MedPAC Recommends Reforming GME Payments - April 7, 2010

At an April 1 meeting, commissioners of the Medicare Payment Advisory Commission (“MedPAC”) approved several recommendations related to reform of graduate medical education (“GME”) payments, which will be published in MedPAC’s June 2010 Report to Congress. MedPAC recommends the adoption of performance-based GME funding, which would allocate payments to institutions sponsoring residency programs based on performance standards to be adopted by the Secretary of Health and Human Services, including standards related to practice-based learning and improvement, interpersonal and communication skills, and professionalism and systems-based practice. The performance-based payment program would be funded through a reduction in indirect medical education (“IME”) payments to empirically justified levels (lowering the IME adjustment to approximately 2% per 10% increase in resident-to-bed ratio, representing a cut of approximately $3.5 million). MedPAC also calls for increased transparency in the reporting of GME funding and studies to determine the number of residency positions needed in the United States, the impact of GME funding on the financial performance of sponsoring institutions, and strategies for diversifying the health professional workforce. A transcript of MedPAC’s April 1 meeting can be accessed here.