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What does Medicare do to Support Graduate Medical Education?
- The Medicare Program (established in 1965) provides considerable support to the training of new physicians though Graduate Medicare Education or GME programs, most of which are operated by major teaching hospitals.
- In 2007, Medicare provided $8.8 billion to teaching hospitals in support of their GME programs and related patient-care activities.
- Medicare recognizes the costs that teaching hospitals incur in training and other activities in two ways:
- First, it provides direct payments for medical education to hospitals that cover a share of the stipends paid to residents, salaries of supervising faculty, and other allowable expenses.
- Second, it provides an indirect medical education adjustment, which generally covers the added patient-care costs associated with training.
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What is the Issue concerning Medicare GME?
- The number of Medicare funded Graduate Medical Education (GME) slots has not increased since the enactment of the Balanced Budget Act of 1997, which included a provision freezing the number of slots at 1996 levels.
- The cap on residency positions was based on the perception that the U.S. had a sufficient supply of physicians. However, according to experts, the current pool of primary care physicians, including geriatricians is insufficient to meet the needs of an aging population.
- Currently, GME funds are provided to teaching hospitals without restrictions on the types of physicians they train.
- The cap applies to hospitals as a whole and not to individual residency programs, therefore hospitals can alter the balance of residents they train as long as they stay within their overall cap.
- For example, a hospital can eliminate family practice positions in favor of new cardiology positions and remain within the cap. In fact, the trend in GME has been towards more specialty and fellowship positions and fewer primary care positions.
- As an increasing number of medical school graduates pursue specialties with more predictable work schedules and turn away from careers in primary care, Congress will face new challenges in determining Medicare payments to teaching hospitals.
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What has Past Budget Proposals Recommended regarding GME?
- Past budget proposals have included provisions for dramatic decreases in the Medicare IME payments to hospitals and the Medicaid program that would have resulted in loss of Medicaid GME payments in those states that provide this funding. If similar provisions are enacted in the future, teaching hospitals will incur significant revenue shortfalls that will require changes in their GME programs. With diminished GME revenue it is likely that hospitals will make choices regarding their GME programs that advantage those specialties that are predominately inpatient oriented and for those clinical programs that have a favorable operating margin (e.g., cardiology, neurosurgery, orthopedics) and disadvantage specialties like primary care, family medicine, and geriatrics that have many educational activities outside the hospital (e.g., nursing homes, patient homes, assisted living) and that do not have as clear a link to their bottom line. This could only amplify the shortages in geriatrics providers that we currently experience.
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What does AGS Recommend concerning Medicare GME and Increasing the Supply of Healthcare Providers who can Care for our Aging Population?
- Under the current physician reimbursement system, marketplace forces will not balance the makeup of the physician workforce to meet the needs of an aging population. However, since physicians must complete a specified number of years in a U.S. graduate medical education (GME) training program in order to obtain a license, adjustments in GME payments is one way to alter the physician workforce in the U.S.
- Since Geriatrics fellowship programs (including Geriatric Medicine and Geriatric Psychiatry) are the only GME programs that care for only Medicare patients, it could be argued that for individuals in these programs, hospitals should get full GME payments, with no reduction for non-Medicare patient days. While this benefit would not directly impact the trainees going into such programs, it would make it more advantageous for hospitals to invest in the growth of these programs. Furthermore, if these enhanced GME payments to hospitals are tied to a requirement for financial incentives to physicians choosing to train in Geriatrics (e.g., loan repayment), there could be a direct impact on the career choices of physicians in training. Such a model could also be used to address other national physician workforce needs such as the increasing shortage of primary care physicians, by creating the incentives for those training in internal medicine and family medicine.
- An additional approach would be to allow for GME positions in needed specialties like geriatrics to be excluded from the BBA mandated cap limitations. Currently, the GME positions for dentistry and podiatry are outside the cap and the addition of these GME positions is accompanied by increased GME payments to a hospital even if the hospital is at or above its cap. Thus, excluding GME positions in a specialty deemed by CMS to be a specialty for which there is a shortage would be a mechanism of providing an incentive to hospitals to maintain or grow the needed workforce.
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