On Implementing a National Graduate Medical Education Trust Fund (1997) / Chapter Skim
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Pages 21-36
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From page 21... ...
The system should be designed to provide greater local flexibility on work force matters and incentives to base the number of residents on market conditions rather than payment rules. The flaws in the current system that call for change are discussed under `'Additional Issues." Briefly, these are: excessive DME payment variation; overemphasis on in-hospital and under-emphasis on ambulatory and managed care training; uncontrolled payments for additional residents; and loss of GME to managed care plans.
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From page 22... ...
The GME Trust Fund would allow separation of at least a portion of GME payments from Medicare inpatient hospital DRG rates. The present IME formula directly links Medicare payments to the level and complexity of the Medicare caseload and the resident-to-bed ratio; payments are also affected by the annual DRG payment rate update, which reflects decisions based on the condition of the overall hospital industry.
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From page 23... ...
Because IME payment is made through the PPS for the support of teaching hospitals, only DME payment eligibility would be expanded; at some point, however, IME payment eligibility may need to follow DME funding out of the hospital. For IME to keep pace with the changes in the delivery system and to
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From page 24... ...
Doubtless, teaching hospitals would remain the usual sponsoring institutions for DME, but medical and osteopathic schools, health maintenance and managed care organizations, group practices, ambulatory centers, universities, and consortia might also qualify to receive payment directly. Consortia could actually be encouraged if they made a case for enhancing national policy objectives and it was deemed desirable, after careful consideration of the implications, to enlist them in pursuing additional GME or work force goals through the payment system.
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From page 25... ...
It also penalizes or rewards teaching hospitals participating in a training system according to local caseload and population characteristics. Further, Medicare admissions to teaching hospitals would not be relevant to the costs and benefits of newly eligible nonhospital sponsoring institutions.
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From page 26... ...
In addition, it is desirable and may be possible to design a DME payment system that recognizes locations with special needs. During the transition, new programs, new sponsoring institutions, or residents added to programs at existing sponsoring institutions should be
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From page 27... ...
Even though there is considerable support for some work force policies regarding primary care and the ratio of generalists to specialists, there are differences of opinion and uncertainties caused by the variability of predictive models (AAMC, 1996; Burg et al., 1994; Cooper, 1994; Meyer et al., 1996; Rivo et al., 1993~. There remains, as well, a legitimate question as to whether weighted DME payments will influence applicants as effectively as the market does (PPRC, 1993~.
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From page 28... ...
Given that, with the proposed plan, resident numbers would impose no aggregate financial cost to the National GME Trust Fund, the committee preferred to adopt a less intrusive posture and allow the system time to change in response to current market conditions. This less intrusive posture also resolves the committee's uncertainty as to the merit of creating a separate payment program for other professions, such as podiatry and dentistry, or the fairness of sweeping them into a restrictive mandate primarily in response to a physician surplus The committee also took no steps to control the number of international medical graduates (IMG)
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From page 29... ...
IME ISSUES IME payments also are made to teaching hospitals and are related to GME. They differ from DME payments in important ways, however.
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From page 30... ...
MODIFICATION OF MEDICARE IME FUNDING To modify these incentives, the committee recommends dividing the IME fund into halves. One half of IME payment would be based on historical IME payments, trended forward by some inflation or medical market basket factors, or as Congress decides.
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From page 31... ...
Added to the limits in DME payment, this is a step toward payment neutrality in the resident market and should reduce the stimulus of payment policy on resident and physician supply. Continuing the other half of IME funding using rate adjustments preserves the added margin that each Medicare patient now brings to teaching hospitals, counteracting the potential loss of access that might ensue if GME payment were totally dissociated from each hospital's current Medicare caseload.
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From page 32... ...
Each IME formula adjustment to DRG payment to a hospital would be multiplied by a coefficient that was based on the proportion of the total Medicare caseload at that hospital that was capitated. Case mix would have to be ignored in calculating this coefficient unless the capitated patients were assigned DRGs and the percentage was then calculated using imputed DRG billings.
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From page 33... ...
In such cases, the committee thinks that receipt of total DME payments is adequate reimbursement presently for nonhospital sponsoring institutions, but as noted, at some point, this policy may need to be reevaluated. The hospital should not receive IME payment for time during which the resident is the responsibility of another, separate sponsoring .
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From page 34... ...
In addition, GME funds in the AAPCC would no longer be an issue, since a defined annual GME fund assures GME payment cannot be lost from the Trust Fund to the AAPCC. Assuming a general, non-Medicare fund, the distribution would occur from four component funds limited by the total National GME Trust Fund amount, two for DME distributed in a uniform way, and two for IME distributed proportionally to Medicare and non-Medicare caseload.
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From page 35... ...
using the current formula and based on the formula's application to hospital reports of non-Medicare revenue. · HCFA makes periodic historical IME general, non-Medicare payments and formula general, non-Medicare IME payments adjusted to keep within the target fund amount.
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From page 36... ...
. HCFA divides the amount of direct medical education funds set aside for graduate nursing by the number of FTE graduate nurses in clinical training to get a standard per graduate nurse payment amount.
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