What is the proper reporting of Nursing School vs. Allied Health

In order to support hospital training of nurses and allied health professionals (NAHE) legislation was created by the following acts: Balanced Budget Refinement Act of 1999 and Benefits Improvement and Protection Act of 2000. Regulation can be found at 42 CFR 413.85 and 413.87. The legislation provides qualifying hospitals a NAH MA Add-on Payment, and teaching hospitals get a GME MA Payment Reduction, in order to fund the NAH MA Add-on payments.

NAH Approved Programs

Approved educational activities means formally organized or planned programs of study that:

(1) Are operated by providers administering the degree/diploma

(2) Enhance the quality of health care at the provider; and

(3) Meet the requirements of paragraph (e) of this section for State licensure or accreditation.


NAH Allowable Cost of Approved Programs

The expense related to Nursing and Allied Health programs is reported on WS A Lines 20 and 23; respectively. Note, each approved allied health program must have its own established cost center (e.g. one for pharmacy, pastoral education, medical technician education, etc.) by subscripting line 23 for each program.

Allowable expenses for approved NAH programs include, but are not limited to the following items:

  • Trainee Stipends
  • Compensation of teachers
  • Other costs related to teaching and training, that do not include patient costs

NAH Add-on Qualifications

  • Must be receiving cost-based NAH payments in the current calendar year
  • Must have received NAH cost-based payment in the cost reporting period ending in the Federal FY two years prior to the current calendar year
  • Must have had MA utilization in the two-year prior cost report

NAH Add-on Calculation

  • Cost-based NAH Medicare Payments / Total Inpatients Days which results in per diem NAH cost
  • Per diem multiplied by Managed Care Days (These days come from PS&R Rpt Type 118) which results in the NAH MA Care Payment
  • Divide NAH MA by National NAH MA (provided by CR 11642-discussed further below) which results in provider share of National NAH MA
  • Multiply provider share of National NAH MA by the NAH MA pool (provided by CR 11642-discussed further below) which results in the Add-on payment for NAH

Note that the above calculation is completed for each calendar year in the cost report period and prorated by the number of months

Change Request 11642

Issued on August 21, 2020

CR11642 revised the following factors: NAH total for all hospitals, the add-on pool, and GME MA payment reduction percentage.

These changes affected all cost reports not yet settled, and MACs must incorporate revisions into all non-settled cost reports as part of their normal processes. These must be completed by 3/31/2022

Cost reports that have already been settled must be initiated by the MAC if within the original 3-year NPR

Additionally, HFS Software has been updated to reflect the change in reporting for GME MA reduction, as well as new questions on WS S-2 Line 60 to ensure changes are reflected properly


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