Blog, Reimbursement

Top Questions from the Payments for Nursing and Allied Health Education on the Cost Report Webinar

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Andrew Kinnaman - BeslerLooking for more information about Payments for Nursing and Allied Health Education on the Cost Report? BESLER’s Reimbursement Manager Andrew Kinnaman answers your questions from the recent webinar. 

To watch Andrew’s Payments for Nursing and Allied Health Education on the Cost Report Webinar, click HERE


  1. Addressing the first question – Yes we are seeing a lot of scrutiny by MACs in regards to the burden of costs and interpreting that the provider, not a sister home office entity, has to incur the costs and that the costs for teachers and residents cannot be paid by the HO entity and then “transferred” to the main provider. I would be happy to discuss further with Andrew.

    We would always entertain additional discussion and what MACs and CMS are applying for interpretation of the rules.

  2. Did we talk about the changes that were introduced in the proposed Rule and Finalized in 2024 IPPS Final Rule ?

    We briefly touched upon the items finalized in the 2024 IPPS Final Rule. What we did address was, FFY 2024 IPPS Final Rule, “…after consideration of the public comments received, we are finalizing the proposed methodology for the implementation of section 4143, such that the amounts previously recouped under CR 11642 (or CR 12596 or CR 12407 as applicable) will be returned to hospitals, and recoupments that would have occurred under CR 11642 (or CR 12596 or CR 12407 as applicable) if not for the enactment of section 4143 of the CAA 2023 will not occur. After issuance of this final rule, we will issue another CR to reflect this finalized methodology.

  3. Are all Hospital Chains (hospitals with home offices) having difficulty getting programs allowed due to payroll being processed at home office level?

    I have not heard of any cases of programs being not allowed due to payroll being processed at home office level. There is clear language in 42 CFR413.85 (d) (2) (ii) that total allowable educational do not include patient care costs, costs incurred by a related organization or costs that constitute a redistribution. I would take the stance that if the program meets the qualification set for in CFR 413.85 for an approved program that would be different than the cost that may be incurred by a home office as referenced in your question. Is it possible that this is a program operated by a provider under 42 CRF 413.85 (f)? I bring this up only to point out that (f) (iii) states “A provider may contract with another entity to perform some administrative functions, but the provider must maintain control over all aspects of the contract functions.” Could such an arrangement exist with your home office? You may not be able to claim the cost incurred by the related organization, but would the contractual arrangement suffice?

  4. I thought tuition can be removed “post step down” so the program can get it’s appropriate overhead?

    I would reference you to the WPS Government Health Administrators website where there is additional discussion of NAH Tuition Revenue Offset, which includes their clarification of the regulation that indirect general service costs are also subject to offset. In this case, the case the MAC has determined the B-2 Post Step-down approach to be improper. The reasoning based on this MAC is included in the below paragraph B-2 post step down adjustment from the MAC Website. Also, the cost report instructions for WS B-2 Post Step Down Adjustments clearly states, “Do not use this worksheet to reduce the total allowable costs that are directly related to the NAHE programs by the revenue received from tuition and student fees. Use Worksheet A-8 to offset NAHE program costs by tuition and student fees (42 CFR 413.85(d)(2)(i)). Do not use a post step-down adjustment.” Learn more on this website.

  5. CRNA program is now requiring a Master’s degree. A local university provides the Master’s degree while the hospital provides specific clinical and teaching of CRNA specific areas. Can the hospital claim the CRNA teaching program as allied health or does the university’s involvement nix the reimbursement?

    Without knowing all the specifics of this particular question, I would address this by first determining if the program meets the requirements of a an approved program under 42 CFR 413.85 (e)or (f). There is some very helpful discussion in the Final Rule Dated 01/12/2001, effective date March 13, 2001, that addresses some of the aspects you bring up in your question. I have included the link for reference: Federal Register __ Medicare Program; Payment for Nursing and Allied Health Education.html

    Starting on page 3363 & 3364. “Comment: One commenter described a CRNA program in which the hospital is allowed to grant a certificate to a student upon completion of the program. This may occur when an affiliated university also grants a degree to the same student. According to the commenter, the Council on Accreditation of Nurse Anesthetist Programs does not prohibit the awarding of an “anesthesia certificate” in addition to the award of the Master’s degree for a hospital-based program. The commenter believed that this could be interpreted as the hospital meeting the criteria to be the operator of the program since the hospital awards a certificate and requested that we clarify this in the final rule.”

