Graduate Medical Education Reimbursement and Residency Funding Prepared by: Erin E. Schneider, MD Emergency Medicine Resident, PGY-2 Oregon Health and Science University

Objectives Funding sources Reimbursement sources Limitations on payments

GME Funding- who pays? Centers for Medicare and Medicaid services Veterans Administration (9%) Private Insurers Costs are separated into direct and indirect costs

Direct vs. Indirect costs Direct Costs: –resident salaries –Overhead –faculty supervision Indirect Costs: costs to hospital of training residents - higher acuity patients - state-of-the-art technology - multiple learners creating inefficiency - added staff

How are indirect costs reimbursed? Congress determines multiplier “X” Inpatient cost per case increases by “X” % for every 10% increase in resident to bed ratio “X” decreased 11.6% (1980s) to 5.5% (2003). –MedPac recommended elimination of X Potential loss of $340 million per year

Report to the Congress: Medicare Payment Policy. March MedPac. P 56

Medicaid Funding in Jeopardy 2007: CMS proposed to eliminate “inappropriate” payments to hospitals Issue may continue to arise in current healthcare reform debates Potential place for resident advocacy

Resident Position Allocations CMS pays 1.0 FTE (full time equivalent) for every resident up to 5 years of residency Balanced Budget Act of 1997 placed cap on residency positions in the US Resulted in redistribution of residency positions to rural/small urban areas

Outside EM rotations Hospital paid by CMS for residents rotating at non-hospital settings Community outside rotations may get reimbursed, but non-hospital settings (e.g poison centers, some rural hospitals) do not.

EMRA Position Statement "EMRA will support current research and studies aimed toward revising current Graduate Medical Education funding mechanisms and work to change current Direct Medical Education regulations that limit research and extramural educational opportunities. EMRA will work with other healthcare organizations to better define the problem of Graduate Medical Education funding and propose alternatives and solutions that may involve both the public and private sectors. EMRA opposes reductions in Medicare funding for Graduate Medical Education at the Federal and State level and supports diversified sources of funding that help meet the overall goals of residency training.” Original policy adopted by Resolution Council, 5/08 9

Conclusions Multiple pressures to reduce payments Limitations on physicians does not reflect expanded need of growing population Funding improvements and redistribution needed for adequate training

References Fishman LE. Medicare Payment With an Educational Label: Fundamentals and the Future. Washington, DC: Association of American Medical Colleges; 1996 American College of Emergency Physicians Issue Paper: GME Funding. Updated CRS Report for Congress. Medicaid and GME funding. Accessed January 8, Accessed January 8 2 Ramano, M. Modern Healthcare Vol. 33 Issue 40, p10. 3 Report to the Congress: Medicare Payment Policy. March MedPac. Pp accessed December 28, 2008http:// 4 Indirect Medical Education (IME). Center for Medicare and Medicaid Services. accessed December 22, Medicare Indirect Medical Education Payments (IME). Accessed January 28, Medicare payments for Graduate Medical Education: What Every Medical Student, Resident, and Advisor Needs to Know. Association of American Medical Colleges Securing Medicare GME funding for Outside Rotations. ACEP accessed December 22, “Public Law : Making appropriations for military construction, the Department of Veterans Affairs, and related agencies for the fiscal year ending September 30, 2008, and for other purposes.” (6/30/08; enacted HR 2642). Text from: United States Public Laws. Available from: The Library of Congress; Accessed: 12/22/08. 9 Section X: Education and Professional Development - Securing GME Funding for Resident Education. EMRA.org. Accessed 12/22/08