Graduate Medical Education

Graduate medical education (GME) funding provides financial support to teaching hospitals to help offset the costs of operating medical residency programs. Created in 1965, the GME funding stream was born out of the then newly-established Medicare program to ensure an adequate supply of physicians to meet the nation's health care needs. Today, it receives the vast majority of its funding from the Medicare and Medicaid programs.

Michigan's final Fiscal Year (FY) 2015-16 budget for the Department of Health and Human Services included $162 million (gross) and $56 million in state general fund for GME, an amount level with FY 2014-15 funding. The Governor's budget recommendation for FY 2015-16 reflected a departure from the approach taken in previous years toward GME funding. Rather than supporting the program with GF/GP dollars, the Executive budget proposed increasing the hospital Quality Assurance Assessment. Program, or QAAP, to support the program. A QAAP is a tax on a class of medical providers, which is then used to supplant GF/GP dollars as the non-Federal share of Medicaid funding. Ultimately the proposal was rejected and continued to fund GME at the same level as the initial appropriations for FY 2014-15: $162,888,300 Gross and $56,033,600 GF/GP.

The initial FY 2015-16 budget included two new boilerplate sections concerning GME as well as a revision of an existing section. The first new section, Section 1805, requires hospitals receiving GME funds from the State to submit fully completed quality data to a qualifying national nonprofit organization with extensive experience in collecting and reporting hospital quality data on a public website. This section spells out the requirements for the national nonprofit organization receiving the data. This section also includes a penalty holding a hospital's fourth-quarter GME payments until submission of the required data. The second new section also deals with data collection regarding residency training programs. Section 1812 requires two reports covering costs associated with residency training programs, postresidency retention rates, and the marginal cost of adding additional residency slots by hospital. Upon submission of the data to the Department, a workgroup will be created to develop metrics for the future distribution of GME funds. This section includes the same penalty as in Section 1805. As discussed above, in FY 2014-15, Section 1870 created the MiDocs GME consortium and appropriated $500,000 to legally create the consortium, obtain ACGME accreditation, develop new residency programs, and prepare a report on per-resident costs for medical training and clinical quality measures. The FY 2015-16 budget maintained the language, but created a work project allocation from FY 2014-15 in order to allow the Department to continue spending the $500,000 appropriated in the previous budget. If you'd like further information, the Senate Fiscal Agency has prepared a comprenhensive report of GME financing in Michigan.

Simply funding GME isn't enough. MAFP advocates for policies that effectively meet our state's workforce demands. As this 2013 peer-reviewed article in Academic Medicine, the journal of the Association of American Medical Colleges, suggests:

"The physician workforce is struggling to meet the nation’s health care needs, particularly in primary care and geographically underserved areas."

GME funding and reform consistently rank as a top advocacy priority for the MAFP. The MAFP Advocacy Committee and the GME Reform Workgroup monitor policy proposals and legislation, actively seeking opportunities to bring family medicine's voice to this important, ongoing debate.

Additional Resources