    “Response: The program described above where the hospital awards a certificate and an affiliated university confers a degree upon the same student appears to be a university-controlled nursing or allied health program. The certificate awarded by the hospital seems to be an adjunct to the actual degree awarded by the educational institution. In fact, as indicated by the commenter, the certificate is awarded “in addition” to the Master’s degree awarded by the university. This indicates the program is under the control of the university and the hospital has merely provided support to that program. We note, however, that if the hospital described by the commenter can show that it, in fact, meets the criteria of § 413.85(e) (§ 413.85(f) in this final rule) of operating the program, it may receive pass-through payment.”

  6. Do you have a copy of the regs that you can send me that you can extend a negative amount in W/S col A to B-1 and also that you can offset tuition in excess of expenses? Thank you.

    The determination of net costs can be defined in 42 CFR 413.85 (d) (2) (i)-(iv). I would also reference you to the WPS Government Health Administrators website where there is additional discussion of NAH Tuition Revenue Offset, which includes their clarification of the regulation that indirect general service costs are also subject to offset. Learn more on this website.

  7. How does Medicare define intern vs. resident?

    Intern or Resident: An individual who participates in an approved Graduate Medical Education (GME) Program or a physician who is not in an approved GME Program, but who is authorized to practice only in a hospital setting (e.g., has a temporary or restricted license or is an unlicensed graduate of a foreign medical school). Also included in this definition are interns, residents, and fellows in GME Programs recognized as approved for purposes of direct GME and IME payments made by Fiscal Intermediaries or A/B Medicare Administrative Contractors. Receiving a staff or faculty appointment, participating in a fellowship, or whether a hospital includes the physician in its full-time equivalency count of residents does not by itself alter the status of “resident.” This definition is from the glossary of the Guidelines for Teaching Physicians, Interns, and Residents (https://gme.med.ufl.edu/files/2011/11/HHS_Guidelines_Physicians_Interns_Residents.pdf).

  8. Is there a regulation for a tuition recovery to a negative value on worksheet A ?

    The determination of net costs can be defined in 42 CFR 413.85 (d) (2) (i)-(iv). I would also reference you to the WPS Government Health Administrators website where there is additional discussion of NAH Tuition Revenue Offset, which includes their clarification of the regulation that indirect general service costs are also subject to offset. Learn more on this website.

  9. Our system in is having a problem with our corporate office involvement in the programs, even though they are exclusively run and controlled by each provider. The corporate office only provides “guidance” and “oversight.”

    I am going under the assumption based on the wording of the question that your programs are approved under 42 CFR 413.85 (f). Not knowing the specifics of “guidance” and “oversite” but looking at the criteria for a program operated by a provider, it appears that the facilities: 1. Directly incur the training costs, 2. Have direct control of the program’s curriculum, 3. Control the administration of the program and be responsible for day-to-day program operation, 4. Employ the teaching staff, 5. Provide and control both classroom instructions and clinical training. This would not appear that the corporate office is responsible for the day-to-day program operation. The concern here is “guidance” and “oversite” being interpreted as to control the administration of the program.

  10. So, if we start a new Pharmacy Residency program, we won’t see any reimbursement until year 3?

    You would be able to claim Medicare pass through payments in the year the program is approved under the various approvals in 42CFR 413.85. You would not see any NAHE MA payments (WS E, Part A, Line 53) until you meet all criteria to be qualified for payment. The three conditions can be found in Transmittal A-03-043, Dated 05/23/2023 as provided in the following link: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/A03043.pdf

  11. So, if you want to start a program, but have to have 2 years experience already in a CR = does that mean no pass thru until 3rd year?

    You would be able to claim Medicare pass through payments in the year the program is approved under the various approvals in 42CFR 413.85. You would not see any NAHE MA payments (WS E, Part A, Line 53) until you meet all criteria to be qualified for payment. The three conditions can be found in Transmittal A-03-043, Dated 05/23/2023 as provided in the following link: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/A03043.pdf

  12. This question is specifically for Pharmacy Residency Allied Health programs. Do you know the reason why Program Year 2 costs are not allowable by Medicare? Or can you please point me to the specific ruling?

    According to the August 1, 2003, Final Rule 42 CFR 413.85, only PGY1 Pharmacy residency programs qualify for Medicare reasonable cost payment. Specialized PGY2 Pharmacy residency programs are not eligible for reimbursement because the certification achieved in not recognized as a requirement to work in the specialty area by “industry norm.” CMS defines industry norm as more than 50% of hospitals in a random, statistically valid sample. If in the future the norm expands to require a PGY2 residency, these programs would also become eligible for Medicare reasonable cost payment.

  13. Can you have a multi-campus (under different Medicare numbers) operate a NAHE program, or do they have to be accredited or set up separately?

