the American Association of Colleges of Osteopathic Medicine

This analysis was prepared by Venable, LLP, on behalf of AACOM.

On February 4, 2022, the Department of Veterans Affairs (VA) published a proposed rule with comment period to establish a new pilot program on graduate medical education (GME) and residency, as required by the Maintaining Internal Systems and Strengthening Integrated Outside Network Act of 2018 (the MISSION Act). Specifically, the pilot program would establish additional medical residency positions and enable the VA to fund residents regardless of whether they train in VA facilities and pay for certain costs of new residency programs. The authority for the pilot program extends to August 7, 2031.

Creating additional, flexible residency opportunities for osteopathic medical students is a key priority for AACOM and its member institutions. As such, AACOM has actively followed this regulation and anticipates filing comments on behalf of its members by the July 5, 2022 deadline.

Key Points of the Proposed Rule

Section 403 of the MISSION Act mandated VA create a pilot program to establish additional medical residency positions authorized under 38 U.S.C. § 7302 at certain covered facilities. Section 7302(e)(1) currently permits VA to both establish medical residency programs in VA facilities and ensure that these programs have a sufficient number of residents. The proposed rule would establish substantive and procedural requirements to allow VA to administer the pilot program consistent with the MISSION Act, including to:

Establish medical residency positions in non-VA facilities, such as health care facilities of the Department of Defense and Indian Health Service;
Establish parameters for VA to determine the covered facilities in which residents will be placed, such as examining the ratio of veterans to VA providers and the range of clinical specialties available in geographic areas;
Require prioritized placement of residents under the pilot program in Indian Health Service facilities, Indian tribal or tribal organization facilities, certain underserved VA facilities, or other covered facilities;
Authorize VA to pay resident stipends and benefits regardless of whether such residents are assigned to a VA facility;
Require VA to pay certain startup costs of new residency programs (such as curriculum development, faculty salaries and recruitment costs, accreditation costs, and resident education expense costs) if residents are placed in such programs under the pilot program.

Background on VA’s current GME program and a detailed section-by-section summary of the proposed rule follow.

Comment Deadline

The Comment Deadline has been extended to July 5, 2022. Comments may be submitted through www.Regulations.gov or mailed to, Paul B. Greenberg, Deputy Chief, Office of Academic Affiliations, (14AA), Department of Veterans Affairs, 810 Vermont Ave. NW, Washington, DC 20420.

Comments should indicate that they are submitted in response to “RIN 2900-AR01—VA Pilot Program on Graduate Medical Education and Residency.” Comments received will be available at regulations.gov for public viewing, inspection, or copies.

Background on Current VA GME Programming

Under 38 U.S.C. § 7302(e), VA establishes new medical residency programs in VA facilities and ensures that existing medical residency programs have a sufficient number of residents. To guide its administration of the existing residency program, VA must consider criteria such as current VA staffing levels, the location of VA facilities in certain areas deemed as health professional shortage areas, and priorities for residents to be placed for the provision of specific types of health care.

Through a request for proposal (RFP), VA Central Office notifies VA facilities of the applicable selection criteria (including the relative importance or weight of such factors), information required from VA facilities to be in any response to the RFP, and the process to submit a response to the RFP. The VA Central Office evaluates responses to determine the facilities in which residence will be placed or whether funding will be made available for certain costs of establishing new medical residency programs.

In administering GME programming under section 7302(e), VA forms relationships with non-VA institutions that sponsor graduate medical educational programs (most often medical schools or teaching hospitals), and it is those sponsoring institutions that provide the residents that would be available for placement in VA facilities. VA, therefore, does not control the pool of participating educational programs or available residents, although VA does assess the requirements under section 7302(e) to determine the best placement for such residents in VA facilities. VA in effect then does not place residents but does provide for resident positions to be filled in VA facilities.

Under section 7302(d), VA forms academic affiliations with sponsoring institutions to delineate the responsibilities regarding the training of the residents, and VA enters into other separate agreements to control funding of both certain residency program educational costs (such as accreditation fees and National Resident Match Program fees) and the costs of paying resident stipends and benefits.

VA envisions that the pilot program authorized by the MISSION Act would be conducted under the same basic tenets of current GME programming, such that there would be academic affiliations formed with sponsoring institutions and the covered facilities recognized under the MISSION Act, in which residents would be placed under the pilot.

Section-by-Section Summary of the Proposed Rule

Section 17.243 —Purpose and Scope

Sections 17.243 through .248 would implement the VA Pilot Program on Graduate Medical Education and Residency Program (PPGMER). The proposed rule would apply only to the PPGMER as authorized under section 402 of the MISSION Act. It would not apply to VA’s more general administration of graduate medical residency programs in VA facilities authorized under 38 U.S.C. § 7302(e).

Section 17.244—Definitions

Section 17.244 would establish definitions for the PPGMER, such as “benefit,” “educational activities,” “resident,” “stipend,” and “VA health care facility.”

Section 17.245—Covered Facilities

Section 17.245 would list the covered facilities in which residents may be placed under the PPGMER. Covered facilities would include any of the following:

A VA health care facility;
A health care facility operated by an Indian tribe or tribal organization;
A health care facility operated by the Indian Health Service;
A federally-qualified health center;
A health care facility operated by the Department of Defense; or
Other health care facilities deemed appropriate by VA.

