accumulated time of each individual that
worked at one or more hospitals. The identification of
duplicate IRs is necessary to ensure that no IR is counted
more than once. The workload associated with these
processes involves approximately 115,900 IRs and 1,155
teaching hospitals.
The MACs use the information collected on IRs to help
ensure that all program payments for IME and GME are based

5

upon an accurate number of FTE-IRs, determined in
accordance with Medicare regulations. The IR data
submitted by the hospitals are used by the MACs during
their audits of the providers' cost reports. The audit
procedures help assure that the information reported was
correct, and that IRs who should not have been reported by
the hospitals (or portions of the IRs’ time) are not
included in the FTE count. The MACs also use reports of
duplicate IRs to prevent improper payment for IME and GME.
If it is determined that a hospital has been
inappropriately reimbursed for IME and/or GME, immediate
corrective action is taken.
3. Improved Information Technology
In accordance with the provisions of the Notice of
Modified or Altered SOR-IRIS, hospitals will report the
required information into two files on an IRIS diskette/CD
by using their copy of CMS’ IRIS data collection program
currently called IRISV3 (Attachment 1, Page 5-1). Thus
there is no hard copy or paper reporting of the
information for burden to be associated with. The burden
associated with computer input generation is greatly
reduced by a download feature in IRISV3 which allows
hospitals to electronically import their IR data files
created outside of the IRISV3 program into IRISV3
(Attachment 1, Pages 4-14,15).
IRISV3, a DOS-based application, is an improved version of
CMS' former IRIS data collection program called IRIS95.
This program incorporates recommendations made by an IRIS
workgroup of hospital, Medicare Part A fiscal intermediary
(FI), and CMS participants during May 1997 for reducing
the electronic reporting burden of IRIS95 on hospital
administrators. These recommendations included the
reprogramming of IRIS95 for Y2K certification, elimination
of redundant questions on foreign medical school
graduates, and reproduction of IRISV3 data entry
instructions within the IRISV3 program (the Help screens
and code tables) in the IRISV3 Operating Instructions.
IRISV3 is currently operable in Windows-based computers
that are capable of running DOS programs.
Hospitals may also create their own IRIS diskettes/CDs
with IR data files that are not edited by IRISV3. These

6

diskettes/CDs are acceptable upon passing all IRIS system
edits in IRISEDV3 (Attachment 2, pages 5-7, & 9), a
DOS-based application that was developed by CO for editing
IR data files on IRIS diskettes/CDs. CO initially
distributed this application to hospitals and FIs in
June 2002 to ensure that hospital created IRIS
diskettes/CDs with unedited IR data pass all IRIS system
edits. IRISEDV3 is also currently operable in
Windows-based computers that are capable of running DOS
programs. Both of these applications are currently
available at: www.cms.gov\Research-Statistics-Data-andSystems/Computer-Data-and-Systems/IRIS.
4. Duplication of Similar Information
The American Medical Association (AMA) and the Association
of American Medical Colleges (AAMC) were contacted because
they also monitor IR activities. However, it was
determined that they do not collect all of the information
needed to calculate payments for IME and GME in accordance
with Medicare regulations. Accordingly, the data
collection does not result in a duplication of effort.
In addition, both 42 CFR 412.105, which pertains to IME,
and 42 CFR 413.75, which pertains to GME, require
hospitals to report much of the same information on IRs;
most of the data required by these rules have been
consolidated for IME and GME in IRISV3. Accordingly, the
burden associated with these rules has been reduced,
because hospitals will only be required to submit one IR
data report per year.
5. Small Business
These requirements do not significantly impact small
business.
6. Less Frequent Collection
The information is submitted only once a year, at the same
time that the hospitals submit their Medicare cost
reports. The data collection supports the hospital's claim
for reimbursement for IME and GME, and is the basis for
verifying the accuracy of this claim through the cost
report audit and settlement process. Accordingly, if this

7

information were received less frequently than the
Medicare cost report it supports, the settlement process
would be disrupted. This means that the MACs may need to
perform costly reopenings at a later date and, depending
upon the circumstances, result in outstanding overpayments
or underpayments to the hospitals.
7. Special Circumstances
There are no special circumstances associated with this
collection.
8. Federal Register Notice/Outside Consultation
The 60-day Federal Register notice published on February
28, 2013.

