In its first report since the passage of the Patient Protection and Affordable Care Act (PPACA), the Medicare Payment Advisory Commission (MedPAC) is recommending changes in how Medicare distributes funds for graduate medical education (GME).
Medicare is the largest source of GME funding, distributing approximately $9.5 billion each year to hospitals to train residents.
MedPAC is a 17 member advisory commission responsible for recommending to Congress changes in Medicare. The commission is required by statute to produce two reports annually.
A number of the provisions included in the PPACA were based on earlier MedPAC policy recommendations.
Of current annual GME funding, $3 billion goes to direct medical education, with another $3 billion paying for extra expenses associated with being a teaching hospital, such as extra procedures required for the teaching of residents.
The remaining $3.5 billion is paid out under a DRG formula that provides a cushion for teaching hospitals that may see either tougher cases or sicker patients.
The proposed changes, in a report entitled “Aligning Incentives in Medicare,” would tie the payment of that remaining funding to certain educational benchmarks that teaching hospitals would be required to achieve. Instead of rewarding hospitals for providing more treatment, hospitals would be rewarded for improving the provision of care, including care that is not hospital-based.
“Despite the tremendous advances our graduate medical education (GME) system has brought to modern health care, the Commission finds that it is not aligned with the delivery system reforms essential for increasing the value of health care in the United States,” said MedPAC chair Glenn Hackbarth, testifying before a congressional committee on the recommendations.
Hackbarth pointed out that graduate medical education is almost exclusively hospital-based, and not focused on broader health care needs.
Hackbarth said the changes are not intended to penalize teaching hospitals, but to move them towards a system of educating doctors that is more outcome based.
Other recommendations in the MedPAC report focused on the medical specialties that will be required to treat patients in the future, as well as achieving broader ethnic and racial diversity in GME programs.