Although a VA health care facility is listed, VA does not anticipate the PPGMER being a vehicle for the placement of residents in VA facilities because VA intends to continue operating its current GME programming to place residents in VA facilities, separate from the PPGMER for the duration of the PPGMER program.

Section 17.246—Consideration Factors for Placement of Residents

Section 17.246 would establish factors that VA would consider when determining in which covered facilities residents would be placed under the pilot. The proposed factors would not be weighted in any particular manner in the regulation to allow flexibility for VA to consider the relative import of factors throughout the duration of the pilot. Although these factors would not be weighted in regulatory text, it may be the case that VA would assign levels of relative importance to these factors as part of its selection process.

The factors would include the following:

The ratio of veterans to VA providers for a standardized geographic area surrounding a covered facility (i.e., the surrounding county), including a separate ratio for general practitioners and specialists. A higher ratio of veterans to VA providers indicates a higher need in an area.
The range of clinical specialties of VA and non-VA providers for a standardized geographic area surrounding a covered facility, where the presence of fewer clinical specialties indicates a higher need for health care providers in an area.
Whether the specialty of a provider is included in the most recent staffing shortage determination by VA.
Whether the covered facility is in the local community of a VA facility that has been designated by VA as an underserved facility pursuant to criteria developed under the MISSION Act.
Whether the covered facility is located in a community that is designated by the Secretary of Health and Human Services as a health professional shortage.
Whether the covered facility is in a rural or remote area as identified by the U.S. Census Bureau and the Economic Research Service within the U.S. Department of Agriculture, respectively.
Other criteria as VA considers important, including, but not limited to, (i) proximity of a non-VA covered facility to a VA health care facility, such that residents placed in non-VA covered facilities may also receive training in VA health care facilities, and (ii) programmatic considerations related to establishing or maintaining a sustainable residency program, such as: whether the stated objectives of a residency program align with VA's workforce needs; the likely or known available educational infrastructure of a new residency program or existing residency program (including the ability to attract and retain qualified teaching faculty); and the ability of the residency program to remain financially sustainable after the cessation of funding that VA may furnish under the pilot program.

This section also requires no fewer than 100 residents to be placed in covered facilities operated by either the Indian Health Service, an Indian tribe, a tribal organization, or covered facilities located in the same areas as VA facilities designated by VA as underserved

Section 17.247—Determination Process for Placement of Residents

VA would not solicit the interest of covered facilities to participate in the PPGMER through a public funding announcement, a public request for proposal, or by establishing a public application process, because section 403 of the MISSION Act is not an express grant or cooperative agreement authority through which VA may offer a public funding opportunity. Further, section 403 does not authorize any amount of money to be appropriated to implement the PPGMER, separate from VA's administration of its existing GME programing. Rather than conducting a public solicitation, the parameters of VA's selection process for covered facilities would be established under the following procedure:

VA Central Office would issue a request for proposal (RFP) to VA health care facilities to announce opportunities for residents to be placed in covered facilities and to have costs paid or reimbursed under the pilot program.
VA health care facilities, in collaboration with covered facilities, would submit responses to the RFP to VA Central Office.
VA Central Office would evaluate responses to the FRP from VA health care facilities and would determine those covered facilities where residents may be placed and costs are paid or reimbursed.

Section 17.248—Costs of Funding Residents and New Residency Programs

Section 17.248 would establish the types of costs that VA may fund under the PPGMER to place residents in covered facilities or to reimburse certain costs incurred by new residency programs. VA would retain discretionary authority to pay stipends and benefits of residents, regardless of whether they have been assigned to a VA facility. Funding of stipends and benefits could occur either through a direct payment or reimbursement mechanism, in accordance with any contracts or agreement VA has legal authority to establish. Conversely, VA would have mandatory authority to reimburse certain new resident program costs if VA places a resident in such programs. VA would enter into such contracts, agreements, or other arrangements to administer the PPGMER. It would be those contracts, agreements, or other arrangements that would establish the terms to control costs that could be funded.

Once VA determines in which covered facilities residents will be placed, payment or reimbursement is authorized for the following costs:

Resident Stipends and Benefits. For residents placed in covered facilities, VA may pay only the proportionate cost of resident stipends and benefits that are associated with residents participating in educational activities directly related to the PPGMER.
Costs Associated with New Residency Programs. If a covered facility establishes a new residency program in which a resident is placed, VA will reimburse the following costs:
Curriculum development costs, to include but not be limited to costs associated with needs analysis, didactic activities, materials, equipment, consultant fees, and instructional design;
Recruitment and retention of faculty costs, to include but not be limited to costs associated with advertising available faculty positions, and monetary incentives to fill such positions such as relocation costs and educational loan repayment;
Accreditation costs, to include but not be limited to the administrative fees incurred by a covered facility in association with applying for only initial accreditation of the program by the Accreditation Council for Graduate Medical Education (ACGME);
Faculty salary costs, to include only the proportionate cost of faculty performing duties directly related to the PPGMER; and
Resident education expense costs, to include but not be limited to costs associated with the required purchase of medical equipment and required training, national resident match program participation fees, and residency program management software fees.

Please contact AACOM Government Relations at aacomgr@aacom.org with questions or for further information.

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