POLICY
PRIORITIES

Areas of Focus

The Issue 

Medicare's Primary Care Exception allows teaching physicians in certain primary care settings to bill for resident-furnished visits without being physically present for every encounter, so long as specific supervision safeguards are met. Because of how the exception's eligibility rules were written in 1995 — more than a decade before THCGME existed — most Teaching Health Centers are structurally unable to qualify, even though they meet every substantive supervision safeguard the exception requires.

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Why It Matters 

Without access to this exception, Teaching Health Center attendings must personally conduct key portions of every billable resident encounter, which limits how many patients residents can see under supervision each session. In communities that already face limited primary care access, this constraint can mean fewer patient visits than the training model would otherwise support.

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AATHC's Work 

AATHC has developed a proposed regulatory update, with input from outside regulatory counsel, and is engaging CMS through its annual rulemaking process to seek a clear pathway for Teaching Health Centers to qualify. CMS acknowledged the issue during recent rulemaking and indicated it would consider the matter in future regulatory discussions — a meaningful opening AATHC is working to build on.

Medicare Cost Report & Duplicate Payment

The Issue 

Teaching Health Centers train residents in community-based primary care settings, but residents also rotate through affiliated hospitals for required inpatient and specialty experiences. Hospitals are federally required to report all residents training on site, including THCGME rotating residents, on their Medicare cost report. Under current rules, that reporting can result in a hospital's Medicare payment calculation overlapping with THCGME grant funding for the same resident time — triggering a reduction to the Teaching Health Center's federal grant.

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Why It Matters 

This is a structural gap between two federal programs, Medicare graduate medical education and THCGME, that were never operationally coordinated. Teaching Health Centers can face funding reductions based on a hospital reporting requirement the program itself does not control, creating financial uncertainty for community-based programs that are already operating on tight margins.

AATHC's Work 

AATHC has convened a member task force to analyze the issue, engage directly with the Centers for Medicare & Medicaid Services (CMS) and HRSA, and evaluate potential administrative pathways to resolve the mismatch — with the goal of preserving program accountability while ensuring Teaching Health Centers aren't penalized for a reporting gap between two federal systems.

Audit Standards & Program Weighting

The Issue 

Teaching Health Centers are currently audited using forms and methodologies originally designed for hospital-based graduate medical education programs, which operate under a different funding and reporting structure than community health centers. This includes how residency training periods are weighted for funding purposes — a methodology built for the hospital Medicare system that does not map cleanly onto THCGME's single, unified per-resident funding structure.

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Why It Matters 

Applying hospital-designed audit tools and weighting rules to a community health center model creates inconsistency across the field and financial uncertainty for programs trying to plan and budget responsibly. Teaching Health Centers need audit and funding standards that reflect how they actually operate.

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AATHC's Work 

AATHC is engaging directly with HRSA to seek clear, written, and consistently applied guidance, and is evaluating administrative pathways — including precedents from other federal graduate medical education programs — to develop audit standards purpose-built for the Teaching Health Center model.