    I did not find any specific reference to multi-campus operating a NAHE program, but there was what I believe to be an applicable discussion in Federal Register Vo. 66, No. 9 from Friday, January 12, 2001, Medicare Program: Payment for Nursing and Allied Health Education. See the following link: https://www.govinfo.gov/content/pkg/FR-2001-01-12/pdf/01-909.pdf On page 3370 of the above reference, there was a comment and response which I think is relevant.

    “Comment: One commenter was concerned that the proposal does not allow a hospital to claim costs incurred by a third party. The commenter’s hospital sends its CRNA students to other hospitals to receive training that the commenter’s hospital cannot provide. These other hospitals employ a CRNA clinical coordinator. The commenter requested clarification on whether the other hospitals can claim reasonable cost payment for the coordinator.”


    “Response: The pass-through payment can be made to any provider that trains students in a nursing and allied health program as long as the program is operated by the provider, whether the provider is the originator of the program or whether the provider is one to which the students are rotated. However, the original provider of the program (or any other provider) may not claim the costs of training the students in the program while the students are rotating to another provider—only the provider actually training the students and incurring the clinical training costs may be paid on a reasonable cost basis. That is, a provider may not claim the costs of a third party provider.”

  14. How far back can a system go to access NAHE Managed Care Payments? We have this issue appealed back to 2016.

    The instructions in the various change requests regarding NAHE add-on payments provide the parameters on whether a given facility fiscal year can be addressed. In its simplest term, the reporting year has to be open or reopenable. For further clarity, I would suggest reviewing CR 11642 & 13122.

  15. WPS is our MAC, and their guidance on NAH reimbursement for Pharmacy preceptors time studies:  “…it should be noted that the preceptor costs of the pharmacy residency program here must be considered to be incremental costs for the operation of the pharmacy residency program in order to be allowable as nursing or allied health education program costs. Incremental costs are additional costs which would not have otherwise been incurred if not for the operation of the nursing or allied health education program. The assumption here would be that the total hours of the clinical pharmacy staff who will be the preceptors of the pharmacy residents will need to be significantly increased now due to the newly added operation of the pharmacy residency program. If not, then the preceptor costs of the pharmacy residency program here would not be considered to be incremental costs for the operation of the pharmacy residency program, as they would have otherwise been incurred as normal operating costs of the pharmacy department, and would therefore not be allowable as nursing or allied health education program costs.”   Do you agree with this interpretation?

    Their interpretation appears to be consistent with current rulemaking based on what I was able to locate. This subject matter was discuss in Federal Register Vo. 66, No. 9 from Friday, January 12, 2001, Medicare Program: Payment for Nursing and Allied Health Education. The term incremental costs were discussed in this final rule on Pages 3364, 3368-3369. See the following link: https://www.govinfo.gov/content/pkg/FR-2001-01-12/pdf/01-909.pdf

    Page 3368, “Section 4004(b)(1) of Public Law 101– 508 also required that we define allowable clinical training costs under this provision for payment for certain non provider-operated programs. At 57 FR 43667 in the September 22, 1992, proposed rule, we proposed to define these costs as the incremental costs that, in the absence of the students, would not be incurred by the provider. These incremental costs would include the costs of clinical instructors and administrative and clerical support staff whose function is to coordinate rotations with a nursing school and to clerical support staff whose function is to coordinate rotations with a nursing school and to schedule clinical rotation for each student nurse. They would not, however, include the costs of a charge or floor supervisor nurse who may spend a portion of his or her time supervising student nurses, but who, in the absence of the students, would still have to be employed by the provider. In general, these costs are payroll and related salary costs.”

    On Page 3369 in response to a comment, the following response was provided. “Response: We believe that allowable clinical training cost should be limited to those incremental costs that the provider actually incurs in the course of training nursing or allied health students. If a provider must hire additional staff or increase the salaried hours of existing staff to accomplish the clinical training, the costs of the staff time for providing the training would be considered allowable costs. These staff could include clinical training instructors and administrative and clerical support. However, if the provider merely adds the supervision of students to a floor nurse’s list of duties and this is accomplished without the provider incurring additional costs, there is no incremental cost to be claimed.”

  16. Did the IPPS Final Rule finally resolve the repaying of all recoupments for the “overpayments” that was supposed to happen under Section 4143 of the CCA 2023 passed December 2022?

    Yes. From the Final Rule, “we are finalizing the proposed methodology for the implementation of section 4143, such that the amounts previously recouped under CR 11642 (or CR 12596 or CR 12407 as applicable) will be returned to hospitals, and recoupments that would have occurred under CR 11642 (or CR 12596 or CR 12407 as applicable) if not for the enactment of section 4143 of the CAA 2023 will not occur. After issuance of this final rule, we will issue another CR to reflect this finalized methodology.”



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