IOM proposes overhaul of GME funding

Residency Program Insider, August 1, 2014

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The current funding system for graduate medical education (GME) is not producing enough physicians required to meet the country’s needs and is dire need of restructuring, according to a report released by the Institute of Medicine (IOM) this week.

Currently, the federal government provides $11 billion annually, mostly through Medicare, for GME funding, while Medicaid provides an additional $4 billion. The IOM’s report focused primarily on changes to Medicare funding, as the largest and most influential contributor to GME funding.

The IOM report made the following recommendations:
·         Investing strategically: Maintain Medicare GME funding at its current level, but modernize payment methods to reward performance, ensure accountability, and incentivize innovation in the content and financing of GME. The current Medicare GME payment system should be phased out.
·         Building an infrastructure to facilitate strategic investment: Establish a two-part governance infrastructure for federal GME financing. A GME Policy Council in the Office of the Secretary of the Department of Health and Human Services should oversee policy development and decision making. A GME Center within the Centers for Medicare & Medicaid Services should function as an operations center with the capacity to administer payment reforms and manage demonstrations of new payment models.
·         Establishing a two-part Medicare GME fund: Allocate Medicare GME funds to two distinct subsidiary funds—a GME Operational Fund to finance ongoing residency training activities and a Transformation Fund to finance development of new programs, infrastructure, performance methods, payment demonstrations, and other priorities identified by the GME Policy Council.

Institute of Medicine


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