Four individuals were contacted to discuss the
availability of data, frequency of collection, and clarity
of instructions and reporting format. In addition,
arrangements were made with the AAMC to test IRISV3 and
IRISV3 Operating Instructions for collecting IR data;
similar arrangements were made with Johns Hopkins Hospital
to test IRISEDV3 for editing IR data. Disclosure of
information obtained from the data collection was
published in the Federal Register on December 10, 2007, as
part of the Notice of Modified or Altered SOR--IRIS.
The names and phone numbers of the individuals contacted
are as follows:
American Medical Association
Derek Smart, Division of Survey & Data Resources,
312-464-4825
Association of American Medical Colleges
Hershel Alexander, Operations and Services,
202-828-0649
Tenet Healthcare, Government Programs
Keith Bremner, Senior Reimbursement Specialist,
469-893-6706

8

Johns Hopkins University School of Medicine
Laura Robbins Winter, Registrar’s Office,
410-614-7013
9. Payment/Gift to Respondent
There is no payment or gift made to any respondent.
10. Confidentiality
The data collected on IRs is protected under Privacy Act
System Number 09-70-0524, Intern and Resident Information
System, HHS, CMS, Office of Financial Management, Federal
Register/ Volume 72/ No. 236/ Monday, December 10, 2007,
pages 69691-69696.
11. Sensitive Questions
There are no questions of a sensitive nature involved in
the IR data collection.
12. Burden Estimate (Total Hours & Wages)
The burden associated with the information collection is
based upon the time attributable to each hospital in
maintaining minimal records, and preparing and forwarding
the annual report to the MAC.
In order to determine a hospital's IR count in accordance
with the regulations, hospitals must report the name,
social security number, and dates that each IR was
assigned to the hospital, and the dates they were assigned
to other hospitals or other freestanding providers and
non-provider settings during the cost reporting period.
In addition, the hospitals must report each IR's
specialty, and the portion of total time necessary to fill
the residency slot in which the IRs worked, either in an
area of the hospital subject to PPS, or the hospital's
outpatient department.
It is estimated that each hospital will spend 2 hours
preparing the information for the IR collection. Burden
is calculated as follows:

9

1,155 PPS hospitals which participate in approved
medical education programs multiplied by 2 hours per
report equals 2,310 burden hours.
Cost to Respondents:
Total costs for all hospitals for annual reporting is
estimated at $108,570 per year as follows:
2,310 burden hours multiplied by the standard rate of
$47 per hour (GS-13, Step 4) equals $108,570.
13. Capital Costs
There are no capital and startup costs or operation and
maintenance costs associated with this collection.
14. Cost to Federal Government
Federal government cost for data entry and processing is
estimated to be $6,361 per year. This estimate includes
the time and costs of a computer specialist for
administering the IRIS system, and peripheral costs
(computer usage/programming, data transmission/storage,
printouts, etc.), as follows:
Computer Specialist (116 hours at $47 per hour)
Peripheral Costs
Total Federal Government Costs

$5,452
909
$6,361

15. Program Changes/Adjustments
The decrease in burden from 2,380 hours as shown on CMS'
previous Request for OMB Review, to 2,150 hours shown
above, directly reflects a decrease in the number of
hospitals.
16. Publication Data
There are no plans to publish the information collected
under this submission.
17. Expiration Date
We are not seeking approval for the non-display of the
expiration date for the information system.

10

18. Certification Statement
There are no exceptions to the certification statement.
C.

Collection of Information Employing Statistical Methods
Not